There is no fool proof way to spot a scam or a rugpull project but there are some red flags which you should look out for. And please do not invest a single cent into the project until you are sure that the project is stable and will at least have some chance of success. A lot of “investors” always think that we should go in at the beginning but honestly how many projects will succeed in the end? I tell you – very few. I have seen projects giving you historical examples about Bitcoin and how many times returns those early adopters get. Sure you might get lucky and become a millionaire with one successful project but those are few and far between. And for god’s sake, please do some research instead of just listening to some Youtuber or even some blog writer. And beware of social media scams as well. These are areas where scammers are targeting.
For those who don’t know what are mobile mining platforms, they are those applications which users can download to “mine” for cryptocurrencies. But all it takes is usually just a click of a button. The idea is to spread the word and have such many users as possible – because everyone has a mobile phone. So in order to optimize returns, users will need to refer other users to the platform. Some people think of it as some sort of a pyramid scheme. But most projects also get the users to refer other users to their platform as well. There are plenty of these kind of projects nowadays. Started with the Pi Network (which I am quite confident will succeed) and then now we have like hundreds of them all vying for our attention in the Google Play Store or the Apple App Store. Anyway here are some pointers and red flags for investors who are interested in the mobile mining platforms.
- Copy cat projects. If you have been doing crypto mining on your mobile phone for a while, you should be able to easily spot copy cat projects. Basically they copy the interface, idea, reward structure and even the whitepaper from other projects and then perhaps change the layout to repackage as their own. I have seen some copying the entire whitepaper (including the original name) and use as their own. Copy cat projects are most likely scams and cons. It shows that the “developers” are not willing to spend time and effort into doing something even remotely original. So they just copy and hope to quickly make a buck or two.
- Whitepaper. Probably one of the most important aspect of any project is their whitepaper. It is supposed to contain all the information about the project – its blockchain technology, the idea and concept behind the project, the rewards structure and how it will be implemented. If you see a project with their whitepaper only one or two pages – might think of staying far far away. Someone never took the effort to even think through what the project is all about. So that is a sure sign that the project is a scam. I have seen some whitepapers looking like they were written by a 10 year old. I also find it disheartening to see that such an important piece of information has tons of typo or spelling mistakes. Certainly does not inspire much confidence in the project.
- Non-functioning application. This might not always hold true as sometimes programs and applications do need some time to develop or even to debug. However if a project has been ongoing for months ago, I would expect most of the application to be at least usable for most of the users. I am not saying that all features are complete and functioning but at least the basics are done and what was promised being implemented. I have tried using some mining applications that users can’t even click on the mining button to start their daily mining! Some even comes with dead links here and there. I have seen some applications having bugs that wasn’t resolved even after a few weeks. If the application is running smoothly and you don’t face too much problems with it, well we know that someone did take some effort and money to develop the application properly. It should stand for something. And for those who don’t know, Apple’s App Store approval is more stringent than Google’s. It is not saying that if the project does not have an iOS version, they are scams but it does show that there might be some problems with their application.
- Downtime. There is no such thing as 100% uptime but if their servers go down more often than not, then you should be very concerned about the project. Most legit projects will at least have some resources to get decent servers or providers to enable good uptime.
- Pay for more “mining” speed. Honestly I have nothing against paying for stuff and I have nothing against smaller projects. But I am sure there are other ways to get some back some revenue like one or two advertisements in the app. Paying for increased mining speed always make me very suspicious of the project. Who knows what will happen to your money after you pay for this “added feature”? And again lets be honest, companies with more financial muscle behind them will more likely to succeed. That is a fact of life. And such companies will not need such “gimmicky” feature to get some revenue. Of course not all projects will have such luxury but this is one of the methods you can use to spot whether a project have some good financial backing behind it.
- Different. That is what I like to see in a project – being different. As you can see, many of these mining applications follow the same concept, you click on a button daily to start your mining and hope that the project will succeed. Basically that is what most projects are. However there are several that offers different features like staking, savings, lending, membership benefits, decentralized exchange, distributed applications and other interesting features. My favourite at the moment is the Hi Network and what they have planned for the members. You can see they did spend some time and effort to making their network more resilient to token dumping and giving more benefits to being a member. And of course we have the Pi Network – the number of dapps running on their platform is is just amazing. These should be solid projects and I am very excited to see what they will become.
- Trying to solve a problem. As with being different, a new project should be a platform that tries to solve an existing problem with all the current projects. There is no such thing as a perfect technology that has everything thought of – there will always be something that is holding down something. Transaction speeds? Scalability? Barriers to entry? Banking problems? Lack of real-use cases? High cost? Confusing mechanics? If you are looking at a project, you should check what it is trying to solve and if it can be successful, surely it will be something that everyone takes notice of.
- Website. Not that crucial but it is great that the project has an official website. It does give the project some legitimacy as well. I mean nowadays websites are not difficult to create and build up but again it is all about effort and cost.
- Social Media activity. One way to check whether a project is actually alive is to check their official social media. If they post often and keep updating their members about the project, at least we know that they are “alive”. Some projects do provide support via their social media accounts and if you find it full of activity with lots of users asking questions and the official team members replying, I think it is a very good sign, especially so if they have a good support team. Again somebody took the effort to hire support staff members to support their project. Most scammers or rugpull projects will not even respond to any questions at all or will only reply intermittently.
If you guys have anything you want to add, please let me know down in the comments below. And if you have any great mobile crypto mining projects that I have not covered , let me know too. I am no financial advisor. Please do your own research no matter what. Take care!