Cryptocurrencies are very new in the finance world compared to other forms of investing. They also rely heavily on mysterious technology that not a lot of people know about. This newness paired with the unknown behind it makes investors looking to get into cryptocurrencies very susceptible to all kinds of scams and schemes that are typical in the investing world. Recently over six hundred million dollars was stolen through a cryptocurrency scheme, over the years some of the most infamous scandal's related to crypto have resulted in BILLIONS being stolen! As more and more potential investors start to dip their toes in the digital coin ocean, it is best to know how to navigate the rough waters and avoid the many scammers who are out for your money. Here's four of the best ways to spot and side step cryptocurrency scams.
1. It sounds too good to be true
Like any other investment scam, crypto currency scammers typically come at their victims with outrageous claims that are easy to catch, things like eye popping gains, lighting fast returns on your investment and so called "testimonials" from other investors that make it sound like you're about to be handed a winning lottery ticket are 99.99% all fake noise trying to trick you. The easiest way to avoid crypto scammers is to use basic common sense and think before you take action.
2. They try getting you to go to sketchy websites
Watching your step around the internet is just as important as watching it in real life. The web is like a massive sprawling city, with lots of good and lots of bad. It's best to stay on the websites that have the best reputations for keeping your private information as safe as your money in the bank. Unfortunately, most crypto scammers try luring unsuspecting people away from the safety of trusted websites and take them to their own sites set up to steal info and trick users into sending them money. Most of the time these trick sites steal your info without you even knowing and may even continue to do so until you fix your mistake.
3. Preying on your fear of missing out
Human beings have a serious dread of being late or entirely missing out on something big, and investing is no different. Scammers know this and use it against people all the time. Everyone knows about the massive gains of Bitcoin, which went from less than a penny to over $60,000 in just over 10 years. Scammers claim they have the next Bitcoin and use that to get millions of investors to pour in their money.
4. Never invest in something you do not understand
Whenever you decide to invest your money in something, be it a single stock, a business opportunity, or crypto currency it is best to take some time and do a little research into what you are getting yourself into, blindly investing is never a good idea. Thankfully the more popular something becomes, the more you can count on reliable information coming out to help you learn more about it. The explosion of crypto over the last few years has created an entire industry around covering and informing the public on everything to do with it. The more you know about the industry not only will you be a safer investor, but you may even find a new passion for such a new and inventive idea.