I’ll keep this short, sweet and to the point.
My quick answer to which cryptocurrencies people should avoid is
ALL of them.
Unless you’re at least educated enough to know to look for those
three things I spoke about in earlier chapters — and have them firmly
implanted in your mind — you shouldn’t invest a penny.
Remember, the (in theory) GOOD ones…
• Have a limited supply
• Fit with the cryptocurrency philosophy: secure (if James sends money
to Joe, Joe gets it first and foremost), decentralized (no geographic
borders), anonymous (nobody needs to know) and forgery-proof (no
“duplicate money” is possible)
• Solve a problem that bitcoin doesn’t already solve.
If they don’t fit that criteria AT LEAST, run away.
HOW TO SPOT A SCAM
It’s just a fact. In every boom market, there are always going to be scammers.
It happened in the dot-com boom. Companies showing no profit went public
just to make the founders rich.
It happened in the housing boom, in which a lot of scammers got rich.
And it’s happening in the cryptocurrency boom.
At every turn, there’s a new coin you can mine, a product to invest
in, a crypto that promises incredible payouts. I promise you — they’re
mostly all scams. They are just land mines waiting for some fool to step
on them.
The vast majority of coins you see on the market won’t exist in five
years. Most people can’t see that. That’s part of the reason why I’ve started
writing about cryptocurrencies.
I’m tired of seeing good people getting scammed.
The thing is people hear about all of the great things cryptocurrencies
can do and they get starry-eyed. They suspend their disbelief for the “hot
new thing.” They see a bitcoin millionaire teenager in the news and think
it means they can become a millionaire in crypto, too.
Charlatans then rush in in droves. They tell people, “You’ve missed
the boat on bitcoin but not on XXXCoin!” They give really complicated
presentations that sound impressive but don’t mean anything.
They use a lot of buzzwords like “decentralization” and “blockchain”
and “trustless” without putting them in the proper context.
They sound like geniuses to the laymen, but they’re really stupid and very
wrong. But many people just sit there and nod because they don’t want
to seem stupid themselves — and they want to believe what they are
saying is true.
It’s often said the difference between an entrepreneur and a scam artist
is the former takes something simple and makes it very complex and
the other takes something complex and makes it very simple.
The value can always be found in simplicity. Here’s a general rule of
thumb I like to stick to.
For what it’s worth:
If it started with a massive premine (like, for example, DASH), I’d
generally stay away.If it’s mined almost exclusively by a central
authority (like, for example,STEEM), be wary.
If it doesn’t solve any problems in the real world, it’s not worth
looking at.If it claims to be able to solve MANY problems at once,
it’s probably hype.
And finally, if it doesn’t have a strong community on social media or
otherwise (Facebook, Twitter, Reddit, bitcointalk, Slack, Discord, etc.),
then it’s probably not going to go anywhere.
So I realize I didn’t really give you a No. 1 crypto to avoid.
I didn’t because giving you one currency just isn’t a good enough
answer. It’s the wrong answer to the wrongheaded question.
The good answer is ALL OF THEM — until you’re sure you know what
you’re looking at.
