A few decades ago, no one could have ever imagined that the world would have a digital currency. Now, this industry is valued at up to $860 million and is projected to reach $2.2 billion by 2026. Moreover, the transaction volume of cryptocurrency surged up to $15 trillion in recent years. No wonder leaders, investors, business people, and even a growing number of politicians support crypto.
What Is Cryptocurrency?
Cryptocurrency is a type of digital currency that is used as a medium of exchange between two parties. This act came as the traditional money exchange mode, but unlike physical money, cryptocurrency does not have any regulations or centralized control. This means no authority is controlling cryptocurrency, and no one is responsible for any mishappening either.
How does Crypto Currency Works?
The cryptocurrency can earn you profits only in two ways – buy and hold. This is not as simple as it may sound. Investors and traders buy cryptocurrencies such as bitcoin, litecoin, or Ethereum and wait until their market value rises to sell them for profits. It needs time and continuous study to understand how the crypto market works like the stock market. If you are going with the trend without understanding it, the chances that you will lose your money is very high.
Common Scams In CryptoCurrency
As per discussions in digital finance summits, such as the Money 2.0 Conference, while this industry holds up a huge potential in enhancing the economy and lives of individuals, it also has one of the highest numbers of scams and frauds globally. In fact, it has record-breaking scams in the year 2021, where scammers took over crypto worth $14 billion.
With the boom in cryptocurrency, many people have created a fortune for themselves, and scammers also did not fall behind. They always manage to get new ways to commit frauds and spam people with their nefarious schemes. While crypto has proven to be a game-changer in how transactions are conducted and recorded, it has also led to the emergence of new challenges and problems.
Let us review some of the most common scams in cryptocurrency as talked about at various finance summits and events for investors in 2022:
1. Phishing Frauds
These types of scams have been present since the birth of the internet. Like a typical phishing scam, fraudsters send emails to users to make them click on certain links containing viruses that can track personal information. The emails in crypto scams intend to steal others ‘crypto wallet key info’, which contains sensitive personal data.
2. Airdrop Frauds
According to digital finance summits, these scams usually happen in the field of decentralized finance segment in cryptocurrency. Fraudsters literally airdrop tokens, which seem to have some value, in your wallet, for taking certain actions in your crypto transaction. When you go to exchange these airdrop tokens with other tokens, then these scammers get access to reach all the information and assets in your wallet.
3. Social Media Scams
In recent years, many fake accounts have joined social networking sites like Facebook and Instagram to thug people. These scammers usually impersonate crypto experts on social media. They call themselves crypto gurus and ask people to invest money in get-rich-fast schemes with them. They also give the users a guarantee to provide them with a big amount of returns by showing them fake portfolios. Unfortunately, many people fall victims to these scams.
4. Fake Identities Scams
The major threat to the blockchain is the absence of KYC (Know Your Customer). Due to the decentralized platform on which it works, it is very challenging to make a distinction between fake and genuine users. Without safeguards, many people become vulnerable to scams and frauds in cryptocurrency.
5. Asking For Only Cryptocurrency
If any new company demands payments in the form of cryptocurrency only and refuses to take any other forms of payments, it is likely to be a scam. Therefore, do your research before you decide to part ways with your digital financial assets. Check whether the company is a legit one and look for reviews online before you proceed.
6. Elicit Platform Scams
Like any other fake platform, scammers have developed many fake crypto trading platforms that promise customers to trade and earn a good profit, but in reality, they get nothing. These applications are easily found on the Google play store or any App Store. They appear genuine, but they are present there with the motive to thug you.
While Google and Apple are taking additional steps to ensure that people don’t get scammed by these shady apps, do make sure that you do not download applications that are not trustworthy enough. Once you enter your personal information and crypto wallet key, they will get access to all your data.
To keep yourself safe, stay updated with crypto news and updates by attending international finance events to keep track of scams taking place in this arena.
Romance Frauds
When it comes to crypto scams, dating apps are not left behind. According to an FTC report, 20% of crypto fraud happens on online dating sites. These scams occur when one party pressurizes or persuades the other to get more crypto coins.
Scams Through Public WiFi
You can also fall victim to crypto scams through the usage of public WiFi. Scammers can get access to your crypto wallet and personal information if you are too exposed while accessing the internet with unsecured public WiFi.
Summing Up
Despite these above-mentioned frauds, 2021 seems to be a big year for cryptocurrency, as we have seen at global finance events. It has become a hotly debated topic among youths as well as adults. Since everyone is trying their hands on crypto to make a fortune, it can become the next most significant industry in the coming future. Due to skyrocketing interest in crypto, we may see a few governments drafting to support and enhance crypto regulation, as well as to make it safer.
The future of crypto is obvious! If you are an investor, finance specialist, crypto lover, or any trader, you need to keep yourself well informed about the changing trends of cryptocurrency.
