Bitcoin popularity has exploded in recent years, and it remains the most popular and trusted cryptocurrency, with over 80% of the market share. With those kinds of figures, attempts at fraud have become more frequent than ever, and users always have to keep an eye out for possible scams. While a new Bitcoin wallet website might look similar to established wallets, is it any good?
In this article, we’ll look into Bitcoin wallet security, and give you useful tips on how to spot fraudulent offers.
The Most Common Bitcoin Wallet Website Scams
There are many ways scammers operate to try and part you from your cryptocurrency. With the ever-increasing security measures from legitimate wallets, fraud methods have changed over the years, but some older ones remain popular to lure in cryptocurrency newbies.
ICO (Initial Coin Offerings)
Mostly used for cryptocurrencies other than Bitcoin, ICOs are a popular way for legitimate companies to gain funding and for scammers to perform an elaborate fraud. Here’s how it works.
A new tech company has devised a way to store cryptocurrency or has created a unique new crypto coin. This company will offer a small number of these initial coins to their backers or investors in exchange for fiat currency. The investors have an excellent incentive since the ICOs could rapidly gain value if the cryptocurrency takes off and becomes an established part of the market.
Unfortunately, fraudulent companies use very similar strategies. Scammers will attempt to lure in investors with hyperbolic claims of gains in a short period – usually a matter of weeks.
It can be challenging to spot a legitimate ICO from a fraudulent one, but recent trends heavily favour scam websites, as they make up a majority of the new ICO market. If you don’t want to risk it, either conduct incredibly thorough research or avoid ICOs altogether.
Fake Bitcoin Wallet Websites
Since everyone needs a Bitcoin wallet to trade and store cryptocurrency, it is no surprise new wallets pop up everywhere to claim a part of the userbase. Unfortunately for newcomers, a fraudulent Bitcoin wallet website is hard to distinguish from the real thing.
When looking for your perfect Bitcoin wallet, always keep in mind their track record, popularity, and whether they are noticeably different compared to the old and established wallets. There can be only so much innovation, even in a highly competitive field. A new wallet is more than likely to imitate an old one with a slightly different marketing approach.
Google Play Store is another hot topic for wallet users. Since mobile crypto transactions have become more common, new wallets frequently appear on the Play Store, often with a few faked reviews to appear legitimate. They will often even blatantly copy existing wallets, such as Trezor.
Dealing with a fake Bitcoin wallet can be frustrating. The best advice is to avoid unchecked wallets and those that seem either too good to be true or very similar to older alternatives.
Phishing Scams and Emails
One of the more common types of scams outside of cryptocurrency, phishing scams aim to gain access to your confidential information, usually in the form of the wallet’s private key.
In most cases, the scammer will send an email, from an address that looks eerily similar to an existing Bitcoin wallet website’s, in an attempt to get you to open a link and plug in your private information. They often sweeten the deal with free Airdrops, returns of investments, or for the mentioned ICOs.
The easiest ways to spot phishing scams are subtle differences in the email address, logos, and images compared to the real thing. Alternatively, just use logic. Legitimate Bitcoin wallets operate on a zero-knowledge model, meaning that their representatives don’t know and don’t need to know your seed information.
Cloud Mining
While some cloud mining offers are legitimate, they too can be replicated by fraudulent websites. Cloud mining operates by users pooling their funds to invest in shared hashing equipment and collectively mine Bitcoin or another cryptocurrency. In the case of a legitimate business, investors can make a noticeable profit. Scams, however, are unlikely to show you any return on your investment.
When looking at a potential cloud mining website, always keep an eye out for security red flags. For example, does the website use HTTP? Did you get referred from a social media ad? Are there no indications of the mining pool being used to operate in? If the answer to these is ‘yes’, you are most likely dealing with a scam.
Trust Your Bitcoin Wallet Website Before Investing
When you start Bitcoin trading, it’s best to be thorough in your research and use established, popular wallets, whether hot or cold, to store and trade cryptocurrency. Check out online reviews from trusted sources and read carefully through statements about data privacy. Otherwise, you might find your crypto wallet emptied and your long-term investment null.
