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Cryptocurrency RED FLAGS Thread

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Anything related to bitcoin, crypto, blockchain

Mr.Brandtastic

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So I'm not sure if everyone has heard of this recent exposed scam called BitConnect. It was a Ponzi scheme. And while I admit they should be prosecuted, what were the investors thinking? They just got greedy and failed to do their homework. In this thread I want to discuss some common crypto-currency red flags in order to protect and educate ourselves.

Bitconnect down 90% today (as of the posting of this): BitConnect (BCC) price, charts, market cap, and other metrics | CoinMarketCap

Reddit thread:
CryptoNick is deleting all of his BitConnect videos, and so are his buddies. Please never forget what he and his cohorts did to so many people, and how much money those people lost in the process thanks to CryptoNick, Trevon James, and Craig Grant! • r/CryptoCurrency

1) Promised Returns: A crypto-currency should NEVER promise a guaranteed return. How could they promise such a thing in such a volatile market? Bitconnect offered loans that people could invest anonymously in. Bitconnect promised 40% returns MONTHLY! They also promised a 0.20% daily bonus. This is ludicrous. While making spectacular gains in crypto is not unheard of, promising these types of guaranteed returns screams scam. Coins should never promise returns and should adequately prepare people for the possible threat of loss.

2) No Reveal of Ownership: I've seen this on many scammy ICOs. I don't care about their supposed excuses. Whether it is protecting their "security and anonymity" or any other excuse this should spell the end right there. Read the whitepaper carefully, do they list all the developers, who they are and what they've done? I've seen this in at least a dozen whitepapers and I instantly turn away.

3) The Little Things Add Up: Like the business world, the little things add up. As pointed out in The Millionaire Fastlane , customer service is essential. Do they have an active and frequently updated website? Is their address real or just a mailbox? Do you get a real human when you give them a call instantly? When you send an e-mail, how long does it take? An hour? Or a week and a half? Do they spend time with their fans with programs like telegram, diligently answering customer questions as they pop up? If not, consider steering clear. While any of these individually might not be a death spiral, combined they show a culture of neglect, disinterest, and disconnection. Translating to poor value and potential scamming later.

4) The Hype: Related to point 1, most people buy into the hype. They buy into the idea and think themselves into the dream. Luxury cars and homes, exotic beaches, scantily clad babes, and a future of eternal riches for well....just being you. Many youtubers and other social media wizards will play off these hopes and dreams. But remember most people are not rich and will never be rich. Most investors never even read the white paper, which outlines the coin, its uses, plan, development, and developers, all absolute essentials to serious investors. If people just stopped and thought, sincerely looked into all aspects of these coins, they would never get swept away so easily.

Any others? Please share.
 
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Envision

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Been following this all day, people losing five and six figures sometimes their entire life savings and their families.

This is a huge drop and will negatively effect public perception on the cryptocurrency world. There is alot of skepticism and people dont understand the difference between Ethereum and Bitconnect - it's all the same to them and thats not good.

I've pulled quite a bit of money out and Im going to keep waiting - I dont think this drop we're seeing is over.
 

LeoistheSun

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The name is eluding me right now but I was recently invited to go to a talk with some Bitcoin millionaire.

He ran some sort of mining pool where you would pay 500 bucks and that would buy a crypto machine for them, and then you would get a percentage of whatever is mined.

Does that seem like a scam to you?
 

mrarcher

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In the winter of 1928, Joe Kennedy decided to stop to have his shoes shined before he started his day's work at the office. When the boy finished, he offered Kennedy a stock tip: "Buy Hindenburg." Kennedy soon sold off his stocks, thinking:

“”You know it's time to sell when shoeshine boys give you stock tips. This bull market is over.
A timely move considering that the stock market would soon resemble the fate of the airship Hindenburg itself.

All I have read in the news since December is BUY BITCOIN! How to get started in bitcoin. BUY BUY BUY!

That's enough of a red flag for me.
 

Mr.Brandtastic

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He ran some sort of mining pool where you would pay 500 bucks and that would buy a crypto machine for them, and then you would get a percentage of whatever is mined.

Yea this is a common scam. Steer clear. They say whatever, that it goes to finance a rig that will mine bitcoin for you. But more often than not they simply take your money and you never see it again.
 

ApparentHorizon

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If everyone is doing it,

DO NOT DO IT!

This was said in TMF about the 2007 housing bubble

Buy when everyone else is selling. “We’ve put a lot of money to work during the chaos of the last two years. It’s been an ideal period for investors: A climate of fear is their best friend … Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.”

Don’t buy when everyone else is buying. “Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance,” Mr. Buffett wrote. The obvious corollary is to be patient. You can only buy when everyone else is selling if you have held your fire when everyone was buying.

Value, value, value. “In the end, what counts in investing is what you pay for a business-through the purchase of a small piece of it in the stock market-and what that business earns in the succeeding decade or two.”

- Buffett


Also a side note to ICOs: They're SEC regulated. Check if they're registered.
SEC.gov | Statement on Cryptocurrencies and Initial Coin Offerings
 

Merging Left

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Be wary of any coins generating hype for partnerships with large companies when the only source of those partnerships is the coin's website.

If a company partners with Microsoft, you would expect Microsoft to have made a similar announcement. Similarly, companies claiming to have partnered with cities/towns/developments/whatever in China (or elsewhere) are showing up quite a bit, and those stories can be very hard to corroborate, but not impossible. For one in particular, the coin's website claimed a specific person approved the partnership. Well, that person isn't listed as a government official on the official website for that city. That's fishy. It's not necessarily false, but it's at least a yellow flag.

Also, an article on Medium or some other internet publication is not corroboration if their sources all refer to the coin's website. Don't be fooled.
 

theag

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ZF Lee

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It's more like unicorn fart that they are unloading instead of dog shit....:happy::rofl::rofl::rofl:

All I have read in the news since December is BUY BITCOIN! How to get started in bitcoin. BUY BUY BUY!

That's enough of a red flag for me.
Me too.

I was actually surprised that people still went to the dungeons although the RED FLAG was flying top-mast, screaming 'f*ck OFF'.

It's not wrong to speculate on crypto, but there's lots of bad eggs around.
 

Vaughn

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Although there are for sure many scammers in the market, crypto currency is a market of big opportunities and some of the companies involved drive awesome technologies and projects.

The recent drop in the market is not unusual for this time of the year. Close to Chinese New Year, Asians use to pull out billions to exchange into FIAT currency in order to buy presents, train tickets and flight tickets. New year is for them what Christmas is to us, and this includes huge spendings. As Asians are still dominant in crypto, their behavior comes along with big price drops. Check what happened the last years in January, it was exactly the same, but afterwards the market went bullish again, approaching new all time highs, every single year.

That being said, there is of course panic in the market, because the FOMO-guys get freaked out by the drops. The best strategy for all investors is to hold positions. I am personally buying more of these crypto currencies, I believe to have real value, because they are tied to a great project. I am aware it's speculation and very risky, but I am willing to take some risks, because I see huge potential for the mid and long term.

Gesendet von meinem Moto G (4) mit Tapatalk
 
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tristano

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Cryptos.....ask people around...most of them don't know what you are talking about...very few of them own some coins. Bubble will explode when average Joe will go comfortly to the bank to buy cryptos without using private exchanges, autentication process and tradingby himself. there is a long road ahead
 

Nigel B

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If everyone is doing it,

DO NOT DO IT!
Sounds advice - but is it relevant to crytpo? I would say <20% of the population know more than the name of a crypto currency. And <1% are trading.

Admittedly of those 1%, a lot are rats following the pied-piper (usually their friend who "just made a killing on ....").

Those who are actually reading the whitepapers, looking at the teams involved AND seeing whether there is a real correlation between the token value and the platform have potential to make money.

Of course the market is embryonic, subject to manipulation, very much driven by the herd and therefore even with a good platform any given token can get pulled down by market confidence (or lack thereof), panic selling, news hype, real issues, etc.

As others have said - do not invest more than you can afford to lose. Honestly anyone who lost life-savings in a crytpo investment was probably going to get scammed out of their money anyway - sad, but likely true.
 

The Autobahn

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Well the Party is over at the Moment.. But i feel later in the Year Bulls can make a comeback. But this is more speculating then Fastlane..
I was never invested in BTC but in many other Cryptos..
 

scott wisniewsk

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Do your research buy and HODL this will get better with time . Then later you wont say I should have . Dont put in more than you can afford to lose and your fine.
 

Nigel B

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Well the Party is over at the Moment

For BTC may be, but there's money to be made trading.

And I saw trading justified hereabouts as being okay because for every transaction there are two parties - so you are meeting a demand of sorts. I think it was a tenuous justification for FL but there you go :)
 

Elif

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Jun 25, 2018
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The name is eluding me right now but I was recently invited to go to a talk with some Bitcoin millionaire.

He ran some sort of mining pool where you would pay 500 bucks and that would buy a cryptomachine for them, and then you would get a percentage of whatever is mined.

Does that seem like a scam to you?
 

Vaughn

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The name is eluding me right now but I was recently invited to go to a talk with some Bitcoin millionaire.

He ran some sort of mining pool where you would pay 500 bucks and that would buy a cryptomachine for them, and then you would get a percentage of whatever is mined.

Does that seem like a scam to you?
Pool mining is actually quite common, but the usual way is to do software mining, meaning that users connect their private machines to a pool and share the outcome according to the cpu power they contribute.
Currently some start ups are offering investing in mining facilities (f.e. icerock mining). Usually located in Russia or Asia, where electricity is cheap, these companies collect money from investors, buy mining machines and distribute the outcome to investors.
I am not aware of single persons doing the same.
Can be legit, can be scam. Like any crypto company, you should do your research about them.

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RahKnee

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May 27, 2013
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The name is eluding me right now but I was recently invited to go to a talk with some Bitcoin millionaire.

He ran some sort of mining pool where you would pay 500 bucks and that would buy a cryptomachine for them, and then you would get a percentage of whatever is mined.

Does that seem like a scam to you?


Post #5 answered your question about 5 months ago. There are also legit mining pools you can join online without having to buy equipment.

Back on topic , I knew a guy who had a fairly successful small business. He sold it and put everything into bitconnect. He told me about it in a conspiratorial whisper and said I should look into it. I did about 2 minutes of research before it looked like an obvious ponzi.

I told the guy to get his money back. Haven't spoken to him since then. Caveat Emptor, I guess.
 

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