How to Smell a Scam

by | Oct 27, 2020 | Industry | 0 comments

A scam is a fraudulent activity executed by a dishonest person, group, or company to swindle money or other valuable assets from unsuspecting persons. Scams are done in different ways; but, all of them are meant for selfish gains.

Blockchain technology has birthed a myriad of possibilities that are impacting every sector. This technology aims to incentivize consensus and restore trust to enhance the efficiency of all areas of our economy. The scope of application in the use of blockchain is irrefutably unprecedented.

Various projects are leveraging blockchain to create novel solutions to deeply rooted problems, like, in the case of Tokenizer- democratizing and reinventing the world of banking and finance. Nevertheless, as it is widely acknowledged, some dishonest charlatans are also trying to exploit this revolutionary invention by tricking investors.

A study by the ICO advisory firm Statis Group concluded that almost 80% of ICOs launched in 2017 were scams. Recently, StellarSHADE- a project that briefly operated with much success on the StellarX market- hit the headlines. StellarSHADE claimed to be “an anonymous blockchain build side-by-side with the technology and speed of stellar.” In reality, it is a pure lie.

The characters behind the project created a wallet and minted 800 million SHADE tokens. They then came up with a scheme applying scarcity of tokens and enticement giveaways to trick investors into sending them XLM in exchange for “hot air.”

Such fake blockchain projects not only erode the reputation of the industry as a whole but also negatively impact other genuine projects that are legally and genuinely operating. So, how do investors and other blockchain enthusiasts like you smell a scam a mile away? Here are a few points to help you!

Social Media Presence

Much can be deducted from a project’s social media presence. Mainly, you need to assess whether a project is only interested in creating investment or excitement about their offering versus the solution it is offering.

These are some of the questions you should ask yourself: Does the project has an active social media presence, like, on Facebook, Twitter, Medium, Telegram, and LinkedIn? Is it creating its personalized content? What do blockchain news and blogs say about the project?

Let us consider the Tokenizer project. The truth is that there is no tokenization project that is socially alive like the Tokenizer. More often than not, we create educative and engaging content, centred on tokenization. By the way, don’t forget to subscribe to our newsletter as we keep you abreast of the latest news and updates from the blockchain and cryptocurrency world, and what reputable blockchain sites, like CoinTelegraph, BusinessBlockchain HQ, and others are talking about us.

A project with an active social media presence and other blockchain forums point to greater credibility.

Team

In the blockchain world, having a team of professionals matters a lot. The team and advisors are a company’s greatest assets; not only in steering the project vision but also drawing attention from the community. A project with a hidden team behind it should be a no-go zone for you. Likewise, if employees of a project are not associating themselves with their plan, for instance, indicating that they work there in their LinkedIn profiles and regularly sharing their company’s progress, that already raises some red flags.

Are you interested to know the Tokenizer team members from our CEO to our developers? We have publicly published all our employees on our official website. You can also personally follow us on social media platforms, especially LinkedIn, to learn more about this unstoppable team.

Community Engagement

Count as a red flag a project that fails to engage its community. Even before a public token sale, projects are on their toes to excite their potential investors. The community’s regular engagement must be valued. The StellarSHADE project was not brought down by regulators but a Reddit community member who warned fellow traders about it. Therefore, when you are doubtful about something, check with other blockchain enthusiasts in blockchain forums, like Reddit, Telegram, or Bitcointalk.

Have you enjoyed reading this article and you want more of it? Join the Tokenizer Telegram Group, follow us on Twitter and check our Reddit forum.

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