Aaron Korb of the CryptoKorb YouTube channel fame has touched upon some interesting points about cryptocurrency scams that I want to share with you all in an attempt to make the internet a safer place (well, one can try at least).
See the video for yourself here: https://www.youtube.com/watch?v=iA-e5UlqNck my in-depth analysis follows.
What are CryptoKorb’s Top Three Scams?
Ponzi schemes encourage a belief that it’s possible to receive substantial returns from an investment into a scheme, pyramid schemes are similar, but instead of investment they offer incentives for recruiting other people. Both sound like easy money makers, right?
Wait, isn’t that two different types of scam?
Well, sort of… Korb argues that actually there are numerous scams around the crypto-sphere that take elements of both Ponzi and Pyramid schemes, I’d call them Ponzimid or Pyramidzi schemes but I’m not sure that’s going to catch on.
These schemes tend to look as if there is very little risk involved in investment, yet the reward is often un-realistically large, so the scheme does look almost too good to be true. If you see an investment opportunity like this, then it probably is too good to be true, avoid it at all costs.
Other indicators include organisers encouraging you to constantly re-invest your profits and of course, organisers constantly promising you profits, never facing the reality that at some point whilst investing, you’ll probably lose money.
FAKE EXCHANGES & WEBSITES
An easy trap to fall into, as unfortunately, replicating honest materials in order to market a scam is something many people are good at, that’s because its actually quite easy to do. Korb points out that scammers are finding it particularly easy to clone cryptocurrency exchange websites which trick you into entering your log on details. When they have these details, they have access to your assets which they can rinse in a matter of seconds.
The URL’s for cryptocurrency exchanges can be subtly altered, meaning you might not notice a spelling error or change in symbol which will directly link you to a scam exchange, instead of the legitimate version. The best way to avoid this?
Don’t click external links and make sure you bookmark the exchanges you use on a regular basis! This way, you are reducing the opportunity for scam links to be presented to you.
Always remember to be vigilant, even when using a website you have bookmarked. Scams are always evolving, and no website is truly secure. Use your intuition, check for spelling errors and security certificates. If you’re ever unsure, leave the website, delete the bookmark and seek advice from the exchange directly.
INITIAL COIN OFFERINGS
Korb, rightfully argues that firstly, not all Initial Coin Offerings are scams, although unfortunately many scam ICO’s do exist.
His advice here is simply to just be careful. ICO’s come in many different shapes and sizes, a lot of the time even the most crypto-tuned people can fall for their traps. By doing research, further reading and studying the currencies, the risk of falling for a scam ICO is minimised but even then, it’s difficult to be 100% certain that the offering is legitimate.
By working as a community, informing each other of scams and what to look out for then the opportunity for scams to dupe us going forward is reduced. Don’t be afraid to ask questions and share your experiences as ultimately, knowledge sharing is the key to stopping these scams from happening altogether.
Sadly, as cryptocurrency evolves, scams will do to. Its about staying one step ahead of the game. Videos like this by CryptoKorb is a great way to spread the messages that need spreading. Obviously, there are many more scams out there than the three mentioned here, in fact I’d even go as far as saying there will be plenty of scams out there that are yet to be discovered. But, by being vigilant, safe and knowledgeable, we can all protect each other and our assets. Pay care and pay attention.
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