How to Recognize Fake Crypto and Ways to Make Secure Investments
Cryptocurrencies have exploded in the past decade or so. We are seeing new projects each year combined with blockchain with various outcomes. There are even play-to-win video games you can enjoy for free while earning crypto.
We live in an awe-inspiring time, but like with any other trend – scammers are always looking to exploit new opportunities. Everyone is talking about the options available in the crypto world, but nobody is talking about security or the lack thereof.
Blockchain is very secure, but it doesn’t mean there are no dangers. There have already been multiple examples of fraud, and one of the biggest crypto scams is offering fake crypto. Here’s what you need to know about crypto fraud if you want to stay safe.
What is fake crypto?
Cryptocurrencies are digital money that comes in many shapes and sizes. These currencies have a specific value and can be traded for FIAT currencies like the USD or EUR. Fake cryptocurrencies are nothing – they don’t have any value and can’t be traded.
In some cases, scammers will simply sell nothing to their victims. In other situations, scammers will offer you currencies that aren’t worth anything. No matter what the case, the point is that you must learn to recognize fake crypto, or you’ll be risking your assets.
How to recognize a fake crypto
Crypto scams are usually well-constructed, meaning you can’t detect them immediately. Luckily, several rules to follow can help ensure you’re not getting scammed.
Big promises about returns
Let’s make things clear. Cryptocurrency projects must create hype around them and use that marketing lingo. However, when you see a project that guarantees returns, you should keep both eyes open.
There isn’t a single financial investment in the world that guarantees returns. It’s the same with crypto offerings, and there’s always a chance you’ll lose your money. After all, this is what investments are about.
Free crypto promises
Some scammers will promise free giveaways of cryptocurrency or cash. However, investment projects are looking to gather money to develop their platforms, not give away free money to random people. Whenever you see a promise like this, it’s best to move away from that platform.
Furthermore, while Airdrops of coins seem like an impressive marketing strategy, they could conceal some dangers.
Check team members
When it comes to crypto projects, it’s normal for developers to provide as much information as possible so that they can convince people to become backers. You should always be able to find the key members of the projects, what they’ve done in the past, and learn why they might be trustworthy.
That is essential to determining whether a project has potential because the people behind it will significantly impact its success. Always be careful when there’s no transparent information about the company and its members.
Check the whitepaper
Another standard in the crypto world is for every project to deliver its whitepaper so the whole public can look at it. This paper is the critical part of the initial coin offering and can give you valuable information about the entire project.
Whitepapers explain everything from how the crypto is designed, its technology, its selling proposition, how it will work, etc. If the whitepaper is just some random information or it simply doesn’t exist, avoid that crypto.
Learn about their marketing strategies
Cryptocurrency projects have clear goals, but they use tokens and coins to help the project deliver results using blockchain. That doesn’t mean investors can’t make money, but this shouldn’t be the goal.
If you find a project advertising on social media as a great investment opportunity focusing on making money quickly and without any risk, avoid it.
Safe investment practices
Even if you are sure about a specific crypto, this doesn’t mean there aren’t any third parties looking to steal your information or assets. You should adopt certain practices when investing, like getting a cold wallet.
Before you start investing, secure all your wallets, emails, passwords, and accounts. Install a good antivirus and store your private key as safely as possible.
Keep your transfer address safe and look to update all the software you use regularly. At the same time, keep looking for suspicious links or activities within your trading history whenever you’re investing.
Set up a VPN for PC to ensure that all activities occur via safe networks. For instance, a Virtual Private Network can help defend against unsafe free Wi-Fi and encrypt data on HTTP websites.
Be organized with your finances and understand what’s happening with them at any given moment. At the same time, thoroughly research all the currency exchanges you use. They can also be a source of malicious software or act as pure scams.
We hope this post helps you keep your cryptocurrencies safe and prevent potential scams. In the end, remember to take the time to learn about a crypto project before getting involved. There’s no need to rush things, especially when making investments.
The editorial content of OriginStamp AG does not constitute a recommendation for investment or purchase advice. In principle, an investment can also lead to a total loss. Therefore, please seek advice before making an investment decision.