This article is fantastic. Here are some tips I use to spot scams:
-
The website should always be selling a project or business. If they are focused on the coin’s value, or selling the coin too much, I would stay away.
-
Just before putting your money in, do one last check to make sure the altcoin website is still there. That saved me some money.
-
Look at the price history. Buying when the price is ramping up is usually the worst time to buy. If an altcoin is new, and the price is ramping up sharply, that could be scammers pumping the value of the coin with the intent to fleece unsuspecting investors.
-
Take a look at their forum page. The community surrounding an altcoin is extremely important. If the forum members seem intelligent, there are a lot of them, and they have differing views, those are good signs.
-
Personally, I like to see low volume relative to the market capitalization. Altcoin scammers like to re-trade the coin over and over again and this pumps up the market volume.
All of these things (volume, price history, market cap) can be checked on www.coinmarketcap.com
One last tip, if you do get scammed, and lose 90% of your market value, instead of cashing out, just wait because sometimes the scammers come back to the same coin and try their scam again. So the price will pump back up for you. You may be able to unload the coin at that time. But sometimes the coin is de-listed by the exchanges and then what you have is totally worthless. Holding the coin might be worth a shot, but only if you’ve already lost almost all of your money.
Also, stay away from coins with really gimmicky names.
All very excellent points @Secretariat415 nicely done.
IMO the article pointed to a very critical component that deserves some ranking and you touch on a little on that in your #4 view…
from the article:
“MANAGEMENT
Who are the people behind the cryptocurrency? Are they trustworthy and competent? Are their names and resumes published for the public to review? Do they have a Google trail of promoting other scams? Do they have an experienced technology team behind the cryptocurrency? These are some of the questions that should be clarified by an investor towards any given prospective venture.”
So as the price of bitcoin continues its trajectory, more and more opportunities are being presented to inexperienced “investors” who have seen easy success and expect that success to continue, regardless.
An interesting one that has been postponed is Tim Drapers Tezos - https://www.tezos.com/. Have a read at how well that puppy is being executed.
Thanks for the great comments @Secretariat415
A lot of people “missed” bitcoins a lot of time ago! I mean when BTC was lower than 10 USD…nobody wants to miss next train again!
That’s why everybody is jumping into all these ICOs because each ICO represent a new “potential train”.
The question is: does another “train” exist?
Probably yes though 90% (maybe even more) of these ICOs are fake opportunities