The blockchain craze and how token products deceive users

I vaguely remember that the price of Bitcoin fell sharply when China officially blocked all token projects . In China, what is completely free to operate should be immediately controlled. Some foreign investors put the blame on the Chinese government, believing that it is stifling innovation, but the fact is that China wants to protect investors from tokens . The Chinese government defines " tokens " as illegal fundraising, and China is right.

More than 90% of all tokens running today are pure scams and frauds. Blockchain culture allows people to get money anonymously and without any control. This has led to thousands of scammers and cheaters from all over the world entering the token market . 9 out of 10 projects will never be repaid for the funds raised through tokens. The token market should be regulated to some extent. Otherwise, the market will be full of scams.

However, Bitcoin culture itself is the most convenient way to invest in emerging companies and talents. Tokens will never disappear, and blockchain startups will never disappear. The market will one day heal itself and get rid of all the fraud, but this process will take time. Until these problems are solved, every novice investor must learn to distinguish high-quality token products from the sea of ​​fraud. You need to see through the scammers at a glance.

Therefore, I will share my ULTIMATE guide to help new investors discover truly forward-looking token projects . If a project meets the following checklist - it is undoubtedly a good investment.

The first problem that every token startup faces is that they cannot show a complete product. Only a few tokens can prove to show at least a product or an alpha version of a product. In most cases, most people invest in the idea or concept of the company. The only way to predict the project is through the token website (which is most of the time set up for fundraising).

Tip: If you invest in projects with real products (already have a product or at least a prototype), it can help you avoid most scammers. More importantly, tokens with real products and audiences are more likely to be invested in.

For example, BitJob, a recently popular token project , allowed alpha testing of its platform, which has risen by 6,000 ETH (the minimum target is 2,250 ETH). This is a good result for a "less well-known" product that has just entered the market.

New investors usually start their token research directly from the whitepaper , thinking that content is not that important. This view is wrong. The first thing newbies should do is check the project’s website. There should be at least 7 to 10 sentences on the website describing the company’s philosophy. The website generally uses common words to describe the main idea and basic content of the product. When the team of a product cannot express the importance and prospects of the product – then they cannot do PR and marketing activities either! I mean, if they can’t convince you, how can they convince others? Without a good marketing strategy, there can be no good operation. If the product doesn’t sell itself, don’t invest.

Tip : The website should clearly inform the readers - the role of blockchain technology in the company's product structure, why the technology can change the world, why the company will be competitive, etc. Products that run token projects but do not use blockchain technology in their product structure are not trustworthy. Their only purpose is to raise funds (not to change the world). I will never invest in such a company.

For example, the popular token project Verifyy can provide readers with easy-to-understand content, and users can understand how their solution works. Their white paper content is also easy to understand, so they are more likely to raise funds when their token project starts.

Mature businessmen understand that the success of a business is not just determined by the amount of investment. Success is 10% the idea and 90% the team that can make it happen. You should know the team you invested in, so anyone who is related to the product should be on the website (and add links to the social media accounts, emails, blogs, etc. of the above people).

More importantly, you need to have a brief meeting with the team before investing. Many fraudulent token projects use fake people and accounts. In addition, there are token projects that pay some well-known figures in the industry who are willing to serve as consultants for these fraudulent projects.

Tip: Don’t hesitate to ask about the project. I check every document. 90% of the teams have blank accounts on social media. If these people don’t reply, or are particularly rude, or they send you whitepapers instead of answering your questions – this is a sign that the token project is not trustworthy.

For example, the BitComo token project aims to create a CPA alliance network based on blockchain technology, which doesn’t seem to be a very good project, but after researching it, I found that it is not the case. I found the idea of ​​the company interesting, but the accounts of the team members on Facebook are blank accounts. They don’t have a ready-made CPA platform, and the website doesn’t look very formal. So I contacted their Russian consultants - Oleg, the CEO of AdCombo Affiliate Network and another Russian. I asked if their project is real, what they think about the token project , etc. The two replied and gave me a lot of valuable information about Bitcomo. I also searched a lot of photos of Adcombo CPA on the Internet and found photos of its CEO auctioning a blue Ferrari. They think that this project is very experimental and not a scam project. This project seems to be real. Now, I am waiting for their token project to start (but I am still not sure whether to invest). So my advice is: do a Google search before investing .

Another very important thing is the roadmap of the token project , because ideas and teams without a good roadmap are not worth mentioning .

It can be interesting when you see a startup with a shady website or a poor whitepaper, but they claim to have started developing products in 2015 (I believe that in 2015, most people didn’t know anything about blockchain technology and cryptocurrencies). If the company is not honest with you – they are not worth investing in. Those who modify the numbers to make them look better, will not be honest with you. So avoid them at any cost.

Tip: Many project companies are very optimistic about their plans. But most companies don’t have enough experience to make a correct plan. So check their roadmap, because the roadmap reflects whether the company is really great, and you can see the company’s actual situation. If the roadmap is all fantasy – then the company is a rookie or a scam company.

Many fraudulent token projects make money by deceiving lazy investors. If you are too lazy and don’t do research, you will get scammed. A common mistake is: investing in a promising project, and later realizing that it competes with dozens of the same type of products (and other products are more competitive and mature). So, google before investing . One more thing: if you find that the project is just a clone of other products – it is better not to invest.

Token distribution is the next potential market. If a team’s project is ready to distribute more than 80% of the initial tokens, then the team obviously does not care about its future. On the contrary, if the team retains most of the tokens – the team is more likely not to be a scam.

Tip: Understand the role of tokens in the business economy. Depending on the project, the value of the tokens received through a token project can be completely different. The value of the tokens and their distribution should be clearly stated in the white paper. You should be confident in your investment.

The whitepaper should detail everything about project development, expansion, budget allocation, audience, marketing and PR strategies. It should all be logical and clear to the reader. The more details in the whitepaper, the better. This is true even for readers who have no expertise in digital marketing. A company should be able to sell itself, otherwise the company is not competitive. For example, the pass-through scheme of the AdEx token project looks simple, but it does not answer the question of how the platform works. Moreover, the company gives far fewer answers than unanswered questions:

Tip: Open source projects are of course the best choice. If the description is full of jargon and the terminology dictionary is difficult to understand, it means that the developer does not want you to know the details. This is very suspicious and you should be careful.

There is a lot to be said about bounty campaigns and marketing management of token projects. Good projects are carefully managed by responsible people. Bad projects are full of complaints, negative feedback, and poor communication. Low-quality management is a sign that the project is not ready to run a token project .

Instead, bounty campaigns should be considered budget-wise. Typically, mature projects spend 2% of their overall budget on bounty campaigns. If more than 2% (5 or more) of the budget is spent, the product is not suitable for investment.

Tip: Check google and forums before investing . People who run blockchain startups usually have some background in digital marketing. They know how to promote projects, so each token project buys a lot of posts in the media. While posts in the media are easy to buy, it is difficult to buy reputation in forums. A startup's reputable homepage in the bitcointalks forum is much more trustworthy than a website with many small blogs and new website links.

This is my opinion. In the end, if you follow the above points one by one and connect them to see the whole picture. By considering all factors, you will see the whole picture of how the token project will conquer the market. If you see the prospects – then there is no need to hesitate to invest. If you still have doubts, start again from the first point.

Remember: This is not how you make money, it is how you change the world. You have to believe in the project you support. You have to believe that it will succeed.