There are more than 7,000 tokens and cryptocurrencies on the crypto market now and the number is still increasing. But do you know which ones to invest in so that you don’t lose your money?
Let’s take a look at how to decide which token you want to invest in, and which tokens are not scams.
White paper is the basis
White paper of each project is very important and needs a lot of attention. Since it must contain all the information about the token – background, goal, strategy, etc., it could potentially reveal many shortcomings and suggest that it is not a good idea to invest in this token.
There are also tokens that do not have white paper at all. In this case, it is a warning sign for you and you should avoid that token. However, it should be added that unfortunately even a scam can have a very convincing white paper, so what do you do next?
Who is behind the creation?
The team that created the token is another important part of your research. If any of them already have a history in other projects that were not fraudulent, there is a good chance that this is not a scam either. It is useful to have an idea of who is involved in the project, this also includes the people who support the token. If the token is supported by a person or a group of persons, that do not use their real names or are annonymous it is a red flag.
The survey is still not over
Reading a white paper and exploring the founders is still not everything.
Tokens should have a unique idea and focus on a clear problem to which they should provide a solution. If it doesn’t offer an answer to that question, it’s probably a scam or the developers do not know what they are doing.
At the same time, the project developers should have all the information available and transparent.
No one can examine every project in detail. Although the cryptoworld has shown that it handles fraud very well and can provide resilient fraud solutions, security is still the # 1 issue.