Reading Time: 2 minutes

For many, the biggest barrier to entering the cryptocurrency space is fear of scams. This fear is not entirely unfounded, but in reality scams are easy to avoid with a bit of basic knowledge and common sense. Bitcoin and cryptocurrency is a revolutionary technology with a tech industry surrounding it that has provided jobs and wealth growth to an unprecedented level. Today, we will learn the basics of Bitcoin and how to avoid fraud and deception on the internet.

To begin, let’s learn the basics of cryptocurrency. The most famous cryptocurrency, Bitcoin, was invented by the pseudonymous “Satoshi” in 2008. Bitcoin is a digital currency which provides low transaction fees and is operated by a decentralized authority. Through the public ledger technology known as “Blockchain”, Bitcoin is able to exist as a transparent and open-access currency that is free of the constraints of traditional government-issued currencies. In addition, there are many alternative coins such as Ethereum which focuses on “Smart Contracts” (a sort of digital automated contract agreement). The most important fact to remember about crypto when it comes to safety is that transactions are irreversible.

The most common technique fraudsters employ is setting up fake accounts which impersonate customer service, celebrities, and other figures of trust. You should always verify the authenticity of accounts, and remember that trusted markets like Yellow Card will never ask for your password or try to obtain access to your computer or digital life. Using traditional lines of support is the best solution for avoiding scams. Talking to a supposed representative on Whatsapp for example is a much riskier endeavor than using the official company email for support. Remember that there is no reason for a customer service representative to ask you to send cryptocurrency to an external address. They may claim it will help you with a stuck transaction, but this is part of their scam. 

Scammers also often create fake investment schemes. Generally, if it sounds too good to be true, it most likely is. Look for publicly verified articles from trusted websites such as Forbes or other reputable financial journalists. Larger scams often have articles warning and investigating them, while smaller scams often have next to no internet presence. Doing your research and due diligence is key to understanding the authenticity of a project. Markets such as Yellow Card have verified articles about them as well as a track record of trust, and should be an example for all cryptocurrency related projects that might interest you.

Finally, there are a few other small tactics that fraudulent individuals deploy. One of the most famous is phishing. Phishing uses fraudulent websites, emails, text messages, and more to try to bait you into logging in or providing other personal information. Make sure to check the spelling of links and the sources of emails and texts. Match them with the publicly available information to stay safe. Scammers often will send you links over Telegram and Whatsapp claiming they can provide support or create some form of get-rich-quick scheme for you. To avoid this, use traditional methods of support and be wary of any outside contact. 

To conclude, remember that Bitcoin and cryptocurrency are incredibly safe. Like fiat currency, their scams often revolve around social engineering and tricks. The actual currencies and transactions themselves are secure from hacking and substantially more private than other forms of payment. For the savvy user, cryptocurrency can increase the security of your finances and avoid the risk of theft that comes with cash and even some banking institutions. Stay smart, do your research, and enjoy the wonderful benefits of crypto!

Kratika is Global Crypto's Admin Assistant. She has extensive experience working for top tech firms from around the world, and has a wealth of knowledge in the FinTech industry.