[Crypto Noob Guide]How To Not Buy Into A Scam Project

As cryptocurrencies has gone mainstream I noticed that majority of people have 0 clue what they're doing and basically invest in anything that has "blockchain" in it, so I'm going to share a few basic tips on how to avoid OBVIOUS(for experienced users) scams and not lose all your money like the average Joe that invests into cryptocurrencies.

There are a few key things you should always research about the project you're investing in, but the main one is reading the project's whitepaper, as a crypto noob you will probably have 0 clue what all those smart word gibberish means, so I'll try to explain in simple terms what you need to look at.

1. Use case

The first thing you should research is how the coin will benefit the economy. If a regular person can't understand how the coin benefits society reading the whitepaper it probably doesn't. A lot of these coins are just made to raise capital from clueless people without making the coin useful in any way, leaving you stuck with a useless coin that solves some non-existing problem that doesn't need blockchain at all(example: DentaCoin), or a coin that only acts as a "gift card" to buy their services(example:CarVertical). These are quite easy to spot if you have at least 3 brain cells left in your head, which a lot of people surprisingly don't.

2. Tokenomics

In simple words, this explains how tokens are distributed into and out of circulation. You can easily find this information in the whitepaper of every project. There are a few red flags you should look for:

Coins with ridiculous deflation which is meant to keep increasing its value(Safemoon, hoge, and other crap)- Let's be honest, no one in the world is ever going to use a coin for anything that burns 2%,5%, or anything more than 0.1% for every transaction, these are the most obvious cases of a pyramid scheme. You're basically buying a "Reverse cookie clicker" coin, that has 0 economic value, and it's whole purpose is to sell it to a bigger sucker than yourself, which most likely isn't going to happen.

Coins with high inflation- I think this is quite self-explanatory, if not I would suggest to stay away from crypto as a whole.

Whitepaper explaining that the coin will raise in price- if there's even a slight mention promising the value of the coin to increase in the whitepaper, then it was purposely made to sell to suckers, and not to solve a real problem, buying a coin like this is probably the smallest brain move i can imagine, I have no idea how a human can even function with such a small brain.

3. Market Cap

Basically you need to evaluate how much money the "blockchain" project can save for the industry it's made for compared to traditional methods. If you invest in a project that solves 1m$ a year problem and it has 1b$ market cap, you really need to evaluate your whole life and financial decisions.

4. Other

DogCoins/MemeCoins and other crap that anyone can copy in 12 seconds- Let's just say if you buy this crap you deserve to lose all your money. "bUt dOgEcOin", Yes I know, and that's only because it was the first coin made as a joke without anyone expecting to make money. You don't make a billion dollars by copying something that was made as "art", if that would be the case i would be painting Mona Lisas full-time in my basement right now.

Buying anything just because you see celebrities promote it- Would you trust someone who is only good at professionally making facial expressions to make financial decisions for you? If yes, then reading any of this will not help you, because this guide is for people with at least a peanut size brain.


Thanks for reading and please send this guide to all your friends that ask stupid questions about cryptocurrencies, and maybe their brain will grow a little.

 

thnx for the guide, hope this helps out the newcomers