The world of digital currencies is expanding every day and many sites and companies are entering this modern world. However, considering that public awareness about Bitcoin has not been done yet and some people still do not know Bitcoin completely; a bitcoin giveaway scam has been formed. These sites and companies commit many scams by deceiving people and exploiting their little knowledge. In this article, I want to share with you tips for avoiding cryptocurrency scams like bitcoin giveaway scams, bitcoin doubler, cloud mining scams, ICO scams, and HYIP scams to increase your awareness and knowledge about these types of scam sites and invest in the world of digital currencies and bitcoin with enough information.
These sites come in a variety of forms that deceive people and take their bitcoins to make a lot of money. In most cases, these sites do not exist externally at all. Also, the information posted on the site is completely fake. as a result, using payment systems such as Bitcoin and other digital currencies and registering fake site information, tracking these people is almost impossible. Usually, these people use Bitcoin mixers (especially in HYIP and ponzi scams) to make most of their transactions untraceable. Even if they do not, it will be difficult to identify them due to the use of digital currencies. If such a company catches your bitcoin and cheats you, your chances of using these companies and receiving your own money will be very low.
1. Bitcoin giveaway scams
Giveaway scams are one of the special methods of fraud. In this method, which was formed in 2017, fraud is done in the form of social engineering. They claim that a large digital currency site or a famous person is hosting a giveaway. You will then be required to pay some of your digital currency to participate in the giveaway to become a member and receive a giveaway. Since these transactions are not traceable and the giveaway has no real identity, you will lose your bitcoin forever by a bitcoin giveaway scam.
An example of a bitcoin giveaway scam:
The most recent giveaway scam is the fake Elon Musk giveaway. Elon Musk is famous in the world of digital currencies and has supported dogecoin. Scammers in this way make people think that if they give some digital currency to this celebrity, they will get more repayments. This scam, which involved many young people, has taken $2 million from people in the last 6 months.
Other examples of bitcoin giveaway scams
- Coinbase Twitter Impersonations
- YouTube Live Streams
- Giveaway Scam Email
- Celebrity Twitter Impersonations
- “Hack the blockchain” scams
- HYIP program, or Ponzi schemes
- John Mcafee or Binance fake giveaway
2. Bitcoin Doubler Scams
One of the most popular scams is bitcoin doubler. These sites are increasing every day and the way they work is very interesting. These sites are not just for bitcoin and there are many sites that dogecoin, LTC, and Other digital currencies are also accepted. In fact, for these sites, it does not matter what digital currency you have. They want to take it from you, with a tempting offer. The peak of this scam was in 2018, but it continues to this day. These sites claim to double your bitcoins! That too for an irrational reason. Another type of scam is similar and it pays investors with other people’s money. We will see it in more detail below.
3. HYIP scams and Ponzi schemes
The HYIP or Ponzi scheme scam is a variation of the bitcoin doubler scam, where they claim to give you a percentage of profit when you invest your bitcoins with them. Then after a few days it stops paying investors and disappears. The truth is they were paying users with other investors’ money.
Any website, HYIP, Ponzi, or otherwise, that claims to multiply your bitcoins is definitely a scammer. It may double your digital currency in the first few days and times. After doing this, there will be no more news about them. Then to avoid the police they will close their website and domain name.
How does a bitcoin doubler work?
There are different methods that these scam sites use, but the main purpose of all of them is to deceive people by promising to double their bitcoins. Some of them claim that after depositing after 2.3 hours, your bitcoins will double. Some of them also ask you for 24 hours to do this. There is another type that allows you to bet your bitcoins and they will double it for you. In fact, the methods and claims of these strange sites are different, but they all have one thing in common: scams!
The bitcoin doubler sites have really weird and false claims, from hacking a bitcoin network to doubling your bitcoin to having a script to doubling it. but one of the most common claims among these sites is that they are large investment companies. by claiming that their large company is bringing your capital into the market and multiplying it, they are trying to defraud themselves in the form of a large company.
An extreme example of the bitcoin doubler scam
In 2020, three people hacked the internal systems of Twitter to send fake bitcoin doubler messages from several verified accounts. It was very successful with dozens of people reporting that they lost their money. Some exchanges such as Coinbase blocked the bitcoin address, saving people from getting scammed. But you cannot rely on exchanges to protect you from all scams. Later, the FBI and UK law enforcement agencies identified and arrested the hackers.
One of the most infamous HYIP and Ponzi scheme scams was the Bitconnect project. It invested users’ Bitcoin for the Bitconnect Coin, with an interest rate. When the Bitconnect website shut down and refunded everyone their tokens, the Bitconnect token price went down by 99%. Many people lost their life savings. This is also an example of an ICO scam, which we will talk about later.
4. Cloud mining scams
This is a way for companies to charge you to extract bitcoins and do the extraction for you. It is another way to defraud users. In the cloud mining scam method, you rent mining devices and receive your profit every month after paying the subscription fee. Not all of these sites are scammers and there are good companies in this area. But you should be aware that hundreds of scam sites scam people this way every month.
Scam method in bitcoin cloud mining
At first, fraudulent companies seem perfectly legal. They introduce you to monthly plans that have good profits (these companies usually offer huge profits per month because they want to deceive people). After depositing money and purchasing your monthly plan, you can see in the dashboard that bitcoin is being mined. But after about 1 month of requesting a withdrawal, you will receive different errors.
These errors are various, from sending identity information and confirmation by the site administrator to blanking the page and blocking the account. In fact, you were only looking at imaginary numbers in this 1 month and no bitcoins were being mined. There is nothing you can do to understand this after 1 month. So first look for the WHOIS and domain information of this company and see if it is real or not. Also, before investing in these sites, research them. You can use WhoIsHostingThis.com to check the identity of any website.
It is also helpful to understand that it is no longer possible to mine bitcoin on computers. It used to be possible to mine bitcoins on PCs and laptops but the mining difficulty became high quickly. So now, only people with a large number of ASICs (hardware miners) can mine bitcoin with a profit. You should understand that mining bitcoin, litecoin, ethereum, etc. on PC is a waste of time and a common trap that scammers make.
5. ICO scams
You must first become familiar with the concept of ICO. ICO stands for Initial Coin Offerings. These services are used for new companies and to raise start-up capital. New companies use the introduction of ICOs, raising money or launching tokens, or creating their own services. ICO is like IPO, but with the difference that it is used for companies and young organizations.
But what is the method of ICO scams?
Many companies are established only to defraud and create ICOs for their own benefit. By giving empty hope to investors, they ask them to invest and after collecting the initial capital, these companies disappear. these companies are pre-selling their coins to you, and with the expansion of blockchain and ERC-20, these tokens are increasing. When you pre-sell, they are actually asking you for bitcoins for the initial cost of the company. After payment, you will be told that the company will start operating on x date and these coins will multiply. But after that date, either that site will be destroyed or you can sell them only at a very low price. In fact, they will take your bitcoins from you and return a very small amount of money to you. This is where the ICO scam project fails.
Ways to detect ICO scams
Look at the support team and see if they care about their goals. Then look at the future of the company and the whitepaper and token sale. Always be careful when investing in these companies so that you do not lose your time and money.
Tips for reporting scam websites
- Report the scam by filling out the form on ScamAlert.
- Report the website domain name on Google Safe Browsing so they can block it from Google Search.
- Notify law enforcement about the scam so they can arrest the scammers. Here are the links to the FTC (USA), Action Fraud (UK) and Cyber Crime Cell (India).
Now we have explained the bitcoin doubler, giveaway, HYIP, cloud mining, and ICO scams. We recommend not investing your money into any of them. Instead, you should use faucets if you want small, free money. But be careful of which faucet you use because some of them are also scams, with a high-profit promise but want to steal your bitcoins and other cryptos. You should always do some research before using any bitcoin-related service.