ICO scams? 4 Tips to spot them

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By now you have seen the unverified airdrops. But are these ICO’s scams?

Our due diligence team has studied over 5000 ICO’s that conducted airdrops. Over half of them were labelled as unverified.

Here are the most common tips to avoid being scammed!

ICO’s

Initial coin offerings (ICOs) were hyped in 2017. What about 2018? Not so much.

The bear market of 2018 was a rough ride for the majority of cryptocurrency owners. Many saw the value of their portfolio’s drop with 85% or more. Even Bitcoin, the grand daddy of crypto, is down around 80 percent as we head into the first quarter of 2019.

Is there still hope?

By now, ICO investors have gotten a reality check. A lambo for my Birthday? Not yet.

Where is the product?

This is supposed to be a technology industry. But why are there many projects without a working product?

A working product should be a priority in the blockchain space.

Don’t forget that the bigger coins like Bitcoin, Monero & Litecoin started without massive fund raising. They were born out of visions of a better financial system and the actual code to support that vision. ICO’s with verifiable prototypes are significantly less likely to be scams.

Who are the Team Members?

Even though we still don’t know who Satoshi is, we do not trust projects with anonymous teams. It’s the number one reason for getting the unverified label on Airdrop Alert.

Accountability is key when it comes to investing in ideas without proof of concept. Profiling the team behind a project is by no means foolproof, but it does add an extra layer of trust. If a team is raising several million dollars in funding, they will need to show some experience to proof they can deliver their promises!

Even at Airdrop Alert we believe that transparency about our team is important for you to trust our listings and judgement. We hope other Airdrop and crypto platforms follow our lead. Sadly, the majority is anonymous.

Have I read this whitepaper before?

After reading thousands of white papers, we started to notice some patterns. There are companies specialized building ICO websites, writing white papers and putting out press releases.

Often the projects have a familiar feel to it. Have we read this before?

A white paper is similar to a pitch deck of a regular start up. Usually it contains a bit more technical details than a pitch deck would consist, mainly because blockchain is supposed to be very techy.

What we see today is a huge overlap in Whitepaper text and layouts. Even the ideas are not very original anymore.

Scam projects aren’t offering a real project to begin with, and the best way to hide this, is to confuse potential investors with jargon, technical details and long pages of text. If you don’t understand the whitepaper, the plans and the product we advise you to stay away from the project!

Is this a real community?

All of us love airdrops and bounties right?

When implemented right, it’s the perfect strategy to attract new users and build your community.

But, many projects have built communities with bots or services that provide fake users.

This one is a bit more difficult to observe. Who is a human and who is not? Scammers are growing smarter every day and if you are an investor you will want to be on the lookout for social media accounts with artificial followers. Bots have become a real problem online, particularly on platforms like Twitter & Telegram.

Fortunately, bots are terrible at authentic engagement. Be aware of spammy feeds with posts that don’t make sense in the context of the discussion. Proof of community is very important for start-ups, but scammers don’t have the patience and skills to nurture and built a loyal community.

One last tip to avoid ICO scams

Have you invested in an ICO without doing due diligence? I know I have. Back in 2017 ICO investing was closer to gambling. Placing bets and dreaming big. I have learned my lesson by now and I hope you have too!

If you don’t trust the project, don’t invest. It’s that simple.

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