Blockchain is the answer
Digital currencies are, in many ways, a different beast than a typical crowdfunding platform. With the cryptocurrency market valued at $100 billion, it’s no small enterprise. But blockchain, the technology that underpins the cryptocurrencies, has plenty of room for improvement. By focusing on delivering services that protect your privacy and improve security, blockchain could replace centralized payment systems with a new kind of decentralized network.
Section 2: With blockchain, you can trade your money
But is it really safer than the traditional banking system?
Unsurprisingly, the answer is “maybe.”
Crypto scams can start from the very first step.
The mind game of fake ICOs
In the early days of initial coin offerings (ICOs), cryptocurrency entrepreneurs would solicit venture capital funding from the public, promising huge returns on investments. Many companies used crowdfunding as a secondary funding source, the proceeds from which would be plowed back into the company for innovation. A number of crypto companies that raised funds through the initial coin offering tactic later faced lawsuits, having over-promised and under-delivered.
Scammers who participate in ICOs often do it for purely financial gain, hoping that the buzz and investor attention will boost their own fortunes.
How to identify a scam
At this point, many bitcoin and blockchain scammers are well-versed at exploiting new technologies. One scam that we have seen a few times recently is the Bitcoin hoax, which claims that someone has “found” a bitcoin lottery prize with a one-in-a-million chance of getting a payout of billions. It’s the best example of a scam that targets everyday people, instead of professionals.
Another scam that’s recently hit the headlines involves cryptocurrency exchanges. Companies such as Kraken have gone offline following hackers compromising the security of its servers, and it took hours for the company to explain what happened. As with other scams, the “hackers” were able to take over Kraken’s systems remotely. You can be sure that these kind of events will continue happening.
By now, it’s clear that cryptocurrency and blockchain may have major advantages over fiat money. However, there are a lot of people out there who still have no idea what it is or what to do with it. Anyone can be fooled into using digital currency for illegal activity, so it’s worth making sure you know what you’re getting into.