How To Avoid Fraud In The World Of Bitcoin

Ways to avoid fraud by staying on the safe side of the Bitcoin ecosystem...

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Along with a lot of positive innovations that Bitcoin and other cryptocurrencies offer to our lives, we see that there have been quite a lot of fraud incidents so far. Such negative situations, which directly affect users in the system, also indirectly affect the entire ecosystem.

Pump-Dump events, fraudulent clearing sites, fake cloud mining companies, security issues and bankruptcies are stories of fraud that we hear all the time and can't be prevented. In our article, we will talk about personal precautions that our readers can take to avoid such an incident.

See If Company Reserves Are Audited

It is an important method of providing confidence that the Bitcoin reserves of all companies engaged in clearing or mining or serving as a cryptocurrency bank are open to users. Companies that publish their reserves so that they can be seen by everyone should be preferred when performing any transaction. Otherwise, there is a possibility of performing a transaction on a non-currency.

Explore the background of the site or company

Check the site for Whois and domain information, where it is registered, address, contact, and employee information. Reliable companies do not hesitate to provide such data to their users, so investigate the company you are trading with Down to all its details. If the company has not given any information, be sure to be skeptical.

Follow whether the company is transparent and business methods

Some companies publish business methods, that is, how they make money or transactions in a transparent way, while others hesitate to publish such information. For example, companies engaged in actual mining under cloud mining; which block is located when, distributed money, total power, cost per share, etc. as such, it publishes all information openly. This can give us an idea that the company is doing real mining. Fake mining companies, on the other hand, claim to be mining without publishing any data. Staying away from such companies is important to protect your money.

Distinguish between Real fraud and mismanagement

Fraud is a deliberate and deliberate malicious act. Mismanagement of a company, on the other hand, means that a mistake was made without getting it. In both cases, the user is harmed. Therefore, company management and whether employees are professional, even their CVs, if they can be reached, should be investigated. Even if a company does not commit fraud, it can harm its users due to mismanagement. For example, in some cases, even a signature placed under an email sent by the company can give a clue as to whether the firm is a professional.

Do Not Underestimate Common Views

Do not underestimate this view if a company or site is constantly being talked about and criticized by the cryptocurrency community on social media or forums about fraud. Common behavior and opinions are often a serious and reliable source of data about companies. Therefore, listen to the common opinion formed by users.

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