A Brief Introduction about Bitcoin
Bitcoin is a digital currency without a financial organization or a single administrator. It is decentralized, which can be sent from the user to a user on the bitcoin network without the necessity for intermediaries. To put it, Bitcoin is a network of independent computers that generate, propagate, and verify monetary transactions. For more detail do Bitcoin Aussie System Login.
What is a Bitcoin Scams?
As we all know that bitcoin is not an actual currency. At present Bitcoin prices have great variation. Because of this there are many Bitcoin Scams cases. The main feature of a Bitcoin scam, compared to other ways to steal money, is that it normally takes advantage of people’s trust and negligence. In most cases, it can be quite apparent what a scam is. But with bitcoin, things become murkier. Below are some popular Bitcoin Scams and way to prevent from them.
False ICOs
Many cryptocurrency-related projects make a cryptocurrency sale before its launch in the exchange houses or the start of the software to finance the cost related to the work of carrying it forward. It is what is known as ICO (Initial Coin Offering). This is not uncommon, the truth is that it can be very profitable investments, until the money you put in a false ICO.
Prevention
Check that the project you are going to finance has a team behind known or company, giving the face. Reddit and cryptocurrency forums are excellent places to contrast community opinions and start analyzing.
Cloud mining
It could be added at the next point, but the main scams related to cloud mining are based on a simple web page. This trend start in full 2016.
As many of you will know, Bitcoin mining is very complicated at the individual level. Many decided to start websites that sold mining power (hashing) guaranteed a return on investment or ROI in a short period.
Consequences
With the closure of a large number of mining pages in the cloud, many users lost all the money invested in these portals. Keep in mind that to start mining in the cloud, what is done is to acquire some mining power in exchange for bitcoins.
Many portals do not even publish data on profitability or are very confusing.
Prevention
Do not rely on third-party services that control your mining or your assets. If you want to start mining, you will have to do a thorough analysis of the situation and if it offers you the return you expect.
Stay away from all those who can contact you by private message with you by telling you incredible discounts or perfect returns. They do not exist or are not as undefined as they want to make you believe.
Pyramid schemes:
These types of fraudulent organizations are a classic form of scam, and there are already several versions related to cryptocurrencies. Promises of extraordinarily high yields, fixed and in a short time. With unclear rules of the game and a multilevel system, asking for an initial investment to start and that more people are invited to participate, and these, in turn, to get other users.
Tip: It is worth remembering that there is no return without risk, so no one can insure or promise high rents without taking risks. Avoid any proposal to earn money that “guarantees” high returns, has unclear game rules and multilevel systems.
Initial Coin Offering (ICO) Fraudulent:
The Initial Coin Offering is a new way of crowd funding using blockchain technology. For this, a new cryptocurrency is offered to the market that will be used to finance a company, project, or protocol. The problem with these “public offers of currencies” is that they are not regulated, and therefore there is no central authority to control them. So it is ubiquitous to see releases of fraudulent ICOs and with a clear objective of deceiving the investor. It is usual for digital currencies, companies, or projects to be invented only to raise funds and then disappear, defrauding those who invested their money in it.
Tip: Find out about the project you want to finance with an ICO and about who are the people behind it, their credentials and background.