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OPINION

How to Detect Cryptocurrency Scam

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The cryptocurrency market is often compared to the Wild West, as there is a constant possibility of being cheated. There is rarely anything like customer service or guarantees. For many, the technology behind cryptocurrencies is too complicated, and it isn’t very easy to deal with the matter.

Unfortunately, people who take advantage of this situation and want to take advantage of ignorance are also not far away. Therefore, you will find some tips below that show you what to look for and what you should avoid. Because, as with any financial transaction, you should think carefully and never act hastily.

Due diligence

The so-called due diligence is a careful, systematic and detailed collection, examination and analysis of data and risks, which is carried out by the buyer when buying cryptocurrencies (but also other investments in general). It usually begins with a rough analysis (screening) of all available currencies and, with a positive assessment, goes into a detailed analysis of specific currencies.

Here one analyzes the functioning as well as the strengths and weaknesses of the currency. Some aspects can serve as concrete reference points for the analysis. It is important to remember, however, that you shouldn’t just rely on others’ research, comments, thoughts, or report, as some black sheep give paid advertising content as their research.

Open code on GitHub & Co.

Any cryptocurrency that wants to be worth something should make its source code openly accessible and viewable (e.g. on the well-known online service for software development projects GitHub ). This so-called “repository” should not only be available but should also be updated regularly.

In the first step, it is not imperative to understand the exact meaning of these updates – the primary concern is that regular updates are available. A warning signal will be that there has been no update for over a year or if only one person provides these updates.
Positive examples of this are Bitcoin, Ethereum and Litecoin.

A relatively clear negative example of such types of alarm signals is the cryptocurrency Karmacoin: there has been no update here in the past three years, and the few changes come entirely from a single user.

Guaranteed profit

If a cryptocurrency “guarantees” that a profit can be made from the investment, or provides incentives to convince others to buy that currency, it is most likely a pyramid scheme. The guaranteed profits come almost exclusively from the fact that new participants invest and participate in the currency and bring in their capital. These business models can grow very quickly, but will inevitably crash at some point – without exception.

Team

Look closely at the team behind the cryptocurrency: are there people with experience behind the currency? As a rule, software developers should stand behind the cryptocurrencies. A simple internet search should be enough to quickly get an overview: Can you find convincing information that comes from several sources? Or can you already find indications of fraud or questionable behaviour here?

An example: The developer of Ethereum, Vitalik Buterin, was previously a well-known name and contributor in the Bitcoin environment.

Fees / trading

This is not necessarily an indication of fraud, but it shows how important it is to understand the background of a currency: which exchanges are they trading on? How are the conditions? And what are the fees for trading?

Beautiful outside, but ugly inside!

A modern and pretty website and an excellent social media presence do not necessarily mean that there is a good project behind it. Many new cryptocurrencies spend a lot of time and invest a lot of money to design their appearances to look good – but without a trustworthy concept. So here it is essential not to be blinded by the first impression.

Conclusion


The ICO and cryptocurrency world provides a lot of opportunities for investors that have taken their time to do research, so they can make smart investment decisions.

There are also pitfalls that can result in losing a tremendous amount of money due to frauds, scams, or even legit businesses that have poor structure and have fewer chances of succeeding.

So, if you take note of all the points stated in this post, there’s a high chance that you’ll never fall into any of these pitfalls.

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OPINION

COVID-19: Is Crypto a Safe Haven for Nigerians who Cannot Access Forex?

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With the continued losses across economies worldwide, and the inability of Nigerians to quickly access forex, does crypto presents an opportunity for entrepreneurs to trade or for others protect their network amid the growing depreciation of the naira? 

As the news of Coronavirus came out and became a global threat to world health and economies, the financial market has been experiencing significant pressure. Globally economies are seeing several services shut down and this is having grave impact on productivity. 

The impact which started with the lockdown of cities in China accommodating millions of people has now spread across the world. 

In Italy, the effect of coronavirus is increasing becoming worrisome and this is just two nations. The most populous black nation on the planet, Nigeria has reported two official cases. 

This virus paints a picture that is as dirty as dirt. At the rate of spread, Nigerians or Africans should be worried if it moves at such rate in the continent. 

As much as the virus has affected economies globally, the Nigerian economy may be headed for a dangerous low. 

The Nigerian economy generates the majority of its revenue from the sale of crude oil. And this presents a significant marker for calculating annual budget. For years the Nigerian State has had to leave other important means of acquiring forex by solely relying on the export of crude oil. 

Since the spread of coronavirus dubbed COVID-19 has now affected the oil market, with the price of oil dropping to a dangerous low and even when compared with the price used in preparing the budget coupled with level of corruption and mismanagement, the fundamentals driving the value of the naira grows weaker by the hour. 

At the current price of Crude oil per barrel, the Nigerian State is already in a tight position. Currently, NGN to the dollar is trading on Binance at over 400NGN/$1. Other platforms are equally doing business at such a range. 

The perception of naira as a stable fiat currency is failing owing to the value drivers. One of the solutions to this issue is devaluation of the naira. However, but then this opens the country to even worse fate. The question that comes to the mind of everyday Nigerians would be “Can I trust the naira to hold my wealth? 

For those who are knowledgeable of the financial market may want to consider holding their wealth in gold. This no doubt is a smart move but then for those who cannot easily acquire gold, may decide to hold in foreign currencies like the USD.

But then, the dollar is also having its hard time in terms of acquisition in Nigeria. With the stringent position of CBN on Forex, there are two options left for people to protect their wealth. Land and Crypto. While the former is a worthy option but the ease of acquisition and disposal is an issue which may deprive people from taking this route. The latter offers a much more safe, portable, marketable and less risky alternative to the former. 

With the use of a debit or credit card or by paying a visit to a Crypto OTC Desk, Crypto of choice can easily be purchased. However, for Nigerians who do not wish to be bothered by the volatility of the crypto market may decide to opt for the purchase of stablecoins. 

Cryptocurrency, especially stablecoins presents a better opportunity for Nigerians to protect their wealth from unnecessary pressure that the global financial system crash may have on the naira. 

The current position of Nigeria is worrisome and no doubt some Nigerians are putting their wealth in safe havens. The question is where and how and should you? 

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OPINION

Shares Tokenization on the Blockchain: Things to Consider

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By: Charles Okaformbah

This piece is a sequel to my earlier article on tradeable asset tokenization on the blockchain. If you are thinking of taking your private company public and running an Initial Public Offering(IPO) on the Blockchain? Then take a seat, let me break down the process as I explain blockchain lingua terms as well.

Just in case you don’t know, asset tokenization is a process of layering a non-sensitive substance or data, referred to as a token, ontop a sensitive element. An example of this would be a coupon or an event ticket.

The ticket or coupon is worthless without the underlined event taking place or discount code programmed into the system. For tokenization on the Blockchain, we create a cryptographic token that is unique and whole or divisible in terms of units.

One of such use-cases is the tokenization of shares on the blockchain which falls under the category of Security Token Offerings (STO). 

So how do you go about this or hurdles to watch out for?

Verifiable Asset Custodian

Unlike Crypto-asset backed tokens like StableCoins which are verifiable and transparent on the blockchain, liquid or physical assets like shares need verification especially in terms of valuation and custody of such assets.

Verification of the existence of such assets and trust on the Custodian to act as required when advised from the investing Public. So when making a choice an asset Custodian, pick wisely. Go for a Custodian whose books are accessible to Investors.

Capping and Burning of Tokens

Just like in an Initial Public Offer where the company states the number of shares being sold to the public and at what price which totals the amount to be raised from the public, so also it is when creating a tokens on the blockchain that will represent the number of shares that will be kept with the Custodian. 

The Blockchain Token Smart Contract needs to be developed in such a way that future shares of stock capital raise will be reflected in the total supply. Also, when a shareholder decides to have the physical shares document in his keep or move his shares out from tokenization, the amount being moved out from the Custodian holding is burned/destroyed from the tokenized shares/asset total supply of tokens.

Regulatory Karate-Chop

Currently, processes and frameworks are being put in place for the regularization of security token offerings or physical asset-backed token. Custodians of these assets need to be licensed and licenses vary based on the geographical jurisdiction. 

Also, tokenized shares need to be legally recognized by the body responsible for Security assets or Commodity trading. So before embarking on such capital expense, organizations should be sure about the possible regulatory fiasco in order not to get karate-chop by regulators.

Token Exchange and Cross-Chain or Inter-Operability

To carry out sales of your token, you’d need a KYC/AML enabled token exchange. Depending on the geographical legislation regarding blockchain tokens/cryptocurrencies, will the token exchange be a custodian or non-custodian service?

A decision should also be taken on the Smart Contract Blockchain you want your shares to be tokenized on and the type(Public or Private/Enterprise); looking at cost of transactions carried out on the blockchain, barrier for users to get your token shares, and if it will be available for cross-asset trading with other public crypto-assets or cryptocurrencies?

Finally, the type of exchange that will provide enough liquidity, with ease of use, fiat-to-crypto on-off-ramp, and user-friendly for your token sales should be considered. 

Governance on the Blockchain Smart Contract

For those that are in the Blockchain space, governance has always been a contentious discuss. Who has access right to administrate the smart contract token codes. What security measures are being put in place like multi-signature authentication on some critical functions before it changes on the blockchain, e.g, creating more tokens and burning of tokens.

Asset Custodian Account manager, a rep from the organization that owns the tokenized shares and possibly a Regulatory representative. Also, the decision on how changes to the smart contract like changing users and upgrading the contract is another aspect to consider.

Scalability of Blockchain

Blockchain trilemma issue is a monster that has led most legacy blockchain solutions to consider improving the drawbacks using layer2 solutions while maintaining finality on the protocol layer.

If you are going to run on a private blockchain, thereby eliminating artificial barriers created by transactional fees using native cryptocurrencies coins in a public blockchain then make sure your project can bridge to the public blockchain if you want a cross-chain asset trading.

Trust Issue

Finally, trust issues. On the blockchain, we verify instead of trust and the blockchain with its transparency gives users the ability to verify an asset or payment. For an offline asset, investors need to be able to verify the valued asset/shares and then the Issuing house and Organization need to trust that each party will do as advised. 

Conclusion

We are experiencing a paradigm shift in the way assets are being managed, traded, transferred and use of blockchain which guarantees immutability as well as transparency with easy asset liquidation. Organizations should take advantage as regulators are waking up to a new digital asset class being powered by tokenization on the Blockchain.

About Charles Okaformbah

Charles is a Techpreneur and Blockchain Solutions Artchitect with a deep knowledge on tokenization/token economy and Cryptocurrencies, SmartContracts development on blockchain, Mobile and Full Stack technologies with over 12years technical and startup experience on ERP, Cloud and Business growth solutions.

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OPINION

Nigeria Hate Speech Bill: A Validation of the importance of Censorship Resistant Platforms

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The Nigerian media went gone on the pins and needles with various sentiments over the Bill by the legislative arm of the government to criminalize hate speech and punishing anyone who commits the crime with the capital punishment, Death – by hanging.

The bill proposes that any person who uses, publishes, presents, produces, plays, provides, distributes and/or directs the performance of any material, written and or visual which is threatening, abusive or insulting or involves the use of threatening, abusive or insulting words or behaviour commits an offence if such person intends thereby to stir up ethnic hatred, or having regard to all the circumstances, ethnic hatred is likely to be stirred up against any person or person from such an ethnic group in Nigeria”

According to the bill, any person who commits this offence shall be liable to life imprisonment and where the act causes any loss of life, the person shall be punished with death by hanging.

One of the fundamental rights of man is the Freedom of speech. However this right, it isn’t a brazen go-ahead right to say just about anything. Restraints is inevitably needed else a person could get in trouble. Libel.

Censorship has been on for a long time across the world in different forms. There is financial censorship, food censorship and most importantly the subject of this work, media censorship.

The creation of censorship resistant media platforms had given the opportunity for people to give their opinions over and over again on sensitive issues. The major social media platforms have censored contents over their years of its existence.

Censorship reduces the effort of man to fight on for that which he seems imperative. A man once said, “You don’t censor content you don’t like, you rather create compelling argument to counter that content.” that is the definition of growth and not the brazen hammer the nail, draconian and authoritarian-absolutarian system of leadership that makes policies which silences the voice before the mouth opens.

The Hate Speech Bill was an attempt to curb the harm arising from actual hate speech however, it would unintentionally drive to the end, valuable and societal building discussions thus reducing society to mere zombie haven.

There will hardly be any public valuable intellectual engagements. Fear will most probably become the centerpiece of public discuss.

This is why censorship resistant media platforms is imperative in our time. As blockchain based social media platforms are anonymous or pseudonymous, there will be no fear to comment on contestable yet society shaping discusses that will ultimately help advance society.

It can not be shutdown. Restrictions to the internet platforms can be bypassed with vpns, and as decentralized domain name services become popular, Free Speech may therefore some day become Free.

Though the legislators have disowned the Bill, we are reminded again of what we have to lose if we condole censorship and the extent it will tear our society structures down.

Image: mediaupdate.co.za

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OPINION

Pornhub & PayPal: A Case Against Financial Censorship; for Crypto

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No. 1 internet provider of pornographic contents Pornhub has revealed payment giant PayPal has abruptly stop processing its payment.

According to Pornhub, it is devastated by the decision of PayPal to stop payouts to over a hundred thousand performers who rely on them for their livelihoods.

The movement by PayPal has caused problems in the business of Pornhub which relies on the payment firm to process payments for its models spread across the world.

Pornhub has advised its Models to select new payout methods so as to be able to receive payments.

Also, for those who had payments pending in the month of October are advised to immediately reach out to support and by the end of the week, payments will begin going out.

Pornhub apologizes for any delay the move by PayPal may have caused and gave assurance payouts will be processed as fast as possible as it had staff working around the clock.

Censorship has been a strong topic globally, abruptly suspending or terminating a service without prior notification(s) is disastrous for any business utilizing such service.

As a centralized financial entity, PayPal could be pressured to do whatever pleases the ‘State’ or do whatever it likes according to an ‘updated terms of service’. But a true decentralized financial system that requires no government backing to be functional will be able to function however the pressure.

Bitcoin and crypto in general is and remains the answer to the many problems faced by those who are disadvantaged by things like this.

It’s peer-to-peer means of exchange excludes the ability for anyone to violate the financial sovereignty of an individual.

Though Pornhub now accepts cryptocurrency with its partnership with Verge last year, it is still faced with the issue of adoption by its models.

While cryptocurrency is the way forward as financial firms overbearingly censor people, organizations, the rate of adoption still remains the challenge which most people in the industry pushing for.

While some people may write crypto off, Anthony Pompliano has the perfect response, It will be a mistake to evaluate Bitcoin and crypto based on what it is today

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