How to recognize scam ico? Part II. Vision

Before we begin, I would like to make two remarks :

1. I am well aware of the target audience of Habr and, perhaps, therefore, for her, this material will be not only understandable, but also simple. But on the other hand, it is you, the inhabitants of one of the largest IT community in the CIS, can always give this material to your acquaintances or people just met on the Web to finally avoid the next artificial bubble.
   
   
2. The second aspect is that understanding and systematized knowledge are two qualitatively different categories, so I would like to begin to structure what is known within the framework of the development of a single reputation system (about it next time).
   

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Scam is cheating

To understand that the scam phenomenon is not new, you just need to add a period to it and com - http://scam.com - will give you hundreds of results on the subject. And this is not surprising: people tend to make mistakes, which means there will always be those who turn their mistakes into a business.

And about this in more detail.

Scam is a scam : again, a simple query “scam + history” will present a large list of various services that one way or another decided to play on the trust, stupidity or carelessness of users. The areas will be very different: from energy to the banking sector. As for the ICO sphere, despite its youth, it has existed since 2013, it has enough scams.

Let's try to classify scam first:

First, the classification by time : short-term (the majority of them and about them below), long-term - this is primarily HYIP. The most striking example is OneCoin, about which everyone has already heard, but new minions still appear.

Secondly, by complexity :

• The simplest. They can be compared with SPAM: they do not hit purposefully, but with mass effects, in the hope that the statistics will work and every hundredth / thousandth will agree to contribute something;
  
  
• Medium complexity - there are no longer drawn faces, but bots with history, not just a description in the style of “and it will come down”, but quite adequate display on the paper of the beliefs of blockchain adepts. But a careful analysis of the team and product makes it clear that everything is not at all as good as we would like;
  
  
• Difficult - in these cases it is extremely difficult to recognize a scam: many today refer one well-known crypto bank to this category. However, for the time being I can neither confirm nor deny this information.

Thirdly, on the subjective side, as the lawyers say:

• When the creators initially do not want anything but fundraising;
• There are cases when the creators for one reason or another come to the scam already as a result of ICO or the work of the project (perhaps one of the clearest examples is MtGox, and today this could be EOS).

In the first case, fraudsters consciously do everything to get more and disappear quickly. In the second, the possible losses of the “contributors” are connected with the creator's lack of will (the “all fed up!” Mode), with a quarrel within the team (you can find one of the storj & filecoin analogs on this topic), with banal greed, which, as you know, comes while eating - getting crypto assets.

To evaluate any ICO project you need to focus on four components (somehow you already wrote about this , but today we will look more broadly):

1. Team - team;
2. Tech - technology;
3. Theme - concept;
4. Token - the legal status of sold crypto assets.

There is no single recipe in the assessment, so we’ll dwell on the principal things, considering and detailing which, you can create your own model of criteria:

The team always needs to be checked for the truth of interconnections, that is, to search not just a profile on facebook, linkedin, but to go out to people who are somehow really exposed somewhere. The fact is that in an online environment people must surely be found who often sit on social networks, have stable communication groups and quite openly discuss their lives. If there are none, it is very strange. Of course, there are groups where people gather precisely because they are introverts, but if from the whole host of acquaintances of each team there is not one with a full story, this should be suspicious. The theory of 6 handshakes in this sense works: it is not necessary to dwell on the figure itself: the main thing is for the participants to be connected with the real world:

• First of all, it is necessary to check communications with legal advisors - their reputation costs money and therefore there is no need to be lazy to write and call in order to confirm / deny information about the project where they participate.
  
  
• Further legal entity : registration, location (online cards for you as a gift); if we are talking about preICO, then you can even check the postal address by sending a welcome letter on paper (at least twice I did it and my instincts did not let me down). Associations and other associations where this legal entity should be. Recently, for example, with a team I checked COSS and from 7 requests received 7 answers confirming that this association is indeed a member of a number of business communities (see example below).
  
  
• There is one more thing that often has to be used in everyday practice: search by phone number or email. Of course, finding a personal address for someone from the team is not always easy, and the phone can be created for a special project. But the probability of finding this data is not so small. For example, before ⅓ projects, in one way or another, similar data were finally disclosed. Why do you need it? The fact is that everything has the property of being indexed. Therefore, old accounts in social networks, on bulletin boards and in many other hidden corners of the Cyber ​​universe often can say more about a person than thousands of letters written for glory.

Technology is very difficult to assess if you are not an expert. True, once I was helped by a banal search for the source code, which coincided with the script of another project by almost 100%. It’s good that the Internet was created precisely as a collective mind : everyone can ask a question on a profile forum, a site of questions or a chat (in telegrams, say, there are enough of them now). Make a link between the first and second "T": some banal request to the slack / telegram developers and the support team of the project you want to invest in: just the other day, the "deafness coefficient" appeared in the https://t.me/bitfund chat ( by the name of the founder, who did not answer a single question, but there will still be material on that, I’ll just say that he even had Apple in his customers and asked to develop a marketing strategy). Feedback from fraudsters and non-fraudsters is completely different. Fraudsters do not answer at all or respond extremely vaguely to direct questions. Exceptions are, of course, but this is a different level of training. By the way, here is a small list of channels where you can ask a question:

1. http://toster.ru : do not be surprised, because Habro community often helps to outline the framework;
2. https://t.me/bitfund - good chat with ICO experts and investors and evaluation of blockchain projects in general
3. https://t.me/ICO_law - the chat is not as big as the previous one, but there are a lot of useful links and materials for beginners.

You can increase the selection by several orders of magnitude, but I personally do not advise: first, the endless stream of information only distracts; secondly, there are a lot of channels-reposts or news channels, and we are talking about those where living people analyze live examples; thirdly, to use the search string is now taught to all. It is bad that not everyone is taught to do it right. And yes: if you still know intelligent sources - write, supplement together.

The concept . If in technology we evaluate the code, the possibility of selling the product from the point of view of production, then there is a competitive market and economic utility of the service as a whole. Unfortunately, even normal projects do not analyze the first and second component (which ultimately results in the collapse of many services). But scams can be distinguished by too rosy descriptions or, conversely, confusing definitions, of which little remains clear after reading. Let's subject:

• We take the White Paper and the Roadmap. The first one says: “the launch of the first stage will take place no earlier than March 3, 2018”; Open the Roadmap and see: “the completion of the first stage: April 2018”. The implementation period of the stage is 3 months. In this sense, I don’t really like the ZrCoin approach: “the deadlines for the completion of construction and the launch of the first production line are scheduled for spring 2018.” We'll see, but for now they look overpriced.
  
  
• And now let's take a look at the development of the concept: how much time has passed from the moment of its birth to the first implementation or at least the description? And how many days, weeks, months between this very implementation and ICO? Here you can find a good example for training such skills https://icotracker.net/project/skyway .
  
  
• And the most important question: how will the blockchain project win, conditionally speaking, in a race with classic it? Say, how can SONM & Golem teams that do the same, but not the first year? This is a matter of doubt. But for the scam, the question is simpler and tougher: is there such a realization in the classic business? Not? So why?

In this regard, I liked the approach of the Kickico team, which is trying to unify the study of projects before their launch, and not after.

Token . Finally, after the SEC & MAS, people began to realize that it is not clear what to release, it is not clear for whom - not just strange, but also dangerous. As a result, if we see that tokens are created using the “buy cheaper - sell more expensive” system and there is nothing else behind them: bonuses, equity, reverse buybacks and so on, then this is another reason to think about the feasibility study (feasibility study ) and its adequacy. Here are some more details on the topic:

1. Is there an agreement on the distribution of tokens?
   
   
2. What is the general meaning of a token in different documents: a roadmap, a white paper, a public offer, etc.?
   
   
3. In this video, you will not find an example of a scam, but rather an item that, among others, looks suspicious: when White Paper is written about repurchase, and documents of purely legal nature are not. Trick or omission? Depends on other directions, but, at least, a reason to study the project in more detail.
   
   
4. How many tokens are emitted and what is their economy? For example, to maintain growth and liquidity, ETH requires a daily turnover of 5,000,000 dollars or more. If it is not, then there is a fall. In this sense, the EHT is an inflation token, and btc is a deflationary. Stablecoins are only at the stage of formation. Why know this? Then, that the Concept must take into account the economic essence of the token and proceed in terms of growth. Today, not all projects are doing this even from the white list - this is another reason to think about the possibility of participating in them.

Everything that is described above is usually perceived as a kind of complicated element and is left as “recognized, but not perceived.” But these are minimal examples of the fundamental analysis on which investment and risk assessment should be built.

In Russia and the CIS countries, priority is mainly given to technical analysis. Let us, and we also will not avoid him.

Let's say the same. Here you can find interesting information about one of the most suspicious among the latter. In addition to ICOtracker, there are a number of similar projects: ICOrating, where there is a special tab with the same bookmark, icostats and several others. On Golos, Den Ivanov made a selection about this - and I am addressing him.

There is also an approach that essentially represents the following matrix:



This approach was created by Alex Kontegna. The author explains this ICO rating structure as follows: “our map divides the space into a matrix with nine slots: in the positive (green) and negative (red) fields, defined at different intersections. A good use of this matrix is ​​to measure the risk parameter of your portfolio (ICO tokens) if you own several coins. ”

The following simple rules are attached to the matrix:

1. Compare the two assets in which you want to invest in the “red zone”: the larger the amount of money already collected by the project in the negative (red) zone, the higher the risk associated with the possession of such tokens. The principle is this: services with a negative coverage area and without strong foundations first of all become even less stable when they grow.
   
   
2. Follow the opposite rule when comparing two assets that are in positive territory: the larger the amount collected by the project in positive territory, the lower the risk associated with owning its tokens.
   
   
3. Finally, investing in an ICO with negative characteristics in general should be avoided. Of course, sometimes there are factors that even prevail over this. For example, earlier projects that could make an ICO attractive in terms of speculation.

But you need to understand that automation is good for mass assessments and does not work well for individual ones. Therefore, it is better to use the point approach here: first, applying the principles stated above; secondly, paying attention to details.

Say, domain registration. If the project was developed, then it should have, albeit a small, but history. And therefore, a domain that is 1-3 months old, even half a year, looks strange (unless it is affiliated with it). Always impressed by the openness of data, even where it is not necessary to do this - this is still the same example from recent observations https://who.is/whois/coss.io . In this case: if the company declares a certain history on old projects that are even already closed, then this information can be checked:

1. http://web-arhive.ru/ - look, what happened before the arrival of ICO with projects
2. directories (formerly DMOZ, now it's Yandex and local site directories)
3. back links: when a site is deleted, not all delete links to it, and there may be many: partners, news sites, forums
4. there are even smaller details: the dates in the sitemap of old sites or elements of seo optimization on the pages (scammers usually don’t bother with this, since they make projects on the knee and extremely quickly).

If we are not talking about per-or retro-view, then you can look at Google’s great tool alerts (goals) from Google and use it by writing the main keywords related to the brand you are researching.

To fix a little reading, consider a number of examples.

https://matchpool.co is a social network tied to the blockchain. The following happened to her (according to Forbes): “At the beginning of April 2017, its creators, with the help of ICO, received $ 5.8 million. But after a couple of days, the technical director, who was suspected of illegal withdrawal of funds, left the company. ” Similar stories happened in other startups.

Accordingly, it is virtually impossible to find out about this until the moment when one of the participants (which is important) did not form the idea to leave the project. This is a risk, but it should always be laid . Accordingly, in this aspect, projects that benefit are:

1. There is a multi-signature;
2. A stabilization fund is being formed that will be used in some unpleasant situations (a case with the same Satoshi Fond);
3. There are smart contracts for the return of amounts in certain situations (not passing the lower ICO threshold, force majeure, etc.). You can read about examples in the book .

In conclusion, I would like to highlight the following aspects:

Before you rush into battle, pay attention to the already existing scams, study, analyze, make general conclusions:

1. https://nodio.net/ - 2016, Ukraine; site does not work.
2. https://www.ebitz.org/ - 2016, Anonymous; The site works nominally.
3. http://www.tithecoin.com/ - 2016, USA; the site is working.
4. https://ascendancy.io/#/ - 2016, Not clarified; site does not work.

In many areas (business organization, the development of antifraud solutions, marketing ICO, etc.) I have often heard about some secret techniques and techniques. But there are very, very few of them , and the approach itself, that there is some insight, leads us to a real concealment of information, which in turn allows us to manipulate the market on the one hand, and on the other, leads to a situation where we hope for something that is not . With the ICO rating, everything is exactly the same.

It is necessary to understand that ICO is a beginner, which means high-risk business . Especially in the framework of the latest statements of the SEC & MAS.

To find scams, you need not some kind of super-methodology, machine learning and working with big data (although this would certainly be useful for everyone), but diligence, attention to detail and time spent in proportion to the investment in researching ICO projects. No time to waste energy on it? Or don’t go into projects at all, or contact at least https://www.kickico.com/ru/ - at least they are trying.

Finally, ICO is a decentralized approach to attracting finance, so you should not copy the methods of centralized analysis here completely, because Many issues in the blockchain environment are determined by trust.

In order to properly invest in ICO or a startup on the blockchain as a whole, it is necessary, in my opinion, to adopt three simple rules:

1. Service for you personally should be clear in the principles of work and close in purpose;
2. The speculative component should not be the only one (in this respect Mavro is just an example of the opposite);
3. And finally, it is safe to invest only those incomes that go beyond your personal expenses, no matter what specific amount you are talking about.

In general, this is not all, but basic - yes. Next, you need to vary the principles obtained within specific assessments and develop your own rating system, which can be:

• According to the criterion of perception: positive or negative;
• In terms of perception: difficult or easy;
• On a scale of:
  Ten-point is one of the simplest and most understandable: everything below zero is closer to the scam; anything higher — farther away from the scam;
  Stoballnaya. If there are a hundred or more elements in your personal set of estimates: the approach is good for semi-automatic assessment;
  You can also use a mixed system: let's say negative factors assign up to 10 points in the minus and positive, respectively, in the plus. We initially take each project as 100% and then begin the analysis: if the final score is below 33-66%, then this is a suspicion of scam, 66-75% is the norm, then there are already good and excellent projects.
• According to other criteria, for example, using a system for evaluating securities or using an emotional coloring approach (negative, neutral, negative, neutral, neutral, positive, positive).

Thus, a scam detection system can be built, but the only thing that always remains outside the brackets is our common human greed: if it is peculiar to you at critical moments, then my personal position is simple: “ICO is not for you.”

At the end - a small selection to expand understanding of the topic:

1. Book about ico. Part 1.
2. Book about ico. Part 2.
3. ICO Common Questions
4. ICO and legalization of funds
5. ICO: main risks

UPD. Scam, ico, we .