ICO Scams: How to Keep Your Crypto Safe
"Decentralized future", "be apart of the revolution", "capitalize on a 100% bonus today!". These are all some common terms that many ICO's love to throw around. They help generate hype and excitement among their user base but don't be so quick to break out your crypto wallet just yet. There are hundreds of scams out their just waiting for innocent investors like yourself. So, here are a few unique tips to help you prepare for any negative incidents in the future.
ICO SCAMS: DOES THIS CRYPTO SOLVE A PROBLEM?
Bitcoin was the first cryptocurrency and therefore an extreme innovation. Satoshi Nakamoto looked at an old problem and found a way to solve it with a new idea (L.U.M.I.A.M.I anyone?). Like many great innovations in the past, there were tons of copycats following the wake of Bitcoin's success. These are the ones you need to look out for.
ICO scams are obviously not real. Hence, they are not innovative. You do not want to invest in a crypto that is trying to solve a non-existent problem. Good, honest projects will have a clearly identified problem in their whitepaper and an innovative solution on how to fix it. It's too easy to go on GitHub, find the recipe for some new altcoin and make a "get rich quick" scheme. Don't invest in altcoins unless you really feel they are doing something unique.
ICO SCAMS: RESEARCH THE CRYPTO TOKENS
So many victims of ICO scams simply read through the landing page of some flashy crypto, give the team a quick read over and then press "buy tokens." But what do these tokens really represent? Do they have anything of substance backing them up? This is one of the most important aspects of the ICO process and it's essential you know everything there is about tokens.
Once you have started a project of interested, then ask yourself "how do the tokens come in?" Also, what role do they play? Do you even need these tokens to use the product? All legitimate ICO's will have a token distribution section along with a detailed report of token logistics. It might take a while for you to read the whitepaper and grasp all the details but it's the only way to ensure you're investing in something real. Scam ICO's will always have holes in their logic if you take the time to find them.
ICO SCAMS: RESEARCH THE TEAM
Simply having a picture and job description on the landing page is not enough. Just because someone has the title "CEO" doesn't mean you should follow them to the ends of the Earth. Roll up your sleeves and get dirty. If the team member page doesn't have links to their individual social media accounts then open up an investigation.
Hit telegram, Slack or email whoever to dig up any intel possible on this team. The team is what holds the project together. If something seems a little off about even just one member, then you should seriously reconsider your investment. If you want to take a look at what some legitimate team pages look like, check out YouToken, Nauticus, or BestRate. These projects are an open book when it comes to their employees and you should never expect any less when investing in ICO's.
