Scam or Not? Lets Take an Intelligent Guess
So I was browsing through some steemit posts when I came across one asking about a couple of cryptocurrencies. The girl wanted to know whether these coins were a scam or not. These coins were born of hard forks and considering that hard forks do tend to cause confusion for some, her doubt about them was not entirely irrational.
This got me thinking about the way I sort my cryptos' out during the initial research. Before you invest your time researching and reading their white paper you obviously would first and foremost want to know if it is even a genuine coin on the blockchain. Before delving into the technicalities of a cryptocurrency, I want to know a few things first.
Why does the coin exist?
Call it their aim, goal or whatever their official statement is. Read it on their website or checkout their videos.Development Team
The people on the team and obviously their qualification is a must know for a serious investor. You may also want to look into their previous achievements and experience. Size of the team also matters. Look at the numbers – too small a team for too big a project is going to struggle to deliver, no matter the greatness of the idea behind them.Community
You guys probably know more about this than me. What I usually do is to check their website, Twitter and Reddit pages. How many followers do they have? Would the community hold when fudding begins? Are radical enough to stand their ground against some crazy whale action?
You can get a basic idea about it when you start to read their tweets, social media comments, posts, etc. and I am not talking just about the recent stuff. Scroll down like crazy and go to their genesis point and read older comments and posts as well.Recent community participation
I mention this separately because a lot of newer coins with smaller communities are much more active in marketing then the older and established coins.
My outlook is – Older and secure is for storage & newer and energetic for growth.
Check out how much noise they make? How much tweeting/redditing are they doing? Do they have a lot of trolls – trolls might not be good for short term, but they have a certain energetic effect on the prices (I am hoping for the positive and preparing for the worst….)Graphs and Projections
Boooooorrrrrriiiinnngggggg!
Meh! Don’t want to go into it (I am not the best guy for this either). So please do it yourself.
Spend a couple of hours behind the screen. Hell, even spend just a few minutes. Do some initial ground work so you get to know that at least what you are looking at is not a scam. The truth is that there might not be a sure shot way to tell a scam from a genuine crypto until the D day arrives. So the only thing you can do is your due diligence.
PS: You should know that there are a few coins that I think to be scams and they are currently doing a lot better than some genuine ones.
Edit: Please add any other things that you might do to weed out the bad eggs from the good ones, so to speak. I would really appreciate it if you don't name any coins here. Once again thanks for reading.
Hey Hashcash, well put. I hope that the girl who was asking the question that got you to ponder your own methods read the post. I think that if people are not used to researching, then something like your post gives them a great place to start. It amazes me how many people, despite being told dozens of times about the importance of carrying out their own due diligence, simply follow the proclamations of someone on youtube or some other social media platform, someone who they don't really know from a bar of soap (sorry if that doesn't make sense....I am originally from the UK so can't help but to say stupid phrases that my mum used to ram down my ears when I was a rug rat). Suffice to say great point made, I would also add who or what are their competition, and how long have they been in the game. Anyway Cheers J
Thanks man!
Made a few mistake of my own in the beginning so it's my way of trying to help.
cool! :)