Cryptocurrencies are a force to be reckoned with in today’s world and are considered the future of finance. The first crypto, Bitcoin, was launched in 2009 by Satoshi Nakamotoand no one had anticipated that it would turn into a huge global market. For the first few years, it didn’t gain much traction due to lack of regulation and uncertainty surrounding it. But, it picked up gradually, especially after the high of 2017. That’s when Bitcoin’s price reached a massive price of $20,000. Thousands of investors made millions overnight when the pioneer cryptocurrency reached its peak. Since then, it has spawned numerous other coins.
As a matter of fact, if you check the numbers, you will discover that there are more than 5,000 cryptocurrencies currently available in the market. Plus, new coins are regularly being introduced. As they have gained popularity, more and more people are interested in buying and selling Bitcoin and other coins. While this is certainly a good thing, it is not without its risks. The market has also become the stomping ground of scammers and hackers because most people don’t have a lot of knowledge about how cryptocurrencies work and they are not under the regulation of any centralized authority.
Furthermore, the anonymous nature of cryptocurrencies also makes it easy for criminals to exploit people and get away with it. Every day, scammers and cybercriminals are devising new schemes for stealing cryptocurrencies. These can range from highly sophisticated ransomware to phishing via phone or email, cryptojacking or even crypto ‘dusting’. However, in most of the cases, the simplest trick usually becomes the most successful. It seems so basic and elementary that people don’t consider it a scam. This is exactly what happens with Bitcoin ATMs. These machine kiosks have sprouted up more and more in a number of busy spots all over the world.
Bitcoin ATMs are regarded as one of the best ways for anyone to get started in the crypto industry. Most people are familiar with these kiosks because they are part of the financial system’s legacy. Furthermore, Bitcoin ATMs are also very easy to use and a quick way to purchase your first Bitcoin. There is no learning curve involved, as is the case with crypto exchanges and other methods. Therefore, it is not surprising to discover that the popularity of these Bitcoin ATMs has increased exponentially over the years.
The first Bitcoin ATM was introduced in 2013 and now there are more than 5,000 Bitcoin ATMs in the world, spread over different countries. This indicates that they have been adopted by people and are being regularly.
What is a Bitcoin ATM Machine?
In simple terms, cryptocurrency users can use a Bitcoin Automated Teller Machine (ATM) to convert their fiat money into digital assets like Bitcoin by just using a traditional ATM-style machine. At first, these machine kiosks were a kind of novelty for crypto users and supporters. But, with improved stability and security, Bitcoin ATMs have become a convenient option for non-technical people to purchase digital assets in retail areas and are very easy to use. When Bitcoin had reached its peak in 2017, a lot of people had believed that these kiosks would become as ubiquitous as regular ATMs quickly. However, this prospect was ruined by the bear market.
Their convenience and usefulness cannot be denied, but the fact is that cryptocurrencies still remain a rather new phenomenon. It will take a long time for people to understand the ins and outs of this market. This allows hackers and scammers to take advantage because they are able to lure in and trap people who are not so technically inclined and dupe these individuals into handing over their Bitcoin. Hence, even though these Bitcoin ATMs are very useful, unfortunately, just like traditional ATM machines have become a focal point for fraudsters and scammers for stealing money through deceit, distraction or outright robbery, they are also in the crosshairs. Bitcoin ATMs are now being used for conducting numerous crypto scams by cybercriminals who either own or target them.
Typically, when buyers are using a Bitcoin ATM, they have to complete a few steps. A typical transaction on a Bitcoin ATM is conducted by following these steps:
- Choose the ‘Buy Bitcoin’ option.
- Select the coin you want to purchase like Bitcoin.
- Click on scan QR.
- Scan QR of the wallet where you want the crypto to go.
- Insert cash bills into the ATM.
- Press the ‘Finish’ option.
- Receive the printed receipt that has your private data.
These are the steps you have to follow in order to make a purchase through these Bitcoin ATMs. So, in what ways can you be targeted by scammers? Below are some of the common ways that Bitcoin ATM scams are conducted and knowing about them is important in order to steer clear of them:
- Out of Order Scam
This is one of the most notable Bitcoin ATM scams used by a number of scammers. A fake notice is printed and pasted on top of Bitcoin ATMs in several places. This notice claims that the Bitcoin ATM in question is currently undergoing ‘software updates’. Therefore, the users are ‘advised’ to deposit the coins they have purchased in a special ‘QR code’ or special address. If the user is someone who doesn’t have a lot of knowledge about how Bitcoin ATMs work, they will fall for this trap.
They will put their money inside the machine, make their purchase and enter the scam QR code. What are the consequences? The Bitcoin or any other cryptocurrency that they bought is sent to the scammer’s address. Once the transaction has been done, it is irreversible, which means the user ends up losing their money. This is a low-tech and simple Bitcoin scams ATM and yet there are many who fall for it.
- Amazing Rewards
Another trick used by scammers to trap people is through the offer of ‘Amazing Rewards’. These cybercriminals call people and inform them that they have won a huge lottery or award of some sort. This is an old tactic that plays on the greed of human beings. If people get interested, the scammers continue to speak naturally and convince them of their good fortune. Once they feel they have convinced the users, they will ask them to send ‘unlock’ the rewards by sending them some Bitcoin via Bitcoin ATMs.
The person on the other end is convinced that they will just have to pay a small sum, as compared to the award they will receive. They readily go to a Bitcoin ATM to send the Bitcoin and never see their money again as the transactions are irreversible.
- Coercion Schemes
This is when people pose as personnel from your bank, your telephone company or even a utility company like power. They will call you up and threaten to cut off your service if you don’t make a payment right away. Since it is the threat of water, phone or electricity looming over their head, it is understandable that people are pushed into making the payment. How are they scammed? Instead of making their payments the usual way, the person will ask you to go to your nearest Bitcoin ATM and deposit an amount. Sometimes, the scammers claim that the transaction was unsuccessful and make them pay again.
- Better than Market Deals
Everyone wants to purchase Bitcoin at the lowest possible price. After all, the cheaper you buy, the higher you can sell. This human psychology is used by scammers for tricking innocent people. Unsuspecting victims are called up and offered Bitcoins at a ‘discount’. Their offers are very tempting because everyone would want to buy Bitcoin at 20% cheaper than the market price. Thus, this kind of scam can draw in a lot of people who have been wanting to invest in cryptocurrencies.
Those who express an interest are instructed to visit their nearest Bitcoin ATM. They are asked to scan a ‘special QR code’, which will enable them to get the discount. People who don’t have any knowledge about this technology assume that it works like a discount coupon. The outcome is that their money is converted into Bitcoin and sent to the scammer’s address.
- Social Security Scams
This particular scam also involves a phone call; this time it comes from someone from the Social Security Administration. They claim that your identity needs to be verified and a payment has to be sent in order to avoid any penalties. They will ask you to use a Bitcoin ATM to send the payment and a QR code will be provided to you. This is the address of their crypto wallet and you will be transferring crypto into their account.
- IRS Scams
As far as this particular scam is concerned, these fraudsters will go to great lengths to convince people that they owe the government some money. They will email, call or even send mail. They will ask you to wire the payment via a Bitcoin ATM to avoid being charged with a crime. This scam should be easy to avoid because the government certainly doesn’t ask forpayments in the form of Bitcoin.
- Fake Membership Scams
In this scam, people receive calls from ‘real’ companies that offer ridiculous deals on expensive items. These can be anything from vacations to cars to concert tickets. Obviously, buyers would love to purchase these things at a low price, but they sound too good to be true. In that case, it is best to avoid them, especially if you are asked to make payments via Bitcoin ATMs.
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