How to beware of cryptocurrency Ponzi schemes?

Over the recent few years, the excessive blast of cryptocurrencies has acquired traction by almost every type of investor, whether a retail investor or a mainstream investor. But not only cryptocurrency investors but hackers are also attracted to these virtual coins. 

The majority of the cryptocurrency scams tend to get access to the crucial details of a cryptocurrency wallet, like the seed phrase and private key. Before you start investing in bitcoins, check if crypto trading bots are good for trading. There are different types of cryptocurrency scams. And the utmost popular one is social engineering cryptocurrency scams. Social engineering scams include romance scams, cryptocurrency airdrop scams and email scams. Here is a list of cryptocurrency scams and how you can save yourself from these scams. 

Different types of cryptocurrency scams!

The primary aim is to access a cryptocurrency wallet or authorization IDs. In short, the hacker or scammer always tries their best to obtain the information that will grant them access to a cryptocurrency wallet or any security code. 

Undeniably cold bitcoin wallet is secure and has an ultimate immune system towards malicious activities, but there were incidents when scammers accessed hardware wallets. The second type of scam is when a scammer tries to send the cryptocurrency holdings of an investor directly to their cryptocurrency wallet. 

Social engineering Scams!

Social engineering scams are pretty vulnerable in the cryptocurrency industry. These scams psychologically manipulate a cryptocurrency enthusiast and pretence to acquire the governance over crucial details subject to the investor’s account. 

Such scams mimic trusted platforms cautiously and ensure users are on a trusted website. Scammers always explore different loopholes and angles to scam the investors. Popular social engineering scams include romance, imposter and giveaway, phishing, Blackmail, and extortion. 

Ponzi Schemes!

Novice cryptocurrency enthusiast always aims to get rich overnight with cryptocurrencies. In the hunger for getting rich as soon as possible, they turn to deceptive platforms that offer definite returns. Unfortunately, these guarantees of definite return turn into financial abysmal most of the time. You will be able to deposit funds on these platforms, but you will always fail to do so while withdrawing funds. Some of the Ponzi schemes are listed below. 

New cryptocurrencies and NFTs 

Initial coin offerings and NFTs are the modern way to invest in cryptocurrency schemes. Undeniably the cryptocurrency-based offers are very lucrative, but not always the case. Many fake websites allow you to deposit your cryptocurrencies in return for NFTs and initial coin offerings, but people end up losing their money on such websites. As per experts, before linking a cryptocurrency wallet with any website, one must monitor the authenticity of that particular platform. 

Rug Pulls 

Rug Pulls are the hottest scams in the cryptocurrency industry. The main motive of decentralized finance is to make a government free and third party free financial system. The rug pull is getting more and more in action as decentralized finance is getting to the limelight. Profit-seeking cryptocurrency investors always keep looking for projects that can give them higher returns in no time. In a rug pull scam, the developers or investors manipulate its market price according to them.

 Evidently, in case the market value of a cryptocurrency will dramatically rise in a few hours, especially for new projects, people are likely to invest more and more in these projects. And as the market value reaches a certain level, the developers and leading investors sell all their holdings and the market value of that coin end up getting crash. 

Cloud mining scams!

Cloud mining is a new and affordable method to participate in cryptocurrency mining. The rewards of cryptocurrency mining are ultimately lucrative. And every cryptocurrency enthusiast wants to participate in this process. Unauthentic cloud mining apps will assign you a dashboard regarding the hash rate. 

But these apps do not own any of the hash rates. One can rent devices online to participate in cryptocurrency mining in cloud mining. Only the cloud mining applications are worth a shot. You shortlist the best cloud mining apps before starting the venture. 

The portion mentioned above describes some scams related to cryptocurrencies.   

 

Original Source: https://thedailyblog.co.nz/2021/12/21/how-to-beware-of-cryptocurrency-ponzi-schemes/