How To Tell If a Cryptocurrency Is a Scam

How To Tell If a Cryptocurrency Is a Scam

By WilliamRyan | The Feedback Loop | 1 Aug 2020


The longer you spend in the crypto currency community the more scams you notice. They are everywhere in the industry because the idea of decentralized finance appeals to investors as well as criminals. During my time I have heard so many stories that have made me wonder ''How can anybody could fall for that?''. Because of this I have decided to release this list of ways to help spot scams and avoid them to help any uneducated investors but also those looking to refine their investment skills because one thing I have learnt over time is that anybody is capable of falling for scams. For example the Bernie Madoff scandal were some of the most prolific investors in the world fell for a Ponzi Scheme.

A Disclaimer: There is no 100% way to tell the difference between a scam and not a scam. This list is mainly to help reduce the risk which is what's most important to think about when investing so you don't treat investing like gambling.

 

1. Check The Supply

The supply of a Cryptocurrency will tell you a lot about it. It most importantly will tell you about the ambition of the developers. If possible try and find out how much of the supply is being held by the public compared to how much the developers have themselves. I understand that some supply will be sold off to help pay/support products but at a certain point the greed starts to show its ugly face.

2. Check Out Their Website

If you check out a lot of scam websites you will find that a lot of them are poorly designed. If a tech company can not design a good website or at least hire someone to make them one than you probably should doubt any of those ambitious when it comes to making a ''ground breaking technology''.

3. Read The White Paper

Most legit products will have white papers for investors to read. They will also be an indication if its a scam or not. If the white paper is terrible it could be an indication of the product.

4. Researcher the Developers

Although a person's past is not going to tell you everything about their future it is a good predictor of future success. If you research what other projects the people involved have worked on it will tell you a lot about who they actually are. 

5. What Does The Product Do Exactly?

This is a very simple one but I see people ignore it all the time. Ask yourself "What is this coin really used for and is it actually needed?" and really think about it. If the coin has no real use case it might not be legit and could be someone just trying to make a quick buck.

 

Thank You For Reading, Stay Safe and Smart.

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WilliamRyan
WilliamRyan

A radical centrist agent of chaos hellbent on destruction of the material world.


The Feedback Loop
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