Cryptocurrency has become more popular nowadays. Especially in recent years, cryptocurrencies such as bitcoin, ethereum, and dogecoin have grabbed the world’s attention. It is growing increasingly popular since it allows users to purchase products and services with it, as well as exchange them for profit, much like real cash.
Even yet, there have been many ups and downs in the debate over the future of cryptocurrencies, as well as several significant issues, one of which is whether or not these digital tokens can be stolen, hacked, or somehow scammed.
Like fiat currency or cash, these items can also be stolen, therefore it goes without saying that you should take some simple precautions to keep yourself secure in the future.
According to the Federal Trade Commission (FTC), fraudsters imitating Elon Musk have stolen more than $2 million (about Rs 14.63 crore) in cryptocurrencies since October 2020, according to a report released in May 2021.
According to data from the United States’ consumer protection agency, around 7,000 individuals were scammed.
In addition, the report stated, “these frauds take many shapes and entail misleading promises and fictitious warranties.”
The fact that cryptocurrencies are not regulated makes their users even more vulnerable to frauds and hacks. However, there are ways to always be certain whether a person or organization is genuine in their intentions, regardless of their location. The duty for ensuring that you are not deceived lies with you. Also, read What is Bitcoin?
The Best Way to Avoid Scams When Investing in Cryptocurrencies If a person, corporation, or group of individuals promises you a guaranteed payout – for example, “we will double your investment in X number of days”; this is a fraud. No one entity can claim to have complete control over the behavior of a whole industry.
Has someone made you a promise of free money? If this is the case, they are likely attempting to deceive you. You should avoid putting your faith in them and dealing with them at all costs.
While the remarks above may encourage you to assume that fraudsters are simple to identify, there are organized groups whose main aim is to swindle unsuspecting traders or investors. As a result, always invest your money through a regulated cryptocurrency exchange and store your digital assets in a cold wallet to avoid identity theft.
Before you ever consider putting your faith in someone, do your homework. Investigate the company’s name on Google, read through their reviews, and see if they have ever been accused of scamming or if anybody has ever filed a complaint against them in the past. Additionally, continue reading to see how fraudsters have scammed investors in the past.
In this case, the merchant stores his digital assets on a cryptocurrency wallet, from which he may make purchases and sell his goods. Access to your wallet is granted only through your passkey, making it difficult to hack into someone else’s wallet.
Hot wallets, on the other hand, which are always linked to the Internet, are regarded as less secure than cold wallets, which are often in the form of USB drives. As a result, you should only connect the cold wallet to the Internet while you are actively trading or dealing.
To mitigate the risk of hacking, security experts recommend using a two-factor authentication procedure. Keep in mind that the most important thing is to keep access to your money secure. If someone gains access to your wallet, there is a good possibility that you will lose all of your digital wealth.