The Practical Ways To Identify Cryptocurrency And ICO Scams – Part 1
The reason behind the scams is weak currencies as the wallet and exchanges are being increasingly facing theft and fraud. Therefore, you need to be cautious in investing in cryptocurrency. Here are how you can.
Cryptocurrency And ICOs
It comes to be seen that alongside the new tokens and coins with a series of initial coin offerings, there are dozens of new cryptocurrencies being launched each month. It is seen to be growing as the appetite among a broad pool of investors is and even though cryptocurrencies were battered. All of these seem to be equally likely to invest in fraudulent tokens or ICOs as all these factors combine to entice scammers with investors who have proven that they are then willing to throw money toward what is a highly speculative cryptocurrency.
While looking to make the most of the host of new investment opportunities, the cryptocurrency investor remains safe from the fraudulent ICOs as well as sketchy coins and tokens with the prospect can be daunting with blockchain and cryptocurrency technology being developed at a rapid pace and even the experienced investors are sure to find it hard to keep up with the terminology. The steps outlined below can help you to be as sure as possible so that you’re not falling for a scam while there is no guarantee that any cryptocurrency or blockchain-based start-up will be legitimate or successful.
Hereby Firstly Get To Know The Team
The single most important success factor for any ICO or cryptocurrency perhaps is the developers and administrative team behind the project as the cryptocurrency space comes to be dominated by major names similar to superstar developers like Ethereum founder VitalikButerin capable of making or breaking new projects thereafter simply having the names listed on a development team. Therefore, it is for this reason that it comes to be increasingly common for scammers to invent fake founders and biographies for their projects.
To thoroughly research the individual team members of a project before you invest is the best protection against the fraudulent tactic. In case you are unable to find any information about a particular developer or founder on LinkedIn or other social media outlets, it is a bad sign as even if profiles do exist, it is better to check to see if their activity seeming to match up with the number of followers and likes they accrue.
Therefore, it may not be real even if the individuals who rarely engage with their followers and yet have thousands of fans. Thereby it is important to make an effort to see if their qualifications measure up beyond determining whether the development team is real as do the founders have the experience they claim to have? Accordingly, is it relevant to the current project at hand?
Why Should You Pore Over The Whitepaper?
Thereby it comes being a foundational document for the project, or a cryptocurrency or the ICO whitepaper that should lay out the background, goals, strategy, concerns, and timeline for implementations for any blockchain-related project. Those companies that have a flashy website may reveal they lack a fundamentally sound concept while whitepapers can be incredibly revealing. Thereafter the company with a whitepaper indicating a rock-solid concept and a carefully conceived implementation plan can be owned by the company with a website containing spelling errors.
Hereby reading it thoroughly is the first step toward analyzing a whitepaper and check to see if the whitepaper has the complementary resources such as including financial models, legal concerns, SWOT analysis, and a road map for implementations.
A lot of companies thereby not offering whitepapers should be avoided at all costs as it is still possible for a fraudulent company thereafter putting forward a convincing whitepaper which was the case with PlexCoin where the company managed to raise over $ 15 million before the US Securities and Exchanges Commission had stepped in to shut it down. Therefore, how it aims to be successful and the measures it will take to achieve its goals is what a whitepaper should answer all of the questions as a potential investor might have about what sets their particular project apart from its competitors.
The Concluding Thoughts
ICO s are sure to bring you newer cryptocurrencies. Hence it is important to ensure there are no fraudulent activities involved in the process. As many coins are being mined each day there seems to be the need for stricter regulations like those of the SEC. the US government, therefore, requires cryptos to be regulated while anonymous Bitcoin developers are gaining more traction among the investors. It is interesting to note the movement of the currencies as the investors are busy researching the strength and security displayed by them.