Fake mining sites and fake faucet wallets are two scams I have seen repeatedly in the cryptospace. Don’t Blame the Victim If you’ve spent time in cryptocurrency communities you know there are many scams out there. You’ve probably also heard people say only “idiots” fall for scams, or that victims somehow deserve to lose their coins because they are “dumb.” I think these attitudes are wrong. The reason people fall victim is that they are inexperienced. And even if intelligence were a factor, why would it mean someone “deserves” to be ripped off? This attitude is anti-social and toxic in any community. It also makes the cryptocurrency community hostile to newcomers. In contrast to blaming the victim, sharing knowledge is the best way to protect each other from being scammed. Pooling our collective knowledge will make the cryptocurrency community a safer place for everyone and help draw in more newcomers. Ok, now that I’ve explained where I’m coming from, let’s move onto the scams. Fake Faucet Wallets A faucet wallet is a website that appears to be both an online and a faucet. As a wallet, it will typically offer the opportunity to register for an account and receive addresses for Bitcoin and various altcoins. As a faucet, it will offer free daily deposits of tiny amounts of cryptocurrencies into your wallet. However, unlike conventional faucets, which actually pay out claims even if they are small, faucet wallets are pure scams. The point is to lure you into depositing your own coins into the site. Here is a screenshot from a fake faucet wallet that was still live at the time writing: crypto wallet The balances are supposedly from free daily deposits. In reality, there is nothing there It looks like a one-stop-shop for Bitcoin and altcoin addresses. Notice it also offers a “100% first deposit bonus.” This is typical of faucet wallet scams. They offer to pay a bonus to get you to deposit your coins. All will seem well until you request a withdrawal and nothing happens, or the site simply disappears. In the case of the site pictured above, I requested a withdrawal of the Bitcoin balance once it crossed the stated minimum withdrawal limit. I clicked “withdraw” and a message appeared saying it was a “success.” However, I was unimpressed. I had never inputted my BTC address. The site had no place to send the Bitcoin. Needless to say, I never received the withdrawal. Fake faucet wallets also typically offer additional bonuses for signing up referrals. Those who post their referral link to social media unwittingly become accomplices in the scam. The QoinPro Saga Over the last few years, I have seen multiple faucet wallet websites come and go. However, one has proven particularly tenacious, existing for several years and scamming people the whole time. QoinPro claims to be an online wallet that deposits Bitcoin and various altcoins into users’ wallets daily. I’m familiar with QoinPro as I encountered it early in my time in the cryptospace. Back then I was naive about scams and registered for an account. I thought I was getting daily deposits and even shared the site on social media. Fortunately, the only people who signed up were family members, none of whom deposited their own coins. I had completely forgotten about QoinPro until recently when I saw some social media activity from people claiming they never received withdrawals they requested through the site. On QoinPro’s Twitter was a post announcing the site was down for an upgrade and would be back on May 25, 2018. The day came and went and tweets from angry users followed. QoinPro then tweeted the re-launch had been pushed back to July 23, which also came and went with no new site appearing. The posts from angry users continued. QoinPro’s Tactics I dug deeper and discovered QoinPro had gone live on February 6, 2014. A user posted on Bitcointalk announcing the launch of a “multi-currency crypto wallet” with free coins deposited daily. For a few weeks, there were posts from users trying to profit from the referral bonus. They were offering to send small amounts of altcoins in exchange for signing up to QoinPro via their personal link. Some posters organized promotions where those who signed up were entered into a draw for some BTC. While there is little evidence many people responded to such outreach (i.e. almost no replies to these posts), people were pushing their referral links quite aggressively. My research further revealed a new tactic from QoinPro beginning in 2017 as the Bitcoin Cash hard fork approached. Account holders began receiving emails stating they could claim BCH through the site if they deposited Bitcoin before the fork. One user mentioned having deposited 0.7 BTC into QoinPro in response to the email. He requested a withdrawal after the fork and it never came. After sending “thousands” of emails to QoinPro he had yet to receive a reply. With all the evidence online of users not getting withdrawals you would think it would be impossible for QoinPro to stay online, however, I recently discovered that the site has indeed returned at a different URL. Fake Mining Pools Fake mining pools are websites that offer to sell or rent hash power. Hashing power is the power a computer uses to run and solve hashing algorithms. These algorithms are used for generating new cryptocurrencies and allowing transactions between them. This process is also called mining. A fake mining pool site will let you sign up for free, promising you can mine small amounts of crypto without having to pay (tip: something for nothing is always ). Once you register, you discover the free coin amount is very low but can be increased with the purchase of more hash power. Here is a typical example: a red flag This image is from a fake Litecoin mining pool website offering to sell hash power I joined one of these sites when I was new to the cryptospace. Fortunately, I did not purchase any hash power packages offered for sale. Instead, I waited to see if it really was possible to mine Litecoin for free. The minimum withdrawal on the site was 0.2 LTC. I kept the tab open on my computer for days until it showed an account balance of 0.2 LTC. I initiated a withdrawal. It never came. I sent a couple emails to the support channel but never got a reply. A bit of research online revealed stories from people who had purchased hash power packages complaining about not receiving payouts. Spotting Scam Faucet Wallets The best way to spot a fake faucet wallet is to look at whether it’s offering free coins in exchange for a deposit. This is a huge red flag. Genuine crypto wallets do not give out free coins. They try to design the best possible product so users want to use it. If in doubt, try searching the name of the website with the word “scam”. If the site has been around for a bit you will likely see hits about it ripping people off. A related option is to consult social media. Check for mentions of the site on Twitter, Reddit, and Bitcointalk. Often people who have been burned by scam sites will post their stories to warn others Spotting Fake Mining Pools Unlike fake faucet wallets, fake mining pools are trickier to spot. This is because there are legitimate mining pools where people combine resources to benefit from communal hash power. began when the difficulty of Bitcoin mining increased to the point where it could take centuries for slower miners to generate a block. For these miners, the was to pool their resources so they could generate blocks more quickly and receive a portion of the reward on a consistent basis, rather than randomly once every few years. Mining in pools solution A fake mining site will purposely try to confuse you by describing itself as a mining pool. For example, the scam Litecoin mining site pictured above calls itself an “LTC mining pool,” though it is anything but. The key difference between a scam mining site and a legitimate mining pool is the latter is a group of miners who agree to share block rewards (mined coins) in proportion to their contributed hash power. In other words, they are selling hash power to the pool. They are not buying hash power from the pool. If a website is offering to sell you hash power it is a scam. Think about it this way: why would anyone sell you hash power and give you some of the rewards for mining when they could use the hash power themselves and keep all the reward? For it to be rational from a business perspective, the value of what you get would have to be less than what you are paying. Conclusion Fake mining sites and fake faucet wallets are two common scams in the cryptospace and newcomers are most at risk of falling victim. Some good rules of thumb are that faucet wallets are always scams, so steer clear of them. The telltale sign of a scam mining site is it offers to sell or rent hash power. You will not make money from such an arrangement so steer clear as well. Finally, when dealing with any website that offers to sell you something in exchange for crypto always do research online. If you see reports of people losing funds, stay away. Subscribe to my Medium and Twitter channels if you like my articles and want to learn more about blockchain and cryptocurrency projects.  If you have any questions about this article, please comment in the section below.Thank you!

Litecoin

Bitcoin Cash

Twitter

Solving the Core Problem of Automation in the App Development Industry

Is Electricity a Limiting Factor to Bitcoin’s Promise?

Check out Mina's blog

Read My Stories

Buy Me a Coffee

Check out my X Profile

Researcher

Too Long; Didn't Read

How to Avoid Two of the Most Common Scams in the Cryptospace

How to Avoid Two of the Most Common Scams in the Cryptospace

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

200+ Banks & Financial Organizations will use RippleNet in 2019

06/02/2018: Biggest Stories in the Cryptosphere

06/09/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

0 to Pro Crypto Trader: Your Ultimate Guide to Bitcoin and Altcoin Investing

07/02/2018: Biggest Stories in the Cryptosphere

200+ Banks & Financial Organizations will use RippleNet in 2019

06/02/2018: Biggest Stories in the Cryptosphere

06/09/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

0 to Pro Crypto Trader: Your Ultimate Guide to Bitcoin and Altcoin Investing

07/02/2018: Biggest Stories in the Cryptosphere

Light-Mode

Classic

Newspaper

Minty

Dark-Mode

Neon Noir

Minty

HN StartUps