Bitcoin is the type of cryptocurrency generated from a complicated algorithm. This is not hard money and hence it can only be transferred electronically. The fact that the transactions can go entirely paperless has made Bitcoin one of the most popular digital money. Those who are willing to purchase Bitcoin can do the same through Bitcoin exchange. This is the platform from which you can get Bitcoin in exchange for your hard cash or other services. Once you have got the Bitcoins, you need to store the same. So to store this cryptocurrency you need wallets. The wallets are specially designed to let the users store digital money and also perform transactions on the same.
The wallet is also responsible for generating the personality which the user can obtain as an address to perform the transactions. Every time the user performs the transaction, not the private information, it is the personal key that represents the identity of the user. With the popularity of this electric money, the other thing which came into the trend is the investment and trading of Bitcoin. Investing is when you store the Bitcoin for a longer duration to make a profit from it. Investment is a simple process that requires only the storage of Bitcoin on the contrary when it comes to trading the situation gets a little complicated.
Bitcoin trading is the process of making trade in Bitcoins related stock trends. This means you have to predict the permanence of the Bitcoin market to earn profit. Doesn’t matter if the value of Bitcoin goes up or down, with a good strategy a trader can earn a decent gain with Bitcoin. However, when it comes to the investors if the value of Bitcoin goes down for the long-term, they may have to face loss.
As we have already seen that Bitcoin is electronic money and the transaction of the same can be performed using the internet, trading the same can easily become prone to scams.
Before you go ahead and start investing your Bitcoins in any company or services make sure that they are powered by blockchain. This means that your exchange or wallet gives the transaction details of the users. Blockchain prohibits the hacking of Bitcoin. Also, before investing in any company you should make sure that they provide good customer service in case of emergency. All these features add to the security of the company and hence securing your investment in the same.
Let’s have a look at the few very common scams related to Bitcoin trading and how to avoid them.
- Fake Trading Software:
It is quite obvious that one has to use trading software for Bitcoin trading. This type of software can either be available in mobile format for your desktop or PC. Several times traders have downloaded fake applications from the app store which are planned just to hack all your Bitcoins. This type of fraud is so common that almost every Bitcoin user has downloaded at least one. The application is designed or named in a way that it becomes love for the traders to trace the difference between valid and imposter software.
One has to be very careful while downloading any trading related mobile or laptop applications. You should always get genuine Software for trading. To check The authenticity of the software you can simply download it from its official website. To open an account in a legal and highly secure trading software make sure you trust the highest-rated ones.
- Fake Website:
Most of the investors believe that just visiting the website of the company they are willing to invest in, will help them get complete information about the company. This is a major mistake done by any investor or trader. The Internet is flooded with fake websites. These websites ain’t harmful to you unless you put your money into them. When it comes to Bitcoin trading, an imposter website can easily convince you of its reliability and seize all your Bitcoins.
The best way of checking The authenticity of the website is to check the ‘HTTP before the website link. You can also check with the ‘lock’ mark, which ensures that the website is secure. Furthermore when it comes to making the payment make sure the website is not directing you to a non-secure website. If you make a mistake here, two of the above inspections will automatically fail. With small scrutiny, you can avoid a huge fraud.
- Email Scam:
Never reply to any email asking you to provide your transaction key. Email scam is one of the biggest scams in the cryptocurrency industry. Once you get yourself registered with any of the trading platforms, eventually you will start receiving hundreds of emails related to the same. You must avoid replying to or clicking on any link provided in that email. The hackers have become so smart that they even have the idea of how to copy the mailing style of legitimate companies. You may think that the email looks exactly like the real one, however, once you visit the link and make any transaction all of your Bitcoins will get hacked.
Before taking any action you should never forget that once you lose your Bitcoins it is not coming back. So you should make sure that you won’t do anything to end up in a huge loss.
- Social Media Scam:
Social media is flooded with fake IDs and trusted someone related to Bitcoin here can put you in great trouble. You might come across some really attractive advertisements related to investment or trading but before you go ahead and put your trust in these advertisements you should always make sure it is from a legitimate source.
The best thing to do is have a check on the bitcoin code review to avoid any Bitcoin trading scams.
Conclusion:
Though there are many scams in Bitcoin trading, there are many legitimate trading applications too that can make your trading experience profitable. All you have to do is use your brain and keep your eyes open before you start investing in Bitcoin.
Risk Warning:
Investing is not suitable for everyone; please ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Please conduct your own due diligence.
