Identifying Scams In ICO and Cryptocurrency

Every month, many cryptocurrencies are launched and with it comes a chain of ICO’s (Initial Coin Offerings). It has made investors enthusiastic for these opportunities, despite the fact about the cryptocurrencies restrictions in the year 2018. These factors are enough to lure scammers. It is so because, if investors become enthusiastic for spending money on much-estimated cryptocurrency, then they may make blunder mistake by investing in fraudulent ICOs. There must be a question in your mind about the safety measures to deal with it. Yes, there are. As it says, if there is a problem, there is also a solution for it. Similarly, there are ways of identifying scams in ICO and cryptocurrency.

According to a report, it has been found that there are around 80% of scams in ICO. Only a few of them reaches to the stage of trading on multiple cryptocurrencies exchanges. For any cryptocurrency investor who is hopeful to new investment opportunities and to be safe from fraudulent ICOs, tokens and coins, the possibility in the future can be challenging to deal. The success of new blockchain-based startup and any cryptocurrency is also very unguaranteed. However, there are some outlined measures, which if followed, can surely help you out from falling into ICO scams.

Teamwork

If you are not abreast with the latest ICO listing, then it is must for you to know about the fact that the success of any cryptocurrency and ICO depends much on the team and the developers. Those who are into the business of cryptocurrencies know this fact about the cryptocurrency being ruled by major players like Vitalik Buterin, the Ethereum founder or Satoshi Nakamoto, founder of the Bitcoin. They are efficient in bringing up new projects or terminating them, by simply registering themselves on a development team. Because of this, it becomes easy for the scammers for creating false founders for their project purposes.

So the best way to deal with such fraudulent techniques is to have a proper research about the individual team members involved in the project, instead of making a hasty decision for investing. If it seems complicated for you to browse information about a founder or developer on any social media outlets, then better check if they are active with the likes and followers they are gaining. If not, then the person may not be true. In this way, you can be saved from scams in ICO.

Analyzing Whitepaper

A whitepaper, be it of ICO or cryptocurrency, is an underlying project. Always remember that an ideal whitepaper must include a proper background, timeline, goals and strategy for the implementation of any blockchain project. Some companies have ostentatiously attractive websites but lack an engaging concept. Contrary to it, some companies have websites with grammatical errors but are having a whitepaper with a better concept. So you need to analyze it very carefully and have to check whether a whitepaper is inclusive of a roadmap of implementation along with legal concerns and SWOT analysis or not. Avoid those companies, which do not provide whitepaper.

Focusing On Token Sales Figures

If you have been following crypto mining news today, then it is essential to know that for facilitating in crowdfunding process, an ICO is always depended on the currency system or the token. Always keep a tab on token sale figures, when the ICO is in progress. Be very active to observe the progress of token sale over time. If there is any company who is making complex for everyone for charting its ICO progress, then it is an indication of big danger. There are some scams in ICO which conceals the progress of their token sales pretending of individual contribution address.

Is The Project Feasible For Achieving Goal?

If the cryptocurrencies and ICOs are equipped with their fundamental structure, then it becomes possible to supersede competitors. There have been so many launches including of overestimated ones but unfortunately failed with fading of their initial interest. Chances of successful investments depend on the company, which have a convenient set of goals that can be achieved. Besides this, it is better to expect a timeline from the company in the process of development.

Be Cautious

Be cautious enough to see whether the projects, which are sounding promising, are likely genuine or not. Be smart enough to analyze each detail and if found any lack of relevant information, then understand that there is an attempt to conceal an unsound concept.

Conclusion

So this was all about how to protect yourself from the scams in ICO and cryptocurrency. By following these guidelines, it will certainly make you aware of all the risk involved in investing in the cryptocurrencies and the ICOs. Although risks are inevitable and do make a negative impact on the credibility of the cryptocurrency as well as ICO, if you are smart enough to analyze the risks by following these guidelines, then it much sure that you can save yourself from persisting scams. Be very wise and analytical while reading a company’s whitepaper and understand whether it covers all the essential needs which can make a project successful or not.