Crypto Academy / Season 3 / Week 6 - Homework Post for [@yohan2on]: Crypto Scams and how to avoid them
Homework task
1. What are Crypto scams?
Crypto scam, is any way to misappropriate money and cryptocurrencies that are not your own. Any company or method that has the objective or purpose of stealing or taking by deception the cryptocurrencies of others can then be classified as a crypto scam.
The way scammers manage to steal cryptocurrencies and other people's money are many. They can do it through deception (promoting projects that have no sustainable basis), through junk coins (or shitcoins), through pishing, through social engineering (systematic exploration of the social networks of the targets they intend to attack), etc.
One of the most dangerous forms of scams in the world of cryptocurrencies is investments, and in that sense, whether you invest your cryptocurrencies in fake mining companies, or through pyramid schemes or even in cryptocurrencies that have no real sustenance or possibility real of keeping exist (or any other form of scam), the worst thing about scams is that they multiply everywhere every day, due to the boom that cryptocurrencies currently have.
2. Make your research on any Cryptocurrency scam. (Attach a few references to the news surrounding that scam crypto project)
One of the most widespread forms of scam in the crypto world is ICOs. For those who do not know what an ICO is, I summarize it like this: They are a way by which cryptocurrency creators and crypto projects raise funds to finance them initially. The acronym ICO literally means "Initial Coin Offering". Many people start investing in ICOs because of the attractiveness of entering a project from the beginning, with the intention of getting the best prices on coins that arise.
The problem with ICOs is that although it is true that many of the most successful cryptocurrencies currently has emerged through ICOs, a large percentage of ICOs end up being scams and not bringing the cryptocurrency or project that represent to a successful conclusion. In fact, according to many experts in the field, it is estimated that more than 90% of ICOs end up being scams.
Which means that many people enter to invest in these projects, and at the end of the day, the creators responsible for these ICOs leave stealing the millions collected from the unwary who believe on them. Not all ICOs are scams, it is true, but what leads many people to invest in those that are scams are two things, excessive ambition, with a total lack of knowledge about the supposed projects that these ICOs represent. All this, coupled with the giant percentage represented by scams in terms of ICOs, causes many people to invest their money in the wrong way and end up losing their crypto funds.
Take, for example, the specific case of Modern Tech (Pincoin y iFan):
Modern Tech (Pincoin y iFan) was an ICO of Vietnamese origin that supposedly aimed to sell two tokens, one token would represent a value that would increase over time, the other was the basis for an internal system within the platform. It ended up being a very common pyramid system that promoted the recruitment of new users and investment to get more profits and revenues that were not really sustainable afterwards (they never really were).
At least more than 30 thousand people lost money with this ICO. In fact, the entire scam carried out by said project had a total estimated value of more than 660 million dollars. The scammers left and did not answer for anything to anyone.
News Sources related
a. Vietnam: Pincoin, Ifan ICOs Exposed As Scams That Allegedly Stole $660 Million
b. Exit scammers run off with $660 million in ICO earnings
c. The 10 biggest crypto scams on record – and the lessons we can learn from them!
Crypto scams have affected the crypto space in many ways, but the main aspect in which they have affected it is through in the fact that now crypto investors (that is, all those people interested in the world of crypto investments) need to educate themselves much more, and be much more attentive to the possible risks of everything they do within the cryptographic space or field; because a bad decision or action can make them lose all their cryptocurrencies.
Preferably I would say that the ideal thing is not to invest in ICOs, but if you are going to do it anyway, what I advise then is to investigate very well the team behind the project, what's the finality of the project that supports it, also examine the road map and any additional details you can get about it.
3. Will regulations in Crypto add value to the Crypto space?
As we well know, regulations of any kind are dictated by the governments of the countries. And in this sense, crypto regulations are, both from the point of view of governments, and of the crypto community worldwide; as a necessary evil, in order to fight the almost infinite number of crypto scams out there.
This is how I can ensure that crypto regulations do add greater value to the cryptocurrency ecosystem and all that they imply because they help to complicate things for all those who only want to obtain benefits by harming others.
Conclusion
If something can be concluded in relation to cryptocurrency scams, it is that an issue of enormous importance since as cryptocurrencies are gaining more relevance on the world stage, cybercriminals become more resourceful and sophisticated when trying to steal. funds from others, and in many cases, they are successful. Therefore, it is our duty to prepare to effectively protect our hard-earned crypto funds properly againts any kind of threat.
Well, this is my participation in the Crypto Academy, in this sixth week of the third season, and doing this task for @yohan2on (Uganda). Until next time!
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Thanks for participating in the Steemit Crypto Academy
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This is good content. Well done with your research study on Crypto scams.