How to Spot Bitcoin Scams Worldwide

The nature of Bitcoin’s price surges and dives is pretty infamous by now. News outlets have been reporting stories of bitcoin’s epic volatility incessantly this past 2 months alone.

There are a couple of aspects causing this:

  1. The market cap of bitcoin is still a tiny fraction compared to the world’s reserve of fiat currency. (billions vs. trillions)
  2. Fixed supply of bitcoins worldwide is < 21 million
  3. Exchanges around the world are buying and selling the same cryptocurrency, zero digital borders.
  4. Social media viral network (herd mentality) panic buys, panic sells from swirling rumors.

Bitcoin is in its formative years, it has just started walking, and now institutional investors are interested.

Added to that the ease of access to the internet made it easier than ever before for everyone to participate in this global phenomenon.

So you should expect bigger swings to come in the year ahead.

The more you focus on the technology, the less likely you are to focus on the “drama” or volatility.

If you consider the early stages of the internet in 1994, you would understand that these tech trends take time to settle in. The better you understand this; the less likely you are to panic buy or panic sell chasing the everyday price.

The only issue with cryptocurrencies in general versus normal asset classes is that very few investors actually have the tech know-how to really distinguish the truth from the scams.

This has resulted in thousands of duplicate and cloned cryptos being distributed all over the world.

Cryptocurrency became a breeding ground for scammers and con artist out to make a quick buck.

Some disguised as multi-level marketing that offer fixed returns every single month.

Others, just cloned a copy of the Bitcoin manifesto, changed the name, designed a logo, and voila, a new cryptocurrency open of early investors.

Sad to say, 99% of cryptocurrencies out there are scams. Click To Tweet


Some more sinister than others…

  1. Malware through torrent and pornographic sites:

This scam uses a bait by offering you a free bitcoin mining software or it can exist as adware infecting your computer while you surf a specific website.

Your browser can automatically get infected and hijacks the computing power of your device in order to mine cryptocurrencies for themselves. In certain cases, it would also work as a keylogger and record each and every keystroke you press.

A good way to avoid this is to have an updated antivirus program or Malwarebytes. They would flag or warn you almost immediately.

Download crypto-related software only from the official sites.

Most times official reddit pages for a specific cryptocurrency offer a glimpse into the scams in the most detailed manner.

For instance, this monero reddit page: Informs that accented letters on the web domain, (a dot on top of a letter ‘ moneŕo ’) tricked users into believing that it is the official domain.

Cryptoshuffler is another trojan that uses this bait to run in the background of your computer, eating away your processing power.

This software can be easily masked and renamed, so its a good idea to look at your task manager to find out whether any weird protocols are running on your computer.


  1. Bitcoin Ponzi scheme:

When someone offers you astronomical returns and backs that up by showing you the returns they made, that is most probably a scam.

The money you make is likely from newer investors paying their hard earned money to participate. This process will continue until the investment pool grows large enough that the owner starts running away with all the money.

Since most non-techies are unaware what bitcoin is and how it appears, they would often trust a friend who have jumped into the bandwagon, likely to be extremely convinced that it works.

All of these investment schemes are scams.

How to detect the bad eggs?

  • Avoid investment schemes with fixed/astronomical returns:

You need to understand that the bitcoin you’re buying is a token that you will own where you can store it in your wallet. Therefore, there is no returns, until you start selling them back at exchanges for fiat.

  • Lack of information about the company and its founders on the internet.
  • Company registration unavailable


  1. Fake exchange websites:

It is always a good idea to go in with the herd. When it comes to using exchanges, read about customer sentiment on their reddit or forums.

If you receive unexpected emails from your exchange service provider asking you to log in to verify your details, it could be a common phishing attempt as well.

Always setup 2-factor authentication if you are trading frequently. You can install the google authenticator app and verify via the 2-D barcode on the exchange site in order to link between them.

Double check the URL before signing in:

Before you insert your login ID as well as a password, you should check the URL to ensure that there is no weird misspelling even with a simple letter added behind a domain can be a simple sleight of hand to trick you.


Here’s what happened before:

Poloniex exchange users received an invite to download their mobile application to trade on their platform conveniently and on the go.

But Poloniex didn’t have a mobile app at that time. Many users thinking it was a legitimate app entered their login ID and password; the scammers were then able to access their funds and withdraw every bitcoin they had.

If they had simply activated their 2-factor authentication, they would’ve prevented this from happening.


  1. Cloud mining scam:

This may be one of the trickiest scams in the book. It is notoriously hard to detect.

The reason for this is that many cloud mining websites are actually genuine.

Cloud mining involves the pooling of monetary resources in order to rent a rig which would then mine Bitcoins. In legit operations, this setup works entirely and you would be able to generate decent returns.

These scam websites appear and pretend to be an investment vehicle for mining cryptocurrency and then simply disappear with your money once you get suspicious.

The only way you could differentiate the real ones from the fake ones is through due diligence.

You could try to find the site on the bitcointalk forum to see what the other users have experienced.

Checking the Alexa traffic of the website is also a good way to filter out the weed. If they have a rank of millions and practically zero sites linking back to them, it is highly reasonable to doubt it.

Established sites would normally be presentable and have a good amount of traffic linking back.

Here is a list of alleged bitcoin scam sites:

Dabbling with bitcoin and cryptocurrency lies somewhere between gambling and investing. It talks a well-read investor to know the difference. With the amount of attention bitcoin is getting, the cons and scams are becoming more and more prevalent.

If you have your doubts, let me know in the comments below. I will be happy to guide you.


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Winson Ng

I Started hearing about bitcoin only in November 2017. As a solo-preneur who has build around the Maverick Philosophy, I found bitcoin to be just the tip of the spear. I watched to see who was getting into it, some of the smartest entrepreneurs who has made their fortunes being the first movers allocated portions of their investment portfolios to Bitcoin. I studied and realized that if it worked, bitcoin was going to be the first global decentralized currency. And that has never existed before. Ever. I was Hooked!
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