Everyone and their dog seems to be investing in bitcoin, but buyers beware: there are plenty of pitfalls. As well as holding your nerve as the value of the cryptocurrency rockets and plummets, potential investors have to be wary of hacks, Ponzi schemes and confidence tricks.
Marie Vasek at the University of New Mexico, and Tyler Moore at the University of Tulsa, Oklahoma, have quantified just how many bitcoin schemes are scamming users.
Alarmingly, between June 2011 and November 2016 there was a new scam nearly once a day. Vasek and Moore found a total of 1780 distinct scams by scouring reports on the popular cryptocurrency message board site @bitcointalk.org.
We tend to recognize traditional scams when we see them, but incorporating bitcoin can muddle minds. “People don’t understand it. They just think: ‘I’m going to be smarter than this other