When you’re new to crypto you’re also at the most risk to get caught in a scam. Unfortunately newbies are often prayed upon by scammers. Cryptocurrency is completely non-reversible and difficult to connect to an identity so when a scammer gets you, they often get away with it.
Beware of “Help”
If someone contacts you privately and offers their services to you be very wary. Don’t let anyone help you set up an account on an exchange or a wallet. Never send screenshots of your exchange account or your wallet. Don’t reveal any parts of your passwords, pins, passphrases, of backup seed words. Don’t sign up for any courses or other services offered by someone who contacts you first.
Beware of “Experts”
If someone were able to reliably predict the market, they would make money doing that rather than attempt to sell you their secret. Also disreguard anyone recommending you get in early on a cryptocurrency that is about to drastically rise in price. It’s likely a Ponzi scheme, a pump and dump or something just as shady.
Stick to the Top 3 Cryptocurrencies By Market Cap
There are a lot of legit altcoins, ICOs, tokens etc. There are a lot of well meaning projects that simply just don‘t work out. There are also a lot of scams. Even if you are able and willing to follow a project on a technical level, you will generally get the best performance from trading Bitcoin. Altcoins have a strong tendency to follow Bitcoin‘s price patterns anyway.
If you do end up investing in an altcoin, we suggest making that a small percentage of your overall portfolio.
Make sure you are in fact on the website that you think you are on. A website may look correct but actually be a phishing scam.
Avoid Mining, Especially Cloud Mining
Mining will likely result in you recieving less cryptocurrency for your money than you would have gotten by directly paying for it. Unless it’s your hobby or you’re one of the rare people with the means to make it worthwhile, it is simply better to avoid it.
Avoid “Advance-fee Scams and Money Transfer Fraud”
In this advanced type of scam, someone will send you fiat money (paypal, credit card, bank transfer etc) in exchange for you sending them some Bitcoin back. This works because most forms of payment are reversible but bitcoin is not. They will wait until you send them the bitcoin and then reverse the fiat transaction leaving you with nothing.
When just starting out with cryptocurrency it’s wise to work in small amounts and stay away from anything that sounds too good to be true.