Bitcoin Global News (BGN)
April 19, 2018 -- ADVFN Crypto NewsWire -- In the cryptocurrency
world, you need to watch your back and mitigate for
portfolio-related risk almost exponentially more than in the world
of traditional finance.
Just read or watch any of the
current pieces about Bitconnect. When you do, you’ll quickly
realize that almost all crypto-related scams have one thing in
common.
They promise a consistent ROI that
is so high, it’s almost unfathomable how it could be reached, even
in the short-term. With just a bit of knowledge of financial
analysis, all of these scams could be easily prevented.
If you’ve already read about
Bitconnect, remember there’s a lot more similar crypto scams that
are still out there. In this month alone, an estimated $660 million
was stolen by one Vietnamese company that was running two separate
ICOs, Pincoin and iFan.
Although the company behind them
seemingly exit-scammed in March, Pincoin’s website is still online,
as is iFan’s.
In the interest of clarity, we will
stick to Pincoin as our primary example here.
Upon analyzing these sites,
although Pincoin claims to have at least one decentralized
application on its network, it truly appears to be a thinly veiled
scam. With quotes like, “joining PIN Community, every member will
have endless opportunities to build his wealth,” this argument is
hard to ignore.
Following this, Pincoin essentially
identifies itself as a multi-level marketing scheme, also akin to
Bitconnect, which somehow, despite everything, is actually still
also online.
If you don’t already know, a
multi-level marketing scheme can be considered to be the same as a
pyramid scheme. The people who enter the scheme first try to
convince as many people as possible to sign up. The more people
that sign up, the more money that the first-comers make. Whoever is
last before the scheme “exits” or stops running, will quite
possibly lose all of his or her initial investment. For a prime
example of this in the traditional finance industry, just look at
what Bernie Madoff did.
At this point, you might be
wondering how the average crypto investor can stay away from these
scams.
On top of paying attention to ROI
related promises as mentioned above, it’s also important to steer
clear of anything that promises you a lot of money for doing
affiliate marketing.
Essentially this means that you
shouldn’t engage with any crypto project that promises you a large
amount of free coins for getting a lot of people to join the
platform. For a further explanation of this, look no further than
Techcrunch’s piece on the shut down of Bitconnect.
The promise of an unlimited earning
potential is always a fallacy. Here’s to hoping that these scams
lose steam as the word gets spread about their
strategies.
BY: BGN Editorial Staff