How new Alts / Scamcoins steal your Bitcoins
It seems every day a new alt coin pops up. They are easy to make - most are just clones of coins
that were programmed by someone else and just given a new name, a few graphic tweaks, etc. to make it look new.
It doesn’t take much work - a new scam coin is born. Most of the devs who create these coins have only one intention - to steal bitcoins from others. This explains how they do it.
First they clone an existing coin, make a few tweaks, make a website (which helps scam coins look legit) then they pre-mine a good amount of coins which they will dump later on.
After the coin is up and ready for launch it is Announced on various sites - bitcointalk.org, reddit, etc.
They get the coin listed on an exchange or two and then deposit a portion of their pre-mine coins they already
have saved up. They may make a few Bitcoins after their coin gets listed, but this is not the way they
intend to get your Bitcoins. They let their coin do whatever the market wants for a month or two, maybe try to hype it up a little thru various forums and trollboxes to help legitimize it. They don’t want to pump it as soon as it gets listed on an exchange - this would be obviously suspicious.
Then the day comes where they decide to make their move. They start by buying up the orders on
the exchange(s) to start driving up the price to give the illusion that their coin is starting to take of. This doesn’t cost them anything because they pre-mined the coins for free and the Bitcoins they are using to buy up the orders go back to them because they are buying the scamcoin from themselves anyways. After us innocent, unsuspecting users see that this alt
is moving up a large percent is when we start putting our bitcoin orders in so we don’t miss out on this coin that seems to be really taking off. As soon as enough orders are put in / coins are bought - when the scammer devs are happy with the amount of BTC they have acquired, they dump the rest of their pre-mined coins on the order book to buy
up any lower bitcoin orders still on the books. Congratulations, you have just become a bag holder of a worthless scamcoin that is back to its previous price of next to nothing, the devs have conned you out of your bitcoins and will let their scam coin die to start working on their next scam.
I couldn't have said it better myself !
