Bitcoin Outdoes Gold, Spurs Social Media Scams

In a significant milestone for the fintech industry, the price of fledgling cryptocurrency bitcoin outdid that of an ounce of gold this month. In reaction, a number of scamsters got active, using social media to unleash dubious schemes and phishing actions. Fake bitcoin wallets, fake bitcoin search services and fake bitcoin surveys are thus spamming social media and online platforms in an attempt to lure the common consumer into the bitcoin buying frenzy. 

Bitcoin is making big headway for its qualities of being decentralized, anonymous, and irreversible. For example, if bitcoin currency is taken away from a person’s bitcoin wallet, the person has no one to go to for remedial action. These very qualities make it attractive to scammers as they offer vast potential for duping buyers. Scammers are increasingly turning to social networks to gain a wide reach and achieve large-scale impact for their scams. The result is that a whole segment of vulnerable bitcoin users is out there, just a step away from being robbed. These scams can be devised to attack individuals or even corporations, making the damage multifold. 

Innovation is not just restricted to ethical technocrats. Even scamsters today are cooking up new ways of misleading users. Some scammers piggyback on existing big brand names, by replicating an awesome bitcoin promotion and passing it off as being offered by a well-known bank. An unsuspecting user sees the trustworthy bank name and falls prey to the con. Companies that are known to dabble in bitcoin are especially vulnerable to such schemes. 

Identifying such scams requires technical and social media expertise. For example, companies such as Zero Fox search for such scams by automating searches on social networks or dedicating data and social researchers to skim the social networks in order to find new types of scams. Once a scam is identified, new search rules come in play, to find other similar scams. While this seems easy on paper, identifying scams in this manner is often a manual process, requiring weeks or even month to get a social media site to remove a scammer. Yet, as of today this seems to be one of the few ways of offering protection from social-media driven bitcoin scams.

The large scale threat is very real considering that bitcoin is the underlying currency that is set to drive a number of sectors beyond the financial world. The fledgling cryptocurrency is making news for its ability to encrypt transactions and make them immutable. Scammers have realized the value and using bitcoin as the preferred mode of payment to extract funds from naive users. This is fuelled by the fact that while bitcoin is being adopted in a big way, technical knowhow about the same is not strong amongst the public. It is high time that users were educated to be able tell a legitimate transaction from an illegitimate one as well as be alert to too-good-to-be-true schemes on the web. This will go a long way in making bitcoin secure.