Blockchain company check: why the team says a lot about the company
From time to time, the world is graced by something as hilarious as this; Ryan Gosling’s face above a name of an individual listed as a graphic designer for an ICO.
But it’s not all the time that a scam gives everyone a good laugh—especially not when people are victimized. In fact, even with Ryan Gosling’s face on that scam ICO website, the scammers still managed to run off with $830,000 before the site vanished into thin air.
Countless blockchain companies are emerging—at what seems to be–by the minute, and since thousands of them are scams, it’s imperative for anyone transacting with cryptocurrencies to do their own due diligence to protect their funds. The blockchain and cryptocurrency spaces can be chaotic, and they will probably remain that way until both industries mature.
Looking back at the history of the internet, its earliest days were also riddled with tons of scams– and this trend persists to this day—almost 30 years after its inception. The blockchain world will probably have to go through the same rough patch that the internet did for a certain period before effectively purging more of the scams out.
In the meantime, users can educate themselves and do their own research. Here are some steps to help keep you from being robbed in the world of blockchain and crypto.
Check the website for the company’s background and backers.
Whether you’re new to the blockchain industry or an experienced participant looking for new projects and platforms, always check the websites of the companies you’re interested in. Most blockchain start-ups include the profiles of their team members so newcomers can better weigh the company’s legitimacy.
You can tell a lot by looking at the team behind a project. One of the best indicators that you’re in good hands is when the expertise of the team members are well-spread and relevant to what they’re doing. For example, a company that is launching an ICO for a real estate blockchain project but whose team members have no relevant background in that industry is probably not a safe bet.
On the other hand, a company building a cryptocurrency trading platform whose members are finance veterans is more likely to succeed. For example, a new cryptocurrency exchange called BitAsset is building a platform for ETF index funds, futures and derivatives, and other financial products—and its team is comprised of Wall Street veterans who know how traditional banking and finance work.
The experience of their team is consistent with the company they’re building. At least one of founder should have the relevant experience for the project at hand. You shouldn’t trust a team comprised of only insurance salespeople to build an artificial intelligence project on their own.
Check if the members listed on the team page are real people and if they are actually connected with the project.
Much like the Ryan Gosling scam, it’s easy for scammers to build a team profile using stock photos of random people, writing fake names and backgrounds for them. Do a background check on the names listed on their website.
Snoop around, find their LinkedIn pages, Twitter accounts, and even Facebook accounts. If necessary, send the account holder a message to confirm their connection with the project. If it turns out they’re not actually connected with the project, not only did you save yourself from a potential con, you would have also helped alert the unwitting individual that their name is being used for a scam.
This is exactly what happened with a project claiming to be reviving SegWit2x last year. The person listed as their CEO denied being involved in the project.
Fortunately, blockchain is also a powerful tool for identity verification, reputation, and background checks. Solutions are being built on the blockchain for more secure, more transparent, and easily verifiable ways to check whether a person is who they say they are. On platforms like LinkedIn, any profile can list made-up credentials, and random people give out their recommendations willy-nilly even when they’ve never met or worked with the person they’re recommending. LinkedIn doesn’t even check to see if the profiles on their site are real people.
But on blockchain platforms, this is changing. Penalties can be imposed on false verifications and rewards can be given for honest, accurate recommendations. One example is a startup called BHIRED.io, which makes identity and reputation verification for employment key focal points on its recruitment platform. Reputation scores are part of the ecosystem, paving the way for a “more transparent and honest LinkedIn.” Additionally, not just anyone can access profiles on the platform; this means data miners cannot just gather data for profit as they please. Data owners have full control over who gets to access their data, and get compensated accordingly should it be shared.
Sounds cliche, but Google it.
Some companies don’t include their team profile on their website; this could primarily be due to turnovers and replacements, which isn’t necessarily a bad sign. In fact, it’s just a natural reality for any company. But a Google search of the company name should help you out.
Results should include news articles, forums, interviews, events—a variety of material about the company. If the company has never been heard of and has no online presence, then proceed with caution.
When in doubt, ask.
There are entities in the blockchain and cryptocurrency space who choose to remain pseudonymous; this doesn’t automatically mean they’re not legitimate. Several pseudonymous individuals have established their aliases in the space, and people trust them without knowing the real identities behind them.
If you’re in doubt, ask around. There are several communities and forums online such as Reddit, Bitcointalk, and Telegram which are dedicated to answering questions and discussing new companies. Even Twitter has a league of people willing to help out; this is the good thing about the blockchain industry—online communities have risen for global collaboration and guidance.
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