Steemit Crypto Academy Contest Season 6 Week 5 -Common Crypto Scams And How To Avoid Them

Hello everyone.

Welcome to this post. I hope that all of you will be good and happy and enjoying your precious health with the grace and blessings of Almighty Allah. Today, I am going to participate in the week 5 contest of the SteemitCryptoAcademy community. The topic for this week is very interesting, Common Crypto Scams And How To Avoid Them. So, stay tuned with me and have a nice read of this post.

Explain Your Understanding Of Crypto Scam.

We are well aware of the word Scam. The term scam is usually used in cases when fraud is happening, a deception of something is happening or a totally unexpected thing is to happen with someone. So, we can say that when these things happen in the cryptocurrency world, they are said to be crypto scams.

The nature of cryptocurrency is anonymous and although there are a huge number of benefits of this nature still there are some drawbacks that could be the result of a high degree of decentralization of the cryptocurrency networks. So, there are always ill-minded people that are always in the seek of fraud others.

So, the decentralized nature of the crypto blockchains always allows such scammers to do their illegal and harmful activities because there is no organization or governance to stop them or make them answerable for their such activities.

Crypto scams are actually the conditions when the scammers do fraud against the crypto holders and investors and stole the crypto assets that they hold in the crypto exchanges or wallets. The scammers can adopt different ways and techniques to scam the investors and make their wallets and exchanges washed out, or trap them via various ways.

In the cryptocurrency space, scammers are always wandering about here and there to search for large investors and stole their crypto assets. These scams could be done either by using various techniques and high technology or by trapping the investors by showing their sympathy towards the investors and in the end, they succeed in stealing their money.

With the advancement in the technology of the world, scammers are also advancing towards new means of stealing crypto assets from investors. Some scammers do everything on their own and get the assets scammed while some other scammers make the investors agree by showing them the golden future ahead, and after all, they are successful in their plans.

Explain The Various Types of crypto Scams.

As I have already discussed that there are many ways and techniques that scammers can adopt to steal the crypto assets of the investors and harm them in any possible way by the loss of money. So, here I am going to discuss some common types of crypto scams in the digital space.

The most common type of crypto scam is the fake exchange platforms and fake crypto wallets. We all know that crypto assets are placed or stored in digital wallets or in crypto exchanges. So, the scammers can scam the investors by inviting them to fake wallets or exchanges that they have specially created for scam purposes.

The scammers grab investors through social media platforms or via direct contact with them. They invite investors to join their fake exchanges and enjoy impressive features with low costs. Sometimes, they ask them to invest more assets in order to avail themselves of the fees of the platform and get huge returns.

But, these are actually scams and they never return the assets because the assets that are once sent there are never transferable again. So, in this way, the investor lost their precious crypto assets by being caught in the traps of the scammers in the crypto space.

Another kind of crypto scam is the investment scam. In this case, the scammers could be the individuals or the groups that trap the investors and steal their assets. They satisfy the investors via different social media groups or public chat groups and ask them to invest in newly launched tokens or NFTs.

They continue doing scam activities and show some proof of the bright future for the investors ahead but actually, they are trapping the investors. Once a large number of investors invest in their project, they stole the whole money, and thus the investors are being scammed by leaving empty-handed.

A very popular term that is used in the crypto space is the Ponzi Scheme. It is actually a type of crypto scam where the investors are trapped in the false statements of cunning scammers. In this case, the scammers start a fake project and ask the investors to invest in that project by claiming that they will get huge returns because their investment is going to be used as mining material.

But actually, this is not the case. The main motto of the scammers in this case of the crypto is to attract as many new investors as they can. For the satisfaction of the new investors, they gave the funds of the new investors to the old investors as a reward for their old investment. But in end, when they saw that they have gathered enough assets, they shut off the whole shit and stole the whole money of the investors.

These types of scams are very much common in the crypto space, and actually in the whole digital world. In this type, scammers are actually using great technology to create fake links and spread those fake links on social media websites and platforms to gather attention.

Once an investor open those links, they were asked to put their sensitive details like the private keys of their wallets, in order to, get the free crypto assets that the scammers are claiming. Once the ignorant investors put their minor details there, the scammers get the keys and access their wallets to steal their crypto assets.

An Initial Coin Offering is actually an event that is arranged by large companies that are going to launch their new tokens in the crypto space. Sometimes, the scammers are in the face of those companies that claimed to launch their tokens or NFTs soon in the market.

So, they ask the investors to invest their assets in that token and get higher bonuses when that coin is launched actually. In this scamming event, the scammers ran away after gathering a reasonable amount of investment from innocent investors and never return those assets to the investors.

How Can We Do In Order To Spot This Types Of Crypto Scams?

When a person enters the crypto space, everything seems very interesting to him and he always takes risks by investing in various things that are charming to them but later on, they found themselves to be scammed. So, there are some points that could be considered to spot the scams that are discussed above.

• To find out whether an exchange or a wallet is fine or fake, you have to do some fundamental study of the project on the internet. If there is no evidence that the platform that is showing a better future, or there is no presence of such exchanges on platforms like coinmarketcap.com, then you can avoid such exchanges because there are many chances of a fake exchange or wallet.

• The messages from random individuals that are claiming to give you something free of cost by just clicking the link are most likely to be a scam. Those links could be the source of a Phishing scam with you. So, we can spot the Phishing scam in this way.

• Whenever you found an ad on social media platforms or you receive a message from unknown contact that is claiming to give you high rewards if you join their ICO, then it could be an ICO scam scenery. First, you have to read about that platform properly and then make any decisions accordingly.

• A type of platform that claims to give you high returns, just like doubling or tripling your investment in that token could be a scam. You must have to be very careful about that. It is possible that they are doing the Ponzi Scheme scams by rewarding the old users with their investments and later on, they ran away.

• The investment scams can be figured out by doing proper research work on the platform that is claiming to be very powerful in the future. You must have to check that project on coinmarketcap.com and do other basic research like the core team of the project, their road map, etc. So, these things can help you to filter out various scams in the crypto space.

Have You Ever Been Scammed Before? Or Has A Person You Know Been Scammed? Explain To Us The Incident.

Yes, I have been scammed once in the crypto space. It was actually an Initial NFT Offering scam. It was the incident that I have to face at the start of the last year 2021. Actually, in those days, the web3 project of the Solana platform was very much popular in the crypto space. I am actually talking about the Stepn platform.

It is actually a run-to-earn platform that rewards its users with GST and GMT tokens but first, we have to purchase the sneakers in the form of NFT from the internal exchanges. I was very impressed by that platform. I also wanted to buy a sneaker NFT but its price was out of my budget as I don't want to invest so much funds there.

After two or three months, I found a similar platform that was about the start working properly. They started their INO and I decided to take part in that Initial Offering of the NFTs in the form of bikes. The name of that platform was BIKEN. There were many bikes of different types with various unique features and I took a bike NFT by investing about 150$ there.

For about a week or two, they stay very active on the Discord and Telegram groups and continued guiding the newcomers about the platform. They have gathered a lot of funds in the 1st INO and used some funds to develop an application and a web app related to that platform. I became very much satisfied with that.

After the end of 1st INO, they started another one to gather more investment from the newcomers. But after about 3 weeks, they eventually shut off all the discord groups, and web apps and there was no connection between the users and them after that. Then, I realized that I had made a very big mistake and now I have lost my funds and have been scammed. Anyways, that incident is a lesson for me to be aware of and very careful throughout the journey in the crypto space.

How Can One Protect Himself From Crypto Scam?

It is a well-narrated quote that prevention and safety measures for a disease are much better than the cure for that disease later on. So, the same is the case here in the crypto space. There are some prevention and safety measures to avoid crypto scams. Some of them are listed below.

• The first prevention to avoid crypto scams is that we should have to ignore the scam messages that we receive from random and unknown identities about the crypto investment.

• We should do proper research on the platform or token in which we are going to invest our assets.

• We should prefer the popular and successful crypto exchange platforms and wallets to store our assets.

• Never pay special attention to the links on social media platforms that are claiming to give you huge returns on your investment in their project.

• Always try to do your own research and technical analysis before investing and never depend totally on the free trading signals from anywhere.

• We should ignore the links that we receive from random identities on social media platforms or private inboxes.

• It is highly recommended to use exchanges and wallets and perform your activities on the devices that are connected to your private network. Never do such activities on networks that are in public use.

• For the high security of your funds, we should have to use the 2 Factor Authentication system that is provided by most of the exchange platforms.

• Divide your total capital into different tokens and exchanges to minimize the chances of being scammed.

• Only store a small number of assets on hot wallets and exchanges. Try to store large investments in cold wallets that are offline.

Conclusions

The decentralized nature of the crypto networks has a lot of benefits for the users but there are also some drawbacks that could be harmful to the traders. Crypto Scams are one of those drawbacks. There are different types of crypto scams that lead to the loss of crypto assets by investors.

We should be aware while investing our money in any token or exchange platform. No doubt, the crypto market is a highly paying market but there is always a risk so we should be aware of that by acting upon the above-mentioned prevention, we can make our crypto journey much safer.

I would like to invite my friends @malikusman1, @faran-nabeel, @suboohi, @sualeha, and @ripon0630 to take part in this beautiful contest.