How to Avoid Common ICO Market Scams in 2018
- Nearly $7 billion has been invested in the ICO market over the course of 2018
- Unprecedented ICO hype has seen more investment pour into ICOs this year than during the entirety of 2017
- Because scam ICOs and projects which never came to market accounted for 80% of ICO investment in 2017, it is imperative for investors not to invest recklessly
ERC-20 cryptocurrency coin market cap data, is showing unprecedented interest in ICOs this year.
With over $6 billion having flooded into the 2018 ICO market, many are hailing ICOs as helping bring stability to the cryptocurrency market during a period of otherwise intense volatility. At the same time, though, it is starting to look likely that an ICO bubble might be in the making. Specifically, due to many scam ICO coins never passing on a return to investors.
Do You Know How to Stay Safe When Investing in ICOs?
In 2016 and 2017, ICOs were regarded as something of a curiosity. Yes, some ICO funded projects like Binance have been a phenomenal success. Such success stories, however, are few and far between. Because of this, investors in 2017, poured money into top cryptocurrency market cap coins like Bitcoin and Litecoin. Fast forward a year later, though, and everything has changed.
Changing ICO Market Dynamics
Thanks to the declining Bitcoin value, many risk-averse investors are pouring funds in 2018, into new and exciting sounding ICOs. – The only question is, will they ever see a return?
Spot a Scam ICO by Always looking at Coin Whitepapers
By far the easiest way to spot a scam ICO in 2018, is to download and read every investment worthy ICO whitepaper.
- At present, scam ICO marketers are outsourcing whitepapers to freelance websites like Fiverr
- By outsourcing whitepapers to budget freelance marketplaces, the material returned is often made up of nothing put cryptocurrency buzzwords and use case details which are impossible to make sense of
- Because people with poor English language skills usually front scam ICO projects, scammers themselves have no way to verify the quality or readability of their whitepaper
Given the above, if after getting a page into an ICO whitepaper, you find it impossible to read, it is likely that the project being detailed isn’t legitimate.
Use Bitcoin Talk to Spot Scam ICOs Easily
Bitcoin Talk is one of the most influential cryptocurrency forums currently online. In fact, in days long gone by, cryptocurrency giants like Satoshi Nakamoto used to chat in real time on Bitcoin Talk, with fellow blockchain technology enthusiasts like Dan Larimer.
Sadly, the credibility of Bitcoin Talk has taken something of a nosedive in recent years. This is because Bitcoin Talk now runs what are known as ‘Bitcoin Talk Bounty Campaigns.’
- Anonymous participants in Bounty Campaigns earn Bitcoin (and other cryptocurrency tokens), by posting favorable comments about new ICOs and other digital assets
- Scam ICO organizers will often hire several Bounty Campaign workers to hype their project and make it look legitimate
- Hyping scam ICO projects in this way works, thanks to the apparent reputability of Bitcoin Talk itself
Have you ever read a comment on Bitcoin Talk saying something like, “incredible whitepaper!” Or, “amazing project!”
Put simply, Bitcoin Talk should never be used as a source of reference when attempting to ascertain whether investing in a new ICO might be a good idea. In fact, many legitimate ICOs don’t even publish details of token sales on Bitcoin Talk because of this.
Look at Where ICOs are Registered & What Contact Information they Make Available
Many of the biggest scams in recent cryptocurrency history have been based out of Southeast Asia and the Middle East. This is because it is easy to set up a registered business address in places like Saudi Arabia and Vietnam. (Sometimes without even visiting a country personally).
As a rule, investing in the ICO market should, therefore, only ever be considered worthwhile, if investors can check the exact physical location and prior reputability of a business or its founders.
Check ICO Website Security (Specifically HTTPS)
As of this year, search engines like Google automatically flag websites in the address bar which have questionable SSL security certificate credentials.
In most cases, Google will display an ‘!’ by website addresses. Either this or a red line through a sites https information. Moreover, when this happens, it means that site owners have not invested what can be as little as $35 – $100 to have domain names independently verified. ICO investors, should, therefore, ask themselves whether a business which isn’t prepared to invest in itself is worth investing in at all.
Unrealistic ICO Goals
Lastly, by far the easiest way to spot a scam ICO, involves merely assessing the feasibility of a projects long-term goals.
If an ICO professes to be the next Bitcoin in the making or the next market leader when it comes to virtual reality technology, its founders are either scammers or simply misguided. Instead, investing in the ICO market should only be considered worthwhile when project goals seem feasible, are 100% unique, and when established blockchain developers are heading projects.