In this article, we explore the popularity of telegram in the cryptocurrency community, and the scams within. We will try to keep information fairly digestible for a reader of any kind. Hence, we would be going through all the reasons and terminology one may be ambiguous about in a detailed manner.
The following article will be discussing Telegram and Cryptocurrencies in the following manner:
Nature of Cryptocurrencies
Marketing New Cryptocurrencies
Telegram and Why is it so popular amongst the Cryptocurrency
Scams on Telegram and how to avoid them
Nature of Cryptocurrencies
Let’s start off by introducing or perhaps reintroducing for the most of us, the concept of cryptocurrency. While most of us would know of them as just basic currencies which exist only on the internet, the idea behind them can go to greater depths. Cryptocurrencies work in a way where no single institution is responsible for the currency in circulation. Meaning a government cannot just print any said cryptocurrency like they can print the fiat currencies under their control. Perhaps, this may as well be the reason why cryptocurrencies have been so popular amongst the masses.
Hence a good reason for the popularity of cryptocurrencies can include the fact that they are decentralized. As mentioned earlier, it is not the government or any other single entity or institution for that matter, which controls most of the popular ones in use. Bitcoin, for example, was created by a person called Satoshi Nakamoto. However, who Satoshi Nakamoto may be is a topic of heated debate to this day. However, this ensures that nobody can attach the said cryptocurrency, Bitcoin, to its owner and hence cause it’s value to fluctuate due to the personal life of the creator, for example.
Most cryptocurrencies now however, are developed by people or even groups of people whose identities are known. Despite this, the feature that sets cryptocurrencies apart from fiat currencies is the fact that their mode of operation is not just known to everyone, it is not in the hands of one as well.
With fiat currency, the government may or may not have made public; the rules regarding minting new units of their currency. With cryptocurrencies, the way new pieces or tokens of that currency are made is public to all users of that cryptocurrency. Usually done by a process called mining, where a person may participate in helping to maintain the cryptocurrency in return for some new units of that very cryptocurrency.
People. Users may choose to be “nodes”, processing transactions which are carried out by the cryptocurrency. They get rewarded for doing so by receiving some of the cryptocurrency for themselves. As this is a good incentive for many, there are large numbers of people who boot up their systems to act as nodes, creating a network referred to as Blockchain.
Cryptocurrencies also allow a user to stay anonymous while doing transactions on the internet. The users can easily create their digital wallet, which is where their cryptocurrencies will be stored. They will then be able to carry out transactions on any platform which accepts payments in cryptocurrencies. This versatility is also something which cryptocurrency users enjoy.
However, just the incentive of earning new cryptocurrencies by acting as a node on the Blockchain network or “mining” for short, isn’t responsible for all of the popularity cryptocurrencies have gained. Indeed, the trading of cryptocurrencies has brought forth fortunes for many individuals who were able to exploit the swings of the market to their favor.
Marketing New Cryptocurrencies
However, to return back to the topic of Cryptocurrency and Telegram, we need to bring our attention towards one fact. The cryptocurrency market is growing. And this isn’t just growth in the market size or even the number of people who have started to use it now. This is growth in the number of cryptocurrencies available. From September 2020 to September 2021 alone, around 4900 new cryptocurrencies were launched. As this is the internet which is accessible by all we are talking about, there can indeed be as many creators as users themselves.
These cryptocurrencies are launched by creators willing to target the crypto enthusiastic public with their innovative coins or tokens, hoping they will be accepted into the ecosystem and grow in value.
These developers often use social media in order to publicize their cryptocurrency related projects. Social Media platforms have enjoyed a far greater adoption than cryptocurrency technology has. Yes, the two are different in terms of what one might do with them but both exist on the internet.
Some cryptocurrencies like Bitcoin and Ethereum have now been so widely adopted that they do not need to market themselves in order to ensure people know about them. However, when it comes to newer cryptocurrency projects; they need to engage in marketing activities in order to attract new users and hence, drive the market value of their tokens high. Many of them still do so however, the most popular platforms such as Facebook and Twitter are now moving towards stricter policies regarding marketing of cryptocurrencies.
Telegram and Why is it so popular amongst the Cryptocurrency community.
In 2018, Facebook had chosen to ban all Initial Coin Offering related ads on its platform. Other social media networks followed suit and this is when a lot of cryptocurrency project developers understood the need to exist on a platform which may not hinder their growth. As a result, many switched to a messaging app famous for its friendly UI and encryption.
No, not WhatsApp. We are talking about Telegram. Now while traditionally, the choice to move to this messaging platform could have been accelerated due to the increasing restrictions of social media networks on cryptocurrency developers being open about their projects, people were using Telegram way before. Telegram also may be popular amongst cryptocurrency users due to its adoption by major cryptocurrency and in general blockchain projects. Almost every large project in the crypto sphere has its own Telegram group.
Telegram offers privacy which is unmatched by any of its peers. So much so that Telegram has even received criticism for having such well encrypted messaging. Users who have enabled Telegram’s end-to-end encryption enjoy communication which is outside anybody’s watch. Be it the government or even Telegram itself. This means that Telegram is more popular than any other messaging platform for the privacy it ensures it’s users.
Such measures of privacy are very important for crypto enthusiasts and this can be expected of them as well. Given they push for a currency which is outright untraceable to any person or entity, they would want to ensure they communicate with each other in a safe and secure manner as well.
Moreover, cryptocurrencies are often in a gray area or even sometimes deemed unlawful by many governments all around the world. In such cases, discussion about cryptocurrency projects can not flourish as the government does not allow it. In order to solve this problem, people turn to Telegram. It’s end-to-end encryption ensures their discussions remain private.
It allows developers to create groups which could at max house up to 100,000 members. Now, that is a lot of people receiving whatever information which needs to be transferred, with the tap of a button. Moreover, telegram also allows users to create “channels” which themselves could house an unlimited number of users.
To add to the privacy part discussed earlier, telegram allows its users to create accounts on its platform not by asking for any contact information of their own. Instead, users can easily create accounts on the basis of usernames and passwords. They can contact each other using their unique usernames. This means brands can contact their users using their brand name instead of the name of the owner, for example.
Perhaps the most fascinating feature which sets telegram apart is the fact that it allows users to interact with bots. Telegram is an application which stands on the transparency and security it claims to offer. In order to really establish this image, it has allowed its code to go open-source. This means anybody willing to go look at what is in the app can easily do so.
This also means that other developers can look at the app code and see what they can do for themselves. Telegram’s API and documentation are also open-source, using which, developers are able to create bots. These bots could have access to third party libraries. Hence, they could, for example, tell users the live prices of particular securities on the market while they’re having a conversation about them.
All these features have allowed Telegram to become a core part of the crypto community experience online. Many multiple large groups and channels exist on the platform, with users all coming together to share and grow from each others’ knowledge. New crypto projects are announced and many developers even take part in ICOs. Short for initial coin offerings, they are carried out when a cryptocurrency development agency is carrying out funding in order to introduce their new token to the market. Telegram has become a central for such activities given how well the crypto community has gotten familiar with the platform. As a result, estimates of last year show an average of around 13,000 members on average, in any given ICO channel on Telegram.
Scams on Telegram and how to avoid them
However, not everything can be all good. Up till now, we have dealt with the nature of cryptocurrencies and how they slot into the telegram ecosystem ever so easily. What follows is the dark side of the cryptocurrency community of Telegram; the fact that most ICOs are fake.
Many estimates say that around 80% of all ICOs are scams. Due to how easily Telegram is able to get information on users’ fingertips, scammers are starting to take a good grip on the platform. They are exploiting users in various ways in order to steal money from them. While the various ways in which they scam individuals are the focus of the article which follows, the point to be established is that with the good of Telegram, also comes the bad.
Given how common scams are on Telegram these days, it is very well likely a regular user may have encountered such tactics of scammers before. It is usually the inexperienced who are targeted, so brushing up on ways to protect yourself from the following scams can help to protect yourself and others in case they rear their ugly head in the future.
The first to be discussed is the one where scammers create fake telegram groups. Scammers will design a given group, let’s say, which is based completely off of a famous legitimate group. They may even go to the extent of producing fake conversations on the group, installing bots like the ones present on the original group and even setting up admin accounts mimicking the ones from the real group. All of this is done in an attempt to fool a potential inexperienced fellow into thinking it is in fact the original group.
The fake conversations play an important role here. In order to scam the individual, they will slip in a message or two on the group which invites members to a transactional activity. This could be, for example, an invitation to a “first come first serve” discounted sale of an upcoming product. While this product will have no connection whatsoever to the original group and its founders, these scammers will end up fooling others that it is. This type of scam is perhaps the most successful kind of one and the most frequent on Telegram.
In order to protect themselves from this scam, one can adjust their settings so that they can only receive invitations to groups from their trusted contacts. This would render unknown individuals unable to invite you to such fraudulent groups.
Coming to the second kind of scam on our discussion list here which involves an individual attempting to fool someone disguised as a helper. In this technique, a person may go on to a cryptocurrency related group and ask a query regarding something they have been having trouble with. This person would then be contacted by an individual who would pretend to be a helper but their objectives are ultimately, scammy.
The scammer would try to offer help to the individual in order to seem helpful, but will then try to obtain the seed phrase or private key of the person who asked for help. In turn, trying to steal a person’s cryptocurrency holdings. They may ask for this directly in the private chat. However, many have now built websites which they have made specifically so that they can phish these details out of inexperienced individuals. Most often, the scammer will disguise themselves as an admin of the very group where the query was first posted. They do so by having a username which looks very similar to the one of the admin. For example, while the original admin may as well be called “JohnAnthony1”, the scammer may make an account called “J0hnAnthony1”.
In order to protect themselves, users need to ensure the person contacting them is really who they claim to be. They can do so by going to the potential scammer’s profile, copying and pasting their username into the group search. You can easily see if that user has an “admin” tag on them or not. Moreover, it should be a general rule of thumb to NEVER HAND OUT YOUR SEED PHRASE OR PRIVATE KEY via chat or any other pesky medium.
Perhaps the most notorious of ways in which scammers now scam individuals are by developing “pump and dump” schemes using Telegram. These scammers disguise themselves as “gurus” of the cryptocurrency game, sharing their valuable insights amongst people who are willing to pay the guru for it. But the scammers don’t just earn off of the fees they charge individuals for their insight which may as well be incorrect. The scammers carry out pump and dump schemes. Now, in these schemes, the scammers themselves have bought large amounts of a particular cryptocurrency.
They then announce the name of that cryptocurrency on their groups making large numbers of people buy it. This leads to the market value of that cryptocurrency rising up. It is here, when these scammers cash out their holdings by liquidating their large amounts of that cryptocurrency. This causes the market value of that cryptocurrency to as a result, drop again. Hence, scammers were able to mislead the community, and earn profit as a result.
In order to protect themselves, individuals can look at the historical performance of such groups. Individuals should look towards how well have the members benefited from the insight the guru claims is beneficial. This should give one a good idea on the legitimacy of the group. Moreover, if the group is advertising itself in a way where it tries to instill in others, a feeling that they may be missing out on making huge profits, they likely are a pump and dump group.
Conclusion
To conclude, this article focused on Telegram and Cryptocurrency and how the two are intertwined when communities are established on the Telegram platform centered around Cryptocurrency. We looked at the general idea of cryptocurrencies in context of what we discussed afterwards, the success of telegram in the cryptocurrency community and the scams which have infested themselves in the very community. We have also discussed a few methods which will allow individuals to identify the scams and protect themselves from it.
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