How To Know If It Is A Cryptocurrency Scam Or Not?

The Crypto market is flourishing at rocket speed recently with new crypto coins being launched every year. More than 8000 cryptocurrencies are actively traded and the increasing number of cryptocurrencies make it hard to verify the authenticity of these tokens. Many investors fail to check this and they fall prey to the scams. Squid Game token was one such scam, which was launched in a Netflix show with massive popularity. Within a few days of its launch, the Squid Game token crashed as the developers escaped with tokens that had a value of millions of dollars.

The fear of missing out (FOMO) is a major factor that the developers use in trapping the inexperienced investors as they invest in speculative tokens without any study or research. Finally, these investors will have worthless crypto tokens without any option for legal help.

However, there are some methods that investors can use to avoid these scams. Like any other investment, crypto investment also needs good research and the credibility of the sources also have to be confirmed before believing the information.

Below are some of the ways investors can try to understand scam tokens from legit coins.

● Check The Website Along With The Whitepaper Of The Project

This method is the easiest method to find the legitimacy of the coin you are planning to invest in. All the cryptocurrencies will have a whitepaper that will include the basic principles and technologies used in the blockchain which is backing the crypto token. You can get it from the official website of its developer. To increase transparency, most of the legitimate tokens give details like their name, address of the creator, contract source code, etc. If you do not get this information, you should doubt some scam in the token.

● Check The Authenticity Of The Creator

Collect as much information as you can about the creator of the token. You may get enough details from the social media platforms. Anonymous creators are a valid reason for concern and you should think twice before investing in such tokens.

● Verify The Source Of The Information

Investors keep huge trust in famous personalities and influencers. Scammers are well aware of this fact and make fake videos involving popular faces and spread fake information among the investors to mislead them. Therefore, make sure to go deeper and check the facts before believing whatever comes your way. To ensure credibility, check the source of information and verify it.

● Be Careful On Surreal Promises

All the investment requires adequate time for its growth and cryptocurrencies are highly volatile and may show extreme swings in their price. Scam tokens promise the investors surreal returns within a short time. They will be mostly targeting beginner investors through social media platforms and spam emails.

● Check The URLs

Scam tokens mostly use unsafe websites. Check for the lock icon on the status to ensure the safety of the website. If the lock icon is not available, consider that the site is unsafe. Also, make sure that the site address starts with ‘https’ instead of ‘http’.