I'll add an important one that everyone needs to be a
* LIQUIDITY
- does the ICO have support from any exchange?
- how quickly can you divest if you see price weakness on the horizon?
Owning an investment is valuable because (A) it can appreciate in value, and (B) you can sell it easily when you no longer believe it will appreciate.
Topic: [GUIDE] Newbie guide: how to DYOR (and avoid wasting money on scams)? - page 2. (Read 638 times)
May 31, 2018, 03:20:28 PM
May 31, 2018, 02:15:25 PM
I don't think that the quantity of their supply indicates that their ICO is a scam or not. Yes it is a good indicator for its price movement but you are straying away from your "DYOR" Topic. You might want to change that into something about Developers offloading their own supply. Or their Token Share from the start, which is a good indicator, the more tokens allocated to their own means the more control they have on the market. Sometimes Altcoin developers/owners with a lot of shares in the token allocation tends to dump their own token for good, but it all still depends on the token we are talking about, because there are coins where the majority of the supply really needs to be with the developers.
Great input. I'll think about a way of formulating it understandably (I mean Newbie-wise). Any (other) suggestions? Would be great if we could make some kind of "ultimate" anti-scam guide for newbies.
EDIT: added a section about airdrops.
May 31, 2018, 02:05:54 PM
* SUPPLY
In most of the cases: the higher the supply, the lower the chance of extremely high prices.
But exceptions exist of course, especially for really good projects, which might take giant leap, even with a rather high supply. Exceptions are however... errrm... exceptional.
I don't think that the quantity of their supply indicates that their ICO is a scam or not. Yes it is a good indicator for its price movement but you are straying away from your "DYOR" Topic. You might want to change that into something about Developers offloading their own supply. Or their Token Share from the start, which is a good indicator, the more tokens allocated to their own means the more control they have on the market. Sometimes Altcoin developers/owners with a lot of shares in the token allocation tends to dump their own token for good, but it all still depends on the token we are talking about, because there are coins where the majority of the supply really needs to be with the developers. In most of the cases: the higher the supply, the lower the chance of extremely high prices.
But exceptions exist of course, especially for really good projects, which might take giant leap, even with a rather high supply. Exceptions are however... errrm... exceptional.
May 31, 2018, 01:48:07 PM
Especially for all new members who would like to know more about the (in)famous "DYOR" expression. Where to start, what to look at, what to follow, important threads etc. and avoid being scammed.
Just follow this short list to get a serious indication if a project / coin / ICO [2020 edit: / DeFi] is real and no scam:
* SCAM ACCUSATIONS [2020 edit]
- check the Scam Accusations board, a subboard of the Trading Discussion which could easily be overlooked if you're new to this forum
- use the Google search function to search the forum for information on the project (simply search for the project's name)
* TEAM
- if team members are known, check their profiles and experience
- make sure they are real, existing people [+Fake Team Guide by Coolcryptovator - tip by hugeblack]
- if team members are anonymous, check if there's a specific reason why they remain anonymous (for ex. because it's an anonimity coin). If there is no reason: consider it as scam unless proven otherwise
* NEWS & DEVELOPMENT
- do a follow-up of the development on social channels. WATCH OUT for fake Twitter accounts (make sure you are on the correct account - double-check the name
)!!!
- do not only read "official" channels but also external media to find out if the project is known to "the outside world"
- has there been no significant news of development for 4 months? Stop kidding yourself then.
* SUPPLY
- from an investor's point of view: most of the time, the higher the supply, the lower the chance of extremely high prices. But exceptions exist of course, especially for really good projects, which might take giant leaps, even with a rather high supply. Exceptions are however... errrm... exceptional.
[+Supply in a nutshell by 1mau]
- from an anti-scam point of view: a high supply could mean a malicious dev is planning to drop a high amount of his self-created coins on the market. By the time you realize that he is dropping his coins, he'll have run off with the BTC you paid for his scam coins, leaving you without BTC and with a big bag of his useless scam coins.
[+Recognize premined coins by tranthidung]
* AIRDROPS
Man... Honestly, I think it's over. Airdrops are soooo 2017 and even back then, most of them were just dropping useless or scam coins. Either the airdropped amount is so low, they are not worth the effort. Or they want you to put something on your Facebook or Twitter or ... and then it's actually not an airdrop but a bounty. They just call it "airdrop" to lure people in.
Personally, I've not participated in any airdrop for months. It's a free country of course, but I would not waste my time on them. However, should you decide to participate anyway: NEVER EVER send coins to someone who promises that you will receive an airdrop in return, and NEVER EVER give your private key to anyone.
* SUPPORT / COMMUNITY
- check how many followers: on Twitter, FB, BTCtalk threads and so on. In most cases: the higher the support, the more lifespan is guaranteed.
- check how many (decent) exchanges are selling this coin: good liquidity means you should be able to buy this coin as easily as you could sell it - and the other way around. You have to respect market prices, of course, but you just don't want to risk being stuck with a coin.
[+CMC Overview of exchanges and the coins they have on trade]
* THE PROJECT - OF COURSE
The most important thing. Just another payment coin? Just another gambling project? Real estate?
I mean: is it really an interesting project which has something new to offer?
Be realistic and ask yourself:
1. Is this what we (or some - enough people to keep it alive) have been waiting for? Gap in the market? Interesting project?
2. Does the fact that the project is created on the Blockchain create an added value?
Don't forget: NEVER INVEST MORE THAN YOU CAN AFFORD TO LOSE. If it looks to good to be true, it's not true.
The one and only (short and easy!)
DO YOUR OWN RESEARCH / DYOR
checklist
DO YOUR OWN RESEARCH / DYOR
checklist
Just follow this short list to get a serious indication if a project / coin / ICO [2020 edit: / DeFi] is real and no scam:
* SCAM ACCUSATIONS [2020 edit]
- check the Scam Accusations board, a subboard of the Trading Discussion which could easily be overlooked if you're new to this forum
- use the Google search function to search the forum for information on the project (simply search for the project's name)
* TEAM
- if team members are known, check their profiles and experience
- make sure they are real, existing people [+Fake Team Guide by Coolcryptovator - tip by hugeblack]
- if team members are anonymous, check if there's a specific reason why they remain anonymous (for ex. because it's an anonimity coin). If there is no reason: consider it as scam unless proven otherwise
* NEWS & DEVELOPMENT
- do a follow-up of the development on social channels. WATCH OUT for fake Twitter accounts (make sure you are on the correct account - double-check the name
)!!!- do not only read "official" channels but also external media to find out if the project is known to "the outside world"
- has there been no significant news of development for 4 months? Stop kidding yourself then.
* SUPPLY
- from an investor's point of view: most of the time, the higher the supply, the lower the chance of extremely high prices. But exceptions exist of course, especially for really good projects, which might take giant leaps, even with a rather high supply. Exceptions are however... errrm... exceptional.
[+Supply in a nutshell by 1mau]
- from an anti-scam point of view: a high supply could mean a malicious dev is planning to drop a high amount of his self-created coins on the market. By the time you realize that he is dropping his coins, he'll have run off with the BTC you paid for his scam coins, leaving you without BTC and with a big bag of his useless scam coins.
[+Recognize premined coins by tranthidung]
* AIRDROPS
Man... Honestly, I think it's over. Airdrops are soooo 2017 and even back then, most of them were just dropping useless or scam coins. Either the airdropped amount is so low, they are not worth the effort. Or they want you to put something on your Facebook or Twitter or ... and then it's actually not an airdrop but a bounty. They just call it "airdrop" to lure people in.
Personally, I've not participated in any airdrop for months. It's a free country of course, but I would not waste my time on them. However, should you decide to participate anyway: NEVER EVER send coins to someone who promises that you will receive an airdrop in return, and NEVER EVER give your private key to anyone.
* SUPPORT / COMMUNITY
- check how many followers: on Twitter, FB, BTCtalk threads and so on. In most cases: the higher the support, the more lifespan is guaranteed.
- check how many (decent) exchanges are selling this coin: good liquidity means you should be able to buy this coin as easily as you could sell it - and the other way around. You have to respect market prices, of course, but you just don't want to risk being stuck with a coin.
[+CMC Overview of exchanges and the coins they have on trade]
* THE PROJECT - OF COURSE
The most important thing. Just another payment coin? Just another gambling project? Real estate?
I mean: is it really an interesting project which has something new to offer?
Be realistic and ask yourself:
1. Is this what we (or some - enough people to keep it alive) have been waiting for? Gap in the market? Interesting project?
2. Does the fact that the project is created on the Blockchain create an added value?
Don't forget: NEVER INVEST MORE THAN YOU CAN AFFORD TO LOSE. If it looks to good to be true, it's not true.
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