How To Avoid Cryptocurrency Scams

Every day on Twitter, you find some new project in search of funding and the people to increase their clout. They want people to believe in them from day one. Many projects start as a genuine investment and effort, but later, those projects wind up.

In this process, many people lose their hard-earned money as they trust those tokens, NFTs, and games. So if you are one of those who got scammed in the past, this article is for you.

Let us take a look at how you can avoid cryptocurrency scams.

Use Case of Token, Metaverse, NFTs

Anyone can create a token if they know how to program with Solidity. You can create a token or a Defi app and learn to create other things around it. However, what about its use case for society?

Because if no use case and value is generated, then you are wasting your money on shiny new stuff—something you should not do because that is just waiting to see money burned in the process.

Real Humans behind Project

This is one thing that a lot of us ignore. We have started to blindly trust decentralization. We think if Satoshi was a good guy, so does the rest of the world. However, that is not the case with most projects.

Many projects do not have the address of the company. They do not have the people's faces, their identities. All they do is make significant promises and expect you to trust them. There is one project called mannabase, which is a scam like this. They change new teams each year and give promise universal basic income.

Pump and dump Scam

Some project tells you it is going to the moon, and you invest in it. And then that project turns scam. This is where you understand how they artificially raised the token's value, and once people started investing in it, the founders exited.

This type of scam structure is known as the pump and dump. Moreover, this type can be avoided if we learn to handle the patterns that lead to the pump and dump scam.

Locking Your Funds in Unknown Delegation

Have you seen companies like Celsius and Nexo that lock your crypto for a specific time? And then they give you a return for your investment? Yes, those types of companies often run away with your money too.

Celsius is already in the process of bankruptcy. You will also find on Google the company called CRED, which was similar to NEXO and Celsius but eventually wound up dead. So you get the idea of locking your crypto in exchange for interest.

Think before you lock your crypto funds. Double-check where you are adding your funds. Make sure not to fall for the scam of such rogue companies.

Rogue Links on Instagram, Whatsapp

Telegram and WhatsApp are infested with rogue link bots to lure you into Defi and investment apps. Moreover, you are blocked once you add the money into those accounts.

This has happened to many and will continue to happen to new people in the cryptocurrency world. Make sure to report such accounts and bots and avoid trusting those links. That is one way to handle being scammed by such types of people.

Your Keys, Password, OTP & Why they Matter

Many crypto DeFis are storing the keys and the data related to the authentication. Later many funds are stolen from people who invested them with them. This is one of the reasons why many people use the throwaway address when it comes to investing in Defi.

Password, OTP, and the other authentication methods are often controlled, and data is stolen so that later people get their accounts compromised if you trust any random unknown authority with your private keys, password, and the OTPs.

In the End...

You have to understand one fact if something is too good to be true, then it is. You will find many scams and issues with cryptocurrency projects, and you have to learn to understand the timing of your exit.

Make sure not to fall for the most obvious and know when to quit most projects.

Posted Using LeoFinance ^Beta