Cyptocurrency investing is increasingly getting more difficult each passing day, as scammers create new tactics to quickly raise funds, and exit with millions of dollars worth of cryptocurrency. But how do you avoid picking bad crypto projects? It’s estimated that 90% of all cryptocurrency projects are pure scams. Before attempting to invest all your hard earned money into a project, you should extremely consider these crucial factors.
Research with Authority Websites
There are fake websites that only promote pure crypto scams. They are involved in corrupt partnership schemes in order to take advantage of as many users as possible. Most of the free bitcoin earning sites, faucets, pay per click earning sites, etc. that advertise 200% or similar unbelievable ROI — they are pure scams. These are mostly owned by corrupt webmasters that enjoy harvesting crypto and have bad morals.
Luckily there are highly credible websites you should always go to, when planning on investing in cryptocurrencies. These sites provide enough information about an asset, before you invest on it… such as:
Dapp Stats
Dapp Stats is an excellent site that provides high quality rated dapp projects to millions of potential investors. A good research can help avoid scams and create a strong thriving community. They also offer a blog and social media channel, that will keep you updated on any profit/losses, token distribution, token price, latest Dapp projects, latest partnerships, announcements and other technical data, which will keep the community updated and alive. Dapp Stats aim is to build a community which doesn’t separate webmasters, Dapp owners and members, but encourages the adoption of cryptocurrency by interacting with a transparent community.
Top ICO List is a powerful website that lists hundreds of ICOs each month, and provides a base rating according to other credible sites, as well as their own due-diligence. The projects on Top ICO List, are scanned and updated regularly, to help crypto token buyers make better decisions. They usually add the best crypto project ideas to the “Top picks” section which gives investors more trust.
CryptoCompare
CryptoCompare does an excellent job of filtering hundreds of projects according to jurisdiction, legal form and token type. They even rate crypto projects in a top list form, and is trusted by huge exchanges such as Binance and Coinbase. The huge advantage here is how this site offers a wide range of information including ICOs, Top lists, mining, exchanges, portfolio, exchanges and news… which is a must have for investors.
ICO Bench
ICO Bench only features projects that have been verified by experts and strive to only provide legitimate projects. The strong point of this website is that it features many categories of projects including: Platform, cryptocurrency, business services, investment, smart contract, software, infrastructure, entertainment, banking, artificial intelligence, communication, big data, media, retail, health, real estate, education and many more!
Genuine Purpose of Project
What is the purpose of the project anyway? Many of us forget that cryptocurrency is aimed at mainly improving the areas where centralization fails, but there are unnecessary cryptocurrency projects that don’t compliment our every day lives, and simply exist just to hoard money, such as:
- Prayer token – some guy prays for you
- Imigize – online 3d shoe fitting service
- Trash cash – exchange that lets you trade loose crypto change
- Milk coin – milk production complex
- Dapameme – reward for posing memes
- Memessenger – message with only memes no words
- Rexpay – borrow, share neighbors items
When choosing a cryptocurrency project, it should be viewed from a point where you believe that the world really needs this technological advancement, and will help the adoption of cryptocurrency. Crypto is here to improve our lives, not to complicate it!
What are some good sectors?
- Crypto ATMs / E-commerce – help bank the unbanked
- Privacy – censorship of private information
- Ecosystem- trading, marketplace, social media – safe moderated crypto environment
- Asset to crypto liquidation
Should have a Credible Team
After successfully picking a list of cryptocurrency projects that aim to truly improve our lives, the team behind the project must not to be missed. The potential to really deliver lies with the team, and what type of work they have done in the past! As a general rule, you should stay away from those freshly new teams that are filled with young enthusiasts and have zero experience in the cryptocurrency space.
Checklist:
- What other prior projects has each individual worked with?
- What is their field expertise?
- What is their level of education ie. Masters, PHD…?
- How many years of experience do they have in that field?
By carefully going through each and every checklist above, and I can assure you that the team has what it takes to fulfill their goals as per the road map indicated in the project.
Market Capitalization
Most crypto projects that fail are usually due to small capitalization limits set by the team itself. You should be able to identify if the capitalization meets the huge goals that they have claimed to reach. Not only does this tell you about the commitment, but gives you an idea how far the project will develop. Westland Storage scam managed to fool users, by promising a lucrative deal with a private real estate island, where users could buy square feet of private land and keep earning 1% interest forever. After successfully raising $2 million dollars, the website completely vanished.
They key take away from here, is that when a company promises too much advancements with only a few million dollars on their ICO, there is 99% chance that project will fail and it is a scam. Good market caps are usually around 30-50 million dollars, with the soft cap being 10 million dollars. But always make sure that the market capitalization and the goals are congruent.
Tip: Stay away from low cap ICOs e.g $M1-$4M! Ideal is $10M+ hard caps for solid gains
Read The Whitepaper
For those who don’t know, a whitepaper is a document outlining all the technical aspects of the business. It basically explains head to toe about the whole purpose of the business, technology and implementation methods that will be used to achieve goals and advancements. A cryptocurrency whitepaper is supposed to be one of the most technical papers you will read in your life, and it is crucial you take at least 20 minutes to go through it, to see that the company knows what they are talking about.
Be careful of whitepapers that barely explain the technology behind their project – this is a huge red flag that will cost you in the future. If the whitepaper is a simple one pager – that is filled with graphics and short explanations and plans on raising $5 million dollars, STAY AWAY! It is better to invest in a project that is way too technical for your comprehension, than a simple diagram with coins and advantages on them.
Conclusion
After carefully following all of these steps, you will be closer to achieving a good value on your Return on Investment. It is important to do your part, and find as much quality projects by using only trusted authority sources, and to go through above checklist every time you want to find a worthy project. Stay away from these so called 5% interest a day, or double your money in a few hours scams, which will just hurt your portfolio.
What things do you consider while investing in crypto? If you have any stories – success or pitfalls, please share them in comments below.
DISCLAIMER: The views and opinions expressed in these article are those of the author and do not necessarily reflect the official position of ‘Bits n Coins’ or ‘Coversine LLC,’ who shall not be held liable for any inaccuracies presented, and/or legal repercussions.
Tadala kuntambila is a cryptocurrency expert who reviews crypto projects, and contributes to the cryptocurrency space, by working hand in hand with legitimate, highly credible project owners. He is also a technology expert who loves travelling, cars, trading and graphic designing.
