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How to Identify Scams in Crypto
With more and more cryptocurrency projects growing by the day, and FOMO hitting hard with a lot of newcomers, I think its important to share and discuss some techniques in finding solid projects worthy of investing in. Here are a few different ways to identify the bad from the good:
- No Public Code Repository (eg. GitHub) - this is a big indicator of how hard the team behind the project is working, how large the team is, as well as an indicator of code quality and craftsmanship. The more contributors there are and the more recent the last commit was, the higher the chance is that the team is dedicated towards making it succeed.
- The Team - is there a list of team members somewhere on the site? Do they have LinkedIn profiles? If they don't, its likely that they are just a bunch of enthusiasts without any real professional background. It's possible for people that are less known to succeed, but it's way more probable that a team with a cryptography background will succeed.
- Lack of open communication channels - a good project is likely to have open communication channels with their customers/investors. If the project makes it hard to contact them, watch out!
- Hyped up ICOs - be wary of ICOs. Buying into a project at launch is like buying a top of the line graphics card the first day it comes out - way overpriced. Do yourself a favor and let it mature at least a couple months and then decide if you want to buy the dip, because they always do!
- Market cap, price, and supply cap - Watch out for the market cap, price, and supply caps of coins if you plan to invest. The larger the supply, the cheaper the token should be. Be careful of low market cap coins because of massive volatility. Make sure there is a hard cap on the token, otherwise with potentially unlimited supply, the token could be worthless at any time.
These are just a few of the indicators to safe trading, please do your due diligence and research before investing!