Fake cryptocurrencies are everywhere, but what can you do about them?

Bitcoin and Ethereum have been around for a while but there are many new coins that pop up every day. One problem is that some of them may be fake or fraudulent.

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Cryptocurrency is one of the most talked-about topics in the world today.

It’s a topic that has been growing exponentially like Bitcoin, and other cryptocurrencies had exploded in popularity and value since 2008 when they were first introduced to the public.

Unfortunately, fake cryptocurrencies are everywhere. So, what can you do about it?

I will provide resources on spotting fake crypto coins so that you don’t get taken for a ride by scammers or end up with worthless tokens. In addition, I’ll also list some examples of these scams so that we can learn from their mistakes.

Okay, let’s get started.

How to identify fake cryptocurrencies

Due to the increased popularity of digital assets, there has been an influx of new coins and ICOs. With so many new cryptocurrency projects out there, it can be challenging for investors to determine which ones are legitimate or scams. You can make this determination in many ways, but one of the best is reading their whitepaper.

A cryptocurrency whitepaper is a document that outlines the problem, details the solution, and provides an overview of how it will work. A white paper should provide evidence that it’s not just a scam. It should also be short enough to read in one sitting (a few hours).

A good cryptocurrency whitepaper will include:

• An introduction with a description of the project and its goals.
• A detailed explanation of the technology behind it.
• The team involved in developing it and their qualifications.
• How do they plan to use the funds after requesting them from investors?
• What type of token is issued — is there an ICO?
• How many tokens are issued? Who gets to keep them afterward?
• An outline of how investors can value the tokens after the ICO.

Here’s XPR’s (Proton) whitepaper — proton-white-paper (protonchain.com) as an example of a credible document.

Now, a team that wants to deceive its investors will do its best to make sure the information provided in a whitepaper is hard to find. Good scam artists know they’ll only get one chance to tell their story.

Additionally, you can protect yourself by bookmarking sites that list all of the cryptocurrency scams out there, so be sure to use these before making any significant decisions. Finally, if you’re planning on investing in cryptocurrency, take your time and do the diligence!

Here are a couple of sites to help you detect cryptocurrency scams:

1. Nomics — Deadcoins & Failed ICOs: The Asset Graveyard | Nomics
2. Scam Alert.io — Scam Alert — Cryptocurrency Crime Fighters (scam-alert.io)

Conclusively, cryptocurrencies are becoming more and more popular with every passing day. Unfortunately, that also means the number of scammers out there who want to take advantage of your inexperience in the field will only grow. Therefore, we can’t overlook the more common-sense precautions.

• Do not invest or send money if you don’t know what you’re doing.
• Please familiarize yourself with how transactions work and make sure they’re legitimate before taking any risks.
• If someone seems too good to be true, they probably are!
• Please don’t click on suspicious links or download files from anyone unless you’re 100% sure they’re safe.
• Lastly, never give out your wallet address to anyone (including exchanges) online-even if it’s another cryptocurrency user! You must vet them first!

Why do people create fake cryptocurrencies in the first place, and what is their primary goal (hint, it may not be money)

People create fake cryptocurrencies for a variety of reasons, including to make money. However, the main goal is not always financial gain. In many cases, creators have more devious intentions and hope to profit in other ways (such as using their currency to exploit computer vulnerabilities). In addition, some people want notoriety or want to see if they can fool others into thinking their cryptocurrency is legitimate.

Here are three of the most notorious cryptocurrency scams/hacks:

• Bitcoin Savings and Trust fraud — Texas Man Sentenced For Operating Bitcoin Ponzi Scheme | USAO-SDNY | Department of Justice
• Mt. Gox hack — The History of the Mt Gox Hack: Bitcoin’s Biggest Heist (blockonomi.com)
• Coincheck hack — The History of The Coincheck Hack: One of The Largest Heists Ever (blockonomi.com)

The most important thing to remember is that it’s never a good idea to trust your money to an untrustworthy person or entity. If something sounds too good to be true, then it probably is! Also, if someone tries to convince you that they’ve discovered the next Bitcoin, walk away!

Valuable resources for discussing legitimate cryptocurrency

Checking the status of a cryptocurrency is an essential aspect of determining its viability. The more recent developments, updates, and community engagement, the better off it usually is. It’s vital to look at what others are saying about it. What do experts and crypto enthusiasts say about it? Do these people have valid arguments that make sense, or are they being unreasonable?

Here are a few sources discussing cryptocurrency:

• Reddit’s /r/CryptoCurrency subforum with over 3 million members! — Cryptocurrency News & Discussion (reddit.com)
• Cryptocurrency info conversations on Quora — Cryptocurrency (quora.com)
• Cryptocurrency groups on Facebook such as CRYPTOCURRENCY TRADES AND NEWS | Facebook

If you don’t see a particular coin discussed in one of those places, it doesn’t mean that it isn’t legitimate. It just means no one has yet created a discussion about its merits or drawbacks.

Conclusion

The most important thing to remember is that it’s never a good idea to trust your money to an untrustworthy person or entity. If something sounds too good to be true, then it probably is! Also, if someone tries to convince you that they’ve discovered the next Bitcoin, walk away! It’s also essential not just to focus on what might make a coin successful but also its drawbacks and potential pitfalls. What are some of the risks associated with investing in this currency? Are there any red flags worth considering before making a purchase? The best way for investors to get up-to-speed quickly without extensive knowledge about how cryptocurrencies work is by reading reviews from reputable sources such as news websites like CoinDesk or CoinTelegraph.

Also, be active in the above-listed cryptocurrency communities.

Lastly, welcome to the digital world of cryptocurrency. It can be a dangerous place, so be cautious and stay safe.