Cryptocurrency has been growing like crazy in 2017 and if you haven’t been paying attention then you must have been living under a rock!
The amount of money that some people have been able to generate is simply incredible however as with any new trend a number of bad people try to get their fair share of the pie (in their eyes).
There’s been a huge rise in cryptocurrency scams and many of them operate in a kind of MLM structure. They basically require you to recruit other people and get paid in Bitcoin.
Sure this can be profitable if you are a professional recruiter however the average person won’t know what to do at all. The truth is that too many of the people who join these programs expect to make a fortune and it never happens and it’s actually quite sad.
It’s really just a matter of time until the program collapses and the original investors all lose their money. A good example of this is the Bitclub Network scam (read a full review about it here) and it’s essentially a ponzi scheme.
How To Avoid Cryptocurrency MLM Scams
So how do you actually avoid these kind of scams. If you are a newbie how do you know what to look for.
Well it’s actually very simple to avoid these kind of scams as I will explain.
Legitimate cryptocurrency websites will never mention guaranteed returns. The MLM cryptocurrency scam websites will always mention how you can earn a guaranteed percentage return for doing nothing.
They will say things like your guaranteed return is paid weekly or even daily and they will make it seem “too good to be true” so to speak. When you recognise these signs it will become extremely easy to spot these kind of scams because to be honest they are obvious ponzi schemes.
Many of them just use cryptocurrency as their “thing” to suck you in but the reality is that these scammers will use whatever is hot at the time. For example a few years ago forex trading was very popular so many of these ponzi schemes were built around forex trading.
They would claim that they have a team of the worlds best traders who make daily returns of super high percentages and that when people invest they will be guaranteed a return. But in reality what happens is the old investors are paid by the new investors.
This is a typical ponzi scheme. What happens is when you invest $100 if you are guaranteed a daily return of say 2% then this 2% will be paid by new investors coming in and investing $100. This means that the returns paid out are not actually from any kind of legitimate investment, they are simply from new money being invested which is a ponzi scheme and is illegal.
So that is how it works with forex trading but now that cryptocurrency is hot the scammers have started to create these schemes around cryptocurrency. They have said that their professional traders will invest wisely into bitcoin and other cryptocurrencies to make money.
But as you now know this is not the case. Plus they recruit top affiliate marketers who can help promote the schemes and get more people involved. The affiliates actually know that the scheme is a scam but they don’t care because they aren’t actually investing any money. They are just earning Bitcoin for free when you actually sign up.
Another warning sign is that Bitcoin is untraceable so the scammers can literally get away with taking your money because nobody would be able to track them down with it.
Investing In Bitcoin
If you want to invest properly into Bitcoin then you need to buy it through a legitimate website like CoinBase.
Once you do this you can actually transfer your Bitcoin to an exchange like Bittrex and trade alt coins which are other types of cryptocurrencies.