The cryptocurrency market is buzzing with activity, with new currencies launching nearly every day.
However, the enthusiasm is making it increasingly difficult to confirm the genuineness of crypto tokens, and investors are frequently scammed.
Fear of missing out (FOMO) is a trap for naive investors who buy these speculative coins with no basics without doing any investigation. They have worthless currency and no legal remedy.
1. Website & Whitepaper
This is the most reliable approach to confirming that the cryptocurrency in which you are investing is real. Every coin has a whitepaper that explains all of the underlying foundations and technology involved in the development that supports that token.
It is available on the cryptocurrency’s official website.
Most real tokens disclose key data such as the token name, creator address, contract source code, and so on for transparency. If any of these are missing, proceed with caution.
2. Big Promises & Lucrative Phrases
Every investor should remember that each investment requires time to increase in value. Furthermore, volatile coins with severe price fluctuations exist.
Scammers take advantage of such characteristics and offer unrealistic profits in a short period of time. Fraudsters frequently employ phishing emails and social media accounts to lure unsuspecting first-time investors.
Verify real dividends are paid out by looking at the blockchain for dividends-paying tokens.
3. Know the Creators
The programmers and administrative staff behind the project are one of the single most crucial success elements for any cryptocurrency. The cryptocurrency field is dominated by big names, with famous developers like Ethereum inventor Vitalik Buterin capable of building or breaking new projects just by being on a development team.
As a result, it’s becoming more popular for scammers to fabricate bogus founders and biographies for their companies.
It’s a red flag, for example, if you can’t locate any information on a certain developer or creator on LinkedIn or other social networking platforms.
4. Look for the Community
The most efficient way to defend yourself against impending fraud is to be cautious. Because cryptocurrency is a digital commodity, all of the required information is readily available on the internet, keep an eye out for any doubts about the validity, history, or reports from other users.
So, first, read what other members of the community have to say about the currency on its website and social networking sites such as Twitter, Reddit, YouTube, and Facebook.
This is also a wonderful method to get to know the community that is supporting the project since most scam coins utilize bots to promote themselves.
5: The Value
This is now one of the most helpful methods for identifying genuine cryptocurrencies. Genuine projects are those that aim to tackle real issues! They bring value to the table, not just hype!
Before you buy any cryptocurrency, try to understand its usefulness and the problem it is addressing.
The projects that aim to deliver solutions rather than get rich quick schemes are the ones that will survive! These issues might range from blockchain scalability to pollution, but they must be genuine!
Hope you find this blog helpful. Be cautious when investing in and learning about the cryptocurrency sector. If you enjoy the content, please consider following us.
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