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As the number of new Bitcoin users and transactions grow, the number and sophistication of scams in the community continues to reach new heights.
Bitcoin, Scams, Investments, Financial Traps
As the number of new Bitcoin users and transactions grow, the number and sophistication of scams in the community continues to reach new heights. Why are so many people getting scammed over and over again?
There are a lot of reasons that explain the why people hand their money to total strangers so easily. One of the prime facts that come into play is that a lot of bitcoin users have joined the network in the post-thousand dollars per bitcoin era. These consumers feel that they have missed the train and desperately want to make up for it, which puts considerable psychological pressure to want to believe too-good-to-be-true stories.
Think of the average Joe that has tens of thousands of dollars of student loan debt following them around, month after month deeper in the red, shocked to find out that his newly acquired college degree only lets him earn a couple of dollars above minimum wage.
These people are desperately wishing for a miracle, and when they find such an innovative and disruptive technology as bitcoin, considered by many to be able to replace the most established and powerful corporations in the word, they are no different than a dehydrated man in the middle of the Sahara desert who just saw an oasis on the horizon.
Now we have people wishing for a miracle on an everyday basis. They suddenly find themselves with cutting-edge technology on their hands, technology that, although they do not entirely understand it, makes them feel that they are in charge of their own lives once again after so long. At first they feel like bank’s doomsday bringers, but after a while, the emotion gets cold and the old problems are still there. This is the critical moment when lots of people hear about High Yield Investment Programs, or HYIP for short, for the very first time.
Scammers come in lots of shapes and sizes, and so do their operations, but they all have one thing in common: they are very good social engineers. These guys know exactly the right buttons to press to get their unaware victim’s attention, as well as how eager their innocent counterpart is to find a magical solution to their financial distress.
Scammers and their HYIPs fool people into thinking that only by pressing a couple of buttons on a keyboard, all their problems will be solved. They offer them redemption. Not everyone who falls into the hands of a scammer are over-indebted people though. There are also those who fancy themselves to be Hollywood-like hedge fund managers.
This particular type of victim usually thinks they are smarter than the rest but for some unknown reason life is not rewarding them as it should. So, when they find out that some shady website offers 50% monthly returns on their ‘investment’, after playing for a couple of minutes with their smartphone’s calculator app, they hand out their money no questions asked.
So, after the inevitable takes place and tears begin to fall, people start wondering why this happened to them. The answer most of the time is that they were using a technology that they didn’t fully understand and let themselves be fooled by their eagerness for last minute salvation. If bitcoin ever taught me anything, it is the power of the word ‘trust’.
At the end of the day, the victim learns an important maxim: there are no magical solutions to problems, be they financial or otherwise. If you have fallen into one of these deceptions, don’t get depressed over it, absorb the experience and move on with your head held high, knowing that you are wiser than before. After all, you now have the means and the knowledge to be your own bank.
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