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  • Apinya Kamon
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Knowing the Five Bitcoin Shams

2015-10-09 07:37:18

The popularity of bitcoin continues to rise. Several retailers have integrated the virtual currency into their businesses. Like in any other investments or business ventures, bitcoin-related fraud cases emerge. Bitcoin dealings are not supervised by a regulator or institution, making it susceptible to deceitfulness and theft.


Below are some of the well-known bitcoin scams.


Bitcoin Exchange Scams. Such exchanges entice clients by offering to facilitate credit card at more competitive, transparent rates. However, deceiving bitcoin exchanges do not intend to give back their bitcoin or cash upon receiving the payment.


Bitcoin High-Yield Investment Programs and Ponzi Schemes. People are lured with high interest rates on deposits. Early traders are paid out using the payments of the latter ones. This scheme crashes once no new investors join and they can no longer make payments. It usually lasts only a month or two, but shammers can simply repeat the entire process again.


Bitcoin Mining Investment Scams. The process entails verifying dealings and giving security for the blockchain or public ledger. It requires powerful, costly computer equipment. Normally, the scams include orders for equipment paid in advance that is never delivered.


Bitcoin Phishing Scams. Scammers send emails, indicating the people have been awarded or given bitcoins. To claim it, they only need to log in into their bitcoin wallets using the link indicated below the message. But when they click the link, this will give defrauders the whole control of the person’s account.


Bitcoin Wallet Scams. Wallet scams gain users by assuring of greater transaction anonymity. The fraudsters transfer the bitcoins into their own wallet once the deposit level rises above a specific level.


While we cannot totally avoid them, it is advisable to do a background checking of the bitcoin company you are seeking to deal with. Check also the transparency of their dealings. Their public audits can help you determine whether this entity can practice what they preach. These companies are required to disclose their bitcoin holdings publicly in order to establish their legitimacy as well.