15th June, 2021
Since people started buying, selling, trading and investing in Bitcoin, some have lost their virtual money forever.
Experts estimate that people might never recover around 3.8 million bitcoins.
But how do people lose their virtual currencies?
Here are ways you can lose your bitcoins and never recover them.
Bitcoin Hackers
You most likely know you can purchase Bitcoin via platforms like the https://bitcointrader2.com.
These are reliable places where people buy this digital currency using fiat money.
However, crypto exchanges are not the same. Some of these platforms have better security measures than others.
Most people lose their bitcoins via crypto exchange hacks.
That’s because cybercriminals target exchanges to steal from unsuspecting crypto traders and investors.
To avoid losing Bitcoin through hacks, use a reliable crypto exchange to purchase or sell your bitcoins.
Fake Bitcoin Wallets
A fraudster can come up with a fake wallet and list it on Google Play Store.
Such a wallet can mimic an actual crypto wallet application.
The purpose of such a wallet is to target individual’s credentials or steal their bitcoins.
For instance, an app can request you to provide a wallet password and private keys after launching it on your phone or computer.
Providing these details means the app developer can use them to withdraw your Bitcoin using a genuine wallet.
Fraudsters can also use fake wallets to ask you to deposit bitcoins, but you will never remove or send them to somebody else.
Phishing
Cybercriminals can steal other people’s bitcoins by obtaining their passwords, usernames, and login details fraudulently.
Once they have such information, they can easily withdraw bitcoins from their victims’ hot wallets.
For instance, fraudsters can impersonate a crypto exchange using emails and email templates resembling genuine Bitcoin exchanges.
This technique often requires the target to click on the provided link requesting them to fix a problem with their real account.
Unfortunately, the link directs the Bitcoin user to a fake page for collecting their login details.
Ponzi Schemes
Ponzi schemes are fraud plans that target Bitcoin investors.
These schemes pay early investors quick profits using money from recent investors.
However, Ponzi schemes do not have practical methods of making money.
They also promise unrealistic returns. The BTC Global Scheme is an example of a Ponzi scheme that promised investors 2% returns per day and 14% returns per week.
Around 2,800 investors in South Africa lost up to R1 billion through this scheme.
Malware
Fraudsters build malware on Google Play Store and torrent sites to steal virtual currencies from vulnerable sorts.
For instance, Clipper, a malware program, uses the users’ copying and pasting wallet addresses to transfer cryptocurrencies.
In most cases, Bitcoin users opt to copy-paste addresses because they are long strings of characters.
The clipper malware can swap the addresses when pasting the characters.
That means the user will send bitcoins to a different address.
Fraudulent ICOs
When new to Bitcoin, you can easily fall prey to a fake ICO.
That’s because initial coin offerings can advertise as a new investment with potentially high returns.
Such a project can use fear of missing out to attract more investors.
Unfortunately, the project might never materialize.
What’s more, the investors will never get their funds back.
An experienced investor can analyze a project based on the crew behind it to determine whether it can deliver on its promises.
They can also decide whether or not it has a minimum viable product.
Centra is an example of a fraud ICO, which Floyd May Weather endorsed at some point.
These are common ways people lose their bitcoins.
However, you can avoid losing your cryptocurrency by researching any platform you use and making a calculated move whenever you use Bitcoin.