The general cryptocurrency marketcap is growing significantly over the past few days, with bitcoin breaking 6800$ price tag today. Even if this is good news for people already in the space, it might be a real pain in the neck for the newcomers, as scammers mostly get advantage of people who aren’t familiar with new technologies, like blockchain.
In this article, we will point some ways on how to conduct your own research on cryptocurrency projects. Note that these ways a mostly apply to pure scams. After a certain degree of work by he scammers , these ways doesn’t seem to work anymore and a more complicated and deeper research must be done.
Spot a potential scam
Pick a project yourself, and let’s start the step by step “scam analysis”.
First things first, ask yourself of how you got the information about the project. It was a person or a major website? It is good to understand if the source that made the project known to you is an early investor or has any other personal affiliation with the project itself. Scammers have the tendency to pay up people to promote their cryptocurrency scams without these people getting any attention as they seem to be early investors and you can’t really blame someone because he discussed a new cryptocurrency project with you and after the conversation you ended up buying this particular crypto.
After you personally asses these information, you can proceed to step two which is the look! Scammers who want quick money don’t put a lot of effort in their scams therefore their project’s websites look awful. If you find yourself surfing on their website and the image resolutions are bad or it provides little to no information at all, most likely this project is a scam. Serious companies with serious people and serious use cases are aware that a website is the face of their project, so they will want it to be as best as it can.
Bitconnect’s website. It may look totally cool but bare in mind that bitconnect did an exit scam after it’s coin reached 430$.(image 1)
If the website looks great that doesn’t mean it is not a scam (Image 1). There are cases were scam projects had really great websites. Don’t forget that well built websites attract more people. That gives the scammers the opportunity to scam more people who will invest in their crypto scam project.
The question now is how you can spot if a project with a great website, may be a potential scam. All you have to do now is to spend a bit more time into cross referencing various information the website gives you. For example, do they have location information that can be validated by other sources? Does the website link their stuff to legit Linkedin profiles? If yes, can you validate the stuff’s information from other sources?
Does the site use external links to suspicious websites? If yes, what these links are used for and what are they are all about? Make note that most of the time, scam websites use external links make you visit fake websites which are copycats or major ones.(always check the link and look for it on google or check it’s ip).
One last thing you have to analyze is the type of the cryptocurrency project that is shown on the website. Is it an ICO? If yes, know that scammers are known to utilize ERC20 tokens or other utility token platforms for their scams, since it is a much more efficient way for them to make money and at the same time is less riskier to get tracked or pursued.
Useful tools
Some tools that might prove very useful in our research, is of course google and a website with tools I personally use for my researches, called inteltechniques.com. Inteltechniques website provides us with powerful search tool to cross reference various information for our researches, and it’s totally free to use.
Other than that, if let’s say the project that we are interested in passes all the above tests, we need to proceed in price analysis with graphs in order to tell if this particular project is getting pumped and dumped by a scammer group.
inteltechniques.com a website with useful search tools.
Price analysis can be hard, though coinmarketcap.com is an excellent website with simple price graphs, which contains most of the cryptocurrencies out there and can help you have a general view.
As great as it is for price graphs sometimes on low marketcap projects, coinmarketcap doesn’t provide any additional information about the coin projects. In that case a really great alternative is coinpaprika.com which contains much more information about projects even if their marketcap is low.
Some last advises
Before I close, I want to make you understand that if you are going to invest your money in a cryptocurrency project, it is always wise to spend some of your time doing some of the basic research mentioned above and also learn and understand the basics of what blockchain technology is and how it can potentially have a huge impact on global economy.
You can find useful information on subjects like Bitcoin, cryptocurrencies and blockchain on our website’s section Learn more.
Comments (No)