A very well known investment process is investing in stocks or popularly known as ‘Financial Securities’. We all have heard about it, and the way it is centralized and highly secured by government mechanism, through RBI, was appreciable. But, there are several new ways where you can multiply your money in no time. This is a decentralized digital market where several investors play with the algorithm present online and earn through a few thousand bucks into millions and billions. Popularly known as Bitcoin Investment. Let’s learn about how to invest and well-known scams.
What is Bitcoin?
These are actually cryptocurrencies that are termed for digital money. Bitcoin is one of the cryptocurrencies that was invented in 2009 by Satoshi Nakamoto, a pseudonym of an anonymous person that is still not known.
These are not governed by any financial authority, but are just for sharing and exchange purposes. It is consisting of several processes based on computer math that has to be solved, in search of Bitcoins. The process is known as mining. Once created you can keep your Bitcoins in an offline wallet as your saving and later can sell them.
This buying at low prices and higher selling costs creates the real money that makes a person wealthy. Having been invested online has provided people with uncountable wealth. But, this has some well-known scams associated as well. Let’s detail them below.
Due to a very uncommon concept, and due to external authority, these investments are at a very high risk. People who have saved Bitcoins as an investment can be fooled or hacked easily under the spoofing like giving them a discount or a higher exchange in return. Hence, these are very risky investments. But with the proper knowledge, these scams can be avoided on a large scale.
1. MiningMax Scam
This was the scam that has made a huge impact on Bitcoin investment. Reportedly, it was one of the South Korean website which was unregistered with U.S securities and exchange commission. The website by the name MiningMax has performed more than one scams that promised the investors to retain a specific amount of ROI on a daily basis. But the amount of one-time investment was as high as $3200, which was named as a Ponzi Scheme. A lot of investors were robbed and never got their currency back. It was in one year after the website MiningMax was registered i.e, in 2016. Thereafter, the frauds were arrested in 2017. Hence it was seen as the biggest scam in the world of cryptocurrency investments.
Another scam, from the South Korean website. It was faked by posing in the name of the Korean security Exchange KRX. They portrayed an image of being a branch of KRX that deals with Bitcoin exchanges. The scam was unveiled in 2017, but had taken up a lot of cryptocurrency from the investors and never gave them the exchange amount. Due to being a decentralized network, the government cannot get involved in all these activities and hence the loss lasts forever.
3. Malware Scam
Cryptojacking is basically hijacking your crypto coin account. Here scammers use malicious software to get into your system, as the passwords are hacked by just clicking on a link that was received by your inbox. The malware scams included in these techniques allowed the scammer to use your computer mechanism to ‘mine’ your Bitcoins. This is a kind of robbery where they will not attack on the frontline but will hide and rob everything out of you.
4. My Big Coin
This was the fake crypto coin that was invented by a website named My Big coin. They use to sell Big coin for the real currency. This was high on Business at the beginning of 2018. The website ensured their customers that MBC – My Big Coin is accepted currency in the market and customers were lured to the scam, losing all over a sum of $6 million. Not only this, the amount was transferred to the personal accounts of the scammers, and millions of people were targeted to be robbed.
How to avoid Bitcoin Scams?
It is simple to understand that no powerful authority has taken a charge over the cryptocurrency generation, distribution, and exchange. This clarifies that it should be kept safe and secure from attackers and hijackers. You can follow the steps below to ensure the safety of your virtual currency.
- Put strong passwords that cannot be hacked.
- Change your password at regular intervals.
- Keeping an eye on the latest news feed.
- Keep your Bitcoins safe offline or use company wallets like Electrum or Armory.
- Have proper internet security.
- Take care of your blockchain account.
- Use transferring Bitcoins online only when you are using them for any transaction.
- Always keep a knowledge bank regarding the transactions and website you are engaged with.
You can always keep your investment safe with having a secure and safety network, hence be aware of the malware and always pay attention to what’s going on in the latest news section.
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Author’s Bio: This article has been written by Rishika Desai, B.Tech Computer Engineering Student at Vishwakarma Institute of Information Technology (VIIT), Pune. She is a good dancer, poet and a writer. Animal love engulfs her heart and content writing comprises her present.
You can follow Rishika on Twitter @ich_rish99, and connect with her on LinkedIn.