Any fraud using the crypto currency BitCoin (BTC) is considered a BitCoin scam. There are two categories of BTC scams: 1) Any scam or financial crime that uses BitCoin as a payment method For example: -Phishing -Sale of illegal goods -Ransom ware payment -Non delivery scams -ETC 2) Scams that involve the protocol used in BitCoins and the BitCoin Peer to Peer Network of users (P2P) Examples: -Stealing BitCoins from ownerâ€™s wallets by hacking -Fraudulent investment schemes such as â€œPump and Dumpâ€ and Ponzi/Pyramid schemes -Moneylaundering -BitCoin Mining scams -Installing unwanted malware on userâ€™s devices to â€œmineâ€ the formation of BitCoins - ETC The majority of BTC scams being detected on the Internet right now are the â€œPump and Dumpâ€ and Ponzi/Pyramid. There are at least sixty types of crypto currencies (and more each day) that are derived from the BTC protocol. Some of them are LiteCoin, NameCoin, and PeerCoin. The majority of scams now involve BitCoin because its value has risen sharply over the last few months. BitCoin â€œPump and Dumpâ€ A â€œPump and Dumpâ€ (P&D) fraud occurs when an item or stock is managed such that the value is artificially inflated. It is thenâ€dumpedâ€ â€“the fraudsters making money and investors losing their money. A BitCoin P&D can occur when a group of scammers buy up a massive amount of low rate BitCoins at one time, suddenly pushing up the price/value of each BitCoin to an artificially high value. The BitCoins are now valued at a higher value than what the scammer group bought them. Then the scammers sell off all the BTCs at once to investors, pocketing the profit. The value of each BitCoin now plummets for those holding those coins. Another variation of a BTC P&D involves the use of BitCoin wallets. A â€œwalletâ€ is a section on a digital device where a BTC user stores his/her private keys which regulate the BitCoin transactions. There are software wallets, which allow the user to store BTCs on their computer, USB drive, or any other mobile device and web sites which allow the user to store their BTCs online to be accessed from anywhere. In this other BTC P&D scammers run â€œexchangesâ€ where BitCoin investors/users help â€œmineâ€ create) BitCoins. To create BTCs, individuals must use computers to solve algorithms. Those working to help create a BTC get a percentage of that BTC, based on the â€œworkâ€ they have contributed. As more individuals are added to create BTCs, it takes longer and more power. The scam exchange now charges more (in the created BTCs) to each individual worker for server rental and for storing their BTCs. The scam exchange is ripping off those who are actually creating the BTCs. Very often these scam exchanges will offer individuals free increments ( Partials) of a BTC as an incentive to begin participating in creating BTCs. BTC Ponzi/Pyramid Schemes In Pyramid frauds the scammers present themselves as a legitimate company. A scam BTC investment scheme will promise a high rate of return in BTCs to investors. A new investor will pay his â€œinvestmentâ€ and a small amount of that money will be paid to the earlier investors while the rest is pocketed by the scammers. In many of these Pyramid frauds the scammers simply fold the website and walk away with the BTCs, leaving investors with nothing. Another fraud, some scammers will represent themselves as a company who provides a â€œwallet serviceâ€- somewhere online so a BTC user can store their coins for easy access. When those scammers get a BTC from a user, they will sell them at a higher price on a currency exchange (or even eBay), then buy another BTC at a lower rate, keep the profit and replace the BTC in the userâ€™s wallet before the user knows it was used. Warning Signs To protect yourself and your BTCs, make sure that you research the company/organization that you will be dealing with. Google the company and find out if anyone else has been scammed. Tell tale signs of a scam are a company who only has an email for contact and no physical location. Also avoid companies that are anonymous- no names are affiliated with the company, and those that have websites that have been newly registered. Remember- If it sounds too good to be true...then it probably is!