The glitz and glam of cryptocurrency has captivated millions of people around the world. With promises of financial freedom, more control over one's wealth, opportunity to get rich overnight, there's so much that keeps people stuck to this great technological innovation called cryptocurrency.

However, beneath the dazzling and enticing surface lurks a hidden jungle filled with fake mining scams that is ready with its hook open to catch the next fish greedy enough to enter into its trap.

In this article, you will learn about an increasing scam in Cryptocurrency known as fake mining. You will learn how this scam works and how to protect yourself from falling into such scams.

What are Fake Mining Scams?

It is common for dApps to request that you grant permission for it to view your wallet balance and for the smart contract to see the tokens in your wallet.

However, bad people who would stop at nothing to exploit a fundamentally good process have been able to create scams through this method which has led to losses for users who aren't aware.

With these mining scams, bad actors paint a picture of you earning passive income whereby your computer produces cryptocurrency for you whilst you engage in other activities. However, instead of riches, these scam minings lead to empty wallets, stolen data, and security breaches after you've interacted with them.

A Typical Approach by a Fake Mining Scam

With these fake mining scams, malicious apps would be embedded in legitimate mining software which would then install hidden malware into your computer capable of emptying your wallet or stealing your data once you interact with it.

Below's an approach that a fake mining scam takes:

1) The dApp lures users to interact with it with a promise of an abnormal Annual Percentage Yield (APY) to come from depositing stable tokens, e.g. USDT.

2) To get the proposed returns, users need to purchase a voucher that would allow them to mine the token in question.

3) Before the user gets the voucher, there'll be a prompt to approve access to the tokens that need to be deposited to get access to the exchange token.

4) Once this approval is given, this scam dApp would employ the <transfer from> function which has already been encoded in its smart contract and this will automatically drain the tokens of the user into a different wallet already predetermined.

5) Despite this drain, the user might still not be aware as the balance would just likely not be unchanged for a few seconds. Instead, the proposed token that was promised would reflect and even appear to increase just as they said it would. All of these are just to maintain trust and confidence in the scam token.

These scam minings come in various forms, not only in the example given here and many have fallen victim at one point or the other.

Red Flags to Watch Out For

Certain red flags come with most of these scam mining apps. Here are some of them:

1) Pressure to Invest Quickly: These scammers often create a sense of urgency to make you deposit your funds even before you research. That in itself is a telltale sign that they are up to no good.

2) Unrealistic Promises: Once a mining app assures you that you'd be getting exorbitant returns with minimal effort, then it's probably too good to be true.

3) Unprofessional Website or App: Some of these scammers don't even take their time in setting up the website or app properly. You'll come across grammatical errors, typos, as well as insufficient information on either the app or the website.

4) Requests for Excessive Permissions: The legitimate mining apps wouldn't need access to your personal information or attempt to control your device. Once you notice any of this, you should stay away.

Tips to Stay SAFU

Now that you are aware of these red flags and basically how these mining scam apps operate, how can you stay safe and protect yourself from being a victim? Here are some tips to keep you safe:

1) Always perform due diligence on any dApp before you interact with it. This entails knowing what the dApp is requesting access to before you click 'approve.'

2) Stick to utilizing mining apps that have been vetted as reputable.

3) Ensure that your software is always updated as outdated software is more vulnerable to malware attacks.

4) Utilize strong passwords and two-factor authentication to make it harder for scammers to steal your credentials.

5) Limit and revoke approvals often. This ensures that if a dApp turns out to be a scam, the loss wouldn't be so impactful.

6) Always turn on your skepticism. If an offer appears to be too good to be true, it is too good to be true.

7) Use a burner wallet with limited funds to connect to dApps you're not certain of.

Final Words

Always keep yourself informed and be cautious before utilizing any dApp regardless of how sweet the rewards seem to be.

Remember the golden rule- if something sounds too good to be true, then it's too good to be true.