7 Cryptocurrency Scams to avoid in 2022
Scams are as old as time, it's their environments and applications that change. Nothing is new under the sun...and in the Blockchain.
Scams are as old as time, it's their environments and applications that change. Nothing is new under the sun...and in the Blockchain.
The most popular cryptocurrency is only 13 years old, and as raging as the concept of cryptocurrency currently is, only 3.4% of the people on earth have ever used it.
However, there are a plethora of ways that a few of these few have adopted to con others out of their hard-earned money.
But first of all, let's get some big words out of the way; Scams, Bitcoin, Cryptocurrency, Blockchain, what are they?
Let’s define some names:
Scam, also known as fraud, is the act of deceiving others for personal illegal gain.
Blockchain is a system of recording information such that it is difficult or impossible to change, hack, or cheat the system. This is possible since the information is not held by one person but by many people in the system.
Cryptocurrency is digital or virtual money. It is a decentralised system that allows for secure online payments. (also known as coins, there are currently over 8,000)
Bitcoin is a virtual or digital currency - or money that is completely virtual.
A cryptocurrency airdrop involves sending free coins or tokens to wallet addresses to promote awareness of a new currency.
P2P (Peer to Peer) is a concept whereby two individuals exchange cryptocurrency directly with each other, without intermediation by a third party. (usually on an app or crypto exchange).
Now that we have satisfied the definition-lovers, let us get to the marrow of the matter (meat didn't seem deep enough).
Here are the scams you should look out for in the era of cryptocurrency. Bear in mind that I have been stupid enough to fall for two out of this bunch, so if you were beating yourself up for doing the same, then don't worry, you're in good company.
Types of Scams in Crypto
1) Cryptocurrency Airdrop scam (A): There are three types of Airdrop scams hence the (A) notation. What happens with this is that you will get an invite to join an Airdrop group on Telegram Discord or WhatsApp. In this group you will get links to join an airdrop to get free crypto, part of the requirements will be for you to follow a couple of social media pages, and refer people to that group to do the same thing that you have done.
Then you will send them your wallet address, the scammers use you to build their social media pages or to increase their referral numbers in the real airdrop (or both). You will know because sometimes you won't see any page that relates to the coin in question.
2) Cryptocurrency Airdrop scam (B): This is the second type of Airdrop scam. Here, an airdrop of a popular cryptocurrency is advertised, to participate you would have to send some amount of cryptocurrency to a wallet address as confirmation. The money may look small, but when you consider the number of people who fall for this type of scam, you'll know that these guys are making a killing.
3) Cryptocurrency Airdrop scam (C): The third variant of the airdrop scam is that you'd think you are inputting your address on the official coin website for an airdrop, meanwhile it's a phishing website. This could get your wallet hacked and you would lose all your money.
4) P2P scam: So for example you are on a centralised exchange like Binance. You want to sell some cryptocurrencies and the other party will send the money to your account before you release the coin. After some minutes, the buyer sends you a picture of the bank transfer receipt and marks the transaction as paid, but you have not gotten the alert. You insist on waiting till you get the alert and this person keeps insisting that he has sent the money and you should get it soon, and he/she convinces you to release the crypto. Don't do it! If you release those coins, there shall be weeping and gnashing of teeth. But when you stand your ground they'll cancel the trade.
5) Pump and dump scam (A): There are two types of this scam. The first one is similar to a Rugpull, however, it's a bit different. For this scam, you may see an ad, or you would get a message on Instagram, Twitter or any other social media inviting you to join a group that will pump a coin. The coin would usually be on a Decentralised Exchange like Poocoin or Pancake swap. You'll be given the contract address and asked to buy or swap your BNB or ETH for the coin at a particular time. Once you do that (along with every other person in the group), you will see your money multiplying but you won't be able to swap back for your profit. And just like that, you will watch your money go, then the owners/developers of the coin will rug pull you, they'll sell off the entire coins available and take everybody's money and you won't be able to do a thing about it.
6) Pump and dump scam (A): This second style of the pump and dump scam has a process that is similar to the first. However, it is usually held on Centralised exchanges like Gate.io or Binance. So this time you think you are safe because you can sell off anytime. But the minute the coin is mentioned on the group and you jump on the exchange ready to buy, you will notice that the coin has pumped and you will be tempted to go in because you are expecting it to be 10x.
Don't buy it! Because if you just watch a bit you will see that the coin will begin to dump.
What has happened is that there are two groups owned by the same person or group of people (scammers). The first group is a paid group and they have bought the coin a day before, waiting for you in the second group to buy. As soon as you and your comrades in your group buy the coin, the first group will sell off and dump it on you.
7) Giveaway scam: This one is for the giveaway lovers and it is similar to the second airdrop scam with a tiny shift. Here a popular celebrity's social media account is hacked and used to announce a crypto giveaway, followed are promised that whatever they send to the address mentioned in the post will be multiplied. Of course, followers in their millions will give coins in thousands of dollars and get nothing in return.
Why would I want to do Crypto then?
Now I have an idea of the questions running through your mind right now, chief of them being "If it's this risky then is it all worth it?"
Well let's just say that you don't have a choice in the matter...you are already in the age of cryptocurrency where people like yours truly have been paid for services in cryptocurrency...and I am the minority.
So you can either follow voluntarily or get dragged violently.
You may also be wondering, how does one stay free of these scams; my answer for you is in three words:
Don't get greedy.
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