How to identify if a crypto or blockchain project is a scam or not?

June 6th 2021 new story

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This Slogging thread by shahmeer khan, Utsav Jaiswal and Ivy Fung occurred in slogging's official #blockchain channel, and has been edited for readability.

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Hi ya all, I Need your expert advice.
How should a person who isn't much in crypto and blockchain identify if a crypto or blockchain project is legit?

PS: I run an interview series where I interview startups and small business Executives. And today Limarc Ambalina told me that there are many scams going on in crypto space 😳. So, I want to make sure We didn't end up interviewing some scamster.

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Utsav Jaiswal, can you please share some of your expertise here!

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Hey shahmeer khan,

The crypto-verse is in a strange place - mostly unregulated and a lot misunderstood.

To see whether you're not falling for a scam, do make sure to look at the basics and count the number of red-flags:

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1. Founders - what have they done prior to their crypto-foray? Can their claims withstand a basic google search?
2. References - Were they referred to you by someone you can trust to make the right decisions?
3. Collaterals - Try to find their FLITPR+G - Facebook, Linkedin, Instagram, Twitter, Pinterest, Reddit, and Github. How old are their profiles. If they started yesterday, you might wanna wait a bit before whipping out the mic
4. Executive Team - At least in the 2017 ICO days, one look at the team photos could help identify scams. I remember this one project that had Dia Mirza as an advisor - lol
5. Irresponsible Keywords - Do they talk about 'solving' climate-change, poverty, inflation, and then the rest is a very simple explanation of how they would do that, if only someone paid them $20M-100M? That's a red flag

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Now to the part on what you can do about the interview.

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The goal of the interview should be to ask questions of the person more and less of the project. For example, tell us about your tokenomics OR tell us how your platform does X - might not be the most helpful for the readers.

Ask philosophical (crypto-related) questions to see where their head's at. Ask them what are some things you learned are important, only after starting your foray.

Ask them about the seedy underbelly of crypto that they had to wade through to get here

Ask them what is it that they look for in candidate for hiring giving the remote-first nature of the industry

Ask them about the future of bitcoin, ethereum, polkadot, and solana

These questions might help the readers see of themselves whether the interviewees really get crypto or are their for that quick buck.

Hope that helps.

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Thanks much, Utsav Jaiswal, it's really insightful. 🙌

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Like stock price, it bases on if the company has a legit and solid business model, and business plan.
A basic understanding of blockchain will help to understand if the project makes sense. A lot of scams make no sense, but people do not even heard of blockchain and do not know how crypto works.

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