I think a lot of people believe cryptocurrencies are nothing but a scam. I don’t believe this. I think it has huge potential for becoming normalized and integrated into our financial options. Digital currency, I think, is a great idea. In fact, I rarely use any ‘real’ currency anymore, paying everything with a credit card or debit card which all involve digital transactions. When I think of bank accounts, there is rarely any ‘real’ paper or coin money handled – it is all done digitally on computers. So I don’t think that digital currency is a scam and I also think that this will become the norm in the next few decades if not sooner.
There are lots of scams, however, that involve cryptocurrencies. Here’s a few of which I’ve become aware:
- Investment scams, where there is a guaranteed positive result. My experience is that cryptocurrencies are extremely volatile and unpredictable, so any time I hear of a ‘guarantee’ or ‘sure thing’ or similar, I immediately think ‘SCAM!!!!’. I’ve heard of this happening in Guelph.
- Extortion scams, where an urgent phone call or text or email suggests that I need to do something now to protect someone or something. I already think ‘SCAM!!!’. And, in addition, if such involves payments involving cryptocurrency, I immediately think ‘SCAM!!!!’. I have read about this type of scam happening in Guelph.
- Rug pulls, where all the liquidity in a token is quickly sold off, leaving all the remaining token holders with nothing. This has happened to me, twice. I bought some of a particular cryptocurrency token on the decentralized market, watched it rise in value, then fall abruptly before I was able to sell it – leaving me with nothing.
- Pump and dump schemes, where influential people over-promote a particular cryptocurrency token then sell it off quickly once they’ve made a profit, leaving all remaining token holders with next to nothing. Any internet search about crypto will lead to this type of promotion, often looking like investment analysis and prediction about how amazing something will be. To me, it’s all ‘SCAM!!!’.
- Email and text messages telling me that I’ve got to do something to protect an account or someone, or a similar worrisome situation. These are mostly all SCAMS!!! Occasionally I get a real email about something needing some attention, but by going through my normal process of logging into my accounts safely and securely, I mostly find that these were SCAMS!!!. I would never log into anything using links in an email or text message regarding any such potential issues. I always go to the real website, and I check the address twice, and log in safely and securely to see what is really going on.
I think that cryptocurrency has a bad name because of the various schemes intended to scam us. I don’t think cryptocurrency is bad or that it will disappear, but rather that it will become increasingly more entrenched in our society. I think scammers are attracted to cryptocurrency because of the, mostly mistaken, belief that it is anonymous and that they can’t be tracked. I have no doubt (and a lot of hope) that police agencies are getting progressively better at linking accounts to specific people, so I also have little doubt that eventually all or most of the scammers will be caught.
As always, this is not advice, just sharing my experience. Do your own research.
Thanks, Jim.