(The below information is not financial or investment advice.  See our disclaimer page for more information.)

Before You Invest Beware Of The Scammers

There are numerous cryptocurrencies out there to purchase and would serve as a great investment in the long run, but unfortunately there are too many so called “cryptocurrencies” out there online and on exchanges that will either disappear, are scams, or simply have no real world use cases.  Some reasons why cryptocurrencies disappear are because they’re scams (try to come across as legit, but not too many people fall for the scam then they disappear quickly), not enough funding, lack of research and development, poor marketing, or lack of real world use.

One popular method of scammers obtaining money quickly during the bitcoin craze in late 2017 and early 2018 was by creating an ICO or “initial coin offering.”  These ICOs would promise huge returns for a “small investment” up front.  Now if someone pays $1000 for a certain number of coins you may tell yourself that a $1000 is quite a bit of money, but if you’re being promised that your $1000 investment will bring you at least a 100 times in return, that initial $1000 doesn’t seem so much to begin with.

That’s where the problem came in.  There were promises made with no real legitimate backing.  What do we mean by no legitimate backing?  This means that the white paper was all crypto jargon to sound and look good to the novice investor, there really was no team of developers, the website developed that was used to advertise the cryptocurrency was poorly designed, and there’s no contact information. These are a just a few things to steer clear from and avoid when investing.

Researching Cryptocurrency

Below is a comprehensive list of questions of what to keep in mind and what to look for before investing in cryptocurrency:

1.  Does the cryptocurrency have a a complete a website with contact information, listed team members, developers, and creators?

2.  Does the cryptocurrency’s website have the whitepaper listed and clearly explained?

3.  Is there a road map displayed and has the team met any deadlines listed on the roadmap?

4.  Do the cryptocurrency’s developers have any social media such as a Facebook page, Twitter, or Reddit?  Are those social media platforms still active, when was      the last post?

5.  Is there a support forum for the cryptocurrency?  Is the forum still active with the developers answering peoples questions?  How engaged and responsive are the creators to visitors and customers?

6.  Are there positive review (non-sponsored or paid) of the cryptocurrency from reputable sources within the industry?

7.  Always be skeptical and cautious.  Just because a cryptocurrency has a fully functioning website and active social media platforms, doesn’t mean they can’t be scammers.  Scammers will go long ways to get your money then disappear.

8.  Whatever you invest, make sure you can afford to lose it all.  Investing in cryptocurrency is highly volatile.  Although the crypto market has had more regulations and policies created, the industry is and can still be volatile at times.

9.  Does the token or coin have any real world use(s)?

10.  Be highly cautious and skeptical of new ICOs.  Yes there can be new ICOs worthy of investing into, but a lot of the reputable coins that have already had ICOs have come and went.

11.  As a guide, generally speaking, the top five or ten coins listed on our homepage, or similar to other cryptocurrency price sites, are a safe investment.  A safe investment in that the coins listed have reputable creators in the industry, have been around for years, clearly defined whitepapers, have real use cases, and are supported by thousands of investors and industry leaders and supported by top cryptocurrency exchanges.

12.  What’s the coin’s market cap, price, volume, and circulating supply?

13.  What cryptocurrency exchanges have accepted and are circulating the cryptocurrency I want to invest in?

14.  What requirements does the cryptocurrency exchange have in accepting and listing coins?  Some exchanges are more lenient while others have a more strict listing process.

15.  What kind of security measures does the exchange employ when you try to sign log-in, withdrawal, deposit, or transfer cryptocurrency?

16.  What does the exchange do in case my coins are stolen or are the protocols clearly defined if such a situation were to arise?

17.  Does the cryptocurrency have a wallet developed to store the coin for you to download?  Is there a cryptocurrency wallet available for Windows, Mac, Android, iOS, or Linux?

18.  Do the creators of the coin clearly provide instructions on how to obtain private keys from your wallet?

19.  What is the cryptocurrency you’re interested in focused on?  For example are they focused on cybersecurity for digital payments or decentralized applications? Is it an open-sourced platform for decentralized applications?

20.  What are the fees if any when I sign up on a cryptocurrency exchange?  Generally you will find a trading fee and withdrawal fee on exchanges.

 

These are the questions you need to ask yourself and research prior to purchasing any cryptocurrency and making any investment when it comes to your money.  It costs nothing to sign up for cryptocurrency exchanges such as Coinbase and Binance, so it’ll be worth while to sign up and familiarize yourself with the exchange of choice and see if you are comfortable with their format, process, security measures, and customer support.  Whether you decide to invest or not always be sure to have thoroughly done your research, are familiar with the associated risks, and know how cryptocurrency investing works within various exchanges and within the industry.  This list will be continuously updated and added with new questions and tips.  Have a suggestion, question, or tip to add?  Add a comment below or contact us and we’ll add it!