Scams You Should Be Aware Of When Dealing With Crypto
Like most other markets, the "crypto" space is full of scams.
This is hardly surprising, due to the fact that it's a rapidly growing market, as well as being almost entirely unregulated. It's very similar to the early Internet, where people were selling all sorts of questionable products - in the form of drugs to dodgy "cures".
The point is that whilst the "crypto" world is entirely legitimate, the process through which people are able to deal with it is very small. There are a whole number of scams, which essentially mean that if you contribute your money to them, you'll typically end up with a large amount of problems - either from poor returns or your money will be lost.
The way to resolve these problems is to ensure that you're basically looking at the market in the most effective way possible. This tutorial aims to do this...
Scams You Schould Know:
Scam ( Double Your Coin ): You send # of [coin/token] and you will receive twice or more in return. A number of Twitter accounts masquerading as notable cryptocurrency developers and startups have been soliciting funds with promises of major gains.
Scam ( Pump and Dump Groups ): You're provided with an exact time/date of a specific coin on an exchange. The pump group then instructs you to buy said coin via message (Telegram, Tweet or Discord). You're expected to hold this coin until it reaches a predetermined value. As the price increases the group leaders are selling and cashing out leaving you with very little chance of profit and high risk of loss.
Scam ( Fake ICO ): You find out about a new coin/token that promises to do xyz using the blockchain. For a short period they're allowing early investments before the price goes to the moon! You buy said coins/tokens and in a months time or more the company goes missing. This is called an exit scam. It's become so common that an awareness how to guide has even surfaced (screenshot). Jokingly someone has created a Useless Token that highlights the scam.
How To Identify Scams
Most of the "crypto" scams come in the form of having a system which is basically unable to give people the ability to get the most out of their investment.
For example, if someone doesn't have the right access to a particular "coin", of if the "coin" drops in value, most people will end up with problems pertaining to the way in which they are meant to work.
To this end, the best way to identify scams is to identify if a system has been focused on providing an actual use-case or whether it has been created to just fleece unsuspecting buyers of their money.
A number of "ICO"'s have done this, as have a number of other "opportunities" presented by people who wanted to ensure that the "coins" were developed to provide the users with the most effective way to make a return.
Ultimately, you just need to perform due diligence before parting with your money. Don't worry about the price - look for substantive offerings / companies who actually know what they're doing. Then make sure you buy or trade the coins in a reputable environment.
[ Insert sad story here...Wife, Kids, Family. Send cash please! JK NOT JK... ]
Welcome to a new way to crypto. I saw value in making this for myself but now this is for you guys.
Hopefully this will help you make "smart choices" when it comes to the crypto market.