Ignorance and greed have been
described as the fuel that has powered the engine of most scams and
financial malpractices.
There is a growing trend within the
cryptocurrency industry that portrays the characteristics of a time-bomb waiting to explode. Almost everywhere you turn,
there is a certain coin to mine, a product to invest in, or a cryptocurrency
based MLM that promises extraordinary payouts. The number of individuals who subscribe
to these programs, on a daily basis, rises exponentially.
Before this current wave of events,
there have been similar cases where money making programs, that looked too good
to be true, appeared and sucked people in, only to suddenly collapsed. Victims
of such scams have always been left in pains and regrets, for those who lived
through the disappointments.
Why do scams persist?
One question that remains to be
answered is the reason why the public keeps falling for this agelong trick,
despite their own previous painful experiences or those experienced by others
within the space. Another major issue that persists is how to identify such
schemes, for what they truly represent, in the early stages, especially as it
relates to cryptocurrencies.
According to Bob Wood, the founder and CEO of Nexxus Partners, scams of all
kinds feed on two ingredients to create their perfect storm: ignorance and
greed. Wood explains that new technologies are not understood by most people,
enabling scammers to twist the facts just enough to include some truth mixed
with deception, so as to occasionally fool individuals.
Wood says:
“If any guilt is to be found with most people, it is not for
perpetuating a scam, but for not fully vetting the claims.”
Wood points out that scams are often
propagated within social circles based on trusted relationships, often in
churches, work associates and other social groups. In such cases, he notes that
the people often look to the reputation of the presenter, trusting that they
would never try to cheat them, instead of asking what has been done to fully
prove or disprove the opportunity claims.
The categories of cryptocurrency scam
1. Opportunities pretending to be
cryptocurrency
According to Wood, the fundamental
principles of cryptocurrency includes decentralization, privacy, unlimited use,
controlled supply, and transparency with a public ledger, called a Blockchain,
and publicly disclosed source code for anyone to verify. Any entity that does
not satisfy these requirements cannot pass for a genuine cryptocurrency.
The biggest culprit in this
category, as noted by Wood, is Onecoin and Swisscoin.
“OneCoin is an illegal Ponzi scheme,
promising unrealistic returns on investment that only come from new investor’s
money,” he says.
2. Real cryptocurrencies with no
real value creator
Wood has classified under this
group, those cryptocurrencies that may have passed the fundamentally required
principles but have failed to deliver value to the marketplace to drive buyer
demand with a user benefit.
Wood explains that building a
cryptocurrency is usually a simple process and can be achieved within a couple
of days for less than the cost of one Bitcoin. However, he says that the real
challenge is building a market for the coin with an ecosystem to use the coin
for real value exchange.
The majority of the 3,534
cryptocurrency coins are listed here.
Proper education is the solution
Wood further explains that value
creation is what companies must do in order to increase the price of their
stock in the marketplace. A typical example that he points out is what Ethereum
did with their own internal currency, the Ether coin.
“Ethereum provides a development
platform for Blockchain applications,” he explains
Wood concludes by making clear that
cryptocurrency is a grassroots movement that will create trillion dollar
industries and reshape human culture. He says that it will also eventually
enjoy transaction volumes approaching that of Visa and MasterCard. However, he
advises that individuals should get the required education to be able to
differentiate between a genuine opportunity and one which is not.
Where
Can I Get The Genuine Cryptocurrency?
The best place to get a list of all
genuine cryptocurrency is www.coinmarketcap.com.
Advice
The best and most generally accepted
cryptocurrency currently is Bitcoin, so
if you must invest then it your choice to choose between a genuine digital
currency and a self acclaimed ponzi scheme.
For more insight into virtual
currency investment contact me on twitter @alabanibaba and gmail:
micheal.adeniyi@gmail.com
No comments:
Post a Comment