How to Spot a SCAM?
More and more startups are entering digital currency market aiming to make money on investors and, accordingly, more and more investors also do so, aiming to make money on startups. It is perfect when both manage to cooperate effectively but unfortunately it is not that common thing. We do face a lot of scam ICO projects. However there are less obvious fraudsters than hidden scam-projects which often look pretty well at first sight. Simple frauds do not care about details that actually show the origin of the projects: last-minute website, no White Paper or an “empty” one, founders swear that you will make a fortune by the end of the week. Sometimes these projects might have been rather successful earlier, but at one point something went wrong. So it is very important to be able to identify scam features and react quickly - stop backing the project or do not even start making investments. But how to spot a fraud? To detect scam you basically have to think like a scammer. So what will a typical scammer do? 1.Unclear concept of the project The first thing an investor usually does is reading project description, roadmap, and White Paper. Basically it should be absolutely clear what profit will an investor gain and when will it happen. If there are more questions than answers then you'd better stay away. 2.Last-minute website or a purchased one even without changes in design You can check a domain name in web-archive or use who.is to find out when the website was registered. It requires some time to develop a particular project however scammers do not take care of that as most of them are ready to say goodbye and disappear as fast as possible. 3.Fictive and incompetent team Steve Ballmer, former head of Microsoft, once said: “Developers, developers developers”. It is important to understand who stands behind the project and who is in charge of its implementation. Trivial incompetence can ruin even the most groundbreaking idea. Today you don't have to work for CIA or FBI to be able to investigate social networks or other internet resources and find out some information about the team of a particular project. It happens that CEO or advisors are not educated and experienced enough, their background is unclear and there is no evidence that they will manage a project properly. Take it seriously and remember that the time you spend on it will cost less than unprofitable investments. 4.No feedback or a vast number of fake comments and profiles If there are no reviews and comments, that looks suspicious. However, the project may have just started and yet not so many people are aware of it. It's much worse when forums and social networks are full of fake comments. The same thing is about advertising. When it becomes aggressive and the team is trying to retrieve the situation by media hype it might show that the project is not attractive enough. 5.Bad community and troubles with bonuses It happens that even the most sustainable company experiences force majeure. Anyway this information is usually widely discussed by the community and with each investor. There`re many articles posted on company's blog and other resources. When the project starts “sinking”, the communication with the community is often getting worse - users have to wait for the technical support to reply and it may respond with standard phrases giving no valuable information. Details usually show how a startup presents itself: if it changes the terms of ICO bonus campaign or does not follow its own Roadmap - this is a strong signal that you should not make investments in it. SCAM-roulette When talking about scam we should always keep in mind that there are fraud-projects and just unsuccessful startups that did not went well for whatever reason. You never know.