Bitcoin Forum

I just saw this advertisement on the forum: https://i.imgur.com/1q2jYFQ.png

After clicking on it, I got sent to - https://www.bitmit.net/item/15000/

"Send me 1 Bitcoins (BTC) now, and I will transfer 3 Bitcoins (BTC) over the Bitcoin network to a single-transaction Bitcoin address of your choice within 3 calendar years. The transfer will be carried out even if Bitmit is no longer operational at that point in time.

The first few orders will be shipped a priori; the succeeding ones may or may not be shipped a priori."

C'mon, seriously?  ;D ??? >:(

It is an obvious ponzi scheme like this one: http://www.wired.com/wiredenterprise/2013/07/sec-says-man-named-the-pirate-was-running-bitcoin-ponzi-scheme/

Why is this advertised on this forum officially?? :(

maybe there is not proof that they have scammed yet. there is a tiny chance that just mayve it is not a ponzi. there is no way to tell for sure.

Seriously? 1 Bitcoin for 3 some days later? Get your common sense straight (Ok I think you are just being sarcastic).
Op is right, this shouldn't be advertised.

Hahahahaahahahahahahahahahaha!

@theymos

Seems like there needs to be a little more ad regulation.  The odds of this person actually paying back are slim to none.  This combined with someone trying to CSS script inject (https://bitcointalk.org/index.php?topic=274749.0) and still getting their text ad run call for something to be done.  It shouldn't just be you win you get your ad up no matter what.

I'm not sure what the process should be, but there needs to be something IMO.

"Crowdsource" it.

Have a page listing all current ads with a "report" button next to each. When 3 or more reports are submitted from 3 or more independent IP C classes auto-suspend the ad until it is reviewed by staff.

So, no more miner ads anywhere on the forum, enh?  (I mean that the mining drama fest will aggressively push report on most hated miner companies)

That's why I put the independent IP range requirement in there. Of course with BFL hate being what it is, you might be right.

I have a KNCminer ad on this thread, so they're not all gone.

The three-year timespan makes it seem possible IMO. If you think that the value of bitcoins will go down a lot at some point in the next three years, making this kind of offer is a sort-of-reasonable way of selling short without actually selling (for example). Could he get a long-term loan much cheaper?

Anyway, I can't usually guess at how safe advertised services are. I would reject a really obvious Ponzi scheme, but this isn't so obvious IMO. Will BFL ever ship? Will KnCMiner? Even a service like MtGox might never enable USD withdrawals... I'm not going to reject every ad that might possibly be a scam.

A reporting scheme wouldn't tell me anything that I don't already know. There are only 7 available ad slots. I review every ad.

Why do people use the term ponzi scheme for everything?

It may be fraud, it may be highly likely "investors" will lose everything but it certainly isn't a ponzi scheme.

Someone not paying back a loan isn't a ponzi scheme it is a default.
Someone taking out a loan with the intent to not repay it isn't a ponzi scheme it is fraud.

I think some people think the definition of a ponzi scheme is

I wouldn't call this a ponzi either, but why would anyone take a loan paying back 200% interest over 3 years?  There's no way this is legit, that's just a ridiculous rate especially taking into account that BTC will most likely go up in $ value.


He should most definitely be able to get a cheaper loan.

The guy bought the ad hoping enough people would fall for it; I'm hoping he's unsuccessful and won't try it again.  But I wouldn't feel bad if people, in three years, realized they weren't getting their money back, which is precisely what I believe will happen.  I wouldn't make a loan to a guy who was advertising on BitMit, anyway; he's asking for loans from a lot of people, none of which he'll ever know personally, and if he isn't able to triple all the money he took in, he'll throw his hands up and say "Sorry, I don't have it!" and that'll just be tough--which is also assuming the guy is completely honest, which requires trust, and if you'll give that trust up so easily, then I see a long and hard road ahead.

But anyway, I don't see any problem with it, even if it is an obvious scam; people need to learn to be responsible with their money, and scoff at such attempts to take their coins through such flimsy promises.  Say no to herding!

I understand that's time-consuming, and bound to fail as a one-man-evaluation.
How about you throw the winning adds for review to your trusted circle and ask for feedback?
Being backed up probably would make things easier for you, too.

Yes, people should be able to spot obvious scams themselves but:
It hurts the image of the board and Bitcoin if it's associated with scam (and you will associate it with scam, if it's all over the place)
Also Bitcoin is a new technology and something that is obvious scam to us, may not be so obvious for newcomers.

There's no avoiding it; the USD is associated with more scams than we will ever know about.  It's better to say, money allows scams to happen, and not even this is true; you can scam people with anything, you could scam someone out of their things or scam someone out of their health, without ever bothering with a trade of cash.  We can pretend all day that Bitcoin isn't used for scams, but we know, even without having a clue what Bitcoin is, that if it is money, it is used by scammers.

Besides, newcomers to Bitcoin who would fall for scams would have to be newcomers to the concept of scamming itself; what better way to acquaint a person with the fact that there are scammers than through publicly portraying the scammer and their petty attempts at taking money?  We are better to show everyone the scammer, than to hide him from the individual, who may be unaware of dishonest people, who will then cry on the forum about how he lost a bitcoin to so-and-so and can't understand how someone would do that and wants the person to be banned without bothering to understand that the scammer can come right back under a new guise.  One of the key features of Bitcoin, I believe, is the ability to have complete distrust in people--but it is a feature one must employ; it doesn't happen by itself.  At some point in time, the newcomer must understand that trust isn't something to simply give out, not to the scammer, not to the forum, not their elected officials etc.; and especially true when it comes to whom they give their money.

We cannot avoid that some scam is there, yes. But we can avoid that the forum is filled to the rim with it.
There is a good reason moderation on forums exists and this includes scam.

Not necessarily, there are lots of things you have to learn to avoid scam/loss of Bitcoins.

It removes trust only for one side of the transaction.
And there are even more things that require trust. Not everybody can read the source code to check that it's fine. What exchanges can you use? Which websites provide reliable information e.g. about how to securely store your coins?...

Don't worry, there are enough scam attempts that everyone has a chance to see, even with moderation xD
e.g. I do think the way to label them scammer instead of banning them is good.

Hmm... seems to be admin need to review every ads that appears in bitcointalk

http://en.wikipedia.org/wiki/Ponzi_scheme "A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation."

And this is exactly what this advertisement is about. He doesn't promise to invest them in some new and exciting project, he just promises to give back 3x more. This is a textbook example of a ponzi scheme.

I am baffled that the administration even seriously considers that this might not be a scam. Can you name even one case in all human history, where 200% interest was promised for loans and it was NOT a scam?

You (the forum's administration) are shooting yourselves in the leg here. Advertising scams and even arguing "well maybe it's not a scam" seriously hurts your credibility, and in the long run you lose a lot more than you gained from what the scammer payed for the advert.

Would you kindly tell us an example of a ponzi scheme more obvious than this one?

A ponzi scheme pays early investors with later investors deposits.  He isn't paying anyone for 3 years.  In three years he will either pay (highly unlikely) or simply disapear with ALL the funds.  There is no ponzi.  Not all fraud is a ponzi scheme.

"He isn't paying anyone for 3 years." - that is false, he has payed some already (according to customer feedback on bitmit). So please, tell me again, how is this not a ponzi scheme?

Read the linked bitmit description.  You send coins and AFTER three years he sends back 3x as much.  There are no payments over time.   It is stupid, and "investors" are almost certainly going to lose everything but it isn't a ponzi.

Not everything is a ponzi scheme.  I have a feeling if someone mugged you on the street you would be telling the policeman you were a victim of a ponzi scheme.

I read the linked bitmit description. Did YOU read it?

He does not say he will send the coins AFTER three years, he says he will send the coins WITHIN three years.

"I will transfer 3 Bitcoins (BTC) over the Bitcoin network to a single-transaction Bitcoin address of your choice within 3 Universal Time Coordinated (UTC) calendar years."

Why are you lying so blatantly, when everyone can check it? There are feedback from other users, stating that he already sent them 3x BTC.

THIS. IS. A. PERFECT. EXAMPLE. OF. A. PONZI. SCHEME.

And it's getting more "customers" from these forums..  :-\
Why can't theymos just accept only clearly legit ads? There are plenty of those available and showing them could actually increase the credibility of bitcoin (showing ponzi / scam ads decreases it).
If there just were ads to services and goods that can be bought with Bitcoin..  :o People could actually see what Bitcoin can be used for!! (if not these currently advertised mining "ponzi" schemes/scams/"investing opportunities")

I am doing some research recently regarding this topic, it is a bit complex, it depends on the long term sustainability of the return

You save your money in the banks and receive 2% interest per year. This could also be a ponzi scheme, since the banks could get more and more deposit each year from new depositors and pay you interest with their deposits

But there is a limitation on how big that interest can be, that's the growth of available new deposits, and ultimately limited by the money supply expansion speed. If money supply do not expand more than 5% per year, it is impossible for banks to give you a return of higher than 5% per year constantly

"Profit earned by the individual or organization running the operation", this term is unclear, what is an operation? Isn't providing a deposit service an operation? This service itself can draw in more and more deposit each year due to expansion of money supply, and if the money supply expansion is constant, then this 2% profit model can be maintained forever

People usually define very high return to be a ponzi scheme, since it is not sustainable, will eventually run out of new depositors and late investors will lose their money

So it all depends on the sustainability. If this return is long term sustainable, then it will be a financial innovation instead of a ponzi scheme

Back to OP's question, a 2X return in bitcoin in one year, is it long term sustainable? We all know that bitcoin's money supply is decreasing each year, so that is definitely not sustainable, so it is a ponzi scheme for sure

Uh... they do. Theymos does.  :P

You fuckin' bastard! You made me spit coffee all over my new laptop. Now, who should I send the bill to?  ;D

I just read this entire thread, and unless I missed it, nobody has pointed out that site in question is just an ad running on Bitmit.


It'll be as if the link went to an auction on eBay or to a Craigslist listing, either one of which, including the site in question, can be deleted by the site owner for whatever reason. With all due respect, theymos, I don't see how this was allowed. If the same was on a self-hosted site, then your argument may hold water, but since that's clearly not the case, I have to respectfully disagree.

Please correct me if my assessment is in error.

If this is allowed, I will then put up a page offering 4 to 1 bitcoins in X timeframe. At this penning, I'm already seriously thinking about doing such, for I clearly see the potential here. My only worries is the guy who've come in behind me and do 5 to 1, cutting into my business. Come to think of it, I could me that guy too, but then I'll have another worry of another guy offering up 6 to 1 unless, of course, I'm that guy too. But if another guy...

It could be just a scam and not a ponzi. I don't think many people have even purchased his 3x bitcoin.

People has and got 3x coins back, for now.

My guess is if one were able to view his stocking drawer in his dresser...

Honestly, if you want to instigate real change, you should be telling all the other advertisers on the forum about how obvious of a scam this is, and ask them why they advertise here if this one ad completely ruins the reputation of the forums.

I think you'd be surprised at how much some of these other advertisers might listen to you and subsequently pressure theymos to reject the ad under the threat of pulling their ads.

I doubt it.  Most of the ads coming from companies selling ASICs and for that target market there is no better advertising space in the entire world.  The window of profitability is rather small (as value of units are going to decline proportional to global hashrate) so it makes little sense to pull ads.

Theymos could say for ASIC companies then min bid is 20 BTC and he likely would still sell out of ad space.  Under normal conditions you probably are right though.

He did (see above) and accepted this one.

I went all in on this one.

I'm going to be rich!  ;D

Did they wait 3 years? Or was it 3x btc in 3 days?

You should visit Alt Coin sometime.