Bitcoin is a virtual, decentralized currency that enables individuals and businesses to send and receive money across international borders. Its decentralization contributes to several significant benefits, including lower transaction fees, faster payment processing, and transparency. However, that characteristic also has some downsides, creating a loophole for scams and other fraudulent financial activities.
The Bitcoin network automatically detects typos and declines payments to invalid Bitcoin addresses. Reputable crypto exchange websites such as Bitcoin Era also have unique software and other analytical tools to detect and prevent scams. However, those measures have not been adequate since many Bitcoin scams still exist online.
The following are some of the leading alternatives for verifying Bitcoin addresses.
Checking the ‘’Bitcoin Abuse’’ Database
The number of scams related to Bitcoin has increased rapidly over the recent years. Most of them ask people to send Bitcoin to the given addresses. For example, Bitcoin giveaway scams promise double returns on the number of funds sent to their Bitcoin addresses. They also use fake social media accounts to broadcast the scams to several people online.
The ‘Bitcoin Abuse’ database lets you check whether the address you intend to send Bitcoin tokens to has committed a scam. The popular website is a public database, with a list of the Bitcoin addresses commonly used by criminals and hackers. Visitors can look up different Bitcoin addresses; report scam addresses, and monitor the addresses reported by others.
The Bitcoin Abuse website also provides additional helpful information, including the number of reported Bitcoin scams daily, weekly, and monthly. For example, the platform had received 156 daily, 989 weekly, and 4,112 monthly Bitcoin scam reports as of July 2021.
Verifying Bitcoin Addresses Through ‘Scam Alert’
Scam Alert is also a reliable platform for verifying Bitcoin addresses. The recently unveiled website insists its mission is to make blockchain safer for everyone by exposing scammers and criminals abusing the network. It encourages Bitcoin users to report scams, thefts, and fraudulent websites involving any cryptocurrency and blockchain.
Scam Alert will immediately issue a warning message, ‘’confirmed scam,’’ whenever users input Bitcoin addresses previously flagged as fraudulent. It also warns users not to send payments to such addresses. The site also provides additional information, like the description of the scams, any associated websites, the number of times users reported a Bitcoin address, and its overall earnings in US dollars.
Unlike the Bitcoin Abuse database, Scam Alert goes further, providing helpful information regarding the different types of crypto scams, including Ponzi schemes, sextortion, giveaways, ransomware, dark web, and theft. Its list of the top ten Bitcoin scam addresses indicates the most successful scams result from Ponzi schemes, fake crypto exchange platforms, and fake Bitcoin giveaways. The website also issues some essential crypto scam prevention advice.
Several other schemes exist, tricking unsuspecting Bitcoin users into sending funds to particular addresses. The Bitcoin website has previously exposed some techniques, including Bitcoin Trader, Bitcoin Evolution, Moon Bitcoin Live, and Bitcoin Loophole. Some scams also occur through emails, which seem legitimate with paid reviews on various websites and Google rankings.
The projected growth in Bitcoin value and complexities of cryptocurrency transactions continually attract criminals seeking to con unsuspecting individuals. Therefore, experts recommend verifying Bitcoin addresses through the above platforms before making any transaction to avoid scams.