Although it is impossible to deny the benefits of Bitcoin’s sudden popularity, the recent frenzy around cryptocurrencies created a new enemy – crypto scammers.
These people use several techniques to try and catch as many victims as possible, using methods such as blackmail, fake exchanges, impersonation, malware, Ponzi schemes, fake ICOs, and others.
Recently, a lot of people became victims of a new type of crypto scam, which involves apps that claim to allow individuals to mine cryptocurrency through their phones. In this article, you will discover why it’s not a good idea to mine cryptocurrency via phone.
While mining crypto is an excellent idea, the safest idea for novice crypto investors is to rely on a well-known exchange to buy Dogecoin (DOGE), Litecoin (LTC), Ethereum (ETH), and other digital assets in a secure environment. Nonetheless, let’s see the case against mobile crypto mining.
Bad News – Crypto Scammers Use Fake Mining Apps to Deceive Victims
Recently, digital security researchers have identified more than 170 apps in Android’s Google Play Store that have been scamming Bitcoin (BTC) and other cryptocurrencies. It’s estimated that more than 93,000 people were deceived and that criminals took at least $350,000 by offering fake mining services.
Cloud security firm Lookout Threat Lab’s report indicates that these apps tricked users through two schemes dubbed “BitScam” and “CloudScam.”
Ultimately, what allowed these apps to go unnoticed is that they don’t do anything “apparently” malicious. In essence, the scammers hardly do anything, as they utilize automated apps to collect money for services that don’t exist.
It’s crucial to remember that cryptocurrency mining occurs when a user gives up the processing power of his machine to solve complex mathematical problems by encrypting and recording transactions of a particular digital currency on a blockchain network.
Over time, the competition for processing data blocks became overwhelming, which led many miners to join mining pools. By using this collective activity, multiple miners contribute simultaneously, later sharing the profits proportionately.
However, many users do not know the complexity involved in crypto mining. Consequently, the sudden rise in crypto’s popularity boosts the interest of people who just want the easiest way available to make money with digital assets.
While it’s possible to make a lot of money trading and mining cryptocurrency, it requires time, effort, and education, which isn’t what these apps promise.
Crypto Scammers Using Fake Mining Apps – How Does it Work?
These fake mining apps offered services involving the rental and purchase of hardware that supposedly contributed to mining pools. The pitch used to lure victims was that they would mine cryptocurrencies without actually having the computing power to do so.
The vast majority of apps involved deceiving individuals into paying for the service, and then collecting their money even before they could finish downloading the application.
The main type of fraud was “CloudScam,” in which apps offered users the opportunity to rent the hardware to mine cryptocurrencies. Using subscription services, the apps showed fictitious information on the screen, indicating the hash rate and other statistics. However, nothing was actually being mined.
Victims could pay for the fake services using Play Store or directly with Bitcoin (BTC) and Ether (ETH).
The other scheme was “BitScam,” in which victims bought a fixed quota corresponding to certain virtual processing power in mining pools, also counting on subscriptions to increase their efficiency. Again, all information presented to users was false.
In both cases, victims lingered to realize that they were being cheated, as there was always a minimum amount in cryptocurrencies to withdraw.
However, even when the withdrawal limit was reached, users carried out the transfer of funds, their balance was reset, and no coin/token mined ever reached their virtual wallets. So far, it’s estimated that 93,000 people were deceived while the scammers took at least $350,000.
Why is it Hard to Ban All Fake Mining Apps Altogether?
As a response to the scammers, Google Play Store banned all mining apps associated with both types of scams, as provided by information from the Lookout Threat Lab. Nonetheless, a report from the same company warns that there are still many unofficial app stores applying the same fraud method.
While scammers are still running their schemes to exploit the frenzy around cryptocurrencies, it is fundamental to pay attention to detail and avoid downloading or subscribing to any service that promises crypto mining without direct involvement.
Why Shouldn’t You Mine Cryptocurrency on Your Phone? – Final Thoughts
The huge profits made possible by investments in cryptocurrencies are incentivizing scammers to steal money from people who want to enter the crypto industry.
According to a report from security firm Lookout Threat Lab, more than 170 fake Android apps claim to turn cell phones into mining machines, while in reality, they are stealing their victims’ money.