Is crypto right or wrong? How to identify?
Cryptocurrency is a digital asset, which is based on blockchain technology. Some crypto projects are really good and innovative, while others are just scams and frauds. Therefore, it is very important to identify the right and wrong crypto.
✅ How to identify the right cryptocurrency?
1️⃣ Strong Technology & Project
Understand the technology and utility (use case) of the cryptocurrency you are going to invest in.
Does it solve any real problems?
Examples: Bitcoin (BTC) is digital gold, Ethereum (ETH) is for smart contracts.
✅ How to check?
Read their website, whitepaper, and roadmap.
View information about teams and developers.
2️⃣ Listing on Big Crypto Exchanges
Genuine and trusted cryptos are listed on major exchanges like Binance, Coinbase, KuCoin, and WazirX.
If a coin is only available on small or unknown exchanges, it may be suspect.
✅ How to check?
Check which exchanges that crypto is listed on by visiting CoinMarketCap or CoinGecko.
3️⃣ Market Cap & Trading Volume
Cryptocurrencies with larger market caps are more secure.
If a coin has very low trading volume, it may indicate liquidity problems.
✅ How to check?
See its market cap and trading volume on CoinMarketCap.
4️⃣ Who are the team and developers?
Behind any good crypto project there is a good and expert team.
If people on a crypto project’s team are unknown or anonymous, it’s worth being suspicious
✅ How to check?
View team members on the website.
Check out their profiles on LinkedIn and other social media.
5️⃣ Whitepaper & Roadmap
Whitepaper is a document in which information about the goals and technology of a crypto project is given.
If a cryptocurrency is without a whitepaper or contains unclear information, it may be suspect.
✅ How to check?
Read the whitepaper on their official website.
See what the future roadmap of the project is.
6️⃣ Community and Social Media Presence
True cryptocurrencies have a large and active community.
If a crypto is becoming popular only due to hype and there is no solid technology behind it, then it could be a scam.
✅ How to check
Check out community activity on their Twitter, Telegram, Discord, and Reddit.
Are people believing it?
❌ How to identify fake and scam cryptocurrencie
1️⃣ Ponzi & Multi-level Marketing (Ponzi & MLM Scams)
Any crypto project that promises “referral income”, “10% returns every month” or “non-realistic profits” is 100% likely to be a scam.
Example: Many projects like Bitconnect, Forsage have defrauded people.
❌ How to avoid?
Stay away from investment schemes without solid technology.
Avoid projects that give “Unrealistic Returns”.
2️⃣ Anonymous or hidden team
If a project’s team is secret and no information is available, it could be a potential scam.
❌ How to avoid?
Always look for transparency of the team.
Trustworthy projects have public teams, like Vitalik Buterin of Ethereum.
3️⃣ Too Much Hype & FOMO
Some crypto projects get highly hyped through social media and celebrities.
There is no real technology in these, but marketing is done only to attract people.
❌ How to avoid?
Don’t invest just by looking at the hype, do your own research.
Understand the technology and utility of the project.
4️⃣ Very low liquidity and volume
If a crypto has very low trading volume, it means fewer people are buying it and it could be a rug pull scam.
❌ How to avoid?
See its liquidity and volume on CoinMarketCap.
If a crypto suddenly rises 1000% and then falls, be careful.
🔹Conclusion
✅ Always DYOR (Do Your Own Research) to choose the right crypto.
❌ Stay away from “get rich quick” schemes.
💡 Always think of long-term investment and do safe trading.