With the help of these tips, you can confidently stay in the safe zone and turn a profit in the world of cryptocurrencies instead of losing your hard-earned money.
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How to spot cryptocurrency scams: these 5 methods reveal every precautionary step you need to follow
The emerging popularity of various cryptocurrencies may be an exciting opportunity for the astute trader, but the more mainstream they are becoming, the greater the number of traps that prey on the improperly educated and the naive. The key principle to keep in mind in order to stay on the safe side is to acknowledge the fact that not everything that shines is worth pursuing, along with the following valuable pieces of advice:
1. Scour the internet if the currency is fraudulent
Open up Google or another search engine of your choice and type in the name of the cryptocurrency , plus the word ‘scam’. This is to make sure that any discussions revealing the potentially not-so-honest background of a particular cryptocurrency come out on top. But not every article that’s trying to blame a particular cryptocurrency for being fraudulent is to be trusted; it’s recommended to follow your best judgment. After all, many competitors are resorting to such lowly tactics just to throw dirt in someone else’s face.
2. Check the recent news
The more trustworthy a particular news source, the higher it tends to appear in the search results. Therefore, if you noticed a reputable entity bashing a particular currency, it might be best to remain cautious. Surely enough, even the most reputable cryptocurrencies might go through an unfortunate event of being targeted by hackers, but if you see constant complaints from various different sources, this is a clear sign that something is wrong.
3. Be wary of the shady exchanges
If you come across something that seems to good to be true, it more than probably is. Examples from not-too-far-away history have taught us that any cryptocurrency exchange can literally disappear overnight, taking all of the funds with it. That’s the risk associated with using any kind of online wallet; even if the provider is genuine, you always run the risk of being hacked, therefore it’s best to diversify the risk and split your funds between different providers, both online and offline.
4. Is there no source code?
If a cryptocurrency project can be considered anywhere near trustworthy, you can bet its source code will be accessible at GitHub. This kind of transparency shows that its creators have nothing to hide. If the source code is nowhere to be found, you are encouraged to think twice about investing.
5. The visibility of the creator
In case you simply can’t seem to be able to find out who is the name behind the cryptocurrency (or worse, in cases where you suspect the name might be completely fabricated), it’s best to hit the road. After all, legitimate cryptocurrencies and its creators would be proud to mention their creator’s name whenever possible, and if they aren’t doing that, something is more than probably amiss.
With the help of these tips, you can confidently stay in the safe zone and turn a profit in the world of cryptocurrencies instead of losing your hard-earned money. Combine them with some good old fashioned common sense, and you should be well-quipped to avoid the vast majority of the cryptocurrency scams out there.