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The Best Ways to Avoid Crypto Scammers in 2021 – 2022

The Best Ways to Avoid Crypto Scammers in 2021 – 2022

Crypto scammers lurk in the dark corners of the blockchain sector. These fraudsters seek to prey on new users who are unaware of their presence or of how this technology functions. According to recent reports, since October 2020, US citizens have lost over $80 million in crypto fraud. These statistics only increase when you zoom out to include other portions of the world.

Crypto crime is a major problem that users need to look out for. So how do you avoid crypto scammers and keep your digital assets safe? Here are some great ways to beef up our security and prevent thieves from tricking you out of your digital assets.

DYOR

The first step in your line of defense is to take some time to learn about crypto fraud. It may seem boring, but it’s vital to understand different ways in which attackers gain access to your holdings. Most people are surprised to learn that in many instances the hacker doesn’t attack your security. Rather, they use a technique called phishing to slowly extract data about you over time.

Another great way to prevent startup scams is to ask the crypto community. Social media platforms like Twitter provide you with the opportunity to interact with other users, developers, and traders. You can ask people’s opinions on projects and get feedback. A word of caution, you can also get some offensive and illogical replies you will need to sort through.

Hard Wallets

Purchasing a hard wallet should be one of the first steps for anyone serious about crypto trading. These devices keep your digital assets safe via a combination of features. Hard wallets create an “air gap” which keeps your crypto offline in what’s called cold storage. When your coins are in cold storage they are safe from online threats.

Hard wallets also employ some other security processes to help keep your crypto safe. For example, most have a physical button that must be pressed to transfer assets. No matter how good a hacker is, they can’t press this physical button. Additionally, the top hard wallet manufacturers,  Trezor and Ledger, provide backup and restore functionalities.

Never Give Out Your Private Keys

Another premier step to take is understanding the importance of your private keys. In the crypto market, you hold your digital assets directly. Only your private keys provide you access to these coins. If you lose your private keys, you have lost your holdings.  That is what is meant when you hear horror stories of investors losing an HD with 650 Bitcoin on it. What the hard drive really held was the private keys to the wallet that held these coins.

If you give your private key out to someone, they have complete access to your funds. They can move assets and drain your account. Remember there are no refunds on most decentralized blockchains. As such, you need to be 100% sure before you send any transactions and immediately quit speaking with anyone who requests your private keys.

Stick to Reputable Projects or Development Teams

There are a lot of different options in the market today. For new investors, all of this selection can seem a bit overwhelming and confusing. Luckily, there are many platforms that have proven to be ahead of the pack. There are the classics like Bitcoin, Litecoin, Ethereum, and more. These early cryptos have been in operating for over a decade.

You also have new DeFi projects like the META1 Coin that combine next-gen features to provide users with more confidence. For example, the META1 coin can only be held by individuals. Companies, firms, or governments can’t trade or HODL these tokens. The network uses this protection to keep users safe from whale manipulation. Systems like these are the future of crypto.

Work with Open Source and Transparent Projects

Professionals agree that it’s ideal to work with open source and transparent projects. Open source projects are the best option because they enable the community to vet the coding and see if there is anything going on behind the scenes. Open-source projects also encourage developers to build on the user experience to make more immersive interfaces and Dapps.

Community governed projects are another example of added transparency. These networks enable users to put forth proposals and vote regarding the future of projects they are involved in. The community makes the final decision on items such as fee changes, new features, and token burns and buybacks.

Double Check Project Addresses

When participating in a crowdfunding event, one of the easiest ways to make sure your crypto is going where it is supposed to is to double-check the contract address. Every crowdfunding event and project will list its contract address. Take this address and copy and paste it into a blockchain explorer. The results of your search should match the project exactly. If not, abandon ship.

Always Avoid FOMO

There is a lot of hype in the crypto market today. The best traders understand that hype isn’t always a good thing. For example, when you hear people who are new to the market hyping a project, it’s best to let them continue as you don’t want to discourage their involvement in the market. However, you need to take their information with a grain of salt versus data you receive from an experienced trader or other experts in the field.

If you are able to discern between a new user and an expert, you are sure to find that you can weed through the hype to find the real gems in the market. Once you achieve this level of understanding, you can spread helpful information throughout the market and do your part to teach new users how to avoid the most common crypto scammers. In this way, you can give back to the community and help drive cryptocurrency adoption moving forward.

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