Bitcoin, the first cryptocurrency to be created, became a global phenomenon within just a few years of its initial release. Since then, more and more people have become acquainted with the technology behind cryptocurrency, this has led to an increase in interest in purchasing and mining digital currencies. However, there are also people who seek to take advantage of this new technology by scamming people out of their money.
ICOs- or initial coin offerings- are a way for new cryptocurrency businesses to fund themselves. They function much like crowdfunding campaigns where people can invest their money into a new project. However, there are several characteristics of an ICO that should make you suspicious if you encounter it in real life. For one thing, most of these campaigns use social media platforms like Facebook or Twitter to publicize their ventures. This is strange since these platforms charge high fees to advertise on them, making them expensive for smaller companies. Not only that, but they also allow only limited text and images in their posts. If you look closely, you might notice many campaigns using the same wording or images in their ICO descriptions. Obviously, someone is trying to make these projects look successful before recruiting investors for their schemes.
If someone wants your cryptocurrency, it's easy enough for them to defraud you out of it- even if you've done your research first. All you have to do is find someone who's selling crypto and tell them it's cheaper somewhere else. They'll usually agree and let you buy it from them cheaper than other places. Once you have what you want, you can either keep it from there or call the other guy and tell him your price is lower so he'll lower his price too- which gives you both a better price and someone responsible for keeping track of it all. Anyone can set up a website with cheap crypto offers if they want; all the scammers need is one motivated seller willing to go along with their plan for fresh meat.
As cryptocurrencies continue to grow in popularity, scammers will also learn how to take advantage of this new technology for their own gain- potentially at the expense of gullible consumers. Promoters may use any means necessary to boost their projects ahead of ICOs and dishonest social media accounts.
After setting up successful scams, defrauders may sell off the coins they've stolen at a profit or keep them for themselves so they can pay off investors later with laughably low valuations. Whether cryptocurrency is good or bad depends largely on whether people use cryptocurrencies ethically or not- but either way, they're here now and they're going nowhere fast without regulation and common sense on the part of consumers.
