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Good evening dear Steemians, One thing that recently have caught my attention with some of the recent happening at this crypto world, is the Pump groups. What is this?
A pump group is a group of people (usually wish significant amount of money) that get together in order to choose a coin (often a coin with a lower Market cap, couse it is more succeptive to strongly pirces changes by an influence of a "small" market cap aditional) to start buying it at a low price making its price to rise, keep buying until the price reaches a pre determined value then they all start selling their coins at the higer price.
### How can this works?
I'm not fully aware abou it, but I do know that one of mechanisms that allow this to happening is that tons of people do not know what is happening at the market, they just see a coin starting to sky rocket and try to get a ride on it. problem is that they do not know what is the target Dump value, so when the prices hit that target it just instantly dump like an meteor, and those who are outside the pump group normally ends up losing money on that coin.
Some may say it is not fair couse people from outside the group will almost for sure lose money if they try to get a ride on its pump, Others says it is perfectly acceptable couse people from inside the groups are literally risking their money buying a overpriced coin, but if something wrong happening such as a bad choosing of target price, if the market react too fast selling the overpriced coin faster than they manage to pump it, or even if people from inside the group decide to start selling before the target, everyone from those groups might lost money while others from outside get profit over it.
IMO Market 1st rule should be, first invest into get yourself well informed Before starting investing your money in coins. exceptionally small altcoins. otherwise you can get yourself trapped into those pump and dump traps. With that said, I do not really think pump and dump groups are a "wrong behavior" is just a kind of a grupal speculative bet based on trust that all participants will follow the set prices.
But like everywhere not only in crypto but in our "real world" there are dishonest people aiming to create scam in order to profit.
Some time ago some random person I've never talked just drop me via PM on discord a link to a group named Pump Gates. it was a small and simple group. after a wile I realized that was and attempt to create a pump group. the group owner "willian Gates" was Apparently setting with everyone the coin, exchange and target to everyone make the pump, and keeps consistently asking people to call others saying "the pump will only start when we have 20 person on it" I told then I had no money to help with the pumpm but that I might want to see how it works. He's answer was that it was ok, I could help calling more people to inside the group.
Well some days latter he decided to start the pump, Looks like the Idea was to pump a coin named SCRYPT at 1000%
So after this amazingly failed pump I've never seen Willian Gates online again at that server, I cannot say for sure that he was planning to dump the coin before everyone else since the beginning, couse I have no proof. However that looks like an reasonable thing to believe in.
Summarizing Be very careful with such groups exceptionally if you was simple random called to join in one of it. A pump group is based on trust, that's why it is so hard to get inside a real one, a group that just get random people and plan to make a pump have a huge probability of being a scan, or being failed.
Information is our best armor and weapon against Scammers !
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### <center>Thank you for reading my post!</center>
I'm @andyluy a Brazilian jobless college student, freshman at cryptocurrencies who live in Rio de Janeiro, love to make new friends , travel around the world, having adventures and believe that steemit can help me to gather 20,000 $ to realize my life dream to study in Japan!
I intend to post about amazing things I've experienced, and hope soon be able to bring you with me to my new adventures