(Bitcoin Core is less usable as money due to much higher fees and delayed transaction times. The Core team has also expressed an interest in keeping these fees high since they view BTC as a “store-of-value” and not something to be transacted on a daily basis. In contrast, Bitcoin Cash’s transaction fees cost pennies and payments can be validated even with zero confirmations. These facts make BCH the ideal cryptocurrency for sending and receiving money anywhere in the world.)

“Bitcoin is a remarkable cryptographic achievement. The ability to create something which is not duplicable in the digital world has enormous value. The Bitcoin architecture, literally the ability to having these ledgers that can’t be replicated is an amazing advancement.” – Eric Schmidt, Executive Chairman of Google, March 2014.

With Bitcoin Core’s price increasing over the years and reaching billions of dollars in market capitalization, all kinds of people see its value and appeal. This brings out both the good and bad in human nature. Unfortunately, with the bad comes scammers. The bottom line is scammers also want to profit somehow from Bitcoin Core, but through nefarious means. This typically involves targeting unprepared victims, who end up losing their BTC as a result.

In this guide we will walk you through the most common Bitcoin Core scams. We’ll show you how to spot them, and make sure you don’t become the next victim.

Fake Bitcoin Exchanges

Often on social media you’ll see a link saying something like “Buy bitcoin for 5% under market value. Save big!” This is a marketing trick to get you to visit and use their fake exchange.

If you visit any exchange site the very first thing you want to do is make sure it’s HTTPS secured and not HTTP. This means that the web traffic is encrypted and secured; if it’s just HTTP without the “S” that is a big red flag and means stay away.

Another red flag to look out for are fake exchanges that offer selling BTC for PayPal. On these sites you’ll see a web form to enter your PayPal email and amount to sell. After submitting, you will be presented with a QR code to send your BTC to. But the money never arrives.

Most of these fake exchanges are here one day and gone the next. You will see them pop up but will quickly disappear, and then re-emerge with a different domain name later.

Fake Bitcoin Wallets

Spotting fake Bitcoin wallets is a bit tougher, because wallets primarily are about storing bitcoin and not buying or selling it. It has less to do with money than it does with the software you may use. Typically, fake Bitcoin wallets are just scams for malware to infect your machine in order to steal your passwords or private keys. To ensure security, Bitcoin.com recommends our official Bitcoin Wallet for desktop and mobile users.

Just like with fake Bitcoin exchange sites, you should trust your instincts and look for red flags. Does the wallet site use HTTPS? Is the name of the wallet site trying to resemble another reputable Bitcoin wallet by impersonating it? Outside of the obvious, it may be hard to tell if a wallet is fake. A good practice is to ask your peers if someone has used the wallet before. 

If the wallet is a downloadable client, another good practice is to check the site for malware. Sites like VirusTotal are a great resource for checking executables to see if they contain viruses.

Phishing Scams

This is a very common scam. Phishing is when someone tries to trick you into thinking they are a trusted company or website by having you visit a fake site.

Typically, phishers contact you via email or through a fake web advertisement. The end result is you go to their website by mistake and either get malware, or lose your bitcoin through a fake sale.

With emails you have to be careful to not take the bait. You may receive an email from a wallet or exchange you already use, either by coincidence or through past database hacks. Maybe hackers obtained your email address on the black market; for example from a Yahoo! or other service hack.

Best practice is to not click on any hyperlinks in an email or open attachments. Go directly to the website if you have to do business there. A common tactic is to make a hyperlink look real, but if you hover over it you will see the fake website URL. Always check the sender email to see where it’s coming from (although this is not 100% reliable as emails can be spoofed).

With fake web advertisements, you have to be careful on the site you are visiting. This usually happens when searching on the web for things like “blockchain.” The top result could actually be an advert via Google for example, but may end up being a fake Bitcoin wallet. Best practice is to not visit sponsored ad content in search results, and just manually type the real website address directly into your browser.

Cloud Mining

This can be a bit tricky because not all cloud mining operations are scams. Some are completely legitimate, however many are scams, so it’s best to warn people (especially newcomers) to be careful when looking into cloud mining.

For the uninformed, cloud mining is shared mining hashpower, where people pool their funds together to rent Bitcoin mining machines. For legitimate operations, this works and can be profitable. For scams, returns may be low or non-existent. As we’ve previously established, it’s best to trust your instincts and look for red flags.

Does the site use HTTPS? Did you find the site from a referral link on social media? Does the cloud mining operation not give any insight into what pool they use to mine, or let you select the pool you want to direct your hash rate to? These are just a few things to look for.

We recommend the Bitcoin.com Mining Pool, which is a legitimate cloud mining pool that offers the highest block rewards in the space with 0% fees. The pool also has very competitive hash rate plans that you can buy. The pool is completely transparent on how it’s run, by whom, and how much return on your investment you will gain. Additionally on your account dashboard you will see charts and information with exact details on any mining contract you purchase.

Let us know what you think in the comments box below.

At Altecho Trading and Exchange Limited- ATEL, we give you news, opinions, advice and research on Crypto-currency (eCurrency, digital currency), computer/general security issues and the latest internet threats.

Credit:Bitcoin+Atel