Welcome to the virtual world of bitcoin, where you are both your first and last line of protection against scammers and fraudsters.
This year, will you finally take the plunge and purchase your first few bitcoins? Here are a few tips to help you avoid falling victim to the bitcoin scammers and fraudsters who will try to take advantage of those who are new to the crazy world of cryptocurrency.
Conduct Research
The initial step is to create a wallet to store your bitcoin securely. There are numerous bitcoin wallets available on the Apple App Store and Google Play. Before deciding on a wallet, make sure to read reviews and conduct extensive research. You want to be certain that you are placing your newly obtained bitcoin into a wallet that will truly keep your cryptocurrency safe and not be stolen.
You will also need to choose an exchange where you may purchase your first bitcoin. There are numerous exchanges available with differing levels of security. Be prepared, as most will require some type of identity verification before you can create an account.
When sending money to wallets and exchanges, ensure that the site you are using is trustworthy. A professional-looking website is not actually proof of a legal business. Similarly, the presence of a wallet app on an app store does not guarantee its safety. Even if they are legitimate, bitcoin exchanges and wallets have been hacked numerous times.
Determine how long an exchange or wallet provider has been in business. Examine reviews and feedback, review sites such as Reddit, and the social media history of a company. Do a news search for the company you are studying, as the majority of reputable exchanges and brokers have likely been reported by major media outlets.
Guard Your Bitcoin Private Keys
Bitcoin is not similar to your bank. The concept of bitcoin is that it lives outside of the old financial system and offers the user absolute control.
This, on the one hand, prevents you from incurring overdraft fees or granting the government access to your personal information via financial transactions. Conversely, there is no centralized authority that will save you if you share your private keys and have your bitcoins stolen. In certain respects, it is the ultimate test of personal responsibility.
“Not your keys, not your coins” is a core concept of bitcoin that you should understand if you are just entering the sector.
A wallet generates two different types of keys: private and public. Using the public key to generate public addresses. These are the Bitcoin addresses that you will share with others.
A private key should be kept strictly confidential. This is the key you’ll need to encrypt and decrypt your wallet, and it’s essential for ensuring the security of your bitcoins. If you do not control the private key of the bitcoin wallet in which you are storing your bitcoin, you do not control your bitcoin.
Sharing Is Not Selflessness
Again, never share your private key with anyone, and under no circumstances do so online.
In addition, when you create a wallet, you are typically given a seed phrase. This phrase, also known as a backup phrase or recovery phrase, is produced once upon wallet creation, and you are urged to write it down and keep it safe. Typically, you are urged to write them down to avoid storing them on your computer, where they are accessible.
This seed phrase serves to recover bitcoin funds on-chain and is therefore a common target for scammers.
“not your keys, not your coins” is a popular phrase for a reason. If a fraudster obtains your keys or seed phrase, they can empty your wallet.
Step one is to keep your private key and seed phrase secure.
Phishing Scam: Inspect Your Links
Be constantly vigilant for phishing scams. Phishing attacks are favoured by hackers and scammers. In a typical phishing attempt, an attacker impersonates a service, corporation, or individual via email or other text-based communications, or by establishing a fake website. The objective is to convince the victim to divulge his or her private keys or to transmit bitcoin to an address that the fraudster controls.
These emails frequently appear real. Emails addressed to users of the hardware wallet Ledger purporting to be from the firm and urging them to download a security patch were, in reality, sent by imposters posing as company officials.
These are only a few instances, but phishing attempts are not limited to email alone. On social media, scammers imitating other users may send you links. You might receive phone calls.
The objective of many phishing scams is to get you to hand over data or information that could be used to breach your digital security and steal your bitcoin.
Be sure to examine the sender’s address in any such spam email. One important indicator of a phishing email is the misspelling of a valid address or URL. In the case of the Ledger phishing scam, the email was sent from the misspelled “legder.com” domain. An attacker will attempt to make the incoming emails appear as authentic as possible, so always verify. Another strategy is to hover over links to determine their destination. Even if bitcoin.org is indicated with a link, it may not necessarily lead to bitcoin.org.
It’s a good idea to bookmark sites you frequently use to access your funds. These sites should only be accessed via your bookmarked addresses, not via an email link. Hence, you may ensure that only legitimate URLs are used.
According to Paul Walsh, CEO of the cybersecurity startup MetaCert, the vast majority of malware is transmitted via phishing emails and malicious URLs. “The vast majority of security vulnerabilities involving harmful URLs go uncovered and are consequently not blocked,” he stated.
In other words, neither Gmail’s spam filter nor those more advanced security tools will catch everything.
Dr. Paul Seager, a professor of social and forensic psychology at the University of Central Lancashire in the United Kingdom, stated, “We assume that only other people fall for cons and cons would never happen to us.” This increases our sense of self-assurance and self-esteem. ‘We’re not foolish. This self-serving bias drags us into complacency, despite the fact that we do not fall for such schemes.
Remember to keep your private key hidden, to double-check every Link, and that if something looks too good to be true, it likely is.
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