ionicXBT
patreon
How To Actually Avoid Crypto Scams.
🕑 Added 2023-09-19 16:21:28 +0000 UTCScams.
Memecoins.
Shitcoins.
These all refer to coins that are considered worthless.
They have no clear value proposition, use case, or long-term development plan.
They appear during the heights of a bull market, promising high returns and innovative technology, only to disappear when the market turns bearish.
.
.
Should I tell you what will happen to these coins?
They get RUGPULLED.
What is a Rugpull?
Rug pulls, also known as pump n’ dumps, are when an asset’s value is disingenuously inflated, only for those that have been doing the inflating to run away with the inflated value.
This leaves everyone else with valueless assets.
It is a dirty trick in crypto.
Especially when the founder makes the digital assets seem really valuable, but it's not.
Then, they suddenly take all the value and disappear, leaving everyone else with worthless stuff.
.
Here's an example:
Imagine there's a new cryptocurrency called "ShinyCoin."
Some people talk about it a lot, saying it's the next big thing. Many people invest their money in it, and the price goes up a lot.
But then, the people who created ShinyCoin suddenly sold all their coins and made a lot of money.
The price of ShinyCoin crashes and everyone who invested in it loses their money because the value was fake from the start.
That's a rug pull. It's like a digital con job.
.
.
Now you know what happens, how do you identify them?
Just as I carefully analyse cryptocurrencies to find potential investments that could multiply in value (100x gems),
I also use careful analysis to make sure I don't invest in scams or fraudulent coins.
Here's what I look for;
1. No Clear Use Case:
A fundamental red flag is when a coin lacks a clear purpose or value in the real world.
For example, if a coin claims to revolutionize the future of digital payments without any plausible explanation on how.
Or if it fails to explain how it's better or different from established cryptocurrencies like Bitcoin or Ethereum.
- it's likely a "SHITCOIN."
Always ask yourself, "What problem is this coin trying to solve, and does it make sense?"
.
2. Overpromising or Vague Whitepaper:
Beware of projects that promise the moon in their whitepapers but provide little substance or evidence to back it up.
For instance, a whitepaper might claim to create a decentralized social media platform that will replace Facebook, but it lacks technical details and implementation strategies.
This is a classic example of overpromising without substance.
They often use complex words but in most cases is often just jargon and a lot of crap.
.
3. No Visible Development Activity:
A dead giveaway of a potential "shitcoin" is the absence of recent updates on the project's GitHub page.
Imagine you're considering investing in a cryptocurrency, but you find that the last code commit was six months ago, with no explanations or progress reports.
It suggests that the developers have abandoned the project, leaving investors in the dark.
.
4. Shit or Anonymous Team:
Trustworthy projects have identifiable and experienced teams.
If a cryptocurrency project's team members are anonymous or have no verifiable track record in blockchain or related fields, it's a warning sign.
For instance, if a project claims to be led by "Blockchain Expert X" but provides no proof of X's expertise, proceed with caution.
.
5. Pre-mined or Insta-mined Supply:
Some shady projects pre-mine or insta-mine a significant portion of their coin supply, giving them a massive advantage and potential to manipulate prices.
Always take a look at their tokenomics on their whitepaper and ensure the team is NOT holding a significant amount
This could be a threat if they decide to sell it later.
For example, if a coin's creators hold 90% of the total supply and can flood the market at any time, it's a clear indication they might be planning a "pump and dump" scheme.
.
6. Lack of Exchange Listings:
Reputable cryptocurrencies are typically listed on well-known exchanges like Kucoin, Binance and so on.
If you can only find a coin on obscure, low-volume exchanges with little to no trading activity, it's a red flag.
The team should at least have a roadmap on when they are going on new listings - not just staying on dextools.
As legitimate projects aim for broad exposure to maximize liquidity.
.
7. Lack of Transparency:
Trust is essential in the cryptocurrency space.
If a project lacks clear communication channels with the community, or if they provide sketchy or contradictory information, it's a warning sign.
For instance, if the team avoids answering tough questions about their project's roadmap or technology, it's time to be cautious.
-
In summary, when evaluating cryptocurrencies, it's crucial to conduct thorough research and apply critical thinking.
Don't chase the quick gains - Let it come to you.
When you chase something it runs away from you, but do your due diligence and be patient and you will attract the right projects.
So look for projects with genuine use cases, transparent teams, active development, and a history of responsible behaviour in the market.
.
And by the way,
I hope you are all actively engaging with all the content on Patreon because it really has the potential to profoundly impact your life.
Go all in and learn - take it seriously.
In just two weeks, you'll receive access to the Discord community and the AI futures bot, which has been consistently delivering positive results.
You will see for yourself soon.
It's absolutely crucial for you to learn and undergo a paradigm shift so that you can approach the upcoming bull market with the right mindset.
I want to emphasise that having the right mindset is essential, as I firmly believe that without it, you will continue to stay broke.
@ionicXBT
Comments
Thanks bro, these are indeed very important points and also new ones I did not think about! Lately there are so many of these shitcoins and you see some people make ridiculous gains on them. I kind off feel left out and get fomo. But when I return to them 90% are literally back to zero. Investing in coins that are higher market cap but proven that they are really working on something is key.
Gotta be mindful that even though so much of this space is filled with scams, there are true game changers too. Thanks for giving us a rough guide on how to spot the scams brother. Much love!
