How to protect yourself from Crypto scams

It seems that in today's crypto industry there are a lot of scams out there. The best thing that you can do is educate yourself about which scams are being pushed and avoid them. Many of today's scams are modelled after Bitconnect and in this post I will:

-take you briefly through what Bitconnect was;
-other sites that are modeled after Bitconnect that you should definitely avoid;
-how to avoid many crypto scams with some common sense tips; and,
-present a list of crypto activitives that I rank from least risky to most.

The Story of Bitconnect

Many are modeled after this platform, which billed itself as a Lending Platform that used a trading bot to earn profits with their user's money. The claim was basically guaranteed interest on your investment paid daily. Your initial investment was held for a period like a year before it is released/returned to you and Bitconnect disappeared just before this year came due for most of its users.

Bitconnect was in reality a classic Ponzi scheme. This means the owners, promoters and initial investors are all getting paid these incredible returns and thus it looks like it is legit but what is secretly happening is the owners are paying everyone off with money that is entering the business from new users. In other words there is no legitimate business activity and the trading bot doesn't really exist in this case. So a new person “invests” and then that investment is what is paying off someone else’s withdrawal. Eventually the owners take the profits and run leaving everyone holding nothing.

What happened with Bitconnect in the end is you bought “bitconnect coins” with bitcoin and then lent these bitconnect coins to Bitconnect for your loans. When they cut and run they made up an excuse and then paid everyone the “full value of their loans in bitconnect coins”

Bitconnect coins were only traded to invest in bitconnects lending platform and when they closed the lending platform there was no longer any use in the world for these coins. The value went from $325ish a coin to about $30 in minutes. It currently trades at $6 or so where you can still find them, which was basically only on bitconnect’s own exchange in the first place. There are apparently a few exchanges with them however.

Likely Scams

-Davorcoin.io
-Lendconnect
-USI Tech
-Profitable Morrows

All of these sites are the same as Bitconnect -- basically clones. They promise outrageous returns that scream ponzi from outset. Many cloud mining sites that just show up are potential scams as well.

What to do

Be careful.
There are a lot of scams out there so you should pretty much go into everything in crypto assuming its a scam.
Also please remember that actual guaranteed results for other people don’t mean its a scam. If no one ever got paid no one would put their money in so these scams payout at first, usually, to some people.

Simple Google Searches
If they have photos of people who are on the development team or pictures of their “mining farm” Google search the image! I know it sounds ridiculous but a fake cloud mining site, Spacemining,io, had photos of a made up team on their site. If you google searched the images of this alleged team they all came back as stock photos for sale on the internet.
Something this simple could save you tons of money so take the extra effort to do the little things.

Too good to be true?
If it sounds too good to be true it probably is. If someone is selling guaranteed profits it is probably a scam. But not just this -- if someone is selling mining equipment way cheaper than anyone else you should be wary. If a cloud mining site is offering contracts way cheaper than anyone else be wary. If it sounds too good to be true it almost always is. To prove an extraordinary claim to be true you should insist on more evidence than a regular claim. Extraordinary claims require Extraordinary evidence.

What are people saying!
What are the most respected names in the crytpo industry saying about it? There were plenty of very respected names in the industry as well as in the YouTube crypto community warning about Bitconnect for a long time. Don’t let greed and fear of missing out cause you to make emoitional unreasoned decisions.

Risk

There is a real risk matrix in crytpo. You need to think about where your comfort level lies. This is my opinion of the riskiest way to try and make money in crytp ranked from least risky to most.

Physical mining
You have complete control. If you buy from known sources like Newegg you wont get ripped off. You also own physical computer equipment that has real value, even used, so even if cryto disappears you can sell used equipment to make some of your money back.

Direct investing
Buying and trading crypto currency directly on cryptocurrency exchanges like Coinbase or Polinex. If you invest and you do it wisely you can make a lot of money. If you buy good coins like ethereum you probably won’t have that investment disappear by the value going to zero.

You can lose money easily tho - especially if you are just investing blindly. Taking too many shots on smaller coins or dumping alot into a risky coin could cost you everything.

Cloud Mining
Definitely not a scam in and of itself but there are many many many fake cloud mining sites that come and go and steal the money. Even well known entities like Genesis or Hashflare -- although not a scam -- are probably some of the least profitable ways to invest in the crypto market.

Buying computer gear over internet with bitcoin/etc… from unknown sources!!!!!!
If they have equipment way cheaper than anyone else and they only accept bitcoin - be wary.

ICOs
These aren’t all over place anymore like they used to be but doing great research may let you make a fortune. The coin could also go bust before fulfilling its goals or the whitepaper itself may be a scam and they are just taking the money and running. Be very very careful of who you are listening to when doing these types of investments.

Lending plaforms/everything else
Even if one of these lending platforms is legit in the future (none have been so far) the number of BS ones will make trusting the potential legit one impossible. Don't invest in these under any circumstances.

For more information you can also watch my video on the same subject: