How to Identify Cryptocurrency and ICO Scams

Dozens of new cryptocurrencies are released every month, and along with these new tokens and coins come a series of Initial Coin Offerings (ICOs). The appetite of a wide range of investors for these opportunities has grown, even as cryptocurrencies arrived in 2018. All of these factors attract scammers. Because once investors show that they are willing to invest money in a highly speculative cryptocurrency, it seems equally likely that they will invest in fraudulent tokens or ICOs foreign exchange market today. For the cryptocurrency investor who wants to take full advantage of the multitude of new investment opportunities while remaining protected from fraudulent ICOs and fragmentary coins and tokens, the prospect can be daunting. Blockchain and cryptocurrency technology evolves at a rapid pace, and even seasoned investors can find it difficult to keep up with the terminology. While there is no guarantee that a cryptocurrency or blockchain startup will be legitimate or successful, the steps outlined below can help you be as confident as possible that you will not fall for a scam.


Get to Know the Team

Perhaps the most important success factor for any ICO or cryptocurrency is the developers and management team behind the project. The cryptocurrency space is dominated by big names, and superstar developers like Ethereum founder Vitalik Buterin can make or break new projects just by listing their names on a development team. For this reason, it is increasingly common for scammers to make up fake founders and biographies for their projects forex trading platforms in India. The best protection against this fraudulent tactic is to thoroughly investigate each team member on a project before investing. For example, it's a bad sign if you can't find information about a particular developer or founder on LinkedIn or other social media channels. Even if there are profiles, check that their activity matches the number of subscribers and likes they collect. People who rarely interact with their followers and still have thousands of fans may not be real. In addition to determining if the development team is real, it is important to make an effort to see if its qualifications hold up. Do the founders have the experience they claim? Is it relevant to the current project?

Pore Over the Whitepaper

A white paper on cryptocurrencies or ICO is the central document of this project. The white paper should set out the context, goals, strategy, concerns, and implementation schedule for each blockchain-related project. White papers can be incredibly revealing - companies with an attractive website can show that they lack a fundamentally sound concept. On the other hand, a company with a misspelled website may have a whitepaper that shows a rock-solid concept and a carefully thought out implementation plan. The first step in analyzing a whitepaper is to read it carefully. Check that the white paper contains additional resources, including financial modeling, legal issues, a SWOT analysis, and an implementation roadmap.


Look to the Token Sale

Each ICO relies on a token or currency system to facilitate the crowdfunding process. The legitimate businesses and efforts make the system itself and the progress of token sales easy to see for potential investors. Look for token sale numbers while the ICO is in progress. Better yet, watch the token sale over time to see how it progresses. If a business makes it difficult for someone to track their ICO's progress, that's a major red flag. Some fraudulent ICOs will hide their token sales progress under the guise of unique mailing addresses best broker in India for forex. This prevents potential investors from seeing exactly how much has been taken and how much time is left to sell. In some cases, this can be an attempt to create a sense of urgency among potential investors, even when there is no evidence of a successful sale.

How Feasible Is the Project?

While it may seem obvious, ICOs and cryptocurrencies have the best chance of success if they have the basic structure to outlast their competition. Many versions, even widely published ones, failed after initial interest. Your best chance for a successful investment depends on a business with achievable and achievable goals. The company must first have a convincing concept, but it must also be able to implement this concept in the short and long term.

Exercise Caution

Even the best-performing ICOs and cryptocurrencies have been criticized for being motivated by speculative investments. The idea of ​​getting rich quick by investing in a hot new venture is tempting enough to attract both seasoned and newbie investors to risky areas. Be careful when looking for new investment opportunities in the ICO and cryptocurrency space. Keep in mind that there will likely be projects that sound too good to be true. Take the time to check every detail and assume that the lack of critical information could be an attempt to hide a wrong model or concept. Seek out outside sources to verify the legitimacy of a project before making an investment, and always ask questions you can't find answers to. The fields of cryptocurrency and ICO offer huge opportunities for investors who have done their homework and can make informed investment decisions. They also present pitfalls that can result in the loss of large sums of money due to frauds, scams, or even legitimate businesses that are simply ill-conceived and unsuccessful.