Cryptocurrency is one of the safest types of money from the point of view of many users. This opinion arose at the dawn of Bitcoin, when a few people knew about it, it was not worth a thousand dollars and did not attract hackers from around the world. The blockchain technology, which assumes a hash function with a digital signature, a transaction identifier that can not be faked due to its unpredictability, and the transparency of remittances really looked reliable. However, now the situation has changed.
The opinion that the cryptocurrency is distinguished by super-reliability has existed for several years and continues to this day, especially on resources for beginners. However, it does not fully correspond to reality.
Over time, bitcoins revealed vulnerabilities that allowed more than a dozen scammers to get other people’s means. The protection of the Altcoins can not be called perfect. In addition, the claimed reliability sometimes plays against the currency owner, not allowing him to return the coins lost by mistake or oversight.
Causes of cryptocurrency loss: fraud
Reason # 1: Phishing Sites and Emails
For example, fraudsters create a site whose address is similar to the address of the popular resource Polonjex instead of Poloniex, domain .ru instead of the domain. Com, etc. By sight these sites are identical to the original. Not very attentive user goes to the resource, sees the familiar picture, automatically enters the password – and he is at the disposal of fraudsters who can immediately use it on the original site.
The second version of the email comes a letter allegedly from the developers with a proposal to enter the wallet, account, etc. The reason for any user may promise a bonus, they may be asked to take a survey or test a new function. The bottom line is that the form for entering the password will be right in the letter, although in some cases the letter may contain a link to the site where you need to “take the survey.” A person enters data – data turns out to be a scam.
Reason # 2: Transferring funds to fraudsters
Here, under various pretexts, fraudsters steal money from users. There are many options, but the point is that the user is persuaded to transfer the cryptocurrency to someone else’s account.
For example, developers offer to invest in a profitable project, which is not going to develop initially. Having collected a certain amount of “investment”, they simply disappear. Most often, such scams are held under the guise of ICO, but are not limited to them.
Some scammers offer to buy an unusually useful thing for a person who wants to earn on cryptocurrency. It can be anything – from a training book, which reveals some amazing secrets of earning, to equipment that supposedly helps mine bitcoins in thousands every month.
Sometimes a fundraising scheme can be used to maintain a known resource that suddenly needed help or the owner of that resource who suddenly found an incurable disease. This is rare, but similar schemes operate successfully outside the cryptosphere and therefore can leak into it.
Reason # 3: Lost Password
It is almost impossible to return a cryptocurrency when a Bitcoin password is lost from a number of other types of wallets. Almost – because to create a new wallet and restore the accumulated funds can help recovery phrase – a special combination of 12 words. If there is no recovery phrase, the money can be considered completely lost.
Reason # 4: Transferring funds to the wrong address.
In case of an error in the address of the recipient, it is impossible in most cases to return cryptomonettes. If such an address really exists, there is a small chance that the owner will return the money mistakenly transferred to the sender. However,, firstly, it is not always possible to calculate the sender, and secondly, not everyone will return such an unexpected gift. If the address does not exist, the money actually disappears “to nowhere.”
Reason # 5: Specifying the wrong amount in the commission field
It also happens that the user makes a mistake and sets a commission that is much higher than the amount of the transfer. For example, an unknown person transferred 0.0001 BTC in April 2016, setting a transfer fee in the amount of 291 BTC. The owners of the pool, of course, understood that this was a mistake and even expressed a desire to return the money to the victim, but he ensured maximum anonymity and it was not possible to calculate it. Of course, even if the user did not attend to solving the problem of complete anonymity, the resource does not necessarily return the money to him.
Reason # 6: Resource Breaking
Hackers hack any places of cryptocurrency concentration – exchanges, pools, individual accounts, wallets. If there is a repository in which an organization or an ordinary user holds coins, then there is the likelihood of hacking. It is inversely proportional to the degree of protection of the resource, but it is always there.
Reason # 7: Failure to use two-factor authentication
Two-factor authentication involves logging into your account only after additional confirmation of your identity, for example, using a one-time password that is sent to the phone or email address attached to your account. Many people are too lazy to enter these passwords, and some resources do not offer two-factor authentication initially. Meanwhile, it significantly increases the reliability of the account. Small hackers and fraudsters find it too difficult to hack not only the account, but also the user’s mail, while binding to the phone number reduces the chance of hacking to a minimum.
Reason # 8: Viruses
Some virus programs can collect personal data on the user’s computer, intercept the entered passwords from the wallet, etc. They appear in the same way as regular viruses when using unreliable websites, when downloading and installing unlicensed software.
Reason # 9: Keeping Funds on Exchanges
It should be said about the habit of many cryptocurrency owners to keep coins on the stock exchanges, because there all operations are performed and there is no need to once again deposit and withdraw funds, paying a commission. Savings of this kind can turn against the user.
Secondly, even if the exchange has reliable protection that is difficult to crack, it is impossible to be confident in the exchange itself. It may close due to sudden internal changes. The owner may need money and he can “remember” that he has huge capital at his disposal, even if he does not belong to him. The situation is the same as with banks, only owners of failed banks or directors who disappear along with clients’ money are legally pursued, while in the cryptosphere legal laws practically do not work and the owner of the exchange has much more chances to avoid punishment. Even the theoretical availability of these chances makes the most reliable exchange not so reliable.