Every month we see the emergence of new cryptocurrencies with different names and policies. Many of these new cryptocurrencies are likely to be scams. But among these cryptocurrencies, we can see currencies with a bright future and good management teams. We want to examine crypto scams and their projects.
These cryptocurrencies operate in the sphere of digital assets and attract many investors. Of course, attracting investors is done with a lot of advertising methods and slogans about the bright future of these cryptocurrencies. Despite such conditions, investors are interested in multiplying their capital through these scam cryptocurrencies oblivious of their intent. Here are some steps you can take to determine which cryptocurrencies are scams.
A whitepaper is the basic descriptive document of a project. It shows the goals, background, strategy, concerns, and many other features of a blockchain project. In fact, Whitepaper represents the strategies and goals of a project. It helps investors and the public to recognize that this project has a future.
It must also answer all the questions that the investor may have. An investor’s key questions are ‘how to differentiate the project from its competitors, the future and goals of the project, the steps needed to achieve the goals, and how it aims to be successful’. In general, you should know in Whitepaper that the management team of this cryptocurrency cares about its own project or is it basically a glamorous site with advertising slogans.
Of course, Whitepaper is not always a good solution to identify scam projects. We sometimes see quality Whitepapers for cryptocurrency projects that their main purpose was to scam.
Project management team
One of the most important tasks in identifying a project in the world of cryptocurrencies is to identify the developers and management team of that project. Many scammers publish false and unrealistic information about themselves and their team, and you need to be careful. But when celebrities work on the project management team, you can have some confidence in the future of that project. In any case, it is better than a management team and developers with a fake identity. Isn’t that so?
To better identify the management team and members of this project, search their names on social networks and research them. If there were no names of members of this team anywhere, this project would most likely be a scam. Or it is managed by a beginner and unknown team, which is not a good thing. Also, if there are social pages, see their activity and number of followers.
It may take time for you to do this, but you must know the project you are about to invest in otherwise, you run the risk of losing your capital.
Are Project Goals Achievable?
The reason why many cryptocurrency projects fail is that they do not achieve their goals. These projects did not have what it takes to succeed, so they lost the interest of their investors. So you need to focus on a project that has a compelling concept, a complete roadmap and achievable goals.
Projects that keep investors informed by regular and accurate reports on the site and on social media show that they care about investors. The issue of transparency is one of the most important issues for any project. If a project does not provide accurate information and report about its progress to its community, investors and supporters, such a project is not reliable.
Dextools is a great platform for viewing token information. It is available for use on Ethereum and Binance Smart Chain networks. By searching for token contract addresses on this platform, you can see all transactions. By observing the sales and volume of token transactions. You can also be informed of its status in the market. However, most transactions may be done by the project itself to show the appearance of good trading.
A Block Explorer
Block explorers can view all the information of a token such as token creator’s address, liquidity pool, token contract address, etc. It also has a section called comments where you can see other people’s comments about that token. Also, by looking at the token creator’s address, you can get a lot of information from token creators and if you see any suspicious activity, avoid this token.
As the name implies, this platform is set up for the Binance Smart Chain network. By searching for the token contract in this platform, you can get a lot of information such as the developer’s wallet info, top token holders, liquidity pool, contract owner status, etc.
Not all of these identification tools can guarantee you a 100% project. You can use these tools and your own knowledge about investing in cryptocurrencies.
If you are thinking about investing in an unknown and unfamiliar cryptocurrency to get rich, be careful since this is unlikely. Just look at the list of cryptocurrency projects that failed after a short time. Most of these projects steal a lot of money from investors by convincing investors to buy their tokens.
If you see incomprehensible parts in a project or see that the project does not have enough transparency, stay away from that project. Before investing, thoroughly review the project and its management team and developers.
Identifying a crypto scams project is common, this is why it is worth researching it before you lose your money. The methods and tools introduced can help you identify scam projects to some extent. But ultimately it is up to you to decide which project to invest in. Don’t invest in any cryptocurrency based on the suggestions of friends. Also, some of the new tokens show strange price increases, but suddenly their price drops and they may eventually become worthless. Do not get caught up in the excitement of the market. Work with sufficient awareness.