The 5 most common Bitcoin scams and how to defend yourself

The interest and continued investment in crypto-currencies have also attracted cyber criminals, here are the 5 most common scams in the world of virtual currencies

The growth in popularity and earning possibilities represented by virtual currencies in recent times have attracted more and more people. With the increase in investments, hackers are also trying to exploit this trend with scams and malware created specifically for cryptocurrencies.

As with any scam present online, however, there are techniques to recognize and avoid them. The fear of a hacker attack, in fact, does not have to limit our investments, we simply have to pay more attention during the purchase phase of virtual currencies and during the collection of information needed to complete the transition. At the moment there are basically five different methods used by cyber criminals on the Net to trick users interested in Bitcoin and other crypto-currencies. Here's how to recognize these deceptions and how to avoid being duped by hackers.

Cryptocurrency exchanges

The growth of Bitcoin and its siblings has led to a steady increase in online virtual currency exchanges. In this way we can buy a cryptocurrency by paying it in euros or with other cryptocurrencies we own. Unfortunately, on the Net many programs and sites that offer virtual currency exchange services are actually fraudulent. To avoid losing our money the advice is to use only highly reliable sites to buy or exchange cryptocurrencies. At the moment the best online ones are: Coinbase, Kraken, Bittrex, Cryptopia.

Pyramidal or Ponzi Schemes

Pyramidal or Ponzi selling schemes are fraudulent schemes often used by cyber criminals to steal money from people interested in Bitcoin or other virtual currencies. These schemes do not originate in the digital world but in sales of non-existent products or services. Thanks to a kind of cascade system that works through chain letters anyone who brings a new customer into the system earns a percentage of that person's sales. This system is also used for the sale of some crypto-currencies. Too bad that after months of investment and work we will not receive anything because behind the company that hooked us there is no virtual currency. In India, OneCoin's scam company tricked several online users in early 2017 with this method and in total earned over $350 million. And only a small part of this money has been recovered.

Camouflaged prices

Some cybercriminals use a scam that is already present in the world of finance to trick users with fake virtual currency offers. This one doesn't need the technologies or cryptography to work. It is a simple fraudulent sale. Basically at the time of sale the price of a new cryptocurrency is pumped up to make us pay more, but once we buy it it loses all its value. The scammers will tell us that unfortunately due to a market response our currency has lost value but in reality it never had the valuation we were given at the beginning of the transition. Now, this scam is only possible with newly created and semi-unknown virtual currencies. Bitcoin, for example, has a valuation that compares in dollars or gold and therefore it is impossible, or almost impossible, to be scammed in this way. That's why it's always better to buy reliable and already known virtual currencies, even if they cost a bit more.

Watch out for ICO scams

An ICO is an Initial Coin Offer. That is, an initial offering of a new currency. Thanks to cryptocurrencies, in fact, anyone can issue their own coin. Only that usually a newly issued coin has no great value. However, if you were able to buy a coin when it has just come out and is worth very little, if it were to increase in value you could earn a lot without doing anything. Obviously cyber criminals on the Net have spread many offers of ICO totally fake and fraudulent. For this reason it is advisable not to make any purchase if: there is no accurate or updated information of the company that generated the coin, we do not find any news on the network about the company that issues the coin and if we notice questionable business practices, such as insider trading.

Beware of investing in DAO

On the network some DAO (decentralized autonomous organization) have successfully issued their own cryptocurrencies. These systems can be a great way to earn money, especially if at first we have little money to invest and can not afford a virtual currency too famous. Unfortunately, however, these systems are less secure. In 2016, for example, a DAO system was tampered with by a hacker who stole a third of the group's total coins in their account. Money that was later never recovered.