The technology that supports crypto-currencies can be quite complex for many people. The technical nature of crypto currencies and the jargon technology used can easily interfere with everyone’s minds, including those who are prone to technology. This created an appropriate environment for creating coins and plans to be used as fraudulent instruments in combination with the absence of any legal regulation.
The crypto money market attracts people because of the possibility of gaining huge profits. For this reason, the market became a speculative home where many people invest their money in hopes of earning a quick profit. It was difficult to separate good coins from rotten coins. Hence, the controls are less efficient than traditional financial markets, and the crypto world is a fertile breeding ground for fraudsters. The most important thing to consider before entering this revolutionary but still crawling sector is to figure out what to deposit and what to do.
In order to identify a coin as a fraudulent tool, the following must be observed:
1- Unrealistic claims
Systems that call for investing in the crypto world by promising daily or monthly return rates are quite common. To be honest, the attraction of being rich in a night can attract everyone and this can create a driving motivation to participate in such programs. In practice, however, it is impossible to generate steady profits. A fixed return offer requires a steady source of revenue, and the only way to keep high, guaranteed profit rates unless you sell a product or service is a pomzi plan.
There are generally three fake schemes in the crypto money community that encourage people with unrealistic claims.
These are as follows:
A) Cloud mining services
Mining is a process in which advanced equipment is used to solve complex mathematical equations in order to ensure the safety of transactions in the crypto money network, and miners are rewarded with crypto money for their efforts. Fraudulent cloud mining sites offer the opportunity to gain mining prizes with only a small amount of capital, without having to enter a Bitcoin mining operation and purchase your own mining equipment. This is a ponzi program that you can pay for as long as there is new user registration on the system constantly, and if you create a stream, everything will crash, you will lose all your money.
Bitcoin investment packages are high-return investment programs with small payments. You start by buying a subscription package that entitles you to receive a fixed payment every day or week and is usually very profitable in the beginning. However, the life cycle is limited due to the ponzi structure they use and a small number of new users are closed when they start to record. Often Bitcoin investment packages appear confusing using confusing words.
C) Network marketing
A common feature of network marketing (MLM) is the uncertainty of actual offers or services, often based on reference plans. Some typical referenced link structures include people who promote the investment scheme for a particular crypto money, and the only way to get involved is to click on the link. MLM detection is very easy because the main source of income is achieved through affiliate marketing rather than dealing with real crypto currencies.
As an example, Onecoin, Centurion Coin enters this category.
To summarize, the common features to note are:
– Guaranteed high profit / interest rates -Refferral / affiliate plans Indefinite details of how it really works – Little information about the starting team or company -Difficult to draw money
The best thing to do when you hear a motivated call to ‘earn a steady income every day’ is to turn around and run.
2- Absence of code base
Given that the majority of crypto currencies are open-source, closed-source or non-code-based projects seem less reliable. All cryptographic resources that are closed source are not fraudulent, but all cryptographic frauds marked as fraud do not open or have no code bases. The fact that they are closed sources may have no reason to be code-based.
The open source code allows the code base to be freely used by anyone, redistributable and modifiable. Open source code allows anyone to look at and obey codes according to their nature.
3) Absence of key information A) Absence of White Paper
A White Paper contains in depth all the information you need to know about a particular crypto money. The technical documents form the main rock of any crypto money, and the absence indicates fraud.
B) Ghost team members
Lack of information about founders and the development team indicates that the project may be a fraud tool. The reliability of any project depends largely on the experience, competence and expertise of its founders and developers.
Centralized cryptographic currencies have a completely transparent public notebook and unique features such as an open source code that anyone can view. Deceptions and pomade plans do not have these common characteristics, they are usually centralized and opaque. The best way to avoid falling into the network of these fraudsters is to identify the common properties listed above. More importantly, to gain knowledge and background about how the crypto currencies work and the basic technology that powers them. The right information will surely protect you from these frauds.