Bitcoin and other cryptocurrencies are gaining more attention as days pass. Aside from the advantages that cryptocurrencies have, like anonymity and easy international transactions, people are enticed by the fact that it can become a good investment. Apart from trading bitcoins for cash, you can also use bitcoins to buy gift cards, book flights, and hotels, buy furniture, or even buy real estate properties. Bitcoin purchases are not taxed at the moment since there is no way for third parties to identify, track, or intercept transactions that use bitcoins. Transaction fees are considerably lower as well compared to credit card transactions or services like PayPal.
Although there are many advantages in using bitcoin and other cryptocurrencies, just like any other investments, everyone should always be careful with transactions. Since cryptocurrency is not regulated, many unscrupulous people have taken advantage of this and incidents of fraudulent cryptocurrencies and other types of scam related to cryptocurrency have occured. One example of this is Prodeum, a cryptocurrency start-up that scammed its investors in just one weekend.
Because of these scams, law firms have now been involved in helping the victims. Cryptocurrency litigation has now become something that some lawyers specialize in. There are a lot of factors to consider when a cryptocurrency dispute arises. Aside from fraudulent Initial Coin Offering (ICO), lawyers would involve if the cryptocurrency is either used to launder money or hide assets, lawyers would also sue if there is an issue with the company, commercial, or intellectual property laws violated in relation with cryptocurrency.
Here are some things that you can do as a cryptocurrency user to avoid being scammed:
1. Research. –
Just like with any other investments that you will make, research is essential. When investing in an ICO, make sure to read and dissect white papers to ensure that you’re working with reliable people. Take time to research the people behind the ICO, their whole team, board members, and other investors. It’s vital to learn as much as we can about the company before investing, so there won’t be unpleasant surprises.
2. Be vigilant. –
Cryptocurrency is still primarily bought and sold at exchanges. Because cryptocurrency is something new and the fuss around is its value, many get scammed by the promise of unrealistic prices. If an exchange promises incredible discounts or offers that seem too good to be true, it probably is. Another thing that you can do to avoid bitcoin exchange scams is to check the exchange’s URL. If a website’s address starts with HTTPS instead of just HTTP, that means that the traffic is encrypted and therefore has more protection.
3. Only use trusted sources –
Hardware wallet is a physical device that stores your private keys. Hardware wallets offer more protection from hacking since there is no way for hackers to access them when you’re not online. However, hackers have now found a way around that. Some hackers sell hardware wallets that have a backdoor for them to access all your cryptocurrency and the best way to avoid this is only to accept hardware wallets from trusted sources.
Hardware wallet is a physical device that stores your private keys. Hardware wallets offer more protection from hacking, since there is no way for hackers to access them when the wallet isn’t online.
However, hackers found a new way around that. They are selling hardware wallets that have backdoor hacks enabled which let’s them have access to the cryptocurrencies, One best way is to avoid hardware wallets from non-trusted sellers.
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