Home Business How To Spot A Fake Bitcoin Exchange – 2022 Guide

How To Spot A Fake Bitcoin Exchange – 2022 Guide

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Bitcoin is a very popular cryptocurrency. Cryptocurrencies, unlike traditional currencies like the dollar, pound or yen, are not printed or circulated by government agencies. These are generated using powerful computers. They are decentralized and run on a blockchain background. And all the transactions are verified on the block.

Cryptocurrencies have gained a lot of popularity in recent times. They are seen as an alternative to the other fiduciary currencies which involve a lot of legal complications. As the demand for this new form of money increased, their prices also saw a large increase.

Traditionally these blockchain-based currencies could be obtained only by those miners who could generate them using powerful computers. However, at present, there are exchanges where any person can get cryptos in return for regular money in the form of dollars or pounds. If someone is interested in visiting an exchange that offers accurate exchange rates, they can visit cryptex.net.

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What Are The Usual Characteristics Of A Bitcoin Exchange

Bitcoin exchanges function much like stock exchanges. Here a person pays for the value of a Bitcoin on that day instead of the value of a share as in the case of a regular stock exchange. In this case, too, the exchange charges a transaction fee as a commission for the services that they provide.

The higher the number of services offered, the higher the transaction fee that is charged. The rules for registration are quite simple, and they require a KYC-type document for their customers.

They also offer services like price discovery of crypto on a particular day. The price of crypto keeps fluctuating, and the price at any moment is determined by the global demand and global supply of the said crypto. A person must carefully read the terms and conditions of exchange and choose the one that best serves his interest.

Some important factors to consider before investing money are to know about the withdrawal policies, the payment methods, the fees charged by brokers, the customer service offered etc. Apart from this, people should put in the effort to check for signs of scams. Many people have been robbed of their hard-earned money, and researching a particular exchange can be of great help in protecting oneself against spam.

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6 Simple Tips To Spots A Fake Bitcoin Exchange

1. When There Is A Promise Of A Very High Rate Of Return

Anything that is fake wants to lure the maximum number of people before its bubble is burst. In order to attract a large number of people, fake sites promise very high rates of returns. An easy way to cross-check is to log in to multiple exchanges and check the exchange rate on that given day and time for particular crypto. If any site shows a very high variation from the others, that site is probably spurious.

2. Where There Is A Promise Of A Guaranteed Profit

Any crypto, by its very nature, is quite volatile. Many things affect their valuation. For instance, if any country accepts cryptos as their legal tender, then global investors start trusting them more. In such a situation, the demand will increase, and the value will rise.

Again, any political event that has vast ramifications will have an impact on a cryptos value. Any war, any electoral defeat impacts its monetary worth. Also, these political events are not predetermined; hence anybody who promises guaranteed returns is probably misleading.

3. High Initial Fees Or Deposits

Most exchanges take a transaction fee, and the fee amount is commensurate with the services that they provide. However, if the fee charged is too high, then that is a red flag. Again, if a site pressurizes the customer too much to make a high deposit initially, then that is also a signal that the site might be a fraud.

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4. Way Of Advertising

Any scam website or application has a special way of luring its subjects so that they make an investment. If a particular exchange sends too many unsolicited messages. Or makes multiple communications in a day, each time garnering more information about a potential customer, then a person should be extra cautious.

Many scams use the pictures of celebrities to attract more eyeballs. They also try to garner credibility by using names that are very similar to popular crypto exchanges. The fake sites may have a slight change in the name, like an extra alphabet or a missing alphabet in the name. Such minor changes are a very difficult spot if a person is not very vigilant.

5. Offer Of Free Coins

An easy technique used by fake channels to attract investors is to give offers of free cryptocurrency coins. A real website will most likely not make such offers, and it is a good idea to do a thorough background check before putting one’s hard-earned money into such channels.

6. Offering A Crypto That Does Not Exist

Some exchanges offer to change one crypto to another, and the profit is made based on the price differential between the two cryptos. If any website offers.

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7. Deposits

For cryptos that one has never heard of before, one should be cautious. New blockchain-based currencies enter the market every day; hence it is quite possible for a person not to be aware of a new currency. In this case, a person should read about if the new crypto indeed exists, and if it does not exist, the whole offer might be a scam.

Conclusion

Thus before making any transaction in a bitcoin exchange, a vigilant person should run background checks. A thorough check of the owners and the developers of a particular exchange is necessary to rule out any miscreants. If he finds any complaints, news reports or reviews that raise a red flag, it is a good idea to reconsider their choice.

Also, it is important for people to report to the legal authorities if they ever get duped. Reporting to law enforcement agencies of the respective country breaks the chain of fraud, and less number of people will become victims of the scam.