Why do people fall for scams and fraud related to bitcoin ?
As the number of new users and Bitcoin transactions grow, the amount and sophistication of scams that try to involve digital currency also increase. Why does it happen? And why so many people continue to be deceived? There are numerous answers to the above questions. One is that even being a disruptive technology, especially the degree of transparency provided by blockchain, the bitcoin is not free of what happens in any market. Since the world began, people have always found alternatives to deceive those who were not well informed. The financial fraud pyramid scheme, also known as Ponzi scheme, in existence for at least a century and consists primarily of progressive recruiting others into the system.
This scam often manifests itself by the name of other legal business models which make cross-selling, an example is the multi-level marketing (MLM). In addition, one of the facts that can make people more susceptible to fall for scams is that many users have joined the network after the bitcoin achieved significant prices, surpassing the price of thousand dollars a bitcoin at the end of 2013.
Many people feel they have lost the train and desperately want to achieve it, which puts considerable stress on wanting to believe in very good deals to be true. There is also the factor "crisis", think about the people with the account running the negative months.
There is a lot of people just looking for a miracle. So when these people hear talk about an innovative technology like Bitcoin, they envision a way out. It is then that they can also hear of High-Yield Investment Program (HYIP), an investment (read fraud) high profitability. Hunting is the hunter. Global MMM offers through its "mutual aid program" a monthly return of 30% for investors.
The investment is made in Bitcoin. There is another option called "MMM Extra" that offers a 100% return per month and cumulative of 409,600% per year. Like other pyramid schemes, users are also able to get bonuses for referrals or testimonials posted online and can receive 10% of "all donations from participants that you invited." This is where the multi-level marketing (MLM).
The irony is that supposedly live in the age of information, or misinformation. People keep falling this kind of scheme . The Facebook page of Global MMM has nearly 60,000 tanned and numerous videos of people telling how happy they are with their winnings .
This is just a story that is repeated , this time with the bitcoin as the protagonist. Inevitably, who is fooled by schemes comes out worse than entered . You must understand that there are no magic solutions to financial problems or foolproof formula for getting rich quickly . Any investment, including venture capital , requires that the possibilities are very well studied. Otherwise, the chance to see the victim of another scheme is great.