Always look for red flags when researching a cryptocurrency.
One of the benefits of cryptocurrencies is that they are publicly traded, ensuring transparency of their transactions, made possible by blockchain technology.
Many newly released offerings fail however many altcoins (currencies that are not Bitcoin) do succeed and gain traction over time.
All peer to peer transfers are validated and added to a ledger that is accessible by anyone, at any time on the public blockchain.
This level of accountability, allows the system to work without the need for a third party to facilitate and regulate transactions.
So what should you look for when researching a new crypto to invest in?
- A public blockchain where all transactions are freely accessible
- An open source code base
- There should also be wallet software available, from which you can send and receive coins
- Everything should be traded publicly- not on a private system that is closed and centralized
- Be wary of promised commissions for signing up other investors
- Also be aware of promises that upselling memberships will alleviate high fees required to withdrawn your own money
- Be skeptical if you are not allowed to use your own machinery to mine the currency
- Also be wary if a currency claims to be branded by a country’s government
- Look for an active and knowledgeable community
- The ability to trade and purchase the currency through reputable and well known exchanges
- Remember the golden rule- if it sounds too good to be true…it probably is!
Don’t let scams discourage you from participating in cryptocurrencies but of course, do your homework before investing.
