This is a concerning question for investors and people who are new to the crypto-field as they’re going to invest their hard-earned money. In fact, this question is extremely valid in this age, with many fake and financially disturbing scams popping up now and then. If you are investing in a cryptocurrency, you have every right to know if it is legitimate or not. But how?
How will you distinguish whether it is the best coin exchange or a bad one? How can tell whether this cryptocurrency platform is a reliable one? Don’t have any idea? Fret not! I am going to discuss some of my personal experience that will help you to decide whether the crypto trading platform is best fit for you or not. So, take a look!
Short Notes on Cryptocurrency
A cryptocurrency is a medium of exchange, such as the US dollar, but is created and stored digitally using special encryption techniques to control the creation of monetary units and to verify the transfer of funds. Bitcoin and Ethereum are popular examples.
BLOCKCHAIN
If you have been following online banking, investing, or cryptocurrency over the years, no doubt you may have came across the term “blockchain,” the record-keeping technology behind the Bitcoin network.
Have you ever wonder how it possible for bitcoin to exit without any central authority or control of the crytocurrency. No such thing as central bitcoin bank. Well, the answer lies on how the data are structured – In Blockchains.
Blockchain is the heart of cryptocurrency. It’s what makes it ‘work’.
A Blockchain is a digital ledger of transactions that is secure, cryptography-based, and distributed across an entire network of computers on the Blockchain. Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.
Cryptocurrency needs blockchain technology because it’s currently the best way to enforce immutability in a way that’s decentralized. Without it, malicious actors could reverse transactions and double spend the currency, which is the classic digital cash problem that the Bitcoin protocol set out to solve with it’s implementation of blockchain technology.
How to identify a legitimate cryptocurrency
Blockchain Powered
A secure crytocurrency must be Blockchain Powered. Doing so will ensure that all data and transactions are encrypted and uncontrollable by the creators of the cryptocurrency or anyone.
Blockchain brings trust and transparency to digital transactions. All transactions that exist on a blockchain are shared and distributed among a network of peer-to-peer computers. Transactions are encrypted before they are stored and shared.
Community Interaction
This involves how the crytocurrency relates with the public. If the cryptocurrency is extremely transparent with its policies and services, it is more often a legitimate currency. Most big cryptocurrencies have their services and policies mentioned in their website or app to keep the user aware of them.
Therefore, before you invest on any crytocurrency, check the FAQ to read and clearly understand it policies and terms of service. If no such data appears on the site or you notice any kind unclear and suspicious section on the platform, then it likely not a legitimate one. A legitimate crytocurrency platform should be glad to share it services and policies to the public for awareness except only if the platform is not legitimate.
Good Security
Security is the main concern when we are looking for any crypto platform. There ar few things that a secure website has that you can cross check for ensuring their security standards including SSL certificates and genuine review from the users. In case you’re wondering what’s an SSL certificate, well let me tell you.
An SSL(secure socket layer) certificate is a type of digital certificate commonly used on e-commerce sites and pages that require users to submit personal or credit card information.
SSL certificates ensure that your information is kept safe and secure such that all the information entered into the website remains encrypted when transmitted across networks. They can prevent users against using fake cryptocurrency exchange sites and also offer protection against hackers.
If the URL begins with “https” instead of “http,” then the site is secured using an SSL certificate. A padlock icon displayed in a web browser also indicates that a site has a secure connection with an SSL certificate. If the cryptocurrency website does not have a small lock icon next to the URL, it might be a scam, and you will lose money. The small lock icon indicates that the site is protected, which means that your transactions and data will remain private and secure. So, the site without this is a big no-no.
Multiple Payment Options
Always rely on the best crytocurrency site which offer multiple payment options such as debit or credit card, PayPal, wire transfer, etc.
Having multiple payment gateways signals to customers that you’re trustworthy. The trust attributed to specific companies like PayPal is transferred to you through simple association. Above all, it a good thing for a better users experience as it allows users to use their best payment method.
Customer Review and Ratings
Check the other users’ experiences with that cryptocurrency. Check the reviews, blog posts, etc., which talk about the experiences people had with that cryptocurrency. This will give you enough confidence to go for it and trust the results.
Beware of fake and paid reviews present on their website or app. Some online platforms do fake customers reviews in order to acquire trust and convince people to invest their money. There are various websites that pay people to give a rating or positive reviews about a platform. The best place to check for customer reviews are on social media pages or groups, as they will not be able to control such number of comments.
Research
You should not buy any cryptocurrency without research. You need to know its history, plans, current status, etc. before buying it. This is why research is important. Without researching properly by yourself, you are very likely to just face losses. There’s no easy way out of this.
