Lolli: How Legit is the Customer Loyalty Program that Rewards Users in Bitcoin

How Legit is the Customer Loyalty Program that Rewards Users in Bitcoin

Imagine getting paid while shopping online. Even better, imagine getting paid in cryptocurrency while shopping online. Sound good? A new customer rewards platform called Lolli thinks so and is paving the way for a new cryptocurrency cashback model. Or perhaps it should be coined the new #bitcoinback model? Either way, users of the service will receive rewards in Bitcoin when shopping at one of Lolli’s participating online retailers.

The founders are no strangers to the online retail world and previously established Cosmic Cart, a so-called “universal shopping cart”. Cosmic allowed companies to sell their goods online anywhere and was a huge success. So much so that they were eventually bought out by another competitor.

Creators Alex Adelman and Matt Senter decided that that wasn’t going to be the end of the road for them, however. Only this time, they would need to build a business with the latest tech in mind. And that, as you may suspect, falls firmly in the lap of blockchain.

Where Did the Name Come From? Lollipop

Alex explains that as a young boy his dad would often take him and his sister to the bank. He always hated banking but looked forward to that small reward at the end of each trip – a lollipop. Alex firmly believes that Bitcoin is the future of banking and that all that’s missing from the equation is Lolli.

How Does it Work

Loyalty reward programs have been around for years. Who doesn’t like a gift for doing a little online shopping? And while the model hasn’t changed that much, the founders are hoping that the increasing popularity of cryptocurrencies will continue to attract new customers.

Market > sell > earn commission. The formula is the same, except that each time you shop at one of Lolli’s partner sites, they take a cut from the retailer and share a commission with you. Paid directly to your Lolli wallet in Bitcoin.

Lolli Browser Extension & Wallet

The easiest way to interact with their rewards program is probably via the browser extension which is available for both Chrome and Safari. The extension will automatically alert you when you visit a partner site and outline the potential bitcoinback you’ll be eligible for:

Once you’ve installed the extension, simply shop as normal. Then activate the reward (as visible above) at your favorite store. Finally, once you’ve made your purchase, Bitcoin will be sent to your wallet. It’s that easy.

The browser wallet allows you to withdraw your savings into your bank account once your balance reaches a minimum of $15. Developers are in the process of launching 2 new features which will allow you to transfer your hard-earned (hard-shopped?) Bitcoin to another cryptocurrency wallet of your choice. This is an important development since online wallets or hot wallets (as they are also commonly known) are more prone to hacking.


Consumers have been shopping online with Bitcoin for at least a few years now. The trouble, however, is that storing and transacting with virtual currency has mostly been the domain of technical folk. Add to that the persistent problem of cryptocurrency theft and you can see why adoption has been a slow but steady process.

Regardless, the number of websites where you can use Bitcoin continues to grow. And major name brands such as Bloomingdales, Office Depot, Barnes & Noble,, and Macy’s to name a few are already connected to the platform. Lolli already supports north of 500 retailers and requests for additional ones can be made directly with the team.

The Benefits of Crypto Rewards

By now the benefits of a cryptocurrency online shopping and reward programs should be obvious. But to clarify, let’s take a look at a few notable reasons.

1. Lolli is handling all the cryptocurrency payments from their end. This way retailers can offer crypto rewards without having to deal with the technical details themselves. Users also get to engage with their favorite brands in an easy way via the online wallet. Alex hopes that this will create the win-win-win situation that he’s building the company on.

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2. There has been a trend of service outages from credit card suppliers such as Visa in recent times. This is a little concerning considering that some countries like Sweden and the US rely heavily on card-based services. Many consumers just don’t carry cash and haven’t done so for quite a while.

If these problems escalate we’ll almost certainly see a jump in cryptocurrency purchases as buyers look to a more reliable way to get their shopping fix. Bitcoin’s uptime is reportedly very stable at around 99.99% since it was created in 2009.

3. Finally, we should also take into account consumer access to online shopping. A huge wave of the world’s population don’t even have access to a bank account in the first place, never mind payment cards.

Anybody with a phone and an internet connection can now shop online and receive rewards via retailers worldwide without having to worry about rip-off exchange rates. And you don’t need a credit score or authority to approve you before getting access to this privilege. As long as you have enough funds, you’re good to go!

Lolli – A Smart Initiative

Such an initiative may be a sign of the growing adoption of cryptocurrencies. If loyalty programs take off, it will almost certainly turn out to be quite the boon for established networks like Bitcoin and Ethereum. Reward platforms and retailers will regularly need to buy Bitcoin as more users jump on board. This may turn out to be a tricky task considering the volatile nature of the crypto-to-fiat exchange rates.

That being said, many users will most likely flock to these platforms as it gets easier to get a hold of some crypto (no matter how little). Registration, verification and navigating exchanges is a daunting experience for many consumers who like the tech, but just don’t want to get stuck up in the details. Alex and Matt seem pretty adamant about bridging that gap. A simple user experience is clearly one of cryptocurrency’s biggest sticking points at the moment.

It’s safe to say that Lolli won’t be the last player in this field. Expect to see other startups capitalize on the cryptocurrency reward phenomenon in the near future.

Original article on CoinCentral.

Thousands of Crypto Coins Dead: These Are Top 5

Although digital currencies have shown a substantial amount of progress over the past few years, recent volatility in the crypto world is giving skeptics more reason to stay doubtful.

While we have seen a consistent stream of innovation with new currencies, particularly in the past 18 months, there are now more than 800 of them that have been pronounced dead. This means that the coins have no value, trading at less than 1 cent. Most commonly the failure of these coins is due to their lack of integrity — being a scam or a joke — or because the product did not materialize. Many of the obsolete cryptocurrencies are listed on the website Dead Coins, which describes itself as a “strategic partnership to clean up crypto.” Coinopsy is another site that has reported dead coins. When considering reports from both sources, the number of dead projects accumulates into the thousands, with reasons ranging from true abandonment to outright scams.

Thousands of Crypto Coins Dead: These Are Top 5

Creating New Tokens: Risky by Nature 

A process called an initial coin offering (ICO) can create new digital tokens. In this process, a start-up can issue a new currency that is available for purchase by investors. While the investor does not obtain an equity stake in the company, the purchased cryptocurrency can be used on the product of the company. Since the coins are cheap while holding potential for substantial returns down the line, people often buy into an ICO.

By their very nature, ICOs are highly risky. Moreover, these kinds of investments have been riddled with fraud. Just in 2018, a scam ICO called Giza was reported by CNBC. It was a fake startup that ran off with $2 million in investor money, giving plenty of fuel to skeptics to continue to doubt the legitimacy of this industry.

It is important to keep in mind that everyone expects the startups to fail. The problem is the massive amount of cash that floods into these projects before they are ready — this is the primary cause for concern. When startups receive more fuel than they can keep up with, the resulting conflagration ultimately consumes both the company and the founders, which is not helpful to the investors in return.

The conflagrations are, unfortunately, a global phenomenon. In 2017 alone, dead ICOs and scams raised $1 billion, and nearly 300 startups had been marked as questionable. The lock-ups and pricing scams within the ICO market are using greed rather than rational thinking, and are hurting the industry more than helping it. In the end, it is crucial to invest only what you can afford to lose and expect any token that you invest in to fail. Then if it succeeds, you will be pleasantly surprised, and if it fails, you will avoid devastation.

Even Bitcoin, the biggest cryptocurrency by market capitalization or value, has had a tough year.

Although it hit a record high of nearly $20,000 last year, it has since decreased by nearly 70%, according to data from CoinDesk. While Bitcoin is still among the stronger of coins, many others have not been as fortunate. To note are five of the greatest failures in cryptocurrency history thus far.

The Biggest Crypto Token Failures 


SpaceBit has long held the status of one of the most ambitious cryptocurrency projects thus far. And perhaps rightly so, as this is the company that wanted to launch several “nano-satellites” into orbit to provide a globally-accessible blockchain, which would be used for the storage of Bitcoin as well as helping unbanked regions access financial services. This announcement attracted much attention and enthusiasm from the public, gaining massive support behind them. However, the project ultimately disappeared. There was never any prototype or proof-of-concept, and eventually, all talk about SpaceBIT faded out completely. Supposedly the team behind SpaceBIT is now completely focused on a new project called BlockVerify, so SpaceBIT has been put on the shelf for good.


Originally branded as “Gems” but now named “GetGems,” this was a social networking platform that uses cryptocurrency to pay members that view advertisements within the app. Having made grand claims in 2014 about disrupting social media, the result was somewhat disappointing with an underwhelmingly low crowdsale that year. Since then, GetGems has been overtaken by competitors, but they are still running; they have seen the most success in the country of Uzbekistan, ranking in 63rd place among apps.


Although this cryptocurrency began as a joke, it quickly evolved into a success with a passionate community behind it that became known for donating to charity with DOGE. After a successful streak, the Dogecoin collapsed. To make matters worse, founder Alex Green had disappeared with everyone’s money, shutting down the exchange. This led to the crashing of DOGE and disbandment of its community.


Launched in 2014, PayCoin grew to be one of the largest cryptocurrencies worldwide by market capitalization. The coin’s white paper presented a vision for new variations of blockchain technology that would produce a new breed of cryptocurrency. However, it quickly became evident that the coin would not live up to this vision when its founder converted PayCoin into a generic altcoin clone, which made it easier to push onto the market faster. As it lacked follow-through, people ultimately lost faith in the coin. By 2015, GAW shut down entirely and faced a federal investigation, with its founder fleeing the United States.


Taking first place in cryptocurrency failure is the Decentralized Autonomous Organization (DAO), an Ethereum-based coin. While its beginnings were met with great enthusiasm, including large purchases of the token, one incident had changed the entire course of this currency transactions. When an attacker exploited a vulnerability in the DAO smart contract, this led to a loss of more than $50 million. After information about the attack became well known, the token became abandoned by traders, throwing it into a downward spiral.

Final Thoughts

There has been intense pressure and skepticism placed on the crypto world, perpetuated by consistent news of novel scams or unsuccessful coins. However, optimism for the industry remains strong. Proponents of crypto expect regulators to learn to be more favorable towards the field, which could boost participation in the market. Similarly, there is a lot of optimism for the future of ICOs as an alternative to initial public offerings and venture capital funding. It is true that many coins have not survived, but there are also many coins that have. Every impactful innovation has its trials and tribulations, but that does not mean that it cannot evolve into a success that improves the way we live our lives.

Article originally appeared on MintDice.

5 Signs of Booming Blockchain Innovation in Australia


5 Signs of Booming Blockchain Innovation in Australia

Australia. Plenty of images come to mind when we think of the land down under. Sun-bleached surfers, wallabies, the Sydney Opera House. But, Australia, despite its modest population of 23 million, is more than just a faraway tourist destination. The home of kangaroos, koalas, AC/DC, and vegemite is well on its way to becoming a world leader in the blockchain space. Here are at least five signs of blockchain innovation in Australia right now.

1. Australia Is a World Innovation Center

You might not know it, but Australia is actually the 11th largest economy in the world. And it’s one that’s in a state of transition–fast. With an economy traditionally based on manufacturing, the government’s focus for the future is firmly fixed on technology. And, more specifically, on blockchain innovation in Australia.

They’ve been paving the pathways for this for some time now. In 2016, the government of Southern Australia allocated $80 million to creating jobs of the future and modernizing the economy. In that same year, three of the world’s most disruptive startups on the Disrupt 100 list (curated by the likes of Microsoft Ventures, IBM curate, and Sky News) came from Australia, recognized as having the power to “influence, change or create new global markets.”

There are also plenty of international companies with a foothold down-under. The likes of HP and Microsoft both with innovation centers here. Australia has already made a splash on the world scene with its homegrown telecom company Myriota. The company won best industrial startup at the Internet of Things Summit, Silicon Valley, for their low-cost, low-power IoT transceiver.

And when it comes to blockchain innovation in Australia, their talent pool is quickly deepening, with an entire innovation district Tonsley already blooming in South Australia. With its driverless buses, open spaces, restaurants, and meetup centers, Tonsley is Australia’s answer to Silicon Valley. A place to foster creative thinking, innovation, incubation, skills, connections, and conditions needed for new technology like blockchain to thrive.

TechStars’ first accelerator program in the Asia-Pacific region is based in Adelaide and the entrepreneur scene is thriving in this Australian city. As the US continues to forge its path to regulating cryptocurrencies, smaller countries, it seems, are steaming ahead. Well, smaller population countries anyway.

2. A Pioneering Stock Exchange

Despite recent announcements from NYSE parent company ICE and Switzerland’s SIX, Australia’s largest stock exchange is already light years ahead. Not only has The Australian Securities Exchange (ASX) already been listing cryptocurrency exchanges and blockchain companies since 2014, but they’re actually migrating their entire infrastructure to blockchain by 2020.

We’re not just talking about listing Bitcoin or other digital assets here. The country’s main stock exchange will embrace blockchain technology entirely. The plan is to implement a post-trade system that is blockchain-based. This will replace their existing Clearing House Electronic Subregister System.

ASX estimates that by moving over to blockchain technology to administer the Australian financial market, they can add as many as 50 new features for traders, at the same time as making significant cost savings. The plan is already underway and will make the ASX the world’s first major stock exchange to migrate to blockchain technology.

3. Government Funding for Blockchain Research and Development

In May, the Australian government announced they would allocate $700,000 AUD ($500,000 US) to “blockchain research,” and how to use it to deliver more reliable and secure government services. Part of the money will also go towards funding a Digital Transformation Agency (DTA) to evaluate using blockchain for government payments.

The goal is to understand how blockchain innovation in Australia can help improve efficiencies and modernize the country’s economy. They also aim to assess the level of maturity of the technology and the problems it may solve. This appears to be taking a leaf out of Malta’s book with the establishment of a digital innovation authority to regulate and assess blockchain initiatives.

While this is not necessarily a huge sum, it’s not the only funding allocated for blockchain projects. The Australian Department of Home Affairs (DHA) also announced tentative plans and a proposal to use blockchain alongside AI and IoT to manage international trade and supply chain.

Then just last month, the Australian government awarded IBM a cool $1 billion AUD ($750 million US) to develop blockchain innovation in Australia over the next five years. This will be specifically geared towards developing AI, blockchain, and quantum technology solutions for cybersecurity, research, and data management.

Some critics have questioned the Australian government’s seemingly blind faith in IBM after their disastrous attempts at managing the country’s 2016 census (which suffered incessant DDoS attacks). Others suggest that a long-term commitment with just one provider may not be a good move. This could mean repeating the mistakes made in the dotcom boom at the turn of the century.

Either way, the five-year IBM agreement is an indicator that neither the tech giant nor the Australian government believes that blockchain technology is going away any time soon.

4. Academic Centers of Excellence

Australia is also earning a reputation for leading academic centers of excellence in blockchain technology. The RMIT University, for example, has a long-established blockchain innovation hub and has already committed just shy of $3 million of funding in blockchain innovation in Australia. The institution claims to be the “world’s leading social science research institute in blockchain.”

There is also no shortage of blockchain meetup centers around the country including the Blockchain Centre in Melbourne, regular meetups in Sydney, and of course, Southern Australia’s Tonsley.

5. Major Blockchain Companies

Finally, some major blockchain projects are coming out of Australia as well, including Perth-based blockchain technology company DigitalX that was listed on the Australian Securities Exchange (ASX) in June 2014. As an innovative blockchain company, they offer ICO consulting, blockchain software development, and other consulting services.

Power Ledger from Western Australia is an energy blockchain startup that enables peer-to-peer (P2P) electricity sharing. Raising a massive $34 million in its ICO, Power Ledger also received a further $8 million from the Australian government. This is meant to help develop its incentivizing marketplace for renewable energy.

Block8 is an Australian blockchain incubator aiming to help other companies accelerate their projects by giving them access to their network, expertise, and funding opportunities. And startups Havven and CanYa are also starting to find success, raising millions of dollars of ICO funding and developing solutions for volatility and an online work marketplace respectively.

Blockchain Innovation in Australia Is Booming

With a government committed to fostering innovation and technology, and conditions ripe for it, it will be interesting to watch developments in Australia. We’ll see if IBM can get it right this time, and how the ASX blockchain-based system works. So, instead of looking around for innovative companies, next time, it may pay to look down under.

Original article on CoinCentral.

Everything You Need to Know About Cryptocurrency Regulation (Right Now)

By UpCounsel Corporate & Securities Attorney Gary Ross

The meteoric rise of cryptocurrencies has taken the world by storm. Innovators, investors, users, and governments are scrambling to wrap their heads around cryptocurrencies and the blockchain technology that they rely upon. The emergence of a new market and business model has created great opportunities for participants, but it also carries significant risk.

Cryptocurrencies present an inherently unique challenge to governments because of their new technology, cross-jurisdictional nature, and frequent lack of transparency. Governments are struggling to develop new ways to regulate cryptocurrencies, adapt existing regulations, and identify fraudulent schemes. Cryptocurrencies and their regulations are evolving before our eyes, and this article will provide a brief background on cryptocurrencies and an overview of where cryptocurrency regulations currently stand.

What are cryptocurrencies?

Cryptocurrency is, by any other name, a currency—a medium of exchange used to purchase goods and services. Or, as some have suggested, cryptocurrency is a “peer-to-peer version of electronic cash.” However, this currency has two qualities that distinguish it from traditional bills and coins.

First, cryptocurrency is a virtual currency that is created through cryptography (i.e. coding) and developed by mathematical formulas through a process called hashing. Second, unlike traditional bills and coins that are printed and minted by governments around the world, cryptocurrency is not tied to any one government, and thus is not secured by any government entity. The fact that cryptocurrencies are not secured by a government authority has led to concerns from critics that this is the second coming of Tulipmania, because we are ascribing value to an otherwise valueless item. However, the potential for cryptocurrencies as a medium of exchange remains enormous.

What is blockchain?

Blockchain is the technology at the heart of most cryptocurrencies, and explaining the technology in detail would require a blog post of its own. What is important to know is that blockchain is a record of peer-to-peer transactions categorized into blocks on a distributed ledger. Despite the obtuse terminology, blockchain functions similarly to a local bank authorizing and recording a transaction, but instead of only one party holding the entire ledger book, the transactions are recorded communally by member nodes, with each node being a computer in a peer-to-peer distributed network.

The blockchain can confirm a transaction within minutes, removing errors that exist when trying to reconcile and audit separate ledgers and transactions. Whenever a transaction takes place, the miners on the blockchain develop a new hash and digital signature to update the ledger and create a new “block.” This block, or recorded transaction, is time-stamped and encrypted and will remain on the blockchain for life.

Regulation in the US – Utility Tokens v. Investment Tokens

In the United States, there has been no federal regulation of cryptocurrencies. Instead, cryptocurrencies are often grouped into two non-binding categories: (1) investment tokens that fall under the purview of already existing U.S. securities laws like the Securities Act of 1933 and the Securities Exchange Act of 1934, and (2) utility tokens, which remain largely unregulated (for now).

Security Tokens

Whether the tokens being offered in connection with a particular cryptocurrency are security tokens is decided on a case-by-case basis that even experienced securities lawyers can disagree upon. Tokens are usually analyzed under the four-part Howey Test below to see if the token is in fact a security. Securities must meet the following criteria:

  1. An ​investment of money
  2. in a ​common enterprise
  3. with an ​expectation of profits
  4. predominantly from the efforts of others

Each characteristic of the token is analyzed against this framework to see if the cryptocurrency is in reality functioning as a new-age security. If it is, then regulators treat it as such, and cryptocurrencies must then be registered and handled with all of the same disclosures and precautions as any other security sold in the United States or to U.S. investors.

Utility Tokens

Cryptocurrencies can also be categorized as non-security utility tokens. These tokens purport to offer intrinsic utility and value, and are typically instrumental in powering the blockchain technology. These tokens function more like commodities than securities, and while they may act like currency in a fully functional network, they also have other values.

However, having a utility token with a properly formed and functioning network does not preclude said token from being labeled a security by the SEC. In In the Matter of Munchee, Inc., a purported utility token with a non-functioning network was labeled a security by the SEC. While labeling a token without a functioning network as a security – as it has no present utility – is not unexpected, the SEC also concluded that: “even if [Munchee] tokens had a practical use at the time of the offering, it would not preclude the token from being a security.”

After analyzing the Munchee Tokens under the Howey test, the SEC concluded that they were investment contracts because purchasers of the tokens had an expectation of profits predominantly from the efforts of Munchee and its staff. The SEC further concluded that Munchee had primed such expectations through its marketing efforts.

While this new case does not eliminate the distinction between utility and security tokens, it does caution that, when deciding whether a given token is a security, the SEC will look beyond utility at the character of the instrument, and base their conclusion based on the terms of the offer, the plan of distribution, and the economic inducements held out by the token issuer.

State Regulation

So far only the state of New York has issued any kind of regulation specifically regarding cryptocurrencies: the BitLicense. The BitLicense is New York’s attempt to control cryptocurrencies within its borders by requiring cryptocurrency businesses to register and comply with several different disclosure and financial obligations. The regulation has been divisive, and many businesses have rallied against its high costs. While a few companies have applied for and received the license, most other companies have simply left the state or stopped offering services to its residents.

Regulation Abroad – The Ever-Shifting Jurisdictional Question

The United States is not the only country grappling with how best to regulate cryptocurrencies. Many cryptocurrency businesses face daunting questions regarding in which jurisdictions to form and to do business in. In the end, the question is quite difficult and fact-specific, requiring communication between legal counsel in different jurisdictions and taking into account nebulous and piecemeal country-by-country regulations. It is impossible to do a detailed analysis without knowing how a country’s existing securities laws, financial regulations, and banking regulations will operate (or will be adapted to operate) with cryptocurrencies. The fact that cryptocurrency-specific regulations are still developing does little to add clarity, and makes the analysis even more challenging. Yet a few global trends are noticeable:

Suspending Cryptocurrencies

Some notable countries, like China, and South Korea, have suspended cryptocurrencies. These countries have cited the risk of fraud and the lack of adequate oversight in suspending cryptocurrencies and their exchanges, forcing cryptocurrency companies and exchanges to relocate.

Regulating Cryptocurrencies

Other countries, like Japan and Australia, have adopted disclosure and regulatory measures, or have companies register with the applicable government authority. Several countries have also tried to implement disclosure or registration regulatory regimes when it comes to cryptocurrencies, but such regimes are cumbersome and expensive to fledging companies.

Cryptocurrencies as Commodities

On the other hand, Switzerland and Singapore, two of the countries at the forefront of the cryptocurrency market, have simply stated that cryptocurrencies are assets not currency, and that they will treat them as such under existing regulations.


Ultimately, cryptocurrency regulation remains in its infancy. Piecemeal regulation has already begun around the world as governments enact new regulations to control and legitimize cryptocurrencies, fold cryptocurrencies into existing regulations, or ban them outright. These splintered attempts at controlling a global phenomenon will keep the cryptocurrency market volatile, and pose a challenge to innovators, investors, and users. They will continue to work in the cryptocurrency space while pushing for legislation and regulation that will remove ambiguity and legitimize cryptocurrencies. At the same time, they must grapple with the possibility that new regulations may be confusing, detrimental, or have negative inadvertent effects.

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About the author

Gary Ross

Gary Ross

Experienced corporate & securities attorney eager to help you and your business reach its goals. My services range from fund formation and capital raising (e.g. Reg D offerings, crowdfunding) to contract negotiation and compliance with securities and other regulations. I have extensive experience with cryptocurrency and non-U.S. companies.

Prior to co-founding my firm, I worked in the law firms of Sidley Austin, Alston & Bird, and Holland & Knight. From 2009 to 2012, I served in the U.S. Department of the Treasury, where I oversaw financial agents engaged by Treasury to provide asset management and other services relating to the Troubled Asset Relief Program (TARP).

This article was originally published on UpCounsel.”

Don’t Fall For These Cryptocurrency Scams

While the cryptocurrency market can be a good way to make money, it is also a prime target market for scammers. In this article, we’ll look at some of the most common bitcoin schemes and how to protect yourself from falling for them.

Don’t Fall For These Cryptocurrency Scams

Be Weary of Cryptocurrency Giveaways

Amongst the various types of bitcoin schemes, many of the top people and projects in the industry are concerned with the prevalence of giveaway scams. These scams often take place on popular social media platforms, especially Twitter. Big names like Vitalik Buterin even list “Not giving away ETH” in their profiles to make the cryptocurrency community aware of this issue.

Typically, these scams will tell people to send ETH or BTC to a given address. The scammer promises to give that person more ETH or BTC in return. While this might seem like an obvious scam, the number of profiles that include “Not giving away ETH” make it apparent that this type of scam is quite rampant.

Even in the case of legitimate airdrops or bounty programs, the amount of funds given away are typically much lower. Most importantly, legitimate giveaways would never ask a user to send funds first and then give funds in the same cryptocurrency back.

“Guaranteed Returns” on ICOs

In some financial markets (i.e. bonds, CDs, etc.), banks guarantee returns of a certain amount. However, this is not the case in other financial markets. Much like in the stock market, the cryptocurrency market has no profit guarantees. Any cryptocurrency ICO that guarantees that the price of its token will rise to a certain percentage is likely to be a scam. ICO scams continue to be a problem for the cryptocurrency market, especially due to the lack of regulatory frameworks throughout the world.

Even if it is very possible that a given cryptocurrency will rise in value over time, scams are likely to use precise numbers and phrases like “guaranteed returns”. Similar to the giveaway scam, these ICOs will ask investors to send BTC, ETH, or other popular cryptocurrencies to the scammer’s wallet address.

The problem is that almost every cryptocurrency project (legitimate or not) relies upon this type of exchange of funds. The only major difference, in the end, is that a scam doesn’t send tokens in return.

So what separates ICO scams from legitimate ICOs?

While some fake projects guarantee returns, legitimate ones do not. Legitimate ICOs typically have several positive reviews, verified team members with KYC and AML checks, established strategic partnerships, and other factors.

Cloud Mining Scams

Cloud mining continues to be another popular option for bitcoin schemes.  The above-mentioned cryptocurrency scams might appear to be more obvious. In contrast, cloud mining scams often seemingly appear more legitimate. In some cases, cloud mining companies guarantee returns. Again, this is an obvious scam, especially since it’s very difficult to predict cryptocurrency price fluctuation.

Sometimes, fake cloud mining companies are disguised much better and don’t include guarantees on returns. They merely charge users a subscription fee upfront without any real chance of profitability. It’s also worth noting that even the most popular and legitimate cloud mining companies do not offer a good return on investment.

Even if you are thinking about going with a legitimate cloud mining service, it’s important to consider how long it will take you to get a return on investment. Most of the time, it’s easier to make profits via mining rigs or cryptocurrency trading. In any case, always thoroughly read reviews on any cloud mining service.

Don’t Go Phishing

There are few different types of crypto-related phishing scams that anyone should be aware of. First, emails that attempt to fool users into thinking that they are a popular service are commonly scams. For example, a scammer might send a fake security alert saying that someone has just tried to log in to a user’s account. This type of email generally asks a user to click on the link to verify that everything is fine. A scammer can even ask a user to participate in a survey or giveaway by clicking on the link.

Once a user provides the scammer with sensitive data (i.e. login credentials, private key, etc.), the scammer then has the information needed to hack the user’s account. In some cases, scammers have created Facebook pages and other social media accounts in order to pretend to be a legitimate exchange. Sometimes, scammers even create Google ad campaigns. Always be careful of the outbound links and try to verify that you are going to a legitimate website.

There are a few ways to prevent against phishing attacks. First, it’s always important to make sure that you are going to the correct website. Sometimes, the URL can be similar enough to make you think it is a crypto-site that you use on a regular basis. By verifying that you visit the correct URL every time when entering login credentials, you can keep your funds safe.

Another way to prevent scams is through increased security measures. For example, by enabling two-factor authentication (2FA), you can make it a bit more difficult for hackers to access your actual accounts in case you accidentally fall for a phishing attack. Hopefully, by setting up 2FA, you will be able to increase the security of your funds.


In an age where it is actually possible to become a ‘crypto millionaire’, it’s also important not to think that doing so is easy to accomplish. It should be a top priority for any investor to understand how to prevent from falling for bitcoin schemes. The types of cryptocurrency scams mentioned in this article provide just a few examples of what to watch out for.  By using these strategies to detect various scams, it will be simpler to mitigate potential risks and sort out the real opportunities from the fake.

Article originally appeared on Coincentral.