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