In the cryptocurrency space, filled with temptation and risk, newcomers often become the 'fat sheep' in the eyes of criminals. The following 5 common scams are like traps hidden in the dark, always ready to harvest unsuspecting newcomers. Understanding and being vigilant about them can really save you 100,000 yuan or even more.
1. Fake ICO (Initial Coin Offering) Scams
ICO once swept through the cryptocurrency world, with many projects issuing tokens under the banner of innovative blockchain projects. Criminals took advantage of newcomers' limited understanding of blockchain technology and their desire for high returns to launch seemingly limitless projects for ICO. They meticulously packaged project white papers, depicting an exciting future blueprint, claiming that the project would disrupt a certain industry and that the token price would soar accordingly.
For example, a certain fake project claimed to have developed a brand new blockchain technology that could solve all the pain points of the existing financial system, attracting a large number of novice investors to participate in the ICO. However, after raising enough funds, the project team disappeared without a trace, and investors' funds were lost.
To avoid falling into such scams, newcomers must carefully review the backgrounds of project teams, checking whether team members have professional experience and good reputations in the blockchain field. Additionally, do not blindly invest just because the project's white paper describes it beautifully; instead, conduct in-depth research on the project's feasibility and practical application scenarios.
2. Variants of Ponzi Schemes
Ponzi schemes in the cryptocurrency world often use high interest returns as bait to attract new investors. The returns for early investors do not come from the actual profits of the project, but rather from the funds contributed by new investors. Scammers usually create a false impression of continuous profitability and generous returns, constantly attracting more people into the game.
Take the 'XX Coin Wealth Management Project' as an example. This project promised investors a return rate of up to 20% per month, attracting many newcomers eager to get rich quickly. Initially, early investors did receive high returns on time, which made them trust the project more and actively recommend it to others. However, as time passed, the speed of new investors joining gradually slowed down, the funding chain became unsustainable, and the project eventually collapsed, leaving the vast majority of investors with nothing.
In the face of such scams, investors must understand that excessively high and unrealistic return rates are often an obvious characteristic of scams. Before investing, one should understand the project's operating model and capital flow from multiple sources to determine whether it is sustainable.
3. Fake Exchange Scams
Some criminals set up fake cryptocurrency exchanges, which have interfaces designed to resemble legitimate exchanges, creating a certain level of deception. Newcomers who register and trade on these fake exchanges find that the funds they deposit actually go into the scammers' pockets. Scammers may manipulate trading prices in a short period, creating a false impression of a lively market, enticing investors to increase their investments, and eventually abscond with the money at the right moment.
For instance, a fake exchange launched a series of enticing trading promotions after going online, attracting many newcomers to open accounts and trade. When investors attempted to withdraw funds, they found that the exchange was unresponsive, and customer service was unreachable, only then realizing they had been scammed.
Newcomers must choose well-known, legitimate, and reputable platforms when selecting cryptocurrency exchanges. They can assess the reliability of an exchange by researching industry information, referencing other investors' evaluations, and more. At the same time, avoid making large transactions on obscure small platforms to prevent financial losses.
4. Fake Wallet Scams
Scammers create fake wallet applications that look very similar to legitimate cryptocurrency wallets. If newcomers are not careful and download from unofficial channels, they may end up installing these fake wallets. Once they deposit cryptocurrency into these fake wallets, scammers can easily obtain the user's private keys and transfer all assets from the wallet.
There was once a fake Bitcoin wallet app that disguised itself as a popular wallet software in some app stores. Many newcomers downloaded and used it without careful verification, resulting in the theft of Bitcoin from their wallets.
To ensure wallet security, newcomers must download cryptocurrency wallets from official websites or reputable app stores. Before downloading, carefully verify the wallet's official information and developer information to avoid downloading fake applications. At the same time, properly safeguard your private keys and do not easily disclose them to others.
5. The 'Air Coin' Scam
'Air coins' refer to cryptocurrencies that have no actual application value or support. The project parties promote and hype these 'air coins', attributing various seemingly lofty concepts to attract new investors. However, in reality, these coins have no real value backing, and their prices are entirely determined by speculation. Once the hype fades, the price will plummet to zero.
For example, a project launched the 'XX Air Coin', claiming to combine the latest artificial intelligence and blockchain technology to create a brand new ecosystem. With vigorous promotion from the project team, the coin's price surged significantly in a short time, attracting a large number of newcomers to buy. However, over time, people realized that the project had no actual progress, and the so-called technology was just talk. Eventually, the coin price went to zero, and investors suffered heavy losses.
Newcomers should deeply understand the underlying projects of the cryptocurrencies they invest in, checking whether the project has real products, a technical team, and application scenarios. For those 'air coins' that rely only on conceptual hype and lack actual value support, it is essential to stay far away. In the Web3.0 trend, what other money-making opportunities are there besides buying coins?
1. Web3.0 Development Work
With the development of Web3.0, the demand for related developers is growing. Professionals with blockchain development skills, such as smart contract programming, decentralized application (DApp) development, can participate in numerous Web3.0 projects. Developers can create DApps and earn profits based on the project's business model by charging usage fees, transaction fees, or adopting a subscription model. For example, developing a blockchain-based decentralized finance (DeFi) application that provides users with lending and wealth management services to generate revenue. Additionally, providing customized blockchain solutions and smart contract development services for enterprises or projects is also an important way to earn income.
2. Content Creation Combined with NFT
In the era of Web3.0, content creators are facing new opportunities. Whether they are writers, artists, musicians, or video creators, they can create their works as non-fungible tokens (NFTs). Through NFTs, creators can better protect their copyright and connect directly with fans and collectors. For example, a writer can turn their novel chapters into NFTs, an illustrator can turn their artwork into NFTs, and a musician can turn their original music into NFTs to sell on NFT trading platforms like OpenSea and Rarible. After fans and collectors purchase these NFTs, they not only own unique digital assets, but creators can also earn corresponding income from them. Additionally, creators can set royalties for NFTs, allowing them to earn a percentage of revenue when the work is resold in the secondary market, achieving continuous profit.
3. Participation in Decentralized Finance (DeFi) Ecosystem
Liquidity Provision and Mining: In DeFi platforms, users can earn returns by providing assets to liquidity pools. For example, in decentralized exchanges like Uniswap, users can deposit two types of cryptocurrencies in certain proportions into a liquidity pool. When other users trade those two currencies on the exchange, liquidity providers can earn corresponding trading fee shares. Additionally, some DeFi projects also reward users participating in liquidity provision with project tokens through liquidity mining. By carefully selecting liquidity pools and participating in liquidity mining, users may achieve considerable returns.
Lending and Wealth Management: DeFi lending platforms allow users to pledge their cryptocurrency assets to borrow other assets, or to lend their idle assets to earn interest income. Users can allocate assets across different DeFi lending platforms based on market interest rates and their own needs to achieve capital appreciation. For example, on lending platforms like Aave, users can pledge their Ethereum and other cryptocurrency assets to borrow stablecoins for other investments, or lend their stablecoins to users in need to earn interest returns.
4. Investment and Entrepreneurship Related to the Metaverse
Virtual Land Investment: In metaverse platforms like Decentraland, The Sandbox, etc., virtual land has become a popular investment target. Users can purchase virtual land, and as the metaverse platforms develop and gain popularity, the value of virtual land may increase significantly. Investors can buy when virtual land prices are low and sell for profit when prices rise. Additionally, they can develop the purchased virtual land by constructing virtual buildings, hosting virtual events, etc., generating income through land rentals or event fees.
Content Creation and Services in the Metaverse: There is also a demand for various content creation and services related to the metaverse. For example, creating customized clothing, accessories, and other virtual items for metaverse users, or developing games, educational courses, and other content within the metaverse. Entrepreneurs can provide these metaverse-related content and services to meet user needs and achieve profitability.
5. Community Building and Governance of Web3.0 Projects
Many Web3.0 projects highly value the power of community and have governance tokens in place. Users can earn governance token rewards issued by the project team by actively participating in the construction and governance of the project community, such as making valuable suggestions, participating in community discussions, and helping promote the project. These tokens not only represent the user's rights in the project community but may also appreciate along with the project's development. For example, in some decentralized autonomous organization (DAO) projects, users holding governance tokens can participate in major decision-making votes, influencing the project's direction while also sharing in the profits generated by the project's development.
