There are a lot of cryptocurrency scams out there, and it’s important to know how to tell if a coin is legit. If you’re looking for an investment opportunity, check out our list of legit coins.
Are they selling tokens?
The first thing to look for is whether or not the token is being sold. Tokens are a type of cryptocurrency, so if someone is selling you one, it’s probably not real. A token can be used to access some feature or service offered by the organization that created it (like an app), but most tokens are just meant as investments—you’ll get more value from holding onto your tokens than from spending them on something else.
A coin (also called crypto) has more value than its underlying token, because there is much less supply available at any given time than there would be if all coins were sold at once in one big sale like Bitcoin Cash did with its hard fork earlier this year. For example: If you had 20 bitcoins at $20 each and then bought 10 new ones over time with those bitcoins’ value increasing over time due to demand for them; then after 3 years later when those same people wanted another 10 coins ($50 per coin), they would only have 15 bitcoins left instead of 20 because they had spent all their money on buying back their original holdings! So while both types of coins exist on separate blockchains (and thus technically different categories), we tend not call them “coins” anymore since most people don’t understand what makes these differences between them significant enough for us make such distinctions between them–but let’s keep our terminology consistent here anyway! Please note: This does NOT mean that any non-cryptocurrencies like stocks aren’t also “coins” either…they just happen
What’s in it for the developers?
It’s important to know what the developers are getting out of it. Are they working for free? If they aren’t, then chances are that it’s not legit.
The developers will want to make money in two ways: by selling their own cryptocurrency and/or mining it themselves. Both of these methods can be profitable if done correctly and on a large scale (in other words, if you’re going to put up $10 million or more). The problem with these kinds of scams is that there is no guarantee that any given coin will ever take off—and even if it does, there’s no guarantee your investment will pay off!
Do they have a roadmap?
You can tell a scam if the roadmap is unclear and/or missing. The roadmap should be clear and detailed, it should be available to the public and updated regularly (at least weekly or bi-weekly). It should also include milestones that are to be achieved by the end of each quarter or year. If there’s no plan for where you’re going at all, then it’s probably not worth your time—the company will just take your money and run with it without any real intention of following through on their promises.
How active are their developers?
How active are their developers? If a cryptocurrency project is new, it’s unlikely that they have many or any developers. The best way to tell if this is true is by checking the team’s LinkedIn page and seeing how many people work for them. If you can’t find an active team there, then your best bet would be to look at their website and see if anything appears to indicate that development has been underway recently (such as a blog post). If you still can’t find any information about who works on projects like these, then it’s time for another search!
Is there a beta version or proof of concept?
If there is a beta version or proof of concept, then you can test it and see if the cryptocurrency works as promised. If there isn’t one, then it’s possible that the team behind this coin has been lying to you since day one.
In addition to trying out their products in person (or remotely), we recommend checking out Reddit threads where people share their experiences with various cryptocurrencies and ICOs. There will be some good reviews posted there as well!
What is the coin or token’s function?
The first thing to do when you’re considering investing in a cryptocurrency is to ask yourself: what problem is this coin trying to solve? The next question is, “How does it help people?”
By looking at these two questions, you can determine if a token is worth investing in and if so, how much risk are you willing to take. For example, let’s say that there’s an app called “Tinder for cats” that allows users in their neighborhood from all walks of life (and even those with no interest in cats) who want to meet new people through shared interests like food or sports teams. By creating this app for our furry friends only and not humans (who might not want anything more than dinner), we’ve created something useful for both parties—a win-win situation!
A lot of questions to ask before you invest in a new coin
When you’re investing in a new coin, it’s important to do your own research cryptorobo. This can help you avoid scams and make sure that the investment is going where it should be going. There are several questions that need answering before investing in any cryptocurrency:
- What is this coin used for?
- How does it work?
- Who created it and why?
- What’s the purpose of its blockchain (the technology behind cryptocurrencies) and how does that work?
So next time you want to invest in a new coin, consider these questions. If you can answer all of them with yes then it’s probably not a scam. It’s always good to research more about the coin and its development team before making any investment decision though!