Bitcoin Forum

A few years ago, we had the "Cloud mining" phenomenon and most people were warned that it was a Ponzi scheme, but they

still invested. A Ponzi scheme is a form of fraud in which a purported businessman lures investors and pays profits to earlier

investors using funds obtained from newer investors. Source : https://en.wikipedia.org/wiki/Ponzi_scheme

I still see some of those types of schemes around, so I was wondering if these schemes has changed their business model or

if people are knowingly investing in these schemes.  ???

I know Ponzi schemes are legal in some countries, but most of these schemes are advertised globally, so they should not be

legal in countries where they are classified as being illegal.  :-\

                                  Would you still invest in something, even if you know it is a scam?

That is a very logical question. If you know that it is a scam why you still invest in crypto related project. Are you a noob to do it?

it is rarely about knowing if something is scam.
but it is always about the profit and greed for gaining that profit. for example you know gambling leads to losses specially when there is a house edge. and this saying is so popular that everyone knows it: the house always wins.
but you see people still gamble. why? because they are greedy.

Nope, it might sound obvious to you and NO I am not a noob. There are people out there, who might think that they could

beat the scammers at their own game and then they invest early into these scams. I know of people who invested into these

Crypto scams, knowing that it is a scam, but hoping that they can outsmart the scammers. The "Getting in early" strategy

has worked for some of these Ponzi schemes and people made some profit doing it by exiting early enough, before it

collapsed.  ::) ::)

yeah, good points. I have noticed this too. there are still a lot of people who have the mindset of "getting in early to beat the scam system and make profit"! it doesn't make any sense to me. I may be able to justify those ICO investments that aren't clearly scam but there are cases like the HYIP scams that I can never wrap my head around. for example if you visit the Investor-based games board you can see that there are still scams going on there although their popularity has dropped compared to previous years.

If you are smart to get the profits before it becomes a exit scam than ponzi schemes are good for you but if you don't jump on new once you could almost loose all your money at any instance. Yes, they are profitable sometimes but one should surely avoid be a part of it as its very risky!

No it's a big mistake to continue investing in a scam project which is much better to hold bitcoin instead . 'cause your just wasting money on it , unlike in bitcoin that surely you can gain profits rather than investing in some projects which is 50-50 chance to gain a return at the end.  

I think it is based on the same mindset that gambling is based on. You take the gamble that it will not implode whilst you are

in it, but the greed drives your motive to do it.  ::)  They say the Japanese are more likely to take bigger chances on these

risky investments, because they have a gambling culture. (Tell me if I am wrong.) If you think about Bitcoin, then you might

agree that it is a gamble too, because it is classified as a high risk experiment.  :D

to be honest i would say it depends!
for example if it is one of those investment scams like ponzis or ICOs then no i wouldn't bother with them at all. but if it is a pump and dump altcoin then i would invest.
and it is not just because i think i can beat the pump scam but because i have tried before many times and i know i  can make profit from the pump and dump altcoin scams. that is how my trading strategy has been for the past year or so!

Definitely, if I am to invest in a particular ICO, I would see to it that I had done the first steps like reviewing and researching about the ICO so that I could atleast assure that I am not investing in scam ICO's. In the event that I could notice something which could made me doubt, therefore I would definitely not continue just to be safe.

People knowingly invest in scams on a premise that majority of other investors don't understand that it's a scam (otherwise it wouldn't be profitable). The ICO market is even better case than cloud mining, tons of people understand that ICO's are either scams or crap, still they invest and trade because it can be so profitable. With hyips more people understand that they are investing in scams, they just assume that they are early investors.

The problem with cloud mining is that they were functioning and paying and people weren't able to prove that they were ponzi schemes. There were some circumstantial evidence like no proof of mining, no addresses, but at the same time some of the companies had pictures of their hardware. I understand people who bought into it out of greed and lack of hard proof.

If I knew that a project is a scam I wouldn't invest in it. If there were some people saying that it's a scam without proving it, I probably would.

i remember a lot of those cloudmining scams. a while ago they were like the most popular thing to create. every week we had at least one new one coming out and they were obviously scams.
i never invested in any of them but i made sure to use those which were "giving away money"! usually some of them to gain some attention they were giving away hashrate which mined for you and paid out. i made a small amount of money doing this. of course most of them started forcing you to invest before you could cash out but that came later :)

Unfortunately there are countless newcomers in crypto world, mostly from poor countries and mostly with very poor understanding of the English language. Scams projects also evolving and work on a different approach to new potential users, most simple way is to pay selectively and thus maintain the semblance of legality among users. Imagine Bob say it is get nice pay from project, he share that with Alice and Amy and they share with Tom and Billy - some of them will also get pay, but what is important that they will also share that with others. At the time some project is marked as SCAM it is too late, owner is fill his pocket with money and after some time starts again with new project.

I would never invest in any project that is suspicious, and certainly not if it is a scam//fortunately I know how to recognize them and so far I keep my money safe.

They learned from people like you who took advantage of their money shower.
Taking free money is something else. It's not being a part of it, it's seeing through it and being smarter.

What about people who unknowingly promoted these scams by posting referral links? Some of them had signature campaigns. There's a thin line between being fooled by the scammer and unknowingly becoming one.

It's not so easy to find a ponzi scheme.Most ponzi schemes hide behind terms,such as "MLM business" or "affiliate marketing".You know that all the only people,who lose money from a ponzi scheme are the ones that invest in the end of the scheme.The early investors can still get some profits.That's why there are still people,who believe they can make some easy money with this.
No,I would never invest in a project,that is a well known scam.

if it's a scam, why do people invest? surely the money we invest will be in vain, if I choose not to do it myself

Why would I invest if I know in the first place that its a scam. If you are in the right mind you probably say no in this kind of question. You risk and then you may regret it in the end because you have been scammed. But I think some people will always choose to invest knowing that its a scam.

Good question by the OP because to me I get the impression that some
people would do or chance anything in order to increase their wealth and
especially so in crypto. I suspect some people are taking the gamble because
of the decentralised nature of crypto and it difficult to trace movements.

Personally, I wouldnt. My thinking is that I would only be feeding the scam
culture and risk loosing what my stake.

HYIPS and MLM schemes are the better example for the question

bitcoin itself is not a scam but there are individuals using the currency to create pots of btc coin hoardings and then juggling this small stash they hold to try keeping in as many victims as possible while siphoning out profits to a few lucky exiters

and yes many fools do invest in them even when being fully aware that they are scams. their mindset is that if they are first-in they can exit being  first-out with the fruits of other people entering them schemes and as such the early exiters are not the victims

But the fact is most of these ponzi scheme are profitable to early adopters before their pool runs out of money, many are investing simply believing their money could be retrieved when its some sort of hyped, and they might be able to at least earn a few percent more of what they are investing, ponzi scheme wouldn't simply get off simply because of its attractive bonus over a period of time

I used to.
Because i know many people will get scamed and i can get profit from it (even i also can be the target that scammed)
But now, i realize that that's not good and make an opportunity the grow a scammer. So i stopped

If I know the projects I'm investing in are fraudulent, I will check the information and verify their eligibility then decide to stop investing. and how about you?

Definitely not at all.. Why should i waste my money if i knew it is a scam project.. Its hard to deal with that unless you have enough money and not even bother how much you can loss..

It depends on how much knowledge I'd have. If I was sure that it's a scam or was an insider i'd definitely not invest and avoid it. I'd also make sure potential investors know about it. That's what I used to do in the shady cloud mining threads.
If It was all rumors with no substance and the investment looked promising I might try it out. It would all depend on my gut feeling at that point.

A couple of months ago, I invested in similar projects. But now I realized that nothing good can come of this, and therefore I do not invest any more, since I consider almost 85% of scam projects.

At least your conscience is at peace and those poor souls who invest pay the scammers won't be able to say that nobody warned them.
Greed is part of every human. I'm also no longer arguing with cloud mining enthusiasts. It's a waste of time. Half of them didn't believe me and the other half ignored it.

Of course not, who the fuck would do that why would you waste some money on some garbage scam, but no one knows because if you are earning money through that why not, but how would you know that project is a scam in the first place you need a better understanding in the thing you are investing, nowadays many people are getting scam so easily because the scammers are getting intelligent while the people are getting dumber falling for their petty scam.

it will all come down to that "knowing" part in my opinion. in most cases you don't exactly KNOW something is scam until it is too late. for example i didn't know Bittrex, cryptscy, ... were scams and i still lost money. obviously if i "knew" they were scams i would have never put my money there!
we always have suspicions  about these services that they may be scam but we can never know until it is too late.

of course there are "obvious scams" that others are mentioning but those are too obvious and i personally will stay away.

I understand your logic here. Some may still support the project because they will still benefit from it. Though it may be silly to support a known scam projects, many are intendly blind by supporting it like promoting it, joining, etc. But if i were to ask, i wouldn't waste my precious time with the useless fraud projects.

Isn't any mining process a pyramid? But nevertheless more and more people do it in order to get more money.
SO here's the answer to your question. People are ready to anything in order to get rich.

Only a fool will invest to a known scam projects if we already knows that our hard earned money will only be steal. We invest so that our money will grow into possible multiple folds but not just to be steal by this scam people therefore if the people are afraid to join Crypto because it is very risky then they should more afraid if they already know that the project that using crypto currency platform is a scam.

No! You should not invest. When you make this kind of investment even you know it was a scam which you should never do, you are speculating. This is not a useful activity. You’re playing a psychological, win-lose battle against other humans with money as the sole objective. Even if you win money through dumb luck, you have lost time and energy, which means you have lost.

Well, it depends actually on the investor. Before investing, do some research about that project first, assess the community and the team behind it. Also, invest only what you can afford to lose. Maybe if they are lucky, they could be one of those who will profit as early investors. If they are not lucky, they they have to learn the lesson from that mistake and be a better investor. Personally, I'll decide whether to invest or not after doing my research and risk only if its worth it.

This is a type of situation we will continue to have until the fraudsters are no longer interested in defrauding people any longer. People are mainly caught by this unreasonably outrageous profit that these fraudsters use to entice them and no longer care about any warning signals.

First of all,I will never invest on the cloud mining sites again because I understand that most of the cloud mining sites were scam and the few legit are also not worth to invest.

When I come to know about the crypto project is scam I wo't invest on it unless I found that I can make money out of it too.

I used to participate in cloud mining a couple years ago. I was a beginner at that time and had no experience when I was involved in a ponzi scheme like that. I was scammed once and after that I never touched the ponzi scheme anymore. So, if I know that a type of investment is fraudulent, I am very sure I will keep away from it!

Up course not, Of the many fraudulent scam projects that trap investors is by utilizing what is not known to investors so that this fraud project will continue to grow as long as they have the opportunity

It's most time not quite east to very detect a particular crypto project is scam in this age. But if by chance one should know this project am about to invest my treasure into is a scam or probably going to be a scam, then I see no wisdom in it if such person still go ahead and invest in it. But sometimes, just that this crypto of a thing is sometimes funny in that, some scam project miraculously turns out to be $$$ project.

If course not because  its scary to join a scam project you will not know if project will harm you or not. There's so many project that you can join but on a scam project.  It's easy now to know if the project is scam so be vigilant.

Why will anybody want to invest in a project which is likely to be a scam?.. I don't think i will be interested in investing in a project which has the probability of being a scam. If you want to risk loosing your money, you can invest in such projects.

yes, I will always invest in ICO, and then choose some legit projects again. I ever become a victim of a scam project, but I never stopped investing, I just set the quantity of the value of my investment.
and now I have never invested more than 5 ETH.

I would like to say no but it wouldn't be honest of me. I'm greedy and I probably would invest if I knew that other people don't know about it. If there was a chance for me to make money I would take it and wouldn't look back at others. I wouldn't promote a scam project or advise others to invest but if there was money to be make for me I would invest, even if I knew other investors will lose.

Anyone that does that is simply wiling to dash out his/her money. However,  humans don't really learn from mistake of the past and still repeat it again.  Sometimes people just want to see and test the waters if it's deep or not even after feelijgbor hearing it's scam and still think maybe it can be a real one just for the profit. This is simply why  humans keep falling repeatedly for same form of traps. 

Of course no, I would not invest my money, if I know a project is a scam. Otherwise it would be dumb to risk any money for doing it. Scams are usually trying to look legit, except some ponzis/pyramid schemes which speculate to earn money from people who are doing this as a business to try entering first and get paid out. I don't think it's profitable for them, maybe they are naive, I don't know.

If I invest in a known scam I would hand out my money to the scammers (they always make profit in a scam).