Stay safe. Know the signs of legit vs scam in the crypto-world
We felt compelled to write this article, in an attempt to help you identify scams from legit coins/tokens/ services in the cryptocurrency world. Quite recently we came across one coin that is trending strong, and we would like you to be aware of the following. We won’t name anybody in a negative matter. Only tested, true and without affiliate links services will be recommended, so you know we’re unbiased and have nothing to gain.
The usual signs of a scam are:
- Referral schemes. This is a tricky one, since not all MLM are scams (i.e. Amazon). If it’s a new cryptocurrency,service or website, and has more than 1 tier affiliate marketing, you should be very weary.
- Cryptocurrency / token only available through their own, centralized exchange! If the coin/ token is not available on a single decentralized exchange, your funds are in a trap! The trap get’s deeper, once you learn that even the new cryptocurrency you bought, has to be locked for over 250 days before you can claim your interest. It’s a musical chair’s game, and you might be left standing.
- Ridiculously large returns for lending or bot trading, more than 100% per year, with little or no explanation of how that profit is made. If it’s a new cryptocurrency or some trading bot that promises 30 to 50 % return per month, it’s most likely a scam, and you should avoid, or investigate much further before buying into it.
- When it comes to mining services it’s much harder to tell, since mining services, legit or scam, they operate more or less in the same way, as in, you pay the initial sum in Bitcoin, and you get back your initial investment +20 to 25%, in diminishing returns over 12 months or so. If you are new to crypto, we advise you against this kind of service. Legit of scam, anything that has your funds locked for up to 1 year is a risky business, since we don’t know what can happen tomorrow. It’s always wise to have availability to our funds.
- Advertised as 100% guaranteed, risk free. There is no such thing. If it’s too good to be true, it probably isn’t. Never forget that.
How does a legit service looks like?
We have been using two services with very good results. Poloniex.com (exchange) and Poloniexlendingbot.com. By combining the two, you can start lending your Bitcoin, and several other cryptocurrencies, for a time set by you (minimum 2 days). You can set the minimum amount % you’re willing to lend for, and let the bot do the work. You can expect about 30% return APR. If it doesn’t sound as good as 40% / month, it might be because one is a scam, and the other is not. On poloniexlendingbot’s documentation you can find notes about how to set-up the bot as well as about the risk involved. 99.9 % safe, but some risk still remains.
What is VialCoin?
We can only present some facts, in the end it is you who decides.
- although not quite yet the cryptocurrency Vialcoin is intended to be, ViC is already available on a decentralized exchange (waves);
- you are in total control of the coins you own, available to you at all times;
- only a total 0.5% return per month. At this rate, even if it takes 1 year for our cryptocurrency to fully develop, in the unlikely scenario that all coins (giveaway + ICO) have been distributed, we will not compromise our mining funds too badly by paying out interest. If owning a node on Waves platform will enable us to customize parts of the automatic payout, we might even propose to keep some of the mining funds on waves, so the interest will remain available even after the coin is mine-able, making us even more unique. By that stage all registered members will have a right to vote, and we will present any major change before we implement it;
- you can see clearly how all the funds are distributed. Unlike Bitcoin, and most other cryptocurrencies, where you deal in anonymity, we are building a network where you can See who you’re about to send the money to;
- unlike most scams, with a minimum investigative work you can find out who started Vialcoin, since I linked the website with my LinkedIn profile. I didn’t make it immediately clear, since I consider it has little importance. I’m trying to build a decentralized cryptocurrency that can be mined. In the end everybody who has it, owns it and can spend it however they like.
We hope this post helps you avoid some future drama. Be safe, and never let greed get the best of you.