How to Avoid Scams in the World of Cryptocurrencies: Practical Guide for Newbies

Hello friends how are you? Today I want to bring you something that I consider essential for all those who are starting out in the world of cryptocurrencies and perhaps for some who have been around for a while, “how to avoid being scammed.”

Entering the crypto world can be very exciting, but we must always keep in mind that despite its benefits, it can be dangerous for our pockets and it is not that cryptocurrencies are bad, but that behind every successful “company” there is always ill-intentioned people willing to scam and steal from anyone they can by posing as this “company.” In this case, the aforementioned “company” is to make an analogy to cryptocurrencies.

There are always unscrupulous people who will try to steal money from people who are careless, poorly informed or unaware of the subject. That's why I wanted to make this kind of guide, if you'll allow me to call it that.

So how can we distinguish a real project from a scam one. There is something that I always keep in mind before making any type of investment or approach to any crypto project or platform (this applies to any type of investment). I will try to explain it as simply and without technicalities as possible.

1. DYOR
   Do Your Own Research: Always do your own research and never get carried away by the influencer on duty who paints you everything beautiful about a project, because when something is too good it is almost always a scam in disguise. Look for news about the project, its development team, approach their Twitter and Discord accounts, check the participation of their community (many followers and little interaction are not a good sign), if all the comments are too good, be suspicious. Try to contact their developers, check their LinkedIn profiles to see how real they are and if they have worked on previous projects. Check how long they paid for the domain of the project website.

2. Find out about the Token
   Search for the token on Google and you should see some information about it, its main page at least and its technical documentation or whitepaper in which the purpose of the token is explained in detail. If it lacks these, run in the opposite direction. Search the block explorer of the blockchain in which this token is located for the addresses associated with it and verify its status and movements.
   Here I am going to take a brief pause to warn you that during this exploration be extremely careful where you click, do not download anything to your device, do not approve cookies, do not approve permissions that the website asks for, because you could be exposing your equipment or privacy.

1. Verify the source code
   As long as you are on a blockchain where you can verify the source code in the block explorer do so, an unverified code is a clear scam red flag. Clarification not all unverified smart contracts are scams but it is one more precaution to take into account.

2. Check the Black Lists
   Check the blacklists of sites like DappRadar to see if the token appears on any of them marked as a scam or scam. In case it appears there, there is nothing more to investigate, just stay away from it.

3. Search for the token on CoinGecko or similar
   If the token is not found on CoinGecko, CoinMarketCap, DappRadar and other similar pages, be careful, these platforms usually list almost all tokens and accompanied by important information. If you see negative reviews calling it a scam, be careful, it is very likely that it is.

4. Check which Exchanges it is listed on
   Check how many exchanges it is listed on, this always helps clear up doubts a bit, a token that is only listed on 2 or 3 Decentralized Exchange (DEX) can be risky, even if it is not a scam. The fact that it is listed on a Centralized Exchange (CEX) and if this is one of the big ones that we know helps to legitimize the token a little, although this is not 100% secure. Many may not agree on this point, but it is something that I always check and that has worked well for me so far.

5. Check the liquidity of the token
   If the previous point does not convince you, this one comes to complement it, before making any movement check the liquidity of the token, this can be easily done by checking the exchanges that are listed. DappRadar also gives us alerts about low liquidity, this could be a tool that helps us with that.

And this point helps us make bad investments, although it is not a scam, a token with low liquidity can be a problem.

That's it for this guide if you can call them that, this is nothing more than what I normally do when I want to investigate any token or project that I want to investigate, so far since I started applying it it has gone much better for me. Even so, I must clarify that it is not 100% effective, every day scams are more sophisticated and criminals try harder to make them seem more real.

I hope that from now on they investigate more the projects they approach, I hope this helps to prevent you from falling into any scam. If you know of any other method or measure to investigate the legitimacy of a project or token, leave it in the comments to add it to my DYOR and reach those who read this post. Until next time.

Original text created in Spanish and translated and formatted with Hive Translator by @noakmilo.

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💻 Dell Vostro-3500

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