Here are points which can help you from getting crypto scammed.
The cryptocurrency market is full of new coins that enter the market almost every month. December saw around 8,711 cryptocurrencies worth $2.61 trillion in the cryptocurrency market. But the euphoria also makes it harder to trace the authenticity of crypto tokens, and investors are often duped. The Squid Game Token is one such example. Coin, released after the huge popularity of the Netflix show of the same name, turned out to be a scam. The Squid Game Token is simultaneously rising and falling within days of launch as developers hide with tokens worth millions.
The fear of leakage (FOMO) factor in the crypto market is a trap for gullible investors who invest in this speculative currency without fundamental data and without much research. You have useless coins and no legal protection. However, there are always red flags that could save investors from potential fraud. As with any investment, the most important thing is to do your research and only trust reliable sources of information.
Here are some basic tests that investors can use to distinguish fake tokens from legal ones:
- Look for project websites and white papers: This is the best way to make sure the cryptocurrency you are investing in is legit. Each token issues a white paper explaining all the fundamentals and underlying technologies involved in designing the blockchain that the token supports. It can be found on the official blockchain developer website. Token name, generator address, contract source code, etc. are some of the important details which are published by most of the real tokens for the sake of transparency. If they are missing then you have to be careful.
- Track Creators: Knowing as much as you can about creators is important. There should be enough information about them on social platforms. This is worrying when the author is anonymous.
- Beware of Scammers: Investors are also known to trust the opinions of celebrities. Scammers often create fake videos with these celebrities and mislead investors with false information. In such cases, deepening often helps. Investors must follow the information back to its source to verify its authenticity.
- Be careful with promises of high short-term returns: Every investor should remember that every investment takes time to increase in value. In addition, there are volatile cryptocurrencies that exhibit extreme price fluctuations. Fraudsters use the property to their advantage and promise real returns in no time. Phishing emails and social media handles are often used by scammers to catch gullible novice investors.
- Follow URL: Most scams involve unsafe websites. If you don't see a "lock icon" in the address bar next to a website, then it's not safe to visit this website. Also make sure that the URL uses "https" instead of "http" as the latter is not secure. For example, URLs of illegal sites may use the letter "O" and the number "0" interchangeably because the differences are difficult to distinguish. Vigilance is the key to avoiding scams.