The cryptocurrency space is new, growing at an exponential rate, and can be very scary for newcomers. If you do not have an understanding about blockchain, I recommend you head here first. If you’re looking to start to invest in cryptocurrencies, this article outlines some common practices among various projects and describes red flags in the industry.

Shilling

Shilling is advertising anything for personal gain. Whether it’s through twitter, discord, telegram, or your best friend, you need to constantly remind yourself that if someone is advertising a project to you, odds are he or she is invested in some way. It could be a simple $100.00, You’d be surprised how little money could bring strong ties to a community of echoing shills. For example, a project’s development team happens to be large investors in their project (even if they claim they would never sell their tokens). This team wants their value and community to grow and is pushed from them as a source to any investor. Then of course, this team will be pushing their biases to all their social followers creating the echo effect to all the social medias and even direct social contact, nudging in your newly formed opinion which is fed from the top down to you. Don’t let personal biases, False FOMO opportunities, and others’ agendas sway your mindset on how to invest.

Twitter

Let’s visit Twitter. Twitter is a source of content and investment advice for loads of people. The thing is that a lot of the community is a part of the echo effect, specifically Tron, Verge, XRP, and Bitcoin Cash. I pick these out directly because of how many bots are behind this movement using hashtags like #CoinNameFAM #CoinNameArmy etc. This is a mob mentality which is backed a lot of the times by the founder. You may know who I’m talking about… His name rhymes with Sustin Jun, and all of his announcements are hyped for weeks if not months directly relating to what I talked about in the previous paragraph. I’d like you guys to take the time to go look at his hyped Tweets and see how many were actually on target and if they even went through Mr. Netflix of China… Again, picking on Tron.

Let’s move on from mob mentality and head over to paid content posting (Looking at Mcafee). Jon Mcafee has directly admitted to getting paid ~$100,000 USD per Shilling tweet. With utter disregard for reputation, it’s no wonder Mcafee would accept this sort payment for 140-280 characters. I’m sure not only did he get paid in cash, but also the coin he was about to shill and ride to the top to dump. This sort of activity hurts the overall crypto community because a lot of people who thought the projects were actually good because of the large name backing them. This doesn’t have to do with only John McAfee but anyone who used their large following to do a paid shill. Greed is an extremely powerful emotion, ALWAYS remember that when you’re doing your due diligence.

The Project Team

You can’t trust anyone when it comes to your money. Next up are the founders, developers and the team. Who are these people? Do they have an education? What is their experience in the field and how does it correlate to their project? Research the team, make sure they are who they say they are. Would you invest in a project with a shady team? A proven track record speaks volumes. I always am looking for how long they’ve been in the field and not just their professional field, but also the crypto field and which network they are thinking to use, why they are using it, etc. Before you invest, make sure you know the team.

Location

Location, location, LOCATION. I understand a lot of companies are registering in places for legal reasons, but which legal reasons? Panama is a red flag in my eyes because I just see them exiting when they raise $XX Million, versus a registration in Malta or some European countries who are looking to be progressive in the crypto and blockchain space rather than having some less than great financial laws and practices. Speaking of location, I enjoy seeing where the developers are located, sometimes you see this “great” idea and company and they say they have 10s-100’s of devs in a location (many times India, or Middle East) you always wonder what their requisites are, are they even related to blockchain development, or is it a random team with general technology backing. Even if it’s not the 10-100’s of developers, sometimes you see the team extremely segmented, Founder Germany, Developer Japan, another Developer Russia, and CEO UK… Yes, I understand there is git and merging your work to create something is how Bitcoin is maintained now (although a lot of people are weeded out and the core contributors are amazing)! But during the startup phases it is integral to be somewhat close or at least in a similar time zone. From personal experience on working with startups, being on the same page and working out problems actively as a team vastly improves the end quality of a product.

Do The Nitty Gritty Before You Invest

The last one is depth diving on the people, the company, the whitepaper, the network and EVERYTHING you can possibly find before you invest! This is basically an overview of everything mentioned above but looking for correlations in it all. The people or the company should be related to the domain in some way, whether it is in the Whois (a lot of the time privatized) or in the SSL. The projects various Social medias should mirror each other, miscommunication is a lead-roll for a downfall of a company whether it’s an ICO or just a startup. I should be hearing/seeing generally the same thing on twitter as the site announcements, and telegram are telling me. If there is a pump group behind the coin, look for specific people there, look for similar names in the twitter community, a lot of times you’ll see a correlation with pumps and bot activity or human echoing throughout the social media during pumps. Now that you see the correlation, try to see if the messages pushed match the company’s messages, then at least this is somewhat organic. The worst thing to see is the opposite, where the company furthers the message by almost encouraging the messages with retweets, favorites, or responses. If they are not announcing it themselves, they should not be in the community driving other’s messages and agendas.

There are many more things you should be checking, and you will learn along the way what is what, especially after you lose out on your first $&#T Coin. A lot of people are beyond that step but there are new people joining the community every day and they NEED to DO THEIR OWN RESEARCH before investing. Due diligence is unbelievably important in this space.

-Crypto Correct