Is cryptocurrency secure? What are common cryptocurrency scams?

Dec 12,2022
Is cryptocurrency secure? What are common cryptocurrency scams?

In the currency circle, I believe you are all familiar with cryptocurrency. Cryptocurrency is a digital payment system that does not rely on banks to verify transactions. It is a point-to-point system that enables anyone anywhere to push and receive payments. There is no intermediate sales or regulatory authority for cryptocurrencies. Therefore, some novice investors asked whether cryptocurrencies are secure? So, let's take a look.

Is cryptocurrency secure?

Cryptocurrencies are generally built using blockchain applications. Blockchain describes the form of recording transactions into "blocks" and stamping time stamps. This is a very complicated technical process, but the result is to encrypt the digital ledger of currency transactions, which is difficult for hackers to tamper with.

In addition, transactions must have a two factor identity authentication process. For example, you may be required to enter an account password to start a transaction. Later, you may be sure to enter the verification code sent to your personal phone according to the text.

Although there are securities, this does not mean that cryptocurrency is unbreakable. Several huge hacker intrusions have made cryptocurrency start-ups pay a heavy price. Hackers attacked Coincheck with $534 million and BitGrail with $195 million, making them the largest two cryptocurrency hackers in 2018.

Unlike the currency supported by the government, the value of virtual currency is completely driven by supply and demand. This may lead to sharp fluctuations, which will bring significant profits or losses to investors. Compared with traditional financial products such as individual stocks, bonds and mutual funds, cryptocurrency investment is subject to much less regulatory maintenance.

What are common cryptocurrency scams?

1. Date application fraud

Cryptocurrency fraud is not uncommon in online dating applications. These defects focus on online only remote relationships, in which one person gradually gains the trust of another. One side slowly persuaded the other side to invest in cryptocurrency.

2. Social network cryptocurrency gift fraud

Many social network posts claiming to give Bitcoin are actually scams. Under some conditions, fraudsters will use false celebrity information to promote free things and tempt victims.

The person who clicks on the gift connection will be directed to a fake website that needs to be verified before receiving the Bitcoin gift. Payment to the account is part of the verification process.

This payment may be lost, or worse, if the victim clicks an improper link, their personal information and cryptocurrency may be stolen.

3. Forged cryptocurrency trading platform

The fraudster may tempt the victim by exchanging cryptocurrencies that can make money, or even by promising more bitcoins. However, investors will not realize that the transaction is false until their money is lost.

Only trusted cryptocurrency exchanges, such as Coinbase and Crypto Com and CashApp. Before entering any personal information, it is better to conduct some research and consult the industry website to master the details of the reputation and legitimacy of the relevant exchange.

4. Speculative Bitcoin Investment Plan

The fraudsters who use Bitcoin to operate Ponzi schemes approach potential victims by dressing up as "investment managers" with years of experience. The so-called "investment managers" promised their victims that they would make money by investing, while boasting that they would earn millions of dollars by betting on Bitcoin.

Fraudsters want money from the start, so they accept advances and operate without making more money. The fraudster may also try to obtain Bitcoin by providing personal information under the banner of saving or transferring money.

5. Celebrity endorsement

The fraudsters dress up as billionaires or famous people on the Internet. They promise to double your investment in virtual currency, but they steal the content you send. They may also use information applications or chat rooms to spread rumors about the use of specific cryptocurrencies by well-known merchants. Once they encourage investors to buy and push up the price, the swindlers will sell their equity and the loan will fall in price.

Speaking of this, I believe you have a certain understanding of the security of cryptocurrency and the common cryptocurrency fraud methods. In general, Xiaobian also reminds investors that the currency circle market is volatile and unpredictable, and fraud means are emerging in an endless stream, so you should be careful when entering the market to avoid unnecessary losses.