Today I'm talking about Bitcoin scams, actually not just Bitcoin scams but all kinds of other cryptocurrency scams because there are a lot of them out there.
The thing is crypto currency is a new technology and everybody is trying to cash in on crypto currency.
This includes a lot of scammers so I'm going to give you some signs on how you can actually tell if this particular coin or this particular endeavor investment is a scam.
Okay these are my opinions. You can let me know if you agree or disagree with my points.
Scam Number 1
One obvious signs that this particular thing is a scam is unreasonably high interest.
They've got some kind of Bitcoin investment or something like that and they come to you and promise you some ridiculous interest that's guaranteed ten percent per month.
Ninety-nine percent of the time this is a scam, in fact I even think that it might be a hundred percent of the time, it's a scam.
You can actually make quite a bit of money with bitcoins.
It's not impossible for you to double your money or make a 100 percent return in a year.
It's not impossible but, if somebody guarantees it, that's when you need to be careful.
Nobody knows what's going to happen in the future or what the price of a particular coin is going to be in the future
Or if they say you will make back all your money plus 10 percent in a year, that's a scam.
A lot of them are Ponzi schemes or if it sounds a little dodgy like, we provide electricity to the Bitcoin miners. Or they tell you that the Bitcoin miners need to get electricity from somewhere, so we buy the electricity wholesale and we sell the electricity to them for a huge profit, and you can pocket the difference.
That's not logical at all.
Why wouldn't the miners just get the electricity straight from the electricity supplier.
Not too long ago a friend of mine lost a whole bunch of money in a Bitcoin trading scam.
If you're giving a whole bunch of money to someone and you don't really know what they're doing, isn't that a little strange.
I think it comes back to the point when they offer an unrealistic profit margin.
Everybody looks at the profit margin and greed starts to kick in, and they don't even check the background of the company.
They just hope that the money will come.
Scam Number 2
Now some of you might disagree with me on this but, I actually think a lot of coins out there that are asset backed, seem a little dodgy to me.
I'm looking at the top 10 market cap coins and none of these coins are asset backed.
I sometimes think asset back coins are just something that the maker of the coin tells people, to make them feel better so that they'll invest in the coin.
They may say, my coins are backed up by gold.
You'll get a gold coin in return for every one of my coins.
You'll get a certain percentage of this particular property.
Why do they need to back your coins against an asset?
The success of your coin or the failure of your coin should be based on the tech, not on the asset.
If you look at the top ten market cap coins, all of those coins are based on the tech.
What are the features of your coin?
What are your coin's tech rather than what are your coins backed up against?
I know that you SBT is actually backed up against the US dollar so that's an asset back coin.
I'm not really a big fan of asset backed coins and I think most of them out there are actually scams.
This is what is being told to people that don't know much about crypto. They feel a lot better with the idea of their coins being backed up against gold.
Number 3 Scam
I do not like coins that are on a private blockchain.
I think there are one or two coins that might be legit, but in general, 90% to 95% of coins that are on a private blockchain are scams.
If you own all the servers for this coin you can go back and alter it just like a database.
So if they have a private blockchain, where is the trust.
How do you know if someone didn't altered the database.
They could have gone back and altered something and none of us would know because the blockchain is private.
So I would say most private blockchains are scams.
Scam Number 4
One way to tell if a particular coin is a scam is that it is not listed on the world coin index.
If it's not listed on coin market cap and it is not being traded on any of the exchanges, it's a scam.
Scam Number 5
If it doesn't have a wallet where you can download and keep it on your computer or transfer it between other people that have a wallet as well, it is a scam. You can only deposit it in that particular coin account.
All of these red flags, tell you that this coin is a scam.
Every system must have a wallet and the coins must be traded in the open marketplace.
The One coin is a very good example of this.
It was not traded on the open market, even though it was like they had their own exchanges, that were just called X coin or something like that.
What's its value
It is hilarious that people would actually fall for this.
The one coin managed to get so much money from people, that they had a huge launch in Dubai and everybody was just crazy about one coin.
This guy had a whole bunch of Russian girls with him. They cornered me in the Starbucks and they tried to get me to buy one coin.
I'm not going to invest my money in something that's a scam. It would be like I was gonna just take my money, and set it on fire. It's the same if you join a scam, you're basically just setting your money on fire.
I'm sick of people actually getting scammed out of their hard-earned money.
Scammers play on your greed and they try to get every cent from you with no morals at all.
People are afraid of Bitcoin in general
They're afraid of cryptocurrency in general and when they think Bitcoin they think scam.
Crypto currency and bitcoin are the real deal.
Just make sure that you do your proper homework and don't hand over your money until you've got some evidence that this particular thing that you're investing in is the real deal.