Every industry on this planet is, in one way or another, plagued by bad actors that look to take advantage of the people who don’t know any better—and Bitcoin (BTC) is no exception.
Don’t get us wrong, BTC transactions are some of the most secure out there. You could buy Bitcoin with PayPal, trade it however you please, and with the power of the blockchain behind it, you can rest knowing that your transaction is in good hands. Despite that, there are still bad actors that will try to trick you into making a transaction you’ll later regret.
One unique feature that Bitcoin transactions have is that they’re irreversible—meaning that if any business out there is advertising that they guarantee your BTC back after you get scammed, they’re probably lying.
Why Bitcoin Transactions Are Irreversible
As we all know, BTC is a unique kind of money—the likes of which we’ve never seen before, at least until the other cryptocurrencies followed shortly after. One of its most prominent features is its decentralization. This feature effectively allows people to exchange value without the need for a middleman or third party—like a bank—to facilitate the transactions. Since no middleman is needed, transactions are much cheaper and faster.
To prevent double-spending—the risk of a digital currency being spent twice—Bitcoin implements a system that requires confirmations before payments are received on the blockchain. As the number of confirmations rises, the more irreversible the transaction becomes. This is how Bitcoin not only keeps the network security but also prevents a single coin from ever being used twice.
With all that being said, it’s important that you make sure you’re sending BTC to the right addresses. If you accidentally send it to the wrong address or are tricked into it, there’s no guarantee that you’ll get your money back.
Watch Out For These BTC Scams
Whether we like it or not, bad apples out there will try to take advantage of Bitcoin’s irreversibility and lure us into situations that we think are safe. To help you ensure that your BTC doesn’t fall into the wrong hands, we’ve compiled a list of common Bitcoin scams to be wary of:
People Faking Identities
A common tactic that a lot of bad actors use is that they pretend to be someone of authority, whether that be a moderator of a trading platform, crypto influencer acting like they can help you make money, or even just a normal person faking a tense situation. They’ll try to trick you into sending BTC into their wallets by luring you with a story about a free giveaway, fake stories, or even threats.
If you encounter someone who’s asking you to send them BTC, make sure to double-check the identity of the person you’re talking to. Try contacting them through a different medium or check their credentials.
Phishing refers to the method of scamming wherein people will lure you to click a malicious link and/or try to get personal information out of you so that they can get access to your funds.
If you encounter a suspicious email or text message that’s asking you to send money, click a link, or provide personal information, more often than not, it’s a phishing scam. If it seems legitimate to you, make sure to check the sender’s credentials by contacting the platform they say they’re from.
Sometimes, people will try to create a legitimate-looking exchange or replicate an already-reputable platform to try to get you to send them money. To entice you further, they’ll make their prices unbelievably competitive and trick you into thinking that you’re getting BTC at a great price.
Before you ever start trading Bitcoin, make sure to do ample research on the exchange you’re going to park your money in so that you know you can trust the platform to hold your money.
Now that Bitcoin has had time to evolve, some of the biggest platforms will allow you to buy BTC with pretty much anything. This includes bank transfers, gift cards, online wallets, and many more. However, some payment methods will allow reversible payments, allowing a scammer to get your BTC and take their payment back (the fiat payment is reversed).
To prevent this from happening to you, make sure that you only deal with trusted traders on the platform you’re using and use a payment method that is Bitcoin-friendly.
Invest Your Time And Money In Preventive Measures
Unfortunately, there are times where we really can’t help it: our money is lost to a scam and there’s pretty much nothing we can do about it. The best thing to do in this situation is to report it to the proper authorities, try to forget about it, and move on.
If you’re hell-bent on trying to get your money back, you might lose even more money. Bitcoin recovery services prey on this type of mentality and it could do more harm than good. Remember that BTC transactions are irreversible, so it’s hard to think of what methods these services could possibly use to get your money back. If such service exists, they will probably use force to recover your Bitcoin from whoever stole it from you.
Instead of putting your money into these services, invest your time and money into measures that can help you prevent a situation like that from ever happening again. Take the time to get to know how these scams work, how you could possibly fall victim to them, and how you can avoid past mistakes. By doing so, you not only minimize the risk of being scammed again but you also become a better trader and BTC holder in the process.
This is why, like in many other forms of investment, research is your best friend. Bitcoin is almost 13 years old now, which means that you have 12+ years’ worth of resources collated by a very passionate community. In this space, knowledge is power, and the more power you have, the less likely you are to lose your money to something as silly as BTC scams.
Jason Gibbs is a freelance content writer and enthusiastic blogger. He is the co-founder of Finance Team. He contributes to many authority blogs such as Sb News Room, EssayWritingGuides, TheBitcoinMagazine, TheCBDMagazine, and TheDatingDairy, Online Marketing Tools, Smart Business Daily, Emblem Wealth, RSL Online, TechNetDeals & TechTrendsPro & OnlineHealthMedia & FollowTheFashion.