Cryptocurrency has become the basic need of an individual. Although the market remains volatile all over the year therefore its price value keeps on changing up and down throughout the year. But still, its significance cannot be ignored. Many people consider it as a quick method to become rich whether they opt to invest 10 to 50 or 100 times their money. But it is not the right way because many of the scammers are trying to rip off the unwary. The survey held by CryptoVantage in 2022 indicates that more than 30% of people fall into such scams. Hence those who are willing to trade with cryptocurrencies should be more careful. If you are interested in Bitcoin investment, you may want to know about who Bitcoin Made Millionaires.
Widely popular cryptocurrency scams are here and how to protect yourself.
Beware of topmost crypto scams:
Crypto scams can take place in various forms. Moreover, you should be aware of their operationalization method so that you can identify the scammers before indulging in their scams. Representative of the global head of public relations, Mr Dion Guillaume, has classified the most popular crypt; scams occurring are Ponzi schemes, pump-and-dump pulled, and pull-pull. Here is their functioning as given below:
A Ponzi scheme is also famous for the name the pyramid scheme. It was classified as a classic scam. In this scenario, rewards will be offered to you for involving more people in the cryptocurrency. Any money of them was involved in this scheme with higher pay-outs for maintaining their position higher up in the pyramid and therefore, no such victims are found, and the scheme fails.
Another scam was famous with Pump and Dump which directly indicates how the scheme works and what to expect. “In pump-and-dumps, fake groups suddenly raise the value of tokens to attract the attention of most of the crypto users and investors before selling off their tokens [dumping] and earning more profit as per their expectations. This scam becomes successful due to the high value of tokens and when the prices rise, the coins are sold by the insiders and further dumped in the public, and traders are left with coins of no use. Their technique works when they raise the value of the coins within a short period.
It is the third famous crypto scam where the crypto founders disappeared in one instance and they took away all their tokens with them. It is known as rug pull where someone takes away your whole currency in one instance and you never know who did it. Moreover, it is an unpredictable act and by the time you get to know it, it will be too late for the users. In general, it is the responsibility of the coin creator and you will not realize it is a scam until the creator will walk away. The only solution to avoid this situation is to restrict your coin-selling decisions only.
Ways to protect yourself from crypto scams
It is obvious that where there is money there would be chances of stealing it. However ongoing scams are common in the financial industry. Therefore, steps should be taken during investment to prevent you from losing your entire investment to a scammer.
Set up two-factor authentication. Setting up two-factor authentication or multi-factor authentication is an essential part to ensure the safety and security of the account. Although it is difficult to manage and remember as well, the single password for the number of applications executed on the internet would be easy to crack for scammers.
Be careful while giving access to your wallet. Access to your account should be limited and restricted to the persons. Unknown people should not be permitted to access your decentralized wallet, especially in that case when you are not sure which sort of permissions you are offering.