It’s no secret the current altcoin launch scene is filled with a large share of scams. Some of them are designed as such from the beginning. Others are the result of inexperienced ‘Devs’ who make crucial mistakes and quickly find themselves in scam territory. It doesn’t matter exactly why the coin turns scam, because a scam still burns bagholders all the same!
Of course there are some who will argue that the scams don’t matter. To a large degree they’re completely right. The market ends up deciding the fate of any altcoin. If you believe enough in the efficiency of markets then you likely will gladly hold on to the faith that the marketplace will decide which coin eventually lives or dies.
In general you’re completely right to think this way! But, and this is a very big ‘but‘ (not Karadashian-sized but close.) But even though the marketplace decides, it doesn’t mean that blatant scams should be tolerated and facilitated by the so-called ‘community‘ of altcoin lovers.
What community allows their young to be preyed on? Which community tolerates the lies of thieves? Which community encourages new people to lose their money in obvious and unrelenting scams? Hah, no real ‘community‘ would ever tolerate this kind of behavior.
So Who’s Doing All These Scams?
I have no evidence to support what I’m about to say, so I’m going to accurately label this speculation. I can’t say for sure exactly who is doing all the scams, but I think I have a glimpse into human nature to make an assessment. In the so-called ‘criminal world‘ an interesting fact emerges that criminals love to specialize in certain crimes.
It make sense. In all walks of life, ‘experts’ are people who specialize in a narrow segment of a field. People who specialize in any area, including a type of crime, will continue to hone their craft until they’ve discovered the ‘perfect crime.’ If they do, they have a guaranteed money maker they can replicate again and again - racking up bigger bucks every time. Once they do, nobody should have a reasonable explanation that they will suddenly ‘have enough’ or retire. They never do.
This could very well be what’s happening in the world of alternative cryptocurrencies - right in front of - or because of - the community members who support launches in their current format. The major players in every launch must bear some of the blame. The actors in these crimes are:
- The criminal coin developer.
- The online community of altcoin lovers.
- The miners who mine the coins.
- The mining pools who aggregate the mining production to in turn dump the coins on…
- The exchanges.
At the point where the alternative cryptocurrency is turned into BTC (and presumably Fiat) the scam is complete. Many of the actors in this scenario are acting in good faith and have no role at all in the scam being pulled other that they’re providing a service which allows it to happen. They are merely following the laws of a competitive marketplace and providing their service on ‘face value‘ basis.
Still, some of the players must be involved. Over time the altcoin community will need to get better at identifying the players who are not acting in good faith. The most obvious vector to attack begins and ends with the coin developers.
So What Can We Do To Stop Being Scammed?
I’m going to revisit this question later with more detail, but right now a closer examination of the coin developer by anyone thinking of investing time, electricity, or energy into a new altcoin should be sufficient.
Some altcoin developers may need to be anonymous. That’s understood. Those taking IPO money, though, clearly must provide some credible evidence of an online persona. They must show SOMETHING other than a brand new account to prospective ‘investors‘ in their scheme.
Even when there’s a big pre-mine involved, we have to remain vigilant and skeptical of the motivation for someone to build yet another altcoin when there are already so many of them. And as DaFuqCoin and AsiaCoin taught us, we must CLOSELY examine the source code as soon as possible to see what suprises are in store for us.
For sure everyone involved with investing in altcoins can stop being naive and overly greedy. If you notice alarm bells and red flags, listen to your intuition and save your funds. Don’t think you’re going to ‘miss the train.’ That type of language is reserved for pumpers and dumpers. Most altcoins will rise and fall gradually. There’s always plenty of time to get in on a move. However, it’s almost impossible to get out of a straight scam.
Keep your eyes open and pay attention to the landscape of the altcoin scene. Recognize patters and start paying attention to the ‘who’s who.’ If you’re careful, you’ll be educated enough to avoid losing money over nothing.
Scammers Are Parasites Who Feed Until The Host Dies
Scammers won’t suddenly ‘get enough‘ and quit scamming. Instead they’ll keep coming back again and again for another feeding. With sucker-rich environments like BitCoinTalk and Twitter, there’s always a new clueless and trusting person who will send BTC to someone online because he thinks that person is going to make him rich.
Kid, that’s not how the world works. Someone who is saying ‘trust me‘ and expects you to send him money based on faith is the last person you should entrust your holdings to.
If the scammers keep preying on the same people, very bad things will happen to the flow of funds into altcoins. It will dry up. Great projects will die because miners and investors and others have lost time, money, and energy supporting the ‘scam du jour.’ Each day that dawns brings new scams (and probably the same old scammers) back to the target-rich environment known as the Alternative Cryptocurrency sub-forum at BitCoinTalk.
If altcoins really are the ‘Wild West’ than the whole business needs its shares of concerned citizens, posses, and maybe even a Sheriff or two to hunt down the desperados. Communities protect their own, especially the weak ones. Community is a word that’s misused every day by altcoin scammers and their supporters. They aren’t the real community. We are. So let’s start acting like one.
P.S. I’d love to hear from anyone reading this. If you’ve been scammed, let us know. If you think you know to prevent altcoin scams, sound off. Thanks for stopping by and taking the time to visit.