Out of all the known bitcoin or cryptocurrency scams in Nigeria, Africa and worldwide, fake news might be one of the most underestimated or underlooked. A lot of crypto investors have been victims of misinformation without even realising it.
Although many Nigerians in the crypto space have trained their eyes to detect phishing activities, fake giveaways from supposed scammers, and the traditional pump and dump, many people may still be vulnerable to fake news.
Someone might be oblivious of what we are referring to here. Today, many scammers resort to fake news to spread false information about bitcoin and other cryptocurrencies to influence prices, thereby making profits. It may be very difficult to avoid misinformation as it penetrates news websites, chat apps, networking platforms, etc.
Even though fake news is not an obvious attempt to steal your bitcoin or cryptocurrency like other methods such as phishing, it can be very dangerous and could result in the loss of all your funds or a large portion of it.
Considering that what is true on the internet community isn't really clear anymore, well-meaning Nigerian people may be misguided by a fake headline. Prospective cryptocurrency investors may be moved to make financial decisions if, for example, a headline says bitcoin will crash soon or a crypto whale just bought a huge quantity of Shiba inu.
In this article, we shall consider how to detect or identify fake news.
Take a Look at the Social Media Handle Carefully
In Nigeria and around the world today, scammers are in the habit of creating fake social media or networking website handles to scam investors of their bitcoin or cryptocurrency. Being one of the oldest tricks in the books, you'd find it very surprising that many people still fall victim to this scam.
Even though one can easily assume that telling the difference between a fake and a genuine social media account is easy, a lot of investors still fall into this scam over and over again. This is because people barely notice the slight differences when a scammer creates a fake famous celebrity account. The difference could be one changed letter in the username.
Sometimes this is all it takes to scam thousands of investors of their money, bitcoin and other cryptocurrencies.
A very good example of cryptocurrency fraud that happened as misinformation via a networking platform was when a scammer impersonated John McAfee, the founder of McAfee Cybersecurity, on Twitter. It may sound quite funny that the founder of a cybersecurity company had his online identity stolen.
However, many surmised it wasn't his fault. This single scam boosted the popularity of the digital coin, GVT, an emergent crypto coin at that time.
The scammer only had to post a tweet using the identity of the McAfee founder, and several thousands of people took the bait. The scam was very convincing because John McAfee had a reputation for being among the first few people who saw bitcoin rise to popularity before it came to the limelight.
Some of the top red flags people should have noticed with this scam is the absence of the blue verification tick on the Twitter handle and the addition of the letter 'L' to the Twitter handle, which obviously indicates it was a fake account.
As expected, the market value of GVT soared at a geometric progression after the tweet. You can imagine the huge amount of money this crypto scammer made from crypto investors who fell, victim.
The scam described above is a perfect example of a pump and dump scheme, where scammers artificially induce inflation of the value of a cryptocurrency by persuading or encouraging others to invest in it with the hope of the scammers selling their crypto when the value rises, thereby making profits and leaving investors with nothing.
Read on some examples of crypto scams you should know.
The pump and dump scheme is so effective because of the cryptocurrency market's volatility. This implies that prices can skyrocket or nosedive in an instant! Crypto investors who have little or no experience in the crypto space may see this volatility of cryptocurrencies as a means to get rich overnight. It can be quite tempting to invest based on an internet community post or tweet, which may turn out to be fake news.
We highly recommend you do enough research and not invest based on random networking website posts.
Always Read Between the Lines
One of the best ways to find out if the article, blogpost or piece of news you are reading isn't the craft of a bitcoin or crypto scammer is to read between the lines. This means taking in all the details and understanding what the article says. Is the content trying to persuade you or make you take a certain financial action?
In general, renowned online publications or news websites might have opinions on bitcoin or other cryptocurrencies. However, it is very unlikely that they would try to persuade or encourage you to invest in a cryptocurrency. These news outlets do not offer financial advice. When you see one that does, you should examine it properly.
If, after reading a publication, you feel a strong urge to invest in a particular cryptocurrency, you must ask yourself some questions and answer them honestly. Do you want to invest because the article gave you some sound financial advice or because Elon Musk invested some billions into the crypto project?
Here are the different types of crypto scams to be wary of.
Verify Authenticity of the Website
If you have been conversant with the rise of bitcoin and other cryptocurrencies in Nigeria, Africa and around the world, you would realise that there has also been an increase in fake news websites that imitate the popular legit ones to convince crypto readers and enthusiasts of their authenticity.
The digital world is really moving fast, and people can navigate to a fake news website thinking it is the popular CNN or BBC. This has happened in the past, and it is still happening. You may find a series of articles or blog posts claiming that billionaires like Elon Musk and Jack Dorsey are investing huge amounts of money into bitcoins or other altcoins.
This may be another attempt at a pump and dump scheme if our guess is right. This misinformation method is very effective because it preys on people's misinformation and confirmation bias. For example, someone who believes Shiba Inu is the next big thing may invest a huge amount of money due to confirmation bias if he sees a blogpost or article saying Amazon is now accepting payment in Shiba.
Also, if, for example, you know little about Dogecoin and read a blog post about how it is increasing in popularity, you may reach for your wallet due to misinformation.
We highly recommend you find out if the website you are reading the article from is legit or not. Look beyond the article's headline and ask yourself if the website is BBC or just a good imitation of the news site. For a legit website, you should find the lock icon by the left-hand side of the URL bar at the top of the page.
It could also be a fake website if you found the link on networking websites or in a marketing or promotion email.
Good Things Don't Always Come for Free
You can get some things for free, but when dealing with bitcoin and other cryptocurrencies, you should be suspicious when getting something at zero cost. In Nigeria, Africa, and around the world today, bitcoin and other cryptocurrencies have proven to be a valuable investment sought after by all and sundry. It makes no sense for someone to offer these digital currencies for free.
Another problem is unsolicited advice from alleged crypto experts on the internet community. However, many legit experts on social media platforms offer sound investment advice. We recommend you follow only verified crypto experts for investment advice. This should not stop you from doing your own research as well.
There is a high probability of being a scammer if a random social media account reaches out to you or you receive an email about bitcoin or cryptocurrency. You would do well to ignore such as not to fall victim to this prevalent crypto scam.
It makes sense to think people will keep the information or the knowledge that a digital currency is about to skyrocket to themselves, rather than go through the pain to visit your social media inbox or email to inform you.
Making smart cryptocurrency investments is not easy. Therefore, to think every piece of advice or fact you read online is helpful would be sheer naivete. Most social media persons don't understand cryptocurrencies well enough but will readily sell you their theories.
It is quite unfortunate that there will always be people looking to make money off others and will do everything possible. Thus, it is best to be cautious and not take crypto-related financial advice from every Dick and Harry.
Here is how to avoid bitcoin scams.
Beware of Apps that Spread Fake News
Don't be surprised to know that not only websites, email and networking websites peddle fake cryptocurrency news. Scammers can also use mobile apps to scam people. These fraudsters go through the pain of developing mobile apps that can be used to spread fake news to prospective investors. It is very important to tread with caution as a bitcoin or crypto trader.
Before downloading any bitcoin or cryptocurrency-related app, verifying if it is from a legit source is important. Do a thorough research online about the app, read ratings and reviews, and find out what the crypto community is saying about the app. This may save you from picking the bait of a scammer.
Remember, caution is key!
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