Anyone using cryptocurrencies needs to know about every Bitcoin scam and what the risks are. Read on to find out our secret to staying safe while paying with Bitcoin.

As Bitcoin keeps breaking headlines and attracting investors and practical users from all over the globe, it has become even more important to stay informed on the latest news regarding a Bitcoin scam.

When you deal with cryptocurrencies, you are exposed to higher risks than any other Internet user. If your device is hacked, if your traffic is intercepted, you stand to lose much more than a typical Facebook account, but your hard-earned crypto cash.

If you ask yourself: “Is Bitcoin worth the risk?”, then read our blog to find out how you can stay safe while using Bitcoin.

What is Cryptocurrency?

Cryptocurrency, also known as digital cash, is an international payment network. Cryptocurrency enables exchanges between any two computer users, creating a “Peer-to-Peer Electronic Cash System” and a public record of financial transactions.

These cryptocurrencies, particularly Bitcoin, possess three attributes that surpass traditional currencies: Decentralization, Open Source, and Peer-to-Peer networking.

Most significantly, they are powered by users with no central authority or middlemen. Although this can be a positive attribute to many living within oppressive governments, it is also this quality that allows a Bitcoin scam to thrive. (Read more below).

Here’s how it works:

Bitcoin Crash: China

China has banned Bitcoin and other cryptocurrencies. China has tight controls on currency, eliminating the ability to move money in and out of the country, making China the world’s largest cryptocurrency market, making up about 80% of total Bitcoin transactions.

Now, China is Blocking Initial Coin Offerings (ICOs), unregulated crowdfunding using cryptocurrency, and Bitcoin Exchanges. The government has even requested that all Bitcoin exchanges in Beijing and Shanghai be shut down, stating cryptocurrencies are “increasingly used as a tool in criminal activities such as money laundering, drug trafficking, smuggling, and illegal fundraising”. It also included:

Personal Details : Exchanges are required to submit DVDs containing all user trading and holding data to the local authorities.

Travel Ban : All those involved in the exchanges, including shareholders, controllers, executives, and core financial and technical staff are not allowed to leave the city and must co-operate fully with authorities.

But it might not be the end of digital currency in China. They actually plan to issue their own digital version of the renminbi.

Benefits of Using Cryptocurrency

Bitcoin and other cryptocurrencies have the unique ability to transcend borders, surpass bank transfer fees, and be impervious to exchange rates no matter what the current state of your government or bank.

It can even help fund freedom by allowing users to make anonymous donations to organizations that may not be approved of by local governments. For example, LBGT rights, abortion, political opposition, etc. all have the ability to find support through cryptocurrency.

Users can even begin to Purchase Real Items. As Bitcoin continues to grow, it is being used more often for a wide variety of products. Here are a few examples:

Cryptocurrency Risks

Although there are plenty of perks when it comes to using cryptocurrencies, there are also many risks. A Bitcoin scam can happen to anyone, so do your research before trading in your bank account for a Bitcoin wallet.

Some general risks include:

Illegal Activities

Since Bitcoin transactions are relatively anonymous, the platform does have the potential to attract illegal activities. This draws negative attention from governments, encouraging a possible ban on Bitcoin and other cryptocurrencies. Irreplaceable

Unlike transactions made through your bank account, Bitcoin can never be replaced if it lost or stolen. There is no way to recover your bitcoins if someone hacks into your wallet. And no way to recover your account if you misplace your login details. Not Easy to Cash In

If you decide you’d like to cash in your bitcoins, there really isn’t a straightforward way to sell them. Although many exchanges offer the service using different methods, it’s not as simple as transferring money from your Paypal. Volatile Investment

Currently, Bitcoin prices are significantly fluctuating. Any webshop interested in accepting bitcoins would need to adjust their prices almost daily. Additionally, investors take a gamble when dumping funds into stocks. Government Regulations

Right now, much of the world hasn’t decided how to handle Bitcoin. Since Bitcoin isn’t taxed, it’s a threat to local currencies. If governments decide to make Bitcoin illegal, you may have a

hard time getting your money back. Nonrefundable

It’s as simple as this: If your bitcoins are stolen, they’re nonrefundable. Someone can jump in the middle if your transaction and changes the destination of your deposit - called a Man-in-the-Middle (MITM) attack.

Avoid a Bitcoin Scam

If you use Bitcoin or other cryptocurrencies, you should be aware of the following risks:

Man-in-the-Middle Attacks

Simply put, man-in-the-middle (MITM) attacks can change the destination of money transfers (or any data transaction for that matter). As the name implies, hackers intercept data packages as they travel between two victims.

If you’re trying to make a deposit using Bitcoin, a MITM can change the destination of your transaction, leaving you out of money and your intended recipient asking where the deposit is – all they need to use is malware via emails or a shared Wi-Fi network.

To stay safe, use a VPN. Since authentication protocols are specifically designed to ward off these types of attacks, a VPN ensures end-to-end encryption, making you anonymous over public networks.

Hackers Can Access Bitcoin Wallets

Digital wallets, where you “safely” store your cryptocurrency, are at fault for providing weak security of user accounts. Apparently, minimum personal information about a victim – their first name, last name, and phone number – was enough to hack a test wallet in Coinbase, according to Positive Technologies.

As CryptoInsider said:

“Cryptocurrency related cyber attacks are on the rise. As cryptocurrency continues to explode in value and public awareness, we can only expect this trend to continue. I was recently the target of such an attack. I also personally know of multiple other cases of the same attack being successfully carried out. Even worse this type of attack is becoming ever more common and is likely to see an even bigger boost thanks to the professional excellence of firms like Equifax, making it an urgent topic as almost everyone is at immediate risk.”

Additionally, all crypto users should enhance their cryptocurrency security by activating 2FA (2-Factor Authentication) across all exchange accounts.

Privacy Complications

Even when your cryptocurrency activities are secured, there are still external privacy issues that users must be aware of.

ISPs: Your Internet Service Provider (ISP) knows every time you log into Bitfinex or any other Bitcoin exchange. Do you really want them to know each of “anonymized” traffic logs? Not really, right?

Public Wi-Fi: If you’re on public Wi-Fi , you definitely wouldn’t want to disclose the fact that you’re a Bitcoin trader to people who are on the same coffee shop’s Wi-Fi as you.

If your ISP or Wi-fi “neighbors” see what you’re doing with online your cryptocurrency anonymity is completely blown away. The online exchanges that you frequent, the online trading tools and wallets that you use, all become known to others. And a secret shared is not really a secret anymore.

How You Can Stay Protected

There are no comprehensive solutions for each Bitcoin scam and security risk. But there are building blocks from which you have to construct your own personal cryptocurrency firewall. Keep these tips in mind:

Beware of phishing attempts.

Make sure that your OS is patched with the latest security updates.

Be mindful of ransomware.

Use secure non-guessable passwords and take other measures to protect yourself.

Use a reliable VPN.

When you use a VPN, all your traffic (including the URLs that you browse) is encrypted. Neither your ISP or your coffee shop neighbor can get a single clue about your online activities. You can visit online exchanges, use your wallets and trade completely anonymously – as it should be!

A VPN also contributes to your security. As your traffic is encrypted, wifi hackers can’t hijack your session cookies or steal your plain-text passwords.

SaferVPN reliably checks all these above-mentioned boxes. It encrypts all traffic using bank-grade modern encryption. You can choose any of the 700+ locations in 36 countries to re-route your traffic and hide it from curious eyes. More importantly, your real IP address is never logged so that your cryptocurrency activities remain truly private. SaferVPN is also listed on WeUseCoins, one of the largest cryptocurrency websites.

Although a VPN is not the complete security solution for your coins, it is an extremely important component of the protection.

How to use Bitcoins to Pay for SaferVPN

Buying, trading, holding and mining cryptocurrencies are private activities that should be performed in a private and secure way. Using a reliable Bitcoin VPN is a very important component in securing the privacy of your cryptos. SaferVPN’s private (no logs), fast and easy platform not only contributes to your privacy while using Bitcoin but even accepts Bitcoin as a payment method.

Simply choose the plan that best fits your needs and select Bitcoin on the payment page. If you haven’t signed up yet, try our SaferVPN for free now (with a 30-day money back guarantee, you’ve got nothing to lose)!

Have you been a victim of a Bitcoin scam? What are your thoughts on Bitcoin? Share your thoughts in the Comments section below.