When Bitcoin first emerged, there were a lot of people that thought it was just a fad that would come and go in a few months. But now it looks like it’s here to stay and there are a lot of new cryptocurrencies popping up as well.

People are making good money trading in Bitcoin and other similar cryptocurrencies, so a lot of people want to get in on the act. That means there are a lot of inexperienced people trying to trade Bitcoin, and online scammers are taking advantage of that.

There are quite a few Bitcoin scams out there and people are losing a lot of money to them. If you want to start trading Bitcoin, you need to be aware of these scams.

Trading Software Scams

There is some great trading software out there for beginners that don’t really know where to start. These robo-advisors will give you tips and advice on trading, for a fee. It’s a good place to start if you don’t have any experience, but there are a lot of scam sites out there that will just take your money and not give you any good advice. If you check out this review by Learnbonds on Bitcoin Revolution, you should get an idea of how to spot a legitimate robo-advisor and how to avoid the scam ones. If you are unsure, always do some research and try to find reviews from other people that have used it in the past. Never hand over any money until you’ve checked them out first.

Fake Wallet Scams

You need to keep your Bitcoin in a wallet somewhere and you have two main choices; a hardware wallet or a software wallet. If you have a hardware wallet, you store your Bitcoin locally on your computer or on a separate memory stick or external hard drive. The only issue is that you could lose it all if the hardware fails, which is why some people use software wallets. But there are some apps that look like legitimate software wallets, but in fact they are just there to steal personal information once you download them onto your phone or computer. A lot of them have made it onto legitimate app stores, so make sure to do your research before downloading any of them.

Pyramid Schemes

Pyramid schemes are a scam that has been around for so long, and now they’ve entered the world of Bitcoin. A simple Bitcoin pyramid scheme works by convincing people to invest their money, and then giving them a payout. Except, that payout isn’t a profit, it’s just money from new investors that have also been tricked into the scheme. That convinces you that it’s legit and so you start putting more money in. This continues until somebody runs off with the money and you lose it all. The best way to avoid this is to be realistic. If somebody is offering you huge returns for a minimal investment, it’s probably a scam. If it sounds too good to be true, it probably is.

If you are going to start trading Bitcoin, make sure to watch out for these common scams.

Image by Darwin Laganzon from Pixabay