Topic: Great resource for scam protection (Read 130 times)

Another Bitcointalk user drew my attention to this site, which is a very comprehensive list of Bitcoin scam sites: http://www.badbitcoin.org/thebadlist/index.htm

This article is a great place to start. It explains a bit about how scams in general work and what to look for. The rest of the site is pages and pages of scam websites. It's worth skimming through the list because you'll see just how similar all those scam sites are to each other and you'll note the different ways there are of parting Bitcoin holders with their Bitcoin, especially those new to the industry.

http://www.badbitcoin.org/tips/index.htm

Here are a few of the scam types I have encountered:

Bitcoin doublers--claim to double your Bitcoin in a short time. Variations of that include ridiculously high returns in very short times. I've seen legitimate returns of around 25% annually, but it's not super common. I'd be suspicious of anything higher than that.

Cloud mining schemes--Cryptocurrency mining is generally not profitable unless you own your own equipment, have access to cheap power, and know what you're doing. Most people dabbling into it will lose money at it. Many people mine for fun. You're not going to put your money into some site, leave it there for a few months, and profit by others mining for you. Many of those sites are scam sites. Others are well intentioned but won't make it. Either way you'l lose funds. When a "cloudmining" site is actually profitable, it's likely they are investing in other ways and simply calling it "cloudmining" for their own reasons. In that case, you'd want to know how they are actually making their money and if it's something you'd like to get involved in.

Trading schemes--Day trading can be very profitable... if you have lots of startup capital, know how to program bots, and know what you're doing. Most people are going to lose money on this practice. There is no "secret" to trading that is guaranteed to turn a profit every time. Variations on this include arbitrage trading, which means you take advantage of the different prices on different exchanges. That can sometimes be done, but it's not as easy as it sounds, and there are transaction fees for transferring funds between exchanges, and in truly open markets, those gaps close rather quickly. More often than not persistent arbitrage is a sure sign of some other issue lurking. For example, if a trading platform disables withdrawals of a certain coin for longer than normal wallet maintenance purposes, that coin's price will go down on that exchange as people holding that coin wanting an exit will sell it to obtain a coin where withdrawals are not disabled. So... you can buy that coin cheap, but you may or may not ever be able to withdraw it.

Lending schemes--I've not seen this as much, but they're out there. You "invest" your Bitcoin and the service loans it out at loan shark rates and shares the interest with you when the loans get paid back. I've just never figured out who the borrowers are who would pay such loan shark interest rates...

Great project idea--otherwise known as an ICO. Most ICOs have turned out to be money grabs with no return whatsoever. They may have started off with good intentions, but it actually takes a lot of time, effort and resources to bring such grand ideas to fruition. The problem with most "project ideas" is that they're all talk and hype and no delivery. How do you tell the difference? That is the hardest, in my opinion. You have to ask hard questions. You need to evaluate deliverables. That's not easy in such a new industry, but it's necessary. The best way to evaluate an ICO is to compare it with a truly solid project. I know of two in the cryptocurrency industry that I consider to be especially solid. You can get a real sense of what a solid project looks like by following their threads. Even if you don't invest in the product, you can at least gain a type of standard to set against other projects that do interest you.

Here are the two projects I endorse: DNotes
DMD Diamond

You can also check out the NEM project. However, the forum thread is not the main place where the devs disseminate information. You'll have to get on the various Telegram channels to keep updated. It is also a solid project.

There are certainly other good projects out there. The above are the ones I know about and I suggest them as a means for you to develop your own standards about what makes a solid project versus one that is all talk and hype.