Bitcoin scams: how to best avoid them?
Bitcoin hits new highs too frequently for us to discount the probability of it doing so again. So, if you have been wet behind the ears, today is when you stop being a greenhorn and buy your first fistful of satoshis. However, just so that you could hit the ground running, as well as steer clear of some of the bitcoin scamsters and sharpies who will try to take advantage of you, we have prepared a list of caveats.
Remember to do your research
The very first step is to set up a wallet to store your bitcoin safely. There are bitcoin wallets galore on the App Store and Google Play. Make sure you read the reviews and research the wallets before you decide on one. You want to make an informed, responsible decision.
You’ll also need to make up your mind on an exchange where you will be buying your first bitcoin. There is a plethora of exchanges you could weigh, all with differing degrees of security. Be ready for identity verification.
When it comes to wallets and exchanges, ascertain the site you visit has a solid reputation before you remit any money. A slick website need not necessarily turn out to be a legitimate business. Likewise, just because a wallet app is listed in an app store does not mean it is incapable of mischief. Despite their legitimacy, the cryptocurrency world sees exchanges and wallets hacked now and then.
Getting down to brass tacks — shielding your Bitcoin
Scrutinise the origins and credentials of the exchange or wallet company. First step — Look for reviews and feedback, review sites such as Reddit. Be a bit of an investigative journalist — read through a company’s social media history.
Shield your bitcoin keys
Bitcoin is an experience quite unlike your bank. There’s neither helpline nor a fraud department. There’s no way a “suspicious transaction.” can be blocked. The raison d’etre of bitcoin exists independent of the traditional financial system, giving the user ultimate control.
With Bitcoin, there’s neither overdraft nor sharing personal details with the government. But, conversely, there is no centralised authority who will step in and rescue you in the event of your sharing your keys or having your bitcoin stolen.
If you’re a newbie, it’s worth committing to memory one of the meat and potatoes bitcoin principles — “not your keys, not your coins.”
A wallet yields two keys: a private key and a public key. The public key creates public addresses. These are the addresses that will be shared with others to receive bitcoin.
A private key, on the other hand, must be kept hush-hush. This key shall encrypt and decrypt your wallet. It is vital to making sure your bitcoin is secure. You don’t control your bitcoin, if you don’t control the private key to the wallet, you’re storing your bitcoin in.
If you care, do not share!
At the pain of repeating ad nauseam — don’t ever share your private key with anyone!
Moreover, when you create a wallet, you’re often given a seed phrase. Also recognised as a backup phrase or recovery phrase, a group of words is generated once upon wallet creation. Then, you’re instructed to write them down and store them in a safe place. These might be susceptible to theft on your system, hence the requirement of jotting them down on paper.
This seed phrase is used to retrieve bitcoin funds on-chain. Obviously, it is often another target of scammers.
If a scammer filches your keys or your seed phrase, they can take you to the cleaners.
Above all, keep your private key private and your seed phrase safe and secure.
Phishing emails: staying un-hooked
Always be wary of phishing scams. Phishing attacks are a favourite strategy among hackers and scammers. In a phishing attack, an attacker, as a rule, impersonates a service, company or individual by way of email or other text-based communication. They could do so by hosting a fake website. The huckster would like to trick a victim into divulging their private keys — remitting bitcoin to an address the scammer owns.
These emails often look like they’re licit. For example, users of the hardware wallet Ledger had seemingly gotten emails from the company coaxing them into downloading a security fix when, in reality, it was from scammers posing as company representatives.
Anti-Phishing: neutralising the Hydra-headed threat
However, phishing attempts come in many forms, and not just email. For example, scammers may impersonate other people on social media, sending you links. or you may get phone calls. The goal is to compromise your digital security — and jack your bitcoin.
In any such unsolicited email, ensure you scrutinise the sender’s address. A sure giveaway in any phishing email is a tell-tale misspelling of an actual address or URL. We can learn from the Ledger phishing scam, wherein the email was from a “legder.com” URL. An attacker will try to as authentic as possible so that it would pay to double-check. A great habit of getting into is to bookmark sites you regularly use to access your funds. Then, only surf those sites via your bookmarked addresses — never use a dubious email link. Thus, you would be ensuring that you are only using legitimate URLs.
Most malware is delivered via email phishing and malicious URLs.
Most security issues that involve dangerous URLs go undetected.
Put another way, Gmail’s spam filter isn’t going to catch everything, nor are those in more complex security software.
Neither free lunch nor free bitcoin
It would pay to develop a habit of vigilance. There are many advanced hacking and scamming techniques out there.
Recently, Twitter was hacked. Recognisable accounts from Elon Musk to Barack Obama to CoinDesk started tweeting, in the main, that if you sent them some bitcoin, they’d send you back more.
Even though they advertise crypto giveaways and pyramid schemes, there are bitcoin scam ads out there on YouTube that are featured on legitimate cryptocurrency shows.
Promising free bitcoin to open accounts and making minimum deposits, Fake exchanges are sending messages on Discord and other communication channels.
The Twitter hackers bagged $140,000+ worth of bitcoin at the time, which is worth roughly $320,000 today. Overall, a report by blockchain analytics firm Crystal Blockchain found that there were113 security attacks and 23 fraudulent schemes since 2011, resulting in the theft of close to $7.6 billion worth of crypto assets.
There’s no room for complacency. A habit of vigilance has to be woven in into your routine. How may they have felt self-assured they need not mask up since COVID 19 happens apparently only to others, not to themselves? Costly mistake. Once they got infected, there was no way back home. Likewise, your crystallized labour in the form of your Bitcoin deserves some caring on your part. Be vigilant. Make finaglers, bilkers and con-artists see a drought of zero income. Crime never pays.
To reiterate: Keep your private key secret, double-check every URL and if something seems too good to be true, it probably is.
Should you need assistance, however, Fast Action Refund would gladly help.