The scams in the world of the cryptocurrencies are certainly not rare, you can run into them practically every single day if you are looking for coins and projects that are a little too exotic.
This is a serious risk to the economic health of the investor, who risks falling fully attracted by wild marketing and some bad advice.
Yes, because, unfortunately, around it is full of influencers, Telegram channels, sites and even “friends”, who do not hesitate to feed stuff for simple inexperience or for pure personal gain.
In this article we will cover some of the most popular tools to use to escape a scam or, at the very least, reduce the percentage of risk.
Of course this does not completely rule out the dangers, nothing could, but however, gives a big hand to the less experienced, trying to give them weapons to defend themselves.
Thanks to these simple but effective methods, it is possible to identify any macroscopic dangers in a few seconds, a small preliminary check to be done every time.
The best way to exploit them is not using only one, but all together and crossing the sources, a method certainly no longer quick but definitely effective.
Analysis of wallet holders of cryptocurrencies
The first method that makes it clear with a simple glance if there is risks is to go and see who actually holds the coin and in what quantity.
Impossible? Absolutely not, it takes a few seconds and no technical knowledge, it is a process that requires a few mouse clicks and nothing more.
This is because, being all registered on the blockchain, even the wallets that have the coin in question are reported without revealing the person’s name but only their market share.
What is it for? If a scammer wants to be smart he creates a coin, puts a good 50% of the tokens on the market through marketing, driving up the price and keeps the others to himself.
When the other buyers have done their duty, they will start to sell their shares a little at a time or all together, inflating the currency and causing the price to collapse.
This will allow the scammer to generate huge profits while, all the others, will end up with a sack of coins without more value, not even good to take the shopping cart.
So, in order to avoid this, you need to see who owns the coin and in what quantity, to understand if there is someone who could heavily influence the market with a sale.
If any wallet has percentages like 30/40/50% or more of the total, then it is possible (not to say probable) that he is just waiting for the moment to sell off.
To find out who holds what you just need to go on chain and see the wallets, which you can do by going from CoinMarketCap, looking for the coin and clicking on Holders found in the menu below.
Scam cryptocurrency analyzer
Once you have verified who holds the token, in case there are no critical issues, it is time to switch to a tool that analyzes the address of the coin itself for problems.
The site in question is Token Sniffer, a platform that is really valuable in the fight against scams in the world of cryptocurrencies.
To use it, just go to the main site, take the address of the coin in question and paste it into the search bar at the top and then enter to start processing.
Once finished the site will give a score of “stink” to the coin, defining the risk it turns into a scam and showing negative or positive points of the token through “X” or “V”.
Thanks to this platform you can easily avoid situations such as honeypots, coins that can only be bought and not sold, such as the Squid Token.
Verifying on this site is the minimum wage to avoid a scam, otherwise you rely solely on your own luck, which may not be at all benevolent.
Knowing tools like this (it’s not the only one but they are more or less all similar) is the first step towards a conscious investment.
Cryptocurrency Scam Reporting Sites
There are websites that report the scams discovered so far.
An example is Scam News Channel, a platform that reports a kilometric list of full-blown scams from which it is well to stay away.
Unfortunately these sites are not always up to date or competitive, they do what they can but they are certainly not the bible of scams, so they should be taken with a grain of salt.
If a coin is in this list, then it is certainly a scam but, if it does not appear, it does not mean that it is a green light for the investment.
Each of the pieces featured in this article is complementary to the others, it does not exclude them, which means having to go through a series of steps to be able to skim the good from the bad.
The problem is that, many of these platforms, require a basic knowledge of English, which certainly does not help those who are not accustomed to this language.
Check out the cryptocurrency website, its whitepaper and road map
One of the methods that leads to nothing official but that allows you to understand if the coin in question is made for a purpose or not is to look at his website.
How? First of all, it is enough to see if the objective of the site itself is to sell the coin or if it shows its strength and goodness of a project through its pages.
If as soon as you open the home screen there are more invitations to purchase or not everywhere, then it is not a good sign.
A button at the top and one at the end of the page are the foundations of marketing, which lead the user to proceed with the purchase almost unconsciously, so you need to be prepared.
Secondly there is the whitepaper, a PDF where the creators of the project explain in detail the foundations on which that reality rests, trying to make things clear.
There are usually quite complex terms here in advanced English, certainly not ideal for most people, but a little more nonetheless.
Lastly, the road map, the path that will follow the currency in the future, which should aim for technological development of some kind, not just say “money, money, money!”.
We need a minimum of critical eye here, to understand if they are words in the wind made to incite the crowd or if there is indeed substance and real possibilities on the horizon.
Read also: Five Reasons Why Bitcoin Will Replace surely Credit Cards!
In cryptocurrencies you need common sense
The comparison seems fitting because what the idea of ”easy money” leads is to throwing money randomly in the throes of FOMO (technical term of the traders) and then find himself with a handful of flies.
Cryptocurrency scams are based on this, they aim to shake the desire to get rich in a flash, without a single drop of sweat.
They offer solutions that seem absolutely unmissable, so much so that people who reject them feel like real fools to let wealth slip through their fingers.
When things start to look too good to be true, it is simply because there are no quick and easy ways to succeed.
Some examples are coins that put very high expenses for those who sell tokens, redistributing those expenses among those who choose to continue to hold them.
In short, a whole series of incredible possibilities that ignite a spark in the eyes of investors and increase salivation, predicting easy success.
Anyone can say that his token will become the next Bitcoin, but it does not mean that he really believes in it or that there is also the most remote possibility for that to happen.
The schema is always the same: to promise great things, see to what extent you can pull people in and then enjoy the profits made by leaving others in canvas breeches.
