What is Bitcoin?
Bitcoin is a virtual currency that allows users to send money online without using an intermediary such as PayPal. These transactions are encrypted, meaning only the sender and receiver can see the details of the transaction. There are no banks or service providers involved. When bitcoin is used, it creates a public ledger of every bitcoin transaction on the Internet.
In general, bitcoin is an algorithm-driven digital currency. It has no central authority, and anyone can create units of it by “mining” (writing a computer program to solve complex equations). This makes bitcoin unlike any currency ever before, according to Fortune. Mining new bitcoins can be an expensive process that requires custom equipment.
Common Scams to Avoid
Before you dive into a crypto scam, here are some common practices to look out for.
A good rule of thumb is to check if the company’s website is real and if they meet your basic needs, before you invest in their product or services. For instance, take a look at their contact information and be wary of any startup that has a contact form on its website with a very generic name and a non-descriptive email.
Investing in anything on the dark web or darknet is dangerous, and scams such as ransomware have flourished on these websites. If the company you’re buying from claims that it’s the only company in the business, that should also be a warning sign.
Once you’ve bought a cryptocurrency product or service, find out if it’s actually decentralized or centralized.
Security Tips for Avoiding Scams
When looking into an ICO, there are some things you can do to avoid scams. According to Tech in Asia, one security concern is sharing your personal or financial information. Make sure that you’re downloading the correct copy of an ICO’s white paper, which explains the company, not your personal information.
Another potential security concern involves ICO servers. Are they secure and can you access your funds? When scammers use servers, they can steal your funds if they become hacked. Instead of downloading an ICO’s white paper, open a secure browser like Google Chrome and enter the URL carefully to avoid downloading anything that may not be legitimate.
Lastly, be careful about the ICO company itself.
While it can be easy to get caught up in the hype surrounding cryptocurrency and its future, it’s important to keep a skeptical eye on promises made by companies that don’t necessarily have your best interests in mind. If you find a startup offering a scam promising easy cryptocurrency gains, block them immediately.