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Scam alert |
I am a huge lover of
cryptocurrency and the benefits it could bring to every suffering family in the
world. Others hate it for the same reason but that’s not the subject of this
piece. I am assuming that you have at least a faint idea of what
cryptocurrencies are so I will not define it here but if you don’t, a little
research would help. The first, most known and most valuable is bitcoin.
Currently, the value of 1 bitcoin hovers around $13,000 and $16,000 on a daily
basis and has not fallen below $10,000 since December 17th 2017. Some
experts believed then, that, it would rise above $10,000 in about 5 years but 5years cae very early. Now, therein lays the danger! Already, several
websites are springing up daily claiming to have some ‘magical powers’ of
doubling bitcoins. Some go as far as promising ridiculously high weekly returns
of 250%. They claim to have the ability to inject exploits into pools and
blockchains. Simply put, they have the ability to exploit mining pools and
blockchains probably by some hacking ability in order to mine bitcoin quickly
hence justifying their ability to pay high returns on investment (ROI). Think
about it, if you have the ‘powers’ to invest in personal mining technology and
exploit pools to mine bitcoins at an insane speed, would you waste time
inviting others on board or would you simply quietly mine away??? The nefarious
activities of these websites only serve to sink the reputation of cryptocurrency
and provide ammunition to the critics and those who fear the impact of this
potentially life changing technology. The MT Gox episode should still be clear
on everybody’s mind. Note that, by the end of this year, about 80%, the equivalence of 21
million of all bitcoins would have been mined already. There are a lot more
people mining today than there was 5 years ago and they are using far stronger
and expensive hardware. This has raised the bar in terms of mining difficulty,
making it extremely difficult to gain 1 bitcoin. Therefore beware of anyone
promising you bitcoin doubling.
So what are these people really
doing?
This is based on some
background investigations, assumptions and observations but I may be wrong.
1.
Based on the information in the introduction,
if we are to assume without admitting that these people are really exploiting a
system to mine more bitcoins, then, they are probably hacking mining hardware/systems
and directing the mining efforts of hundreds, probably thousands of machines to
their benefit. They may also be hacking wallets and stealing bitcoins. Don’t
forget that, in this day and age, it’s easy to hack all ‘internet of things’.
That is why even Mark Zuckerberg would cover his webcam. Hacking is illegal and
someday when they are caught, the websites would shut down and they will vanish with your
bitcoins or earnings. On top of this, most of these websites have conditions that
you must fulfill in order to withdraw your earnings and you can easily be
blocked. And come to think of it, the blockchain technology is one of the most highly encrypted technology today, therefore trust me, no one can hack it. This can only be done through social engineering (being convinced by people on social media and forums to give away your wallet ID and password so that they can mine crypto-currency for you).
Test
Case 1 – An Investigation
So,
here’s a test I conducted using one of these websites. I was asked to just
insert my wallet address and click start on a supposed online software bitcoin
generator. Some progress bar appeared and run for a few minutes, then bingo, I
was told my wallet has been credited with 0.1 BTC (over $200). I visited my
wallet and there was nothing there so i came back to the software and found a
notice asking me to send .000227 in Bitcoins (a little over $6 at the time of writing
this piece) to the owners of the software for the confirmation of the
transaction. Note that, it’s normal to pay transaction fees in crypto-curency transfer but
here’s a little bit of common sense. If you have possession of funds that you
generated on my behalf, why would you request I pay transaction fees before you
forward the funds to me when you can simply deduct it from what’s in your
possession and forward the balance to my account??? See?? Basic!! The fees have
been deliberately set at a little above $6 to make you think it’s nothing. But,
think about it, if just a 1000 people fall for this every day, these criminals
would be smiling to the bank at the end of every month. To top it up, they have
a live chat room on the site saturated with bots singing their praises. How did
I know? Well, I tested that too. I went into the room several times with
different names typing different messages on the board and I kept getting the
same replies. Yes, from automated bots…. They also have a persuasive narrative on
the site claiming they don’t know when they would be found out for the software
to be shut down by ‘the authorities’. This is intended to create an urgent
effect on you to pay the .000227 BTCs, don’t be fooled.
2.
Any investment firm promising you huge daily
Returns On Investment far beyond the going market rate in that industry is very
likely running a Ponzi or Pyramid scheme. Basically meaning, they are taking
investment from others and giving it to you based on the amount you invested
(the higher the amount you invest, the higher the percentage interest gained).
They are not mining!! Such a business can shut shop at any time and vanish into
thin air especially in this case where cryptocurrency is not under any
regulation.
What most of you don’t realize is that, for as
little as $3 a month, anyone can create a so-called bitcoin doubling website with
a life-span of 3 months which would collect as much bitcoins as it
can and vanish when the domain expires, smiling to the bank with all your
bitcoins. They may probably metamorphous as another bitcoin generating website
and steal more bitcoins. Wise up!
Test
Case 2
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Scam advisor |
I
investigated another website offering the doubling of bitcoins, a registered
website in Europe, beautifully created and professional looking website, that
is. The narrative is persuasive although couched in some technical financial
terms that would confuse the ‘ordinary’ person. However, there was one problem!
They have blocked scam advisor (an online software used in checking the
reputation of a website; you would learn more about scam advisor in the next paragraph).
That’s the first red flag. Any website that blocks a reputation checking
software has an ulterior motive, I suspect. Then again, a little background
check from the registrar in that country proved that the website is only 1
month old and registered as offering financial investment services. There was
nothing in there about bitcoins. The catch here is that bitcoin is not
regulated so if they vanish with your earnings, they can’t be prosecuted. I
seriously suspect a pyramid scheme here.
How
to Avoid Being Scammed
A while back I wrote this
piece Avoiding online scam, which I really suggest you read immediately. It’s
a guide to finding the right tools online to investigate the background of
every website before you give them your money or profile. Here are two main
characteristics that you should spot:
a.
Making wild claims of getting rich overnight
b.
Having landing pages that lead you to sign up
without showcasing the details of what the business or website is about.
Read the full guide on that
article.
How
To Make Real Bitcoins
1. The
only way to benefit from bitcoins without being scammed is to set up your own
mining rig and store your coins on a hardware wallet or a credible virtual
wallet. There are several cost-effective ways to do this by investing in energy
efficient hardware. The positive news is that, top hardware and software
manufacturers like AMD and Nvidia have ventured into the market with some great
graphic hardwares intended for that purpose. You can mine solo or join a mining
pool where you bring on your mining effort and take a share of the profit based
on your contribution. However note that, solo mining bitcoin is not cost-effective
anymore at this point.
2. You
can also buy, store and sell at the opportune time if you have the resources.
3. If
you don’t have the resources to do all of this, then you will have to take the
hard road of doing some online work that pays in bitcoins. My favorite is Paid To Click (PTC)
where you just click on ads or do surveys and get paid for it in bitcoins. This
article may interest you How to make free bitcoins. You’re not going to be
paid so much overnight for viewing an ad but it’s low risk if you’re risk averse. The
good in it is that, you can put all your earnings together and wait for the day
the price of bitcoin appreciates and then strike.
Conclusion
It’s possible that the real
intentions of these new websites are good and would be clearer when they have
been in business for 3 years and beyond at least. However, be wary of
unreasonable promises in the bitcoin world. In the wake of the appreciation in
value of bitcoins, these numerous new websites may be preying on human greed to
satisfy their own. Just because you got paid on a bitcoin doubling site, does
not mean there is no fraud scheme here. It only means you are one of the early
birds who might have benefited. The day that the value of Bitcoin depreciates
steeply or appreciates significantly is when your earnings will also vanish if
you still have it with them, of course. Do due diligence and don’t fall for it. Good luck!