Crypto101 - How to spot a scam 👀Hi Traders, Investors and Speculators 📉📈
Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year.
Hundreds if not thousands of new cryptocurrencies launch monthly. All with big promises of use case, flashing tech and a stock-standard wide mouthed YouTube guy telling you how high it will moon. With these new tokens and coins also comes many initial coin offerings (ICOs) that are often scams. The demand for these have grown, even despite the fact that many people get rugpulled. This mostly unregulated market makes for a perfect place to scam innocent people out of their money, with little consequences to the thieves. When it comes to cryptocurrencies, one of the biggest challenges for investors is not getting caught up in the hype. Digital currencies have quickly risen to prominence in the portfolios of many retail and institutional investors. At the same time, people are still shocked when something like the recent LUNAUSDT / TERRA happens.
Let's discuss a few ways to navigate this wild west market:
- Research the team. Perhaps the single most important success factor for any ICO or cryptocurrency is the developers and administrative team behind the project. The cryptocurrency space is dominated by major names, with superstar developers like Ethereum ETHUSDT founder Vitalik Buterin capable of making or breaking new projects simply by having their names listed on a development team. For that reason, it's increasingly common for scammers to invent fake founders and biographies for their projects.
- Check the whitepaper. The whitepaper should lay out the background, goals, strategy, concerns, and timeline for implementation for any blockchain-related project. Whitepapers can be incredibly revealing: companies that have a flashy website may reveal they lack a fundamentally sound concept. On the other hand, a company with a website containing spelling errors may have a whitepaper that indicates a rock-solid concept and a carefully conceived implementation plan.
- It it sounds too good to be true, it probably is. The idea of getting rich quick on an investment in a hot new project sure is tempting. Keep an eye out as you look for new investment opportunities in the ICO and cryptocurrency spaces. Remember that projects sounding too good to be true , likely are. Spend time scrutinizing every detail, and assume that the absence of a piece of crucial information may be an attempt to hide an unsound model or concept. Look for outside sources to verify the legitimacy of any project before making an investment. Ask questions that you can't already find the answers to.
Now, the project on the chart - BURGERUSDT . BurgerCities crypto was developed on the BNB Chain ecosystem and is now linked to MetaFi . People compete for rewards on the BurgerCities platform. BurgerCities transitioned from being a DeFi product available on the BNB chain as Burgerswap to integrating DeFi and NFT into a more expansive metaverse space, producing uniform and standardized Web3 behavioral metaverse universe. Being a metaverse-oriented project, BurgerCities supports the NFT concept making it possible for users to earn returns through gameplay.
Don't get me wrong; I am not stating that Burger coin is a scam - I am merely pointing out that you should always do your due diligence research on new coins / projects, and be extra cautious when the coin / token has a funny name.
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