If you’ve made the decision to get involved in cryptocurrencies you’ll start looking around on the internet and perhaps talk with people from your network to see if they are doing ‘something’ already.
Now, I realize not everyone is going to appreciate what I’m about to share in this blog post with you. It might very well put the business they are involved with in a negative light. It never is my intention to bash an opportunity or an individual. The only intention I have is to educate you, reader of this blog post and to help you avoid the pit falls of the legion of scammers out there.
What are red flags you should be alert on?
If an opportunity is hyping it very often means that those marketing it are emphasizing big gains, perhaps even guaranteeing it. If the business concept has no real product involved, or no REAL MINING, it doesn’t matter what currency the opportunity is doing business in: USD, EUR, GBP or Bitcoin, the currency will not make it sustainable nor legitimate.
BS statements by marketers
It is absolutely shocking to read statements made by many marketers. They simply lack proper knowledge and will use marketing mantras to get you blinded by earning potential. Having enormous amounts in a backoffice doesn’t mean a thing. I can have millions playing Monopoly, it doesn’t make me really wealthy does it?
What promoters are at the top?
Look who are promoting it heavily and then look at their history. If they have a track record of being involved in scams, the odds are this is another. Get rick quick is what DOES attract these recruiters.
Pump and Dump Alt Coin Schemes
There are many coins being offered that people are offered to buy into. Packages for absurd amounts in order to get so called tokens. Of course all of them claim to be better than Bitcoin. Some of them claim to have thousands of merchants ready to start accepting them. These are just claims, there is no real proof or documentation there really are.The coins have a value that is determined by the company. Mostly these coins can not be exchanged, or the schemes have their own exchange where there are enough sellers (people who look at thousands and thousands in their backoffice) but there are no buyers. Why would you want to buy coins that you cannot sell nor use.The potential success of any cryptocurrency is in the practical use of it. If there is no practical use, any value attached to it by the company mining it (rarely it’s an open source decentralized blockchain) is wishful thinking and fairy tales.The fact a coin is showing on coinmarketcap.com isn’t proof of it’s future success at all. Many think it is, but they are wrong/ misinformed.
There is a lot more to doing due diligence on online business opportunities, but for cryptocurrency schemes, the ones mentioned above will already help you eliminate the majority of scams.
Now a very important question:
How to identify whether a cloud mining or alleged real mining company is trustworthy?
Unfortunately, there are mining offers available that are scams. Hash Ocean has been a sad example: Millions have been collected and the site and company simply vanished. You don’t want that to happen to your money.
If you start mining you aim to mine real coins, whether that’s bitcoin or an alt coin. Do NOT buy into any hype. Hype is the biggest pitfall for the uneducated masses, who easily get blinded by dollar signs and tend to ignore the red flags waving into their face!
Very often the website that is being used has a hidden identity of the owner. When asked for proof of existence, you’ll get pictures that are simply taken from the internet. Any mining company offering fixed mining results (like 10% per month), that’s a HUGE red flag, since there are no fixed results in mining.
There are cloud mining opportunities that conveniently abuse the name of a real mining farm: they use a derivative of the real mining farm’s name, add a letter or something to give the IMPRESSION it all is real. You will find out when your money is gone, no coins are in your possession and the site has gone black. Or, another convenient untruth, a site owner will communicate it has been hacked.
Either way, the money or bitcoins you have put in that specific mining company is simply gone.
Many will claim to offer cloud mining, but there is no real mining involved. So be very careful when choosing whom to trust and where to pay your money or bitcoins to. Reliable companies will proudly show who they are, proudly show pictures and videos taken on site and preferably have some members visit the mining facility. No real mining company will publish the exact location of their mining facility because of security reasons, this makes perfect sense.
Well, this brings this series to an end.
I hope you’ve found it useful and has helped you understand the power of blockchain and cryptocurrencies and how it can have a huge impact on life as we know it in the coming years and probably decades.
Sign up for the newsletter on this website. We’ll be announcing and launching a Cryptucation course in the coming weeks. A very important part there will also be how to protect and store your mined coins safely. Many have insufficient security and will one day find the coins they had on their smart phone have disappeared. Learn how to minimize the risks and benefit from a trend that is bigger than many realize today.