The Scam List - A guide to avoid scam - Part 6
Instagram and Paypal scam
This Scam cost us $10.
Not because we didn't realize it was a scam, but only because the situation had become so funny and absurd that we wanted to see how it would end.
Let's start from the beginning. Like many of you, I have an account on instagram where I rarely post content that makes me and my friends laugh. It is a very normal account that has very few followers and i know all ot them.
I get a message from a stranger who wants to buy pictures of my feet from me. For the incredible sum of $1,500. I am a boy but he thinks I am a girl and I can also understand the kink but the amount is too high. Curiosity was stronger than me and I let him write.
Our friend, let's call him by his nickname Randy, convinces me that he is a serious buyer and wants to pay immediately, despite me buying time by promising him photos and payment a few days later.
He starts insisting that he wants my paypal address, after a couple of hours I show him my address and Randy sends me a screenshot of Paypal where there is a money transfer of $1500. The strange thing is that underneathm there is a note where it says that I, the recipient, have to pay a $10 fee to receive the money.
The screen is clearly an edited screenshot of a real money transfer, not yet formalized, with the fee part added.
I start asking more about the fee only to see the scammer's reaction. Our friend Randy began storming me with messages, telling me that now that I had the money in the account I was no longer responding and that I was the scammer. The fee , according to him, was motivated by the fact that he had a business account and, because of this fact, Paypal worked this way. And this was not true.
Plus The push to me to pay the $10 was very strong.Β Here we have another element to pay attention to.
After a while I decide to send him this $10, obviously knowing I'm going to throw it away. I send the $10, as Randy tells me, with the "send to a friend" solution (so without the possibility of being able to get it back) and he asks me for a screenshot.
Randy disappears for half an hour, probably he moves the $10 into another account, and in the meantime he prepares another screenshot for me. In fact, after a short time I get another screenshot of the payment but now with another 25 dollar fee.
It becomes apparent that the vicious cycle becomes unstoppable, and that the payment fees will rise in value exponentially. That said, I declined payment and Randy in despair accused me of trying to make him lose his $1500. Another impossible thing, since if the money was in the Paypal loop, it would go back to the sending party.
That said, I ended it all by thanking Randy for the lesson and the fun.
To recap, as you can see, this scam is based on ignorance of how Paypal works, absurd excuses, and the haste and pressure created by the scammer on the victim. If you have used Paypal you know that any fees are charged to the payer, not the recipient. Just the initial situation alone was so absurd that it could only be a scam.
The next day we got the exact same scam again, from another user who always wanted to buy pictures of my feet (I still don't understand why). The pattern was the same, the only difference being that in this case the payment fee was justified by the fact that the paypal account was in cryptocurrency and not USD.
This is all fantastic
Death and Market
This article is purely an expression of my personal thoughts and a series of experiences that have been part of my life. These are thoughts put in order after seeing some online posts.
Boom.
Market crash.
Anxiety, panic, pain. Account zeroed out.
No prospects for the future. Our hopes are dead.
It's time to follow our hopes.
No. Absolutely NO.
There is no financial reason big enough for a small investor to end his or her life. The pain for this choice is much, much greater thanΒ anything else.
In my life I have met friends, with whom I shared many good times, who unfortunately years later, for healthy reasons, decided to end their lives.
I understand their point of view. They were facing a destructive time in their lives, the future was marked by a certain physical and mental decline that would reduce them to nothing.
Their choice was drastic, with a lot of depression and pain that they were unable to sustain.
However, I also saw that their pain pass to their families. Destroyed by sudden loss, by such great but unperceived distress. That hurt that afflicted my friends passed into the souls of their parents, who throughout the rest of their lives will wonder why and if they ever could have done anything different to change this horrible ending.
Whenever I see articles about some crash that leads to suicides I think of my friends' parents. And I reflexively think of the parents or families of those who have killed themselves for making financial mistakes. And I think of what they will go through in the future, the wave of grief and despair they will have to experience and endure.
There are no good reasons for a family man who has made financial mistakes to kill himself.
The most important thing is to try to be careful and vigilant and not put ourselves in conditions that corner us and that can be a source of despair and family destruction.
If we take one of the latest examples in the crypto world, namely the Terra crash, we see how part of the public staked everything on this assett, convinced that it would quickly lead them to instant wealth.
You know very well that this is not how it works, wealth is not a one moment thing, it is a long and difficult path. Putting all your eggs in one basket is self-destructive to your wallet.
I know the rush to be rich, I know the desire to possess, I know the thirst for money. These are all desires that only destroy who we are and lead us to make mistakes, sometimes huge ones that could sink us for good.
We have to control our psyche, control our desires and reason wisely.
There is always only one solution.
Risk control. Always at all times.
Emotion control.
Reality control.
Understanding that achieving wealth is a path and not a one-time event in our lives.
The Scam List - A guide to avoid scam - Part 5
- Links and emails
Our mailbox can be a source of trouble if we use it wrong and without thinking too much about it.
It's true that we receive a lot of emails but we must always be careful.
It often happens to be prey to waves of phishing mails.
Now you should always check what you receive.
If you get an email that you don't recognize with some strange link in it, throw it away.
I have personally received clone mails of the electricity bill, which invited me to pay small amounts on different bank accounts and with different methods from the previous bills.
I have also received clone mails from banks, not only the one where I have the account, but also others with which I have never had to do, inviting me to login directly from the mail or sending me to an external link to login.
And then steal my credentials to access my account.
Same exact scam procedure to steal my credentials, but with the excuse of a contest in which I could win a dream vacation and an iphone.
Always check what you are doing with these emails and never ever enter your credentials or click on the links inside.
In addition to sending you on clone sites can lead you to download malware that infect your PC and steal your sensitive data.
Protect yourself at all times.
- Guru
You often see them in youtube ads or on instagram.
They have the secret, the magic formula and they want to reveal it to you.
They read 200 books a week, live in huge villas with 50 bedrooms and have garages full of Ferraris, Lamborghinis and Bentleys.
They are the self-made millionaires who want your personal growth and who want to see you rich.
OK
All beautiful, but who the heck is this guy?
And if he has all this money why does he want to sell me a course or a book?
Now, let's get this straight, I have nothing against wealthy people who have large assets and who make their knowledge available to everyone, but these people in most cases are selling you half scams. It is hard to tell who is really good from the one who wants to scam you.
These kinds of scams appeal to those who want to make money quickly, effortlessly, at most by reading some booklet or with a magic formula.
The world of social media has made the presence of these kinds of investment gurus soar, who have all the answers and know it all.
In most cases they aim to sell a course, a book or an investment method, all seasoned with a social image of success wrapped in luxury and opulence.
The story is very similar, it starts from a childhood without prospects up to an adolescence where non-stop work and study reward up to have a stratospheric bank account, with companies around the world that bill as if there was no tomorrow and contacts with all the big celebrities in the world.
Now, we may or may not believe these gurus, maybe they are right, maybe they are really good and they will make you a lot of money.
But those of us who want to avoid risk have a few research methods.
The first thing to do is not to fall in love with what they sell us but to analyze what they propose.
Done that, if it all seems too good to be true, well we have already understood that it is a scam.
To go deeper we can start to scan google and the various social. If this guru is so good, he will have left traces around the network, with all his companies operating in the world.
Linkedin is already a showcase to start with. After that we start looking for reviews of his work on various forums or reddit.
If he has so much success and so many followers, surely you will find recent reviews of his work where you will be explained well what he does and what he teaches.
Remember that some reviews can be deleted, so do a thorough search.
Now based on the results you can decide whether to listen to these people or leave them where they are, having a laugh watching their videos with models and rented lamborghinis.
- Scammers on Telegram
Today we talk about telegram and people who contact us trying to scam us.
Typically when we are contacted by people totally unknown on telegram, 99 out of 100 we are in the presence of a scammer, who perhaps has even stolen the identity of someone famous in the environment to give a tone of reality.
Now somehow the scammer has to make sure that we send him our money.
What are the methods?
One method is to pose as a big trader or investor, with a big opportunity in his hands and he proposes it to you.
He proposes it to a perfect stranger on telegram. And already here we should block it.
But let's go on, obviously he gives you information to seem credible and to make you trust him, plus he will try to get information from you to use against you. This is a subtle psychological game played against you and your wallet.
First of all, if he sends you files or links, don't download anything.
You don't know if there is malware or anything else.
He will easily ask you for money and try to put urgency on you because this opportunity is getting away, you have to hurry and it is the purchase of your life.
In case you fall into the trap, say goodbye to your funds.
Nothing will be given to you in return, you have decided to send this money to an unknown address.
No one can ever come to your rescue.
A variant of this method is to be contacted by someone who was, like us, in a chat room of some crypto project that had a price collapse or cheated its investors. This guy who contacts us pretends to be one of the founders of the group and wants to help us recover our money spent on this project.
And here he starts to ask us for personal information and then ask us for money to recover our money.
Money that obviously will be gone because this is nothing but another scammer who wants to take advantage of our negative psychological condition of the moment.
We will do anything to get our money back, even trust the first person who offers to help us.
And we would lose more money.
A more elaborate version of the first scam method is the so-called boiler room, a term for an improper negotiating tactic done in secret, in some company's boiler room. Who would make serious and honest contracts in a boiler room.
However, the scam usually works like this.
You are contacted by someone from some big company with big investors behind them.
They have everything set up right, the website is nice and accurate, and maybe they even have a real office in some coworking space.
They present themselves in the right way and offer you a great deal, yet another opportunity of a lifetime.
You are not convinced and maybe after a while you talk in chat you go to meet them in person, and when you meet them they offer you a coffee, all nice and in this case you trust them, because they have done things right, they are serious because they are well dressed and speak well, they don't have tattoos and are freshly shaved, they have an address and a hot secretary.
And you fall for the scam by giving them money you'll never see again.
Because they, with a huge sense of urgency have promised you huge profits.
Profits that you will never see as your money.
Now there are some things in common in these stories:
lack of transparency on the part of those who contact you
an offer too good to be true
sales tactics that put pressure on you
an urgent request for money
Now, remember that you have no idea who is on the other end. Are you really sure they are looking out for your best interest?
The Scam List - A guide to avoid scam - Part 4
- Nigerian SCAM
You are quietly at your computer while working or chilling and an email arrives from an unknown address.
You open it and read the story of this Nigerian prince in trouble somewhere in Africa or Europe, who ran out of money and is asking you for financial help.
In return, he promises you in the email that he will send you 10 or 20 times the agreed sum once he gets home.
Isn't it a bit strange as a story?
We also have another variant, that of the Nigerian astronaut.
Abandoned in space by his agency, a super sad guy that just only wants to go home.
From Space.
Probably in the ISS.
Of course, because space agencies spend millions of dollars to send scientists into space to do research and then halfway decide to abandon them, no one knows where, inside some random shuttles.
Or inside the Space Station, which is known to be so large and spacious that it has room for random people.
Another variation we have seen is the story of the prisoner.
Our writer asks us for help because he is being held prisoner in some village in Afrika or Arabia, in the hands of terrorists or criminals.
Our new friend has managed to get his cell phone to work and he promises you that if you send him money to pay the ransom he will give you all his jewels.
In fact,is full of criminals and terrorists who leave you the cell phone with which to write emails around the world, especially to do crowfunding to pay ransoms of people you have never seen.
And they write to you, because they know that you are so much good hearted that you will help them.
Now it is clear that they are scams if you think about it for a moment.
The stories are quite ridiculous and imaginative that with careful analysis they also make you laugh.
Don't be fooled.
Trash the emails and have a laugh.
- Ramson mail
Ramson mails are emails arriving from unknown addresses in which you are asked for a ransom in bitcoin to prevent your photos or videos in intimate behavior from being spread on the web or sent to your email contacts or social friends.
In the email it is assumed that your PC is infected with a malware that has filmed and stolen your data.
You will find a bitcoin address and an ultimatum, indicating a figure to be sent within a certain amount of time.
The email looks like this:
πΈ ππππ , (your password), ππ π’πππ πππππ πππ.
πΈ ππππ π’πππ ππππππππ πππππππππ πππ πππ πππ‘π ππ ππππ’-ππππ πππππ, ππ πΈ π πππ ππππ ππππ π’ππ ππππ π’ππ ππππ πππ ππ πππππ πππ πππ ππππ ππ π’πππ ππππ.
π·π, π’ππ ππ πππ ππππ ππ ππππππππππ’. π±ππ πΈ ππππ πππππ’πππππ πππππππππ π’ππ. ππππ ππ πππππππ ππππ, πππππ ππππππππ ππππ πππ πππ πππππππ ππππππππ’ ππ π’πππ ππππππππ ππππ ππππ π·πΌπΊ πππ’π.
π°ππ ππππ ππππππππ, π’πππ ππππ ππππππππ πππππ, π ππππ ππππππ ππ ππ πππ ππππ ππππππ π ππ’ πΈ ππ π ππππππ ππππ ππππππππππ π-ππππ ππ π’ππ.
ππππ πππ ππππππππ ππππ π’ππ π πππ ππ πππ ππππ π ππ πππππ, ππ’ ππππ πππ πππππ ππ πππππ πππππππππ ππππππ π’πππ ππππππππ ππππππππ π ππππ πππππ ππ ππππππππ π πππππππππ πππππ ππππ ππ π’πππ ππππππππππππ πππ ππ’ ππππππππππ π’πππ πππ.
(π’ππ πππ π ππππππππππππππ’ πππππππ πππππ πππ πππππ)
πΈ ππππ πππ ππππππ πππππππππ. πΈπ π’ππ ππππ πΈ 'π ππππ’πππ ππππππ, ππππππ’ πππππ’ πππππ πππ πΈ π πππ ππ ππππ ππππππ πππ ππππππππππ πππππππππ ππππππππ’ ππ πΉ ππππππ π’ππ'ππ πππππππ π πππ.
πΈπ πππππ πππ ππ πππππ π’πππ ππππππ, ππ π ππππππ, ππππ, ππππππ πππ ππππππ (πΈ πππ'π ππππ ! πΌπ’ πππππ πππ π πππ ππππππππ’ ππππππ πππ πππππππ πππππππ).
πππππ π’ππ ππ πππππππ ππ ππππ ππππ πππ’πππ'π ππ’ππ πππππ πππππ ππ? πΈ πππππ ππππ ...
π·ππ ππππ, ππ ππππ πππ ππππ ππ ππ ππππ ππππ.
πΈ π πππ ππ ππππ π’ππ π π· ππππ, ππ ππππππππππ πππππ.
πΏπππππππ πππ³ πΈπΆπΆπΆ ππ πππππππ πππ ππππ ππ ππ πππ πππππ πππππππ:
1EGynC8hJMzXXXXXXX3NRD4AZK * V5Wsu28jdGB
[ππππ πππππππππ, ππππ’ πππ πππππ ππ, πππ ππππππ * ππππ ππ]
(πΈπ π’ππ ππ πππ ππππ πππ , ππππππ πππ ππ πππ’ πππππππ. π³π πππ π ππππ ππ’ πππππππππ ππππ)
πΈπ π’ππ ππππ ππππ 'ππππππππ' (π π π πππ ππππ ππ ππππ?). πππππ πππππ ππππ, πΈ π πππ ππ ππ ππ’ πππ πππππ πππππππ π’ππ πππππ. πΈ π πππ πππππ πππππ’πππππ πΈ'ππ πππ πππππ π’ππ. πππ πππ’ ππππ’ π πππ ππππ ππ ππππππ π’πππ ππππππ πππ’ ππ πππ’ ππππ π πππ π£πππ ππππ.
πππ ππππ πΈπΊ πππππ ππ πππππ ππ ππ ππ. ππππ ππππ ππππππ ππ ππππ π’ππ πππππ πππ ππππ π ππππ. πΈ ππππ πππ ππ πππππππ ππππ ππππ π πππ ππππ ππ ππ ππππ ππ π’ππ ππππ ππππ πππππ πππππππππ πππ'π πππππππ ππ πππ πππππ.
As you can see, they claim that they know your password, which makes many people panicking.
But let's stay calm.
What do we have to do?
Exclusively trash the email with a big laugh.
In most cases this is a classic phishing email sent to thousands of people, taking some stolen database containing your email and password.
No one has pierced your pc, no one has taken your data and no one has your email contacts.
You can even have a laugh by going to see on the bitcoin blockchain explorer how the address you were given is totally empty and without transactions.
To be on the safe side, do a check of your pc with a good antimalware and avoid certain "happy" sites to spend time.
And if you really have to, stick a piece of tape over your laptop's webcam.
Follow our cybersecurity guide to avoid this unpleasant kind of thing.
Check next Scam HERE!
The Scam List - A guide to avoid scam - Part 3
Pump and Dump Scheme
The same scam of Β pump and dump scheme is used in some telegram groups.
In fact, there are telegram groups that are dedicated only to the pump and dump of some low liquidity altcoins and on exchanges that are not of the highest order. In these groups, the pump organizer will indicate a coin with a surprise message about the group. At the same time, this coin on the indicated exchange will have a sudden rise in price, even in the order of 50 or 100 percent. This climb will be very short, we are talking about a time ranging from 2 to 5 minutes, and then the price will drop again due to lack of buyers. In fact, the system is fraudulent because the organizer of the group in the period preceding the message bought up coins at a very low price. When he posts the message on the group, he puts purchase prices for a few coins at very high prices, making other users of the group follow him in their purchases as well. Immediately after, the same organizer of the group begins to sell the coins bought at low prices. The pump runs out when the organizer has run out of coins to sell and the price immediately collapses due to lack of buyers. Most of those who have been a little slower than the other users of the group, but who have bought at an exaggerated price, remain screwed by the climb and with the coins in their wallet.
Trading Bot scam.
A trading bot scam is simply a website that sells a trading system or bot, which most likely does not exist, at a not particularly high price. This revolutionary and innovative software is sold on these sites, which through an incredible and unsurpassed artificial intelligence, allows the user to trade on various assets and to have unthinkable earnings. All while spending ridiculous amounts like 200 or 300 euros. These trading bots are promoted with fake sites and portals, where there are fake testimonials, with fake investors and even with fake testimonials taken from the world of VIPs. It's all fake, only the money you will loose is real.
These sites are complete scams, because given the small amount requested per user, upon reaching a figure such as 500 thousand 1 million euros, the site will be closed and the money will disappear on accounts abroad or in offshore banks. The small amount at stake means that none of the scammers spend money and time on complaints and lawyers given the costs of justice.
These trading bots cannot exist, both because the figures requested from users are too low, and because each financial asset has its own peculiarities and therefore a single bot would never be calibrated to work at its best. In this case the ideal victim is the one who knows nothing about finance and trading, wants to earn quickly without effort and without studying. A minimum knowledge of the environment would be enough to understand that these systems are only used to enrich those who create and advertise them.
Any information on those sites is created for the sole purpose of enticing people and making them fall into a trap, sometimes prompting them to spend more money to make these non-existent programs work even better.
Fake Ledgers
Another scam that has been happening lately concerns hardware wallets bought on second-hand markets such as ebay or passed off as new on sites of unidentified origin. The user buys the wallet on the site and if he sees it delivered to his home. Inside the box, he already finds a seed phrase, with clear instructions that this phrase is the one to use with this wallet. A user with a minimum of experience and who read our blog knows that this is a security flaw. In this case, the experienced user would format the wallet and create another new one of which only he has a password and seed.
The inexperienced user, on the other hand, uses the wallet directly with the phrase indicated by the seller. In this case, the scam seller is aware of the sentence and monitors the wallet. When the wallet is filled with some bitcoins or other coins, the seller empties it by stealing the funds from the inexperienced user.
Be careful when buying hardware wallets, if possible only buy them new and always from official sites. In the case of a used one, always create a new phrase and a new wallet.
Learn more about scam in Part 4 here.
The Scam List - A guide to avoid scam - Part 2
The ransom email
You open your mailbox and you find a strange email, from an unknown sender, calling you by name and threatening to make public videos or photos stolen from your webcam, of you in particular and spicy acts or situations. Some emails even have weird allusions to your most hidden perversions or your weird sexual tastes. Don't panic. It's just a scam.
In the email, the sender threatens to put this hot material online and send it to all your contacts, letting you know that he has infected your PC and that he has stolen your email address book data. In 48 hours you will have to pay a sum in bitcoin or other cryptocurrencies, to an address in the email.
Behind these emails there are scammers. in almost all cases your pc has not been infected nor has it been hacked. They simply send emails using databases stolen from the big providers and try to fish in the pile, given the very high amount of visits on the various porn sites in the world.
You may find attachments in these emails, obviously do not download or install anything but simply trash them.
Ponzi scheme
The Ponzi scheme derives its name from its founder, Carlo Ponzi, an Italian immigrant to the United States who, between the 20s and 30s of the twentieth century, invented this type of fraud, probably the biggest contribution made by Italy to the world of fraud. Ponzi is in the hall of fame of world scammers.
The Ponzi scheme is based on the promise of earnings in an investment that has well above average earnings in a very tight time frame. In effect, this investment is returned with the negotiated sum of earnings, making the public believe that the investment system really works. Word spreads and by word of mouth other "investors" are pushed to invest. To push even more to raise money, those who bring other people receive bonuses, cash prizes and higher earning percentages. Money continues to be distributed in cascades to the first who entered the investment, fomenting the perception of the functioning of the investment system.
The scheme is interrupted only when the first in the chain runs away with the bag, or if the refund requests exceed the new payments entrance.
This system is based solely on greed and the desire to make easy money quickly. The financial ignorance of the people, combined with the thirst for money, makes this scam working.
in fact, the product to sell is perfect but it does not exist and the only real push is to become a promoter to bring in as many people as possible to increase their personal earnings with bonuses for adding new followers
We must try not to be greedy and to understand that quick and easy money does not exist. If they offer you a similar system, where the product is empty and you have to bring in acquaintances, you now know that it is a Ponzi scheme. Always do analysis on the company and the products offered
Guaranteed annuities are a different type of scam scheme, which are based on guaranteed returns with an impossible percentage in a very short time
For example, we have had experience with platforms that promised 10 percent revenue per day by simply downloading a small program or sending ethereums to some address.
The most blatant promised to double their capital in a month
These are absolutely fraudulent figures that have no way of existing.
The False ICOs pump and dump group
The scams also can happen during an ICO with the creation of a scam coins
Let's recap what an ICO is.
ICO or Initial Coin Offering, is the initial offer of new tokens generally on the Ethereum platform. When a certain sum of Ethereum is sent to a defined address, the smart contract inherent in that address will send us the number of tokens defined for each ethereum sent to the sending address.
So participating in an ICO for an average user is very simple. It is just a matter of sending ethereum and seeing the corresponding tokens appear on the wallet.
The sending address of the ethereums is made clear on the official website of the crypto project, with all the information to read up on, the road map and the white paper.
As you can imagine, however, there are many weaknesses in this structure. Here are some examples that actually happened in the real world.
First of all, it happened that a hacker changed the ethereum address marked on the official website of the company that made the ICO. So the funds sent did not end up in the start-up wallet, but in the hacker's wallet. These ethereums have been lost forever, because as you remember, there is no way to cancel transactions on the blockchain.
Another scam method applied was to create a clone site, identical in all aspect to the official site but with a different web address. The site had the only difference in the ethereum sending address, this referred to a wallet owned by the scammers. Also in this case, the ethereum sent were lost. An example above all, the fake scam sites that pretended to be the Telegram ICO.
Third method, the similar name. It happened that a Blockchain project was copied into the idea and a website was created with similar graphics but with a slightly different but very similar name. In this case, the careless investor would have confused the two projects and therefore would have sent the ethereums to the pirate site.
Another scam method using ICOs was the creation of ICOs for the sole purpose of putting scam tokens on the market that were used exclusively to create the pump and dump phenomenon on exchanges.
The situation is the following. The scam start-up presents you with a fantastic project that solves a small technological problem and promises a short-term development in other markets. The project appears solid and with interesting long term vision. This makes the ICO and the Ethereum collection a success. However, the team-owned tokens are not locked, so the team is free to sell on the market. Generally hype is created about the project and pushes for a sharp rise in the price on exchanges. This is the pump phase. As the price rises, the team without being noticed sells their tokens until they run out. At this point the dump phase takes place, where the project is abandoned and the price on the market collapses, the tokens without real use and value remain in the hands of the scammed investors and the creators of the start-up run away with the funds.
Learn more about scam in Part 3 here.
Being exposed in crypto consciously and knowing the dangers.
Why investing in cryptocurrencies? Why starting to study a whole new environment with a huge initial difficulty? Why endanger that part of our assets that we have decided to allocate in cryptocurrencies?
Because yes.
We start from the idea that the world of investments as a whole is huge, and that Blockchain is currently the most recent technology and with the greatest growth push on the planet. Investing in blockchain projects is within everyone's reach, so even less capable investors with little experience or just beginners can invest. Investors of this type are the ones who will make the biggest mistakes so they need to understand the various projects and decide if they are worth our money.
If you remember the dotcom bubble, you could have invested in amazon or google or other realities of the early internet era ... But we only remember those who survived and we forgot all those realities that had stratospheric growths in a few weeks, and then see your stock value crash to the downside and disappear from the market. But only from the market, not from the sad and shocked minds of their investors ...
Let's forget for a moment Bitcoin and Ethereum which are now the two champions of the crypto world, the universe of Blockchain projects is huge and varied.
It should be immediately understood that there are many projects that are or have turned out to be exclusively scams or clones of other more noble and serious projects, which with scammy name and various tricks have simply tried to drain funds from inattentive and inexperienced investors.
Currently over 90 percent of blockchain projects launched and funded have failed, most without writing a single line of code. Aware of this, and also aware of the fact that the Blockchain is the future and it is time to be inside it, as investors we must ask ourselves some simple and basic questions to understand where to put our funds.
Let's start with the first doubt to be eliminated, if the project we are evaluating creates a product or service that solves a real problem and if this is in line with Blockchain technology. Not all projects showed off as crypto friendly are suitable for the Blockchain. In case it is really suitable, and perhaps thanks to the blockchain it solves an unsolvable problem, well we have taken a big step forward. Those who do not respect this rule can be eliminated in a long-term investment perspective.
After that we will have to understand if the evaluated product really exists or is still under development or worse, it is only on paper and not even explained in a perfectly understandable way. In fact, a product under development takes months if not years to be launched on the market, extending the time for the return of the investment and therefore enormously increasing the risks for the investor.
After the product, the team should be checked. It is clear that the team must reflect experience in the sector to which the project belongs and the individual members must be experienced and competent, with a good curriculum. The team will then have to try to create partnerships with various companies already on the market. Experience, partnership and reputation are excellent indicators.
Another aspect to check is the type of token created to finance the project and offered to the public. There are utility tokens that offer a service linked to the project and whose value changes according to company and market trends. Otherwise, security tokens can be offered, which are backed by real company assets. These tokens are regulated and, in addition to offering an extra guarantee on the project, they carry rights on assets owned by the company.
Another point to check for the investor is the control of who issues the token, whether through an exchange or directly by the company in charge of the project. In the case of little-known exchanges with an unclear past, here is an alarm bell.
And this point makes us shift our attention to the dangers of investing in cryptocurrencies. Danger seen as the possibility of losing all our accumulated value.
First of all we need to define and differentiate the types of risks we run by investing in crypto.
We have two main type of risk, which are technical risk and financial risk.
When we talk about technical risk, we mean any problems we may have with wallets, exchanges and other technological issues.
The wallet is your property and it is your responsibility to manage it in the best possible way. One of the things that you cannot predict, however, is a possible bug that cause to hack the wallet Β and make you lose your funds. For this reason, the best choice to always make is to look for and use only the most successful wallets created by companies that invest a lot in security for their products. This choice is yours and it is your responsibility.
The same goes for the choice of the exchange on which to operate. An exchange can be attacked and its wallets can be hit and looted. But a large exchange has the funds and a strong need to protect itself, so it will always be state of the art in protecting its business and consequently its users. On the other hand, small exchanges do not always have these capabilities and are much more risky. The risk you take, however, can be rewarded since small exchanges often have coins that are not present on the larger ones and the movements can be more violent and faster, making you gain or lose more.
Leaving your coins on an exchange is a big risk. Remember that the coin that is on your wallet on the exchange is in the wallet of an exchange and not on your proprietary wallet. If something should happen to the exchange, you are almost certain that you have lost your parked coins waiting to be traded. In my experience it is better to spend something on movements from and outside your wallet. You run the same risk when you borrow your coins on an exchange that gives you this option. In this case, however, the risk is greater since your coins will be blocked for the entire time of the loan, not allowing you to quickly exit the exchange for whatever reason you want. It should also be considered that exchanges do not always allow immediate exits since the general timing is between 12 and 24 hours.
Scams are a full-blown reality of this world, we have made an article with the list of the most famous so we can teach you how to defend yourself. Learn more about Scam here.
Another problem you may find is the technological protection of the coins. Coins like Bitcoin and ethereum are difficult to attack, the development teams are very large and made up of capable programmers with very large budgets. On the contrary, coins just put on the market and therefore small and with few developers could have bugs that undermine their intrinsic safety. Choosing the coin to invest in is your responsibility, you take a risk in any case but it is a risk that you can manage.
Therefore the risk is reduced by using high quality wallets, exchanges of proven trust and coins among the most liquid. If you use the right things in the right way you have lowered the problematic risk.
Now let's face the financial risk.
The major problem encountered in the crypto market is the extreme volatility of prices, given by a combination of low market liquidity, thin books and a strong presence of whales that can move the market. However, this volatility is the key to making money. If we position ourselves in the right trend, our coin will obviously have a growth that is impossible on conventional markets.
But be careful, there are no guarantees regarding the growth of the price of a coin. It is not acceptable to buy something at random and abandon it, and then hope that in the following months or years it will increase in price.
The same goes for the underlying of each coin. The underlying of each coin is the development and use technology that it has in the real economy. If this technology is useless, wrong or totally non-existent, it is obvious that the value could collapse and reach zero.
There are Ponzi schemes like OneCoin which have no underlying and which are based only on the trust placed in them. When confidence collapses, OneCoin is like a fake baseball card. I only mentioned OneCoin for the trust issue, OneCoin is not a cryptocurrency.
Bitcoin has value because people believe in this technology and believe in the monetary design philosophy that underlies it. Bitcoin is also valuable because it is used according to its philosophy. The use of a coin, like the trust that the public has in it, creates value on the market.
There are some basic things that you must always remember.
By investing in anything, you are taking a risk. Risk that you can lower but never eliminate. Balance the risk on your profile, never overshoot it. Every mistake is always paid with your money.
In the long run there are no certainties about the value, while someone more famous and better than me said that in the long run we are all dead.
The risk of losing and zeroing your trading account is as real in crypto currencies as on any financial instrument. On crypto and derivatives, obviously all this can happen very quickly.
Anyone who promises you fast, safe and risk-free earnings is lying and wants to scam you. Say goodbye to this fool.
Security and personal hardware
With the use of digital assets in the blockchain sector, it is good to start with an analysis of your computer and smartphone, and their safety. It is good practice to always have the operating system updated to the latest security patches, and consequently all the programs installed on the PC. The use of the latest generation paid antivirus is essential. Let's destroy a myth, there is no best antivirus but good antivirus (do your research and buy a license). We reiterate the importance of having a good antivirus as many malware are designed to steal data relating to cryptocurrencies (your assets).
It is also not recommended to connect to public wifi connections, it is better to use your own data connections, and to implement the use of vpn (virtual private network) to secure your connections. There are many very affordable subscription plans.
It is essential to have a back up of your private keys and passwords off line, not on the computer in use, as if you were to fall victim to the notorious cryptolocker, we will lose all data (all the contents of the pc will be encrypted), and to obtain the key we will be forced to pay cybercriminals in bitcoin. So, watch out for email scams. Never open an attachment if you are unsure of the sender.
When using a smartphones we highly recommend an antivirus / antimalware updated to the latest definitions. The VPN contract certainly provides for use on multiple devices, so we are going to take advantage of the usual subscription also on smartphones.
If you also use your smartphone for work, for leisure (social, chat of various kinds, entertainment for adults), you will create a promiscuity with the operations in the field of cryptocurrencies, so it could be optimal to use a dedicated smartphone . For those who are obsessed with security, we can also indicate a specific smartphone, the htc Exodus created to ensure maximum security in the context of the blockchain.
Small but fundamental mention of the use of 2FA (two factor authenticator) for access to the various exchanges, in order to make operability with your own cryptocurrencies even more secure.
Learn more about safety here.