Cryptocurrencies have begun to acquire popularity at a rapid pace and have been embraced by millennials and gen-z in particular.
What to Look Out for in a Cryptocurrency
Cryptocurrencies have begun to acquire popularity at a rapid pace and have been embraced by millennials and gen-z in particular. This popularity has also meant that the risks associated with these transactions have also become apparent. These risks don’t necessarily relate to the volatility in the market alone. There happen to be a number of scams occurring online and cryptocurrency exchanges aren’t spared from them. Should you decide to invest in a cryptocurrency you must be aware of the fact that there does exist the possibility to lose your cryptocurrency investment to a scam.
When you go about assessing and looking into digital cryptocurrency start-ups and companies, it is wise to cross-check whether or not they are upheld via blockchain. The value of a cryptocurrency using blockchain lies in the fact that it is capable of tracking the intricacies of all transaction data.
An additional aspect you must consider is whether the cryptocurrency in question features firm business plans that are capable of solving real-world problems. Always look at what a cryptocurrency company lists as its liquidity as well as its rules relating to initial coin offerings (or ICOs). The cryptocurrency company you ultimately opt for must be one that has real people behind it and if it exists as a start-up that lacks any of these characteristics you must review it with even more caution.
Cryptocurrency Scams to be Wary Of
Some of the popular scams that currently plague the world of cryptocurrencies are as follows.
While you might follow individuals that provide sound advice as they are experts, the possibility of your accidentally visiting a fake website continues to exist. Unfortunately, there presently exist a number of websites that have been designed to resemble real cryptocurrency start-up companies. In the event that you do land up on such a page, you must exit it immediately.
In order to determine whether it is a false website, check whether there exists a small lock icon near the URL bar indicating that the website is secure, and that “HTTPS” hasn’t been mentioned twice in the site’s address. If the icon is absent and “HTTPS” has been mentioned more than once, think twice before staying on the page.
This advice holds true even if the site resembles the one you think you are visiting in its entirety. To understand the extent to which trickery may exist on fake websites, consider the fact that attackers can create false URLs with zeros placed in the position of each letter ‘o’. If such a website was visited by you the platform wouldn’t lead you to the cryptocurrency investment you are interested in but would try to scam you of your holdings. In order to avoid running into this trouble, you should ensure that you type the correct URL of the platform with care and should make it a point to double-check what you enter.
Mobile Applications that are Faulty
Websites aren’t the sole area targeted by scammers who have gone on to plague the Google Play store as well as the Apple App store such that fake applications are available and can be used to trick cryptocurrency investors into downloading them. While stakeholders can find these fake apps fairly quickly and have them removed, it isn’t to say that these smartphone applications aren’t adversely impacting several bottom lines. This is evident from the fact that over ten thousand individuals have already gone on to download fake cryptocurrency applications.
Android users are unfortunately more vulnerable to these risks; however, all investors must be aware of this crypto scam. You must make it a point to look for obvious misspellings and should look at the logo with care. In case the branding appears inauthentic and has vague colours or else if the logo is entirely wonky you must take note and should reconsider whether or not you should download the application.
Social Media Posts and Awry Tweets
If you happen to have social media accounts and enjoy following celebrities and business personalities on social media, you can’t always know whether or not you are following an imposter account. This holds true for cryptocurrencies as well where bots that impersonate the real cryptocurrencies are a dime a dozen and these can be fairly malicious.
Cryptocurrency offers that appear on platforms like Facebook or Twitter must not be trusted particularly if they seem to promise a result that is impossible. Fake accounts presently exist on all social media platforms and must not be engaged with.
In the event that anyone on these platforms asks for even a modest sum from your cryptocurrency holding it is more than likely that it will never be returned to you. You shouldn’t get swayed by comments on these posts either as there’s no knowing whether the responses also happen to be made by robots. Owing to this very fact it is particularly important to be careful with how you use your social media accounts.
While fraudulent emails have been around for a while, they have evolved over time such that they may resemble legitimate cryptocurrency companies. You must make sure to check whether the email is exactly the same and whether the branding and logo are also the same. Additionally, you must make it a point to verify whether the email address that has sent the email is legitimately tethered to the company or not. The ability to cross-check this fact is one of many reasons that highlight the importance of investing in a cryptocurrency that has real folk working for it. In case you are uncertain about an email you shouldn’t hesitate to reach out to someone who works at the company and ask them. Another aspect to factor in is the fact that should the email contain a link directing you to a site, you must never click on it.
Faulty ICO announcements are particularly popular among scammers who use these false announcements to steal significant sums of money. You must avoid falling for these fake offers and should pore over these emails with care.
It is unfortunate that crypto fraud is a major issue, however, given that cryptocurrency is a relatively new currency, the chances of it being misused by criminals is higher given that the legalities surrounding cryptocurrency itself have yet to be made sufficiently clear by governments around the world. As a cryptocurrency investor, it is important to stay vigilant. You should ideally only invest in those digital coins that are powered by blockchain technology and feature real people working behind the scenes for them. Learn more about cryptocurrency on the Angel One website today.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.
Angel One Limited does not endorse investment and trade in crypto currencies. This article is only for education and information purposes. Discuss with your investment advisor before making such risky calls.