Every year, millions of dollars lost due to scam activity, in this case, specifically Bitcoin related. Recently, the BitClub Network leader pleaded guilty in court for promoting a fraudulent scheme involving cryptocurrency.
Believe it or not, the BitClub Network scam worth around $722 million earned between 2014 to 2019.
The BitClub Network offers unsuspecting victims to invest in cryptocurrency mining pools and offering rewards for recruiting new investors. The victims will invest in a certain amount for a mining pool with shared profits. If a victim can find more investors, there will be bonuses included. Sounds familiar?
That is because scammers have been using the same scripts for such scams. While some victims are lucky to receive little profits, some lost everything without any return.
What went wrong?
There are things that you should consider when somebody comes to you with such an offer. Please consider the following:
Mining is not all profit.
The cryptocurrency mining landscape has changed. During the early days, you can probably use a decent computer to run a Bitcoin mining network. However, mining is a big industry with dedicated hardware and resources. It is no longer a feasible plan to run a small mining network like back then.
Is it the real Bitcoin?
There are no entities owned Bitcoin exclusively because of its decentralized nature, allowing scammers to promote scams using Bitcoin as a pretext. Victims believed they are investing in Bitcoin, where they are not.
An obvious red flag that most victims prefer to ignore. Of course, nothing is wrong with guaranteed profits, like 3-6% or a believable range of numbers. Something like 60% or 80% is absurd by just mining alone.
Questionable business model.
It is a common scam trait when you are unable to understand their business model. Such doubts usually appear on their website, like poorly explaining their products and services.
If you able to contact their representative directly and they still couldn’t explain it clearly. Plus, leaving some secret mysteries here and there. It is better to stay away.
A glance through, it is impossible to stop scams. There will always be a new one with a better modus operandi targetting gullible and desperate victims.
The only thing that you can do is to educate yourself and the people around you.
If you are involved in such schemes, you are an accomplice, even though you are not working with them. The reason is that you are promoting it.
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A writer, hustler, believer in continuous learning, and believer in creativity can change the world for the better. In Techcryption, Jumali is the Broadcast News Analyst for Bahasa Malaysia and English, covering the 4.0 Industry.