Cryptocoin Fraud Prevention

Cryptocoin Fraud Prevention – How to Keep Your Coins, Stop Scams and Get Rich Over Time.

A day doesn’t go by when someone isn’t scammed out of their money or their cryptocoins. Cryptocoin fraud prevention has become a necessary educational item that everybody – Bitcoin miners, cryptocoin investors or would-be miners or investors need to learn. Whenever you are holding Bitcoin or any other crypto currency you are holding items of value.  They have worth.  They are worth money and they need to be protected as if they were gold coins themselves.

Cryptocoin fraud prevention has become more important than ever as very resourceful criminals are getting very creative in how they trick people out of their cryptocoins or actual fiat currency.  Even intelligent who are “street smart” get fooled into voluntarily giving up their money or cryptocoins…

I can’t say for certain if there are more AmerIcan cryptocurrency scammers as compared to Africans or Indians or any other group.  What I can tell you is that it seems more likely to be attempted by people who live in countries with an overall lower average income, lower standard of living, etc. However, ANYBODY can be tempted to steal money if it’s easy to do and impossible to get caught. Unfortunately, that’s exactly what we have here so let’s get you educated so you don’t get robbed or scammed.

bitcoin fraud preventionCryptocoin Fraud Prevention Tips

Never Give Out Your Wallet Address AND Password.  Yes, you need to give out your wallet address to receive coins.  But you NEVER need to give out your password and you never should.  Why? Because anyone with your Wallet ID and your password can clean you out in less than one minute.  NEVER give your password to ANYBODY.  Your cryptocoins will be GONE.

Never Fall For A Get-Rich-Quick or Easy Money Pitch. These run the range of “Invest $70 and earn as much as $750 per week!” OR “I’ll show you how to get 2 Bitcoin in 2 days!” etc. etc.  I sometimes troll these posts on Facebook with a simple answer: “Prove it!” and nobody ever does.  These are out and out scams and are to be avoided.  I’m a Bitcoin miner and I own my own equipment.  I invested a HELL of a lot more than $70 and I NEVER made $750 per week.  And after MONTHS of mining I’ve mined almost one HALF of one Bitcoin.  The math of these bullshit offers just doesn’t work.  Ditto for bot investing with promises of 1%, 2%, 3% etc. returns per day, etc. etc.  Making money in cryptocoin is not done these ways.  You do lots of homework and research, you invest your money and watch your portfolio as you continually educate yourself.

NEVER Buy or Sell Bitcoin Privately.  ALWAYS use an exchange. Whether you are the buyer or the seller – WHO GOES FIRST? Who sends their money to a perfect stranger and HOPE that stranger will give them their Bitcoin? An idiot, that’s who.  On the flip side of that coin, who sends their Bitcoin to somebody they don’t know and TRUST this perfect stranger to send their money? A moron, that’s who. If you can’t buy cryptocoin of any kind with an exchange then DON’T BUY IT PERIOD.

Never Buy Overseas ICOs. Scam ICOs are robbing millions of dollars from people.  Some of them look and sound great with a perfect whitepaper, a plausible business model and beautiful website.  There’s just one problem; they rake in millions of dollars and disappear.  Here’s your ICO buyer’s guide to safer ICO investing.

Bitcoin Whale Spotted

Bitcoin Whale Spotted – Anonymous trader buys $400 million in bitcoin

We reported Bitcoin whales behind the recent rally of Bitcoin going over $10,000 a couple of days ago.  One Bitcoin whale spotted got the attention of everybody; he gulped up some 41,000 Bitcoin totaling $400 million over the span of three days.  Looking at the seven day Bitcoin price chart he already made a very handsome profit thanks to this latest Bitcoin rally.

Who is the Bitcoin whale spotted?

bitcoin whale spotted

Nobody knows who or she may be but everybody knows this is one smart Bitcoin investor.  They bought near the latest bottom and already made a ton of money on gains.  Other investors see the $6,000 Bitcoin price earlier this month as the bottom leaving nowhere to go but up.  And that is holding true; Bitcoin has nearly doubled in value in the past two weeks and is up 35% compared to this same time last week.

Apparently, the anonymous cryptocurrency trader who made what may very well be the largest single investment in Bitcoin ever and has an optimistic outlook.  And with good reason.  Bitcoin is on the march back up and heading towards an all time high.  Most experts agree that Bitcoin will rocket up to the $20,000 level sometime during summer ending 2018 at $40,000 or even higher.

Buying on a Bitcoin dip is a proven investment strategy and the Bitcoin whale spotted is not alone.  With jitters over potential US regulatory action out of the way coupled with similar relief out of Asia, Bitcoin bad news is in the rear view mirror.  Anybody who bough Bitcoin at the $6,000 or $7,000 level earlier this month has already seen an impressive gain in value.

The purchase was made between February 9 and February 12 via Bitcoin address address 3Cbq7aT1tY8kMxWLbitaG7yT6bPbKChq64. That account has seen its bitcoin balance balloon from 55,000 BTC up to more than 96,000 BTC


LoopX ICO Scam

LoopX ICO Scam – LoopX Disappears with $4.5 Million Without a Trace

The LoopX ICO scam is just another scam in what is turning out to be an alarming trend.  ICOs can be wonderful things in raising capital for a new solution to a vexing problem via blockchain.  The problem is, it’s just too easy for scam artists to raise all kinds of money then simply vanish.  Prodeum was the last one to pull this off although it remains unclear of exactly how much they got away with.

When it comes to ICO ripoffs the LoopX ICO Scam is small potatoes compared to what Bitconnect pulled off.  Even so, a lot of people lost a lot of money as the perpetrators pulled off the perfect exit scam.  Website? Gone. Twitter Feed? Gone. Facebook Page… Telegram…. Gone and gone. These guys are gone without a trace and likely won’t be tracked down.

The LoopX ICO Scam starts with a familiar story; They promised a revolutionary investment platform to earn backers’ money with its proprietary trading algorithm, (remember the Bitconnect Bot?) Lots of people bought in looking for next round of easy money with the enticement of “no brainer” high returns.

Read some LoopX ICO Scam blurbs for yourself, taken from a cached version of their website before it totally disappeared…

“After developing over months and testing successfully with great profits, we can release now with great confidence the LoopX [t]rading [a]lgorithm,” the LoopX marketing read. “This [s]oftware will give us all the opportunity to make more money online then we could ever do in real life.”

“Our software handles over 10,000 trades per second and calculates over 100 currencies at a time…Always looking for those opportunities to make profits bigger then 10%, which will payed out to our members on a weekly basis.”

“This was not thinkable in the normal financial sector, but has become reality in the cryptoworld.”

loopx ico scam

Clearly they used all the right buzzwords and reeled in unsuspecting investors with this amazing new thing they’ve developed.  Just as with the vaunted Bitconnect bot, these people were no different than the snake oil salesmen of yesteryear who plied their bottles of bullshit across the American frontier to a naive pubic.

The word on the street was LoopX was planning to launch its lending investment platform (Hmmm, that sounds a lot like Bitconnect too…) this month.

The LoopX ICO Scam was driven by its whitepaper which really reeled in the gullible; “Finally the opportunity is here for the common investor to be part of a revolution and be finally free, financially free,… Our top priority is to give you an opportunity to sit back, let us do the work and watch your money grow.”

This appeal to people’s greed has worked for centuries the world over.  Amazingly, some people really do never learn.

For lack of any other guidance, we urge cryptocoin investors to ONLY invest in ICOs based in the United States.  ICOs in America are subject to compliance with a string of requirements under US Federal Law.  Violators are subject to the full force of the Federal government and scam artists WILL be caught.  Alternatively, look to Western Europe where there is also a respectable amount of oversight, regulation and a stronger presence of law enforcement with the resources to track down wrongdoers.

Equally as important, DO YOUR HOMEWORK.  Do deep research.  And as we pointed out in an earlier article — approach every ICO with a healthy amount of skepticism.  Get the word on the street from Reddit, and Facebook groups.  Start conversations with other people.  Find out all you can about the ICO and ask lots of questions.   Once you’ve done your research and feel satisfied with everything you learned then go for it.



Bitcoin Back Over 10K

Bitcoin Back Over 10K- Bitcoin Shrugs Off Bad News,  is Climbing Steadily Higher

With Bitcoin back over 10K, Bitcoin is proving the critics and the cynics wrong yet again thanks to crossing back over the $10,000 line and staying there.  Bitcoin has been on a slow and steady rally the past several days. While still halfway from it’s high of nearly $20,000 just two months ago, Bitcoin is steadily climbing from a February low of under $6,000.

With Bitcoin back over 10K most other cryptocoins, as usual, follow suit.  Crypto currency investors are breathing a big sight of relief at seeing their portfolios look green for the past few days.

While the sustained rally that brought Bitcoin back over 10K is a global event involving hundreds of thousands of people, some Bitcoin whales have been spotted making VERY large buys today to the tune of over 1,000 BTC.  That’ll drive prices higher all by itself.

Then there’s the drought of Bitcoin bad news with good news filling the void.  We recently reported on Coinbase Commerce, a gamechanger for Bitcoin markets as well as the other big coins. Then there are positive signs in South Korea that they will more than likely pursue a licensing system for their cryptocoin exchanges to crack down on illicit activities than an out-and-out ban.  Earlier this week the CFTC in the United States convened meetings signalling no intention to regulate cryptocoin beyond the myriad of laws already on the books as well as a slew of enforcement methods.

With Bitcoin back over 10K it looks like the FUD has faded and the FOMO has returned.  Experts like the redoubtable Tom Lee, among others, predicts new all-time highs for Bitcoin by July.  I don’t think it’ll take that long.  I think this rally, while starting out slow in the past few days, while gain steam and pickup momentum leading to fresh highs sooner rather than later.

Cryptomining In Your Browser

Cryptomining In Your Browser – Salon Magazine Offers an Alternative to Paywalls

Newspapers like The New York Times and The Washington Post make their paywall simple; you get a limited number of free articles with constant offers to sign up for a monthly subscription. The Guardian has taken a softer approach by appealing to mankind’s generous nature by asking for far cheaper and totally voluntary donations. Now cryptomining in your browser can allow you to read articles you might not otherwise see.

Salon Magazine really thought outside the box; You can read all of their articles with ZERO advertising and at no cost if you give them permission to perform cryptomining in your browser as you consume their content.

Long story short; If a reader chooses to block its advertising using an ad blocker (editorial note: ad blockers are becoming increasingly popular across the world), Salon Magazine asks readers to allow Salon to use that person’s computer to mine for Monero, a cryptocurrency on the rise.

Mining cryptocurrency in your browser – or any other way – consumes much of a computer’s processing power due to the complex calculations necessary to mine any given cryptocoin.

Salon told readers: “We intend to use a small percentage of your spare processing power to contribute to the advancement of technological discovery, evolution and innovation.” Small is a relative term; some surfers have complained of their browsing slowing down to a crawl as laptop fans spun up to top speed to cool down the computer as it was suddenly challenged with daunting computational tasks as the reader browsed Salon articles.

Salon has deployed CoinHive, a controversial mining tool that can easily be exploited for illicit gain by hackers.  Let’s be clear; Salon is upfront with their approach and nothing they are doing is illicit.  At the worst, it could be considered annoying as some computers are slowed down to a crawl.


cryptomining in your browser

Cryptomining in your web browser, or on any normal PC in general, has become largely impractical due to the very low returns realized for expenditures in terms of electricity and computing power.  Salon’s approach leverages the proven concept of distributed computing which, as the name implies, distributes a complex computing task among numerous computers.

Salon Magazine is trialing cryptomining in your web browser as an alternative income stream.  We’re watching this experiment with keen interest and will share any updates as we have them.

Cryptocoin Market Dilution

Cryptocoin Market Dilution – There Are Too Few Dollars Chasing Too Many Cryptocoins.

Visit any discussion on the Internet and the question asked more than any other is “When will coin X rise in price?” The answer seldom if ever heard is “never” Why? Cryptocoin market dilution.  Simply speaking there are more coins out than investors able to buy enough to move the price in any meaningful way.

To put cryptocoin market dilution into perspective let’s look at the all-time high number of IPOs on the United States stock markets.  There were 848 IPOs in 1996 raising $78.6 billion (Source: CNN Money).  Now let’s look at 2017 ICO statistics; 913 ICOs raised a total of $5.6 billion (Source: Business Insider). And that’s GLOBAL – encompassing the US markets and the rest of the world.

Numbers don’t lie; there aren’t enough investors to support all of these different coins.  I suspect this is why Bitcoin pricing is struggling to gain footing past $9,000 to let alone $10,000 and not even dreaming of reaching it’s high of $19,000+ just two months ago.  That’s also why other coins aren’t exploding in value; cryptocoin market dilution makes it impossible for a sufficient number of cryptocoin investors to make a significant difference in any given coin’s price. Long story short? There’s not enough money to go around so cryptocoin values remain stagnant.

Cryptocoin Market Dilution

With cryptocoin market dilution clearly evident I forecast a lot of coins will crumble and drop off the cryptocurrency markets due to lack of investor interest, frustration with ROI, etc. leaving the big coins on the block left standing; Bitcoin, Ethereum, etc.This will become more apparent in 2018 as even more ICOs are expected with all of these altcoins further diluting cryptocurrency markets.

I see two silver linings in these clouds of cryptocoin market dilution: Weiss Cryptocoin Ratings will empower investors to make informed decisions on a select few cryptocoin investments (which will starve out the rest) coupled with an inevitable rise of Bitcoin prices followed in tandem by BTC’s little brothers ETH, BCH and LTC.

Coinbase Commerce

Coinbase Commerce – Striking Back at The Banks and Hitting Them Where it Hurts

Coinbase Commerce empowers over 48,000 businesses to accept Bitcoin, Bitcoin Cash, Litecoin and Ethereum alongside Visa, MasterCard, Discover and American Express.  This alone silences the critics that often cite Bitcoin and other cryptocoins as being useless since cryptocurrency can’t be spent anywhere.

Thanks to Coinbase Commerce the four major cryptocoins can now be spent EVERYWHERE.  From the big boys like Dell, Microsoft, Expedia, Intuit, Bloomberg and Dish Network to much smaller online merchants, accepting cryptocoin for payment can be implemented in just a few minutes.  With such a simple and swift implementation process it’s easy to imagine websites accepting Bitcoin for payment numbering into the hundreds of thousands in no time at all.

coinbase commerce

Coinbase commerce is a dream come true for online merchants. That’s because online merchants face the bane of their existence in the form of credit card chargebacks.  That’s when a consumer disputes a credit card charge with the issuing bank of the credit card.  Within a couple of days the merchant’s bank account is hit and the funds are removed.  The merchant then has to respond to the chargeback and then hope for the best.  Hope for the best? Yes indeed.  One of my other businesses, crowdfunding promotion firm Crowdfund Buzz, has only been successful in winning a chargeback case just 50% of the time.  The other 50% means that the customer ends up getting our services for free.  Online merchants selling products have the same pain; they ship the goods (think Apple MacBooks, Gucci handbags) then get slapped with a chargeback.  To add more pain to the process, researching and submitting the documentation needed to answer a chargeback is time consuming AND the merchant typically waits TWO MONTHS for the decision. Even with breathtaking documentation (I typically provide a 45 page response LOADED with proof of work, proof of client acceptance, etc. as other vendors provide FedEx or UPS proof of delivery, etc.), too many chargeback challenges fail.   In that case the customer gets to keep the goods or services – and the money.  It’s become so common that it has garnered a term all its own; “friendly fraud”.  By the year 2020 friendly fraud will cost merchants $25 billion per year at the current pace.

With Coinbase commerce that’s a thing of the past.  Chargebacks are impossible and businesses can sell the crypto they received as payment instantly and receive fiat currency just as quickly as if they made that sale with a credit card. It’s not hard to imagine online merchants accepting cryptocoin in droves then eliminating credit cards from their websites.  This has already started and I predict will continue to gain momentum.

Banks rake in $200 billion per year on credit cards from the merchant fees imposed to interest charges, annual fees and all the rest of them. Coinbase commerce will steer some of that money their way through the transaction fees they’ll earn on every transaction.  With wider adoption cryptocoin becomes more mainstream, consumers have a lighter debt load and this must have the banks scared to death.


Coinstarter Review

Coinstarter Review – A Great Idea or The Next Big Scam? has a brilliant idea – bring together thousands of ICOs under one website with a Kickstarter-like presentation.  Coinstarter is the convergence of crowdfunding and cryptocoin ICOs in a similar fashion to what Indiegogo has cooked up.  The first thing that got me curious as I started writing this Coinstarter review are the numbers; Indieogo has just one ICO listed while Coinstarter boasts 3,861 ICOs signed up as we go to press.

The ICO on Indiegogo has been vetted, curated and checked out from every possible perspective.  The thousands of ICOs that could appear on Coinstarter don’t seem to be scrutinized nearly as much if at all.   Kickstarter can’t promise or guarantee that any given crowdfunding campaign listed is legitimate or honest but there is a vetting process and not all Kickstarter projects make the cut.  I’d like to know more about the Coinstarter equivalent to this process.  I have to raise a caution flag in this Coinstarter review for this reason alone.

Curiously, Kickstarter has 3,846 live projects right now — just about as many as Coinstarter advertises as being submitted ICOs.  Kickstarter and Indiegogo are THE NAMES in Crowdfunding and have built up a solid reputation over the course of years.  How Coinstarter was able to attract so many ICOs in such a short period of time (just nine months) is another caution flag anyone reading this Coinstarter review should take notice of.

A discussion thread on Bitcointalk.Org also raises a lot of questions which need to be satisfactorily answered in any Coinstarter review such as:

Some of the LinkedIn accounts of people claiming to be involved with Coinstarter are questionable.

Their website domain name registration is anonymous – this is a bit worrisome for a company raising millions on an ICO of their own.

Why is Coinstarter registered in the British Virgin Islands? This raises some alarm bells for me vis a vis Tether/Bittrex.

coinstarter review

All told I think the Coinstarter concept is pure brilliance with building an ICO as easily as a Kickstarter campaign.  I see vast potential for fraud on the part of the people launching an ICO through Coinstarter and there are lots of unanswered questions about Coinstarter itself.  If Coinstarter becomes more transparent and institutes a quality-control process for the ICOs they plan to list while providing assurances and accountability to ICO investors it could very well be that Coinstarter is the next big thing.  In the meantime, I can only advise cryptocoin investors to proceed with caution.