Bitcoin Forum

As the title says.  What are the initial warning signs that shows a coin or project is nothing but a pump and dump?

Bobsurplus, I know it's counterintuitive for you, but your input would be much appreciated as you have extensive experience on this.

Thanks.

I personally noticed things such as;

Significant pre-mine, ninja launch, copy-paste job, no innovation or unproven innovation or features.

Anything that is ICO or full POS.

This is a topic I want to work on.  Please post more of these red flags.

I second this along with any "traders" who continue to pump the coin. These are the known pump groups such as Bobsurplus, ryanpumper, etc.


I would mention IPO/ICO as well, but there are real world examples of developers who are full into cryptos who need this in order to continue their work (one I personally know). So this is a "take with a grain of salt" situation.

Anything newly-launched using the Bitcoin 0.8.x codebase. It's a dead giveaway.


Cheers

Graham

1. Newbie dev, no community involvement,  price is high as sky on trex = Obvious Scam.
Example: Dibbits, Globe, Ibits (new coin)

2. Newbie dev, project looks like crap, senior members supporting it (Hidden Scam)



Personally, I don't even invest in any new altcoin unless Dev has been delivering continuously and there is a community support. If I see handful of people posting over and over in a thread just to bump it..I run to the other side. Don't invest in new altcoins most of them are just plain scam and copycat of other coins.

i couldn't disagree more, there is not a single example of an ipo/ico in cryptocurrency that isn't a scam. any 'dev' that require one to continue their work are scammers.

biggest red flag would be having it launched on bitcointalk  ;)

My way of looking if a coin is a scam is just comparing it to the value of guldencoin. Guldencoin will become the scam killer in about a year from now if they keep up the services/merchants they adding. Also going to be first alt coin updating to 0.11 code base.

Premine!!!!

If an altcoin has a significant number of coins minted during a premine, it's a dead giveaway that the developer is looking to make a quick profit. Stay away at all costs.

Generally the ICO's that are also accompanied with a massive amount of volume, big flashy roadmaps but vague information. In order to P&D a Coin, they need around 50-60% of the Coin otherwise all the holders will dump on their pump.

During the height of scam coins, the grammar used in most of the obvious scams had lots of small giveaways indicating they weren't native English speakers.  They would say things like "coin count:  10 millions".  You would then see another and another and another coin released all sharing similar descriptions and codebase week after week with the same grammar.  I believe the spam release of coins all using the word "millions" originated from India.

Could lack of transparency and anonymous devs be red flags?  

In crypto, I've seen some projects with anonymous devs but are not scams.  And some legit projects don't have much to say and are playing it close to their chest.

I wonder what you guys think about it in general.

1. new account making OP on btctalk
2. sponsored coins on bittrex
3. a coin just coming out of a rat hole with huge volume
4. fake buy walls. these walls can disappear in an instant
5. ico/premined
 

I completely agree, but for every legit project there are 100 scams.  I guess that if the devs are still delivering updates after 6-12 months and they have delivered original code, then that is probably the best indicator of a legit coin. 

Completely lack of transparency sure but not anonimity. Even if a coin is a great success, knowing the identity of the devs can be dangerous. Just imagine what would happen if Satoshi was known.

And it's not like people who give their name to a coin never scam (Paycoin - Josh Garza), in fact they can scam more because people tend to trust them more.

i think the most significant red flag is the pre mine or any sort of ninja pre mining which leads to a lot of blocks being mined as the coins is released.

Sadly it happens all to often.

Privacy can be a concern and people should be allowed to have their privacy but you can have anonymity and proving trust over time. A newbie or low active member launching a Coin would be a red flag for me because they would not have the experience needed in how to manage a community and are likely an anonymous newbie account for the purpose of being able to exit the project without any repercussions.


Lack of transparency is possibly the biggest factor because you can be fully transparent in what you do even if you are being anonymous by proving every action on the Blockchain. In PayCoins care they weren't anonymous but had 0 transparency and would never go out of the way to prove anything being said.

when a coin doesn't have an honest dev, and looks shady in total. also when it is just a simple copy and paste of hundreds of other similar coins before it without any significant change and / or improvement.

also the pre-mine or any sort of ninja mine that comes at the beginning of the release of the coin is a big flag for me that they are gonna pump the hell out the coin as soon as they can.