A Quick 3 Tips To Identify Cryptocurrency Scam Projects So You Don’t Lose Your Money

In addition to the great economic pause after this COVID-19 in this 2020, we have unfortunately witnessed scandals due to fraudulent projects in the crypto ecosystem that have already been exposed, one of the weaknesses of the new decentralized cryptocurrency model that is used by detractors or scammers to exploit the flaws to which it may be subject to the lack of honesty on the part of a few actors within the crypto ecosystem.

Some of the reasons why many people tend to be deceived with fraudulent projects is due to the absence of regulations, a high possibility of obtaining massive returns on their investments that has been observed throughout of this decade of the new decentralized economy.

With the large number of cryptocurrencies and tokens to choose from, it is difficult to separate the good projects from the rotten ones. Thus, the world of cryptocurrencies within an environment with few checks and balances, becomes a fertile breeding ground for scammers. Therefore, the most important thing to consider before getting involved in any technology is knowing what NOT TO INVEST in.

To do this, we will prepare some basic tips with which you could help you differentiate from ‘scam’ projects from those that really deserve a vote ($) of confidence, taking into consideration that many common characteristics apply various potential Ponzi schemes or cryptocurrency scams in general.

1.- Exaggerated promises with cryptocurrencies

When they tell you that the return on investment is practically immediate and that there is no risk of loss, run away: it is a scam alert !. In any type of investment, the returns are proportional to the risks.

There are also those who promise constant returns on investment. In a market as volatile and unpredictable as that of cryptocurrencies, it is almost impossible to guarantee a constant amount of profit regardless of the market trend. Another scam alert.

There are others who offer a revolutionary product, the new Bitcoin with the technology that promises to revolutionize not only finance, but the entire world. But the product is in development. It may be released next year. Or the next. Or never.

Fraudulent schemes such as cloud mining, cryptocurrency investment packages or funds, trading bots such as Immediate Edge, scam that often exist with these bots, and multilevel schemes that offer products such as trading courses to be found within the framework of exaggerated promises. change of subscriptions.

2.-Absence of base code

Due to the open nature of cryptocurrencies “mostly open source “, closed source projects or those that for some reason or another not justified or not very credible do not reveal their source code, it is a scam alert! not to believe in them .

Almost all coins that have been flagged for scams do not reveal their base code or simply do not have them. One reason they are closed source could also be due to the fact that there is no code base at all.

The particular token or cryptocurrency must be able to provide its link or reference to its source code on Github, if it does not, it is a sign of Scam alert. Otherwise, you must be able to at least provide a transaction explorer to verify the veracity of your cryptocurrency.

The open nature of cryptocurrencies in general allows the codes to be freely available to anyone and can be redistributed and modified, as well as taking advantage of community input to improve it.

3.- Lack of important information

Basically, this section refers to two key pieces of information for any cryptocurrency project in general: absence of a “Whitepaper” and ghost members of the project team.

In the first case, a detailed whitepaper of all the information about a particular crypto or token is vital, from its purpose to its mechanics and the dynamics of its currency. The absence, or worse yet, the plagiarism of a white paper is a big red flag that we must be careful

As for team members, the absence of information about the founders, the development team, and even more so the lack of links to verifiable personal or professional profiles is another sign of possible scam.

Remember that most of the time, fraudulent coins and schemes will not publicly disclose information about the founders for obvious reasons. And if your profile is doubtful, the credibility of the platform will be too.

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Ponzi schemes and scams do not possess the common characteristics of legitimate cryptocurrency projects such as decentralization, full transparency through a public book, and open source code that anyone can view and audit.

It is important that you acquire sufficient knowledge about cryptocurrencies and their basic workings to avoid falling for these various scams and shady schemes that do not offer the common features mentioned above.

However, the important thing to consider at all times is to EDUCATE yourself about the token or cryptocurrency to invest.

Always remember that “If it sounds too good to be true, then it is probably a scam. There are no free dinners ”.

A simple list like this could help make it easier for you to waste your time and money on scam projects:

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