- Ethereum is one of the most popular cryptocurrency platforms.
- The token’s legitimacy has to be verified every time.
- The process can reduce the chances of token scams.
Ethereum, a decentralized platform, has ether (ETH) as the native cryptocurrency of the platform. It is at the second number on the list of most popular crypto coin in the crypto world and industry after Bitcoin (BTC). The cryptocurrency experienced the highest price level even after the decline last year, making it an altcoin with high potential and development scope in the future. The legitimacy of tokens on the platform should always be verified to prevent the chances of scams.
What Is Ethereum?
Ethereum is a decentralized blockchain technology-based platform. It can be used in the digital technology world to pay for tangible services and goods. It is secure, programmable, and scalable, and it supports smart contracts, which are an essential tool behind decentralized applications. ETH is considered an integral part of DeFi (decentralized finance), the metaverse, NFTs, and DAOs. It was launched in 2015 by Buterin and Joe Lubin (founders of ConsenSys, a blockchain software company) but was first introduced in 2014 by Vitalik Buterin.
It is based on blockchain technology It has three major properties, which are distribution through duplication, cryptography, and openness. Distribution and openness say that the data is accessible to everyone; it gets duplicated from one computer to another. Blockchain is structured through blocks, and blocks can be of any size based on the type of blockchain. The ‘value’ of the block depends on the data of the blockchain for which it is used to record.
Ethereum changed from proof-of-work- to proof-of-stake consensus mechanisms in September 2022. Proof-of-stake is the way of processing cryptocurrency through staking, which means getting the digital equivalent of interest on invested assets. Ethereum, as a cryptocurrency, is the second-largest cryptocurrency in the market, ranked after Bitcoin.
Identification of Scam Tokens
There are eight ways to check whether it is a token scam or not. We can always start with the basics, like the most accessible methods such as Google Search and Twitter, to verify the legitimacy of a token.
Check for social media red flags, then check for the token’s address in a Google search. The check code is verified on Etherscan. Then check the Etherscan comments section. Check the Dappradar blacklists, followed by checking the token details in a token explorer. Check how many exchanges host the token. Then check the amount of liquidity in a token’s balance pool. Check the third-party analysis tools.
Conclusion
The Ethereum cryptocurrency has great potential for development because it has experienced the highest level since February, despite its recent decrease in the market. It has high scalability and security and is highly programmable, which gives it a profit as compared to other cryptocurrencies.
It is the second most popular cryptocurrency in the market and Bitcoin is ranked first. The role of its consensus mechanism, proof-of-stake, also gives it a plus point. It is always very important to check the legitimacy of a token to prevent the possibility of a token scam. There are different ways to check it, which can be started from the very basics, such as a Google search.
