It's true that you can make lots of money with bitcoin, but you'll need to learn to be savvy and avoid bitcoin mining scams. Here's what to watch out for.

Don’t Get Fooled! How to Avoid Bitcoin Mining Scams

When many people first hear about cryptocurrency, they get excited. They imagine all the “free” money their computer might generate.  However, be careful of Bitcoin mining scams.

You might get pulled in by just how much one bitcoin is worth. Then suddenly you’re confronted with the fact the cryptocurrency game isn’t an easy one. It’s work to balance the rig and cooling costs necessary to make it economically feasible.

Then you might notice one of many websites making big promises. This is the trap of bitcoin mining scams. They take newcomers and those otherwise frustrated with the realities of bitcoin mining and pretend to show them an easier way.

Today we’ll review some ways to see through these scams so you don’t waste any time or money on cheats. Without further delay, here are some common signs of various crypto scams.

Sign #1: Bad Reputation

The cryptocurrency market is fairly huge right now. While that means you have a lot of competitors, it also means you have a large pool of information to pull from.

When an individual or company is making big promises, you’re almost certainly not the first to hear them. The very first thing you should do when faced with any cryptocurrency hack or deal is to see what others are saying.

The harsher things people have to say about an offer, the more likely it is a scam. You also need to beware of extremely positive reviews, especially when surrounded by otherwise very negative stuff. Many shady companies will pay others to post fake reviews to drown out legitimate criticism.

For an offer to be worth considering, the general consensus should be positive or at least neutral. Meanwhile, don’t trust extremely positive reviews unless they’re coming from legitimate, verified sources.

Sign #2: Breaking the Laws of Physics

Bitcoin mining takes a lot of power. To mine at meaningful rates, you need the right equipment and a fairly good cooling system.

While some optimization on the software end might be possible, the gains will be small. This is a hardware game. Beyond that, it’s about geography and power costs.

If a website is claiming you can make huge gains with some simple software, it’s almost certainly a scam. It’s likely they’re trying to get you to download malware (or plan on stealing either information or what coin you already have mined.)

There isn’t some magical software that will suddenly make you thousands of dollars. Especially not one you don’t hear every Bitcoin and cryptocurrency website already discussing.

Sign #2: Promises Ignore the Basics of Economics

This is a fairly broad thing to look out for but we shall try to keep it simple. Ask yourself if what a company promises makes sense on their end.

If they’re a small company, they basically can’t have a cryptocurrency solution that gives big gains over the competition. Otherwise, they wouldn’t be small! This is an industry where true innovation can quickly make a company huge sums of money.

Meanwhile, remember that a company that loses money won’t last long. Doing anything at a loss generally only makes sense for very large companies. So if a company’s offer seems like it’d lose them money, it’s probably fake.

Successful companies should have good reputations and be relatively well-known. They should have some capital to work with. Only scammers will be desperate for small-time investors (since bigger fish have better lawyers).

Sign #3: Trades are Through Unsecured Channels

Trading bitcoin safely isn’t actually especially hard. Cryptocurrency can be stored in online wallets that only you can easily access. So long as the site you use is reputable, it should be almost impossible to steal from this wallet without you giving important information away.

Legitimate sites that deal in bitcoin understand the importance of security. Only reputable sites and services will be used. Trades will almost exclusively be online.

In-person trades especially should never be performed unless you know the other party well. It is a common scam to ask for such a meeting and then either rob the victim or pay in counterfeit currency.

The problem with trading through an unsecured channel is that trades are very difficult to reverse. Once someone has your bitcoin, you’re probably never getting it back. This is why you should only use secure channels where you can guarantee you’re getting what was offered.

Sign #4: Signs of Low Effort

One of the more damning signs of a scam is low effort. If a website looks cheaply made, with spelling errors and broken links, that’s a big warning sign.

The same goes for email offers. Mass phishing emails are a big way bitcoin scammers try to attract people to their shady websites.

Broken English is actually a feature many scammers use. It drives off savvy miners who are looking for warning signs, letting the scammers focus on people more likely to be valid victims.

This means low effort ventures actually serve two purposes. First, they drive away people who aren’t likely to fall for scams. Second, it means the website isn’t a big loss when it is inevitably taken down for illegal practices.

Just remember not every scam takes this approach. There’s a reason we listed a bad reputation as Sign #1. If a website looks nice but everyone says it is a scam, don’t just forge ahead!

Stay Savvy About Bitcoin Mining Scams

If you’re in the bitcoin mining game, you need to stay informed. Stick to verified sites and don’t go searching for “secret” advice or mining hacks. It’s all mostly poorly researched trash or downright intentional lies.

If you’re looking for a safe way to start depositing and buying bitcoin, we can help you do it right. Here at Coinstash, we can safely store your cryptocurrency (and let you buy currency too) with ease. The whole process only takes thirty seconds to get your account started!

About Coinstash

Coinstash is a registered digital currency exchange based in Australia. Our customers praise Coinstash as one of the most user-friendly, educational and supportive platforms. Through its live support 7 days a week, Coinstash has accumulated numerous positive reviews from its customers. Coinstash is also one of the only digital currency trading platforms that has participated in Australian government Austrade’s landing pad program.

Note nothing in this article should constitute general or specific financial advice. Coinstash does not take into account your circumstances when publishing articles. Any content on Coinstash.com.au or related domains are informational only.