When it comes to crypto, sometimes there can be a lot of negative media surrounding the innovative tech with scams or illicit activities. That can raise concerns for many and being something that is speculative, it can have a huge impact on how we value it.

Negativity

These kinds of things happen with fiat and other types of things that hold value but the benefits of blockchain technology just outweigh the negatives. Blockchain technology has been around for over a decade now and for something that was not worth anything when it first started, it is not doing too bad despite all the negative reports and price volatility. At the time of writing this, the price of BTC is hovering around $7300 USD.

This is the internet so you need to take everything with a grain of salt. There are many ways of the use of blockchain and one of the features of it is that it can be used as a digital currency. The bigger picture is that it is a global public database that is immutable and anyone with a smartphone or computer can access it. It's the value of what you can do with and on this database that makes it appealing to so many. Unfortunately, this is also appealing to some bad actors. Some would say that's a good thing as that would increase the value.

Scams

With the recent media attention on the latest Ponzi scheme, there is still some work to be done so that everyone in the ecosystem can be protected and safe.

One of the concerning details that were released about this case was how the scammers would target their victims.

Goettsche discussed with his conspirators that their target audience would be ‘dumb’ investors, referred to them as ‘sheep,’ and said he was ‘building this whole model on the backs of idiots

It is now more important to educate new and old users on ways to see the red flags and not fall victim to scams in the crypto-currency space.

Here are some tips:

Secure Your Private Keys

This is the first thing you should look for and do when it comes to trying out something that involves crypto-currency. If the platform you are trying doesn't allow you to obtain your private keys or seed password, then they have custody of your coins while you have to rely on that platform to keep those keys secure and give you your coins when you want them. Most in the crypto space would recommend and go with the saying,

If You Don’t Own Your Keys, You Don’t Own Your Crypto

There have been many platforms that have "exit scammed" with everyone's crypto or exchanges get hacked and many in crypto have lost their coins.

Make sure to backup and secure your keys on a separate hardware wallet such as a Ledger or others. You do have to remember that a hardware wallet is an electronic device and there can be times where they just stop working. So it is recommended to make an alternate backup as well. If you decide to have an alternate backup, make sure that it is kept in a secure place as well.

Do Your Own Research

Source: Pixabay

It is important to do your own research and determine whether or not a platform could be a scam. Some hide their schemes really well so take the time to look into what you're planning on getting into.

Who is Behind the Platform

Source: Hackernoon

It is always a good thing to see who is behind the crypto platform to get a sense of what direction it could be heading and the possible decisions that could be made in the future. Just like in any business, you look at people's skills, past experiences and reputation to put trust into it.

There are many scams that have setup full fake websites and use fake or stolen photos of people that are not even involved in the project. So try not to only use the website to determine whether or not a platform is a scam.

Look at the Code

Source: Pixabay

The vast majority of blockchain platforms are open-source and you can look at the code to see what's going on. Not everyone can read code so you would have to rely on those that can read code to help determine if there is anything questionable.

There is one major thing you can look for without having to read code. Let's take Bitconnect for example, there were so many that believed it was not a scam but if you were to look at their GitHub back when they were operating, you will see they only have 30 commits or changes to their code the entire time they were up.

When you compare that with the official Bitcoin Github, you will see a big difference in commits. 

The reason any crypto platform would have so many commits it's because they are actively working, improving, optimizing, and securing the platform. They are constant bugs and exploits that need to be fixed and changes to the code need to be submitted. There is no such thing as a perfect blockchain or crypto platform.

So if you don't see the commits continually increasing, then there's a red flag.

Take the Time to Read The Whitepaper

Bitcoin Whitepaper

I know there are many that will skip over this because some Whitepapers are really long. But if you want to know what you're getting into and know the ins and out of how that platform will work and the direction they want to go with it, then you should read the Whitepaper. 

The WhitePaper should include things like financial models, legal statements, analysis, and a roadmap. Scams can make convincing Whitepapers so be aware there are still risks involved. 

Platforms without Whitepapers should be avoided.

Monitor How the Platform Operates

Source: Pixabay

One of the most important things you can research into paying attention to how the platform operates. See how they will launch or have launched and look at things like how they run their ICO if they have one or if they try to hide their numbers and make it difficult for anyone to analyze their progress.

Is the platform actively interacting with the community providing places for resource information? Do they have a structure and identify their legitimacy? Questions you always want to keep in mind.

Invest in Only What You Can Afford To Lose

Source: Pixabay

Last but not least, the constant reminder. If you're planning on investing in crypto, only invest in what you can afford to lose or afford to take a risk on. We have seen people invest their life savings and sell their homes even during the rally $20k back in Dec 2017. Only to watch it fall to the price of around $3k. While there might still be some that are holding, many have taken a loss and don't want anything to do with crypto. That is understandable.

In the end, if you believe in this industry and technology and can get past all the scams and negativity then continue to and be a part of this new innovation.

Thank you for reading,

@M87