How to Identify a Ponzi

[nrd525]

Mining isn't a ponzi scheme and pbmining looks like a mining rental site.  That said you must take into account future difficulty increase. So if you rent any hash power - it's value past six to twelve months or so is essentially zero.  Your hardware is  losing 20% in value every time the difficulty increases by 20%.

[1714892427]

1714892427

[Muhammed Zakir]

Mining isn't a ponzi scheme and pbmining looks like a mining rental site.  That said you must take into account future difficulty increase. So if you rent any hash power - it's value past six to twelve months or so is essentially zero.  Your hardware is  losing 20% in value every time the difficulty increases by 20%.

I know that mining isn't a ponzi scheme but I saw many posts saying pbmining is a ponzi scheme. I bought some GHs from it and I am getting some BTC ...
Pbmining isn't giving a photo of their mining place or hardware, it seem suspicious. Anyway it is better than others if it is a legit mining group as there is no fee and cheap price for GHs.  .
Kindly,
       Muhammed Zakhir

[nrd525]

I wouldn't be surprised if someone organized a fake-mining ponzi scheme. 

If they do have 845 Th/s - I'm guessing (don't take this as an expert opinion) they should be able to prove it with a payout address from the pool that they use.

What would be especially suspicious is if they are providing higher rates of return than owning an ASIC miner does.  Are they doing this?

[Muhammed Zakir]

What would be especially suspicious is if they are providing higher rates of return than owning an ASIC miner does.  Are they doing this?

They are not giving higher rates of return, they are giving the same BTC you get from your miner. Check it in a mining profitability calculator! They are paying out, you can check the proof.
If it is a legit mining group, then it is the best one so far!

[nrd525]

They are giving you the same BTC that you'd get for the hash rate that they CLAIM they are providing you.  However they are selling this hash rate at 1/2 (or less?) of the CEX.io rate.  And it seems like they are selling it at or slightly below the cost of buying your own ASIC miner - not giving them any room to pay for electricity and other hosting and staff costs.

There is no evidence that they actually are mining.

At a minimum, they will break their 5 year guarantee. The fact that they provide one is very suspicious and there is no way they'll be able to keep it and be profitable (unless BTC prices go up a lot in the future - but you cannot build a longterm business strategy on assuming that there will be a bubble).  A one year guarantee is more realistic.

"If it is a legit mining group, then it is the best one so far!"
This statement makes me think they are a ponzi.

[JoelKatz]

An implausible business model, implausibly high promised rates of return, and implausible claims of low risk are hallmarks of a ponzi scheme. If it sounds too good to be true ... well, you know the rest. If the most logical explanation is that it's a ponzi scheme, it's probably a ponzi scheme.

[nrd525]

List of projects that have refused to drop Bitcoin Trader sponsorship after being informed (by me) that it was a ponzi:
-Bitcoin Second North American Conference 2014, Chicago
-Bitcoin 2014 Amsterdam

Pending Request
-North American Bitcoin Car Giveaway Tour 2014 - run by Bitpages and Kryptos Media

Either my emails aren't getting through, people are stupid, or people are very greedy.

[Sydboy]

these days ponzi identify you.
no really, they say "ponzi" in the title or name. can't get any simpler than that!

[Muhammed Zakir]

these days ponzi identify you.
no really, they say "ponzi" in the title or name. can't get any simpler than that!

Not all ponzi schemes. Some of the ponzi schemes are hideous which will be a little hard to find. Say for example pbmining. Is it a real mining group? How can they offer less than 1/2 of the real price and for a mining period of 5 years. I am really confused about them.

Kindly,
        MZ

[nrd525]

What do people think about Bitcoins Reserve?

http://bitcoinsreserve.com/services/arbitrage/fund

Checkout their monthly returns. They seem very high and always positive (though not guaranteed). And they claim to be making all their money on arbitrage.  And they have a long list of other services.

Do they have a bitcointalk thread?

[JoelKatz]

What do people think about Bitcoins Reserve?

http://bitcoinsreserve.com/services/arbitrage/fund

Checkout their monthly returns. They seem very high and always positive (though not guaranteed). And they claim to be making all their money on arbitrage.  And they have a long list of other services.

Do they have a bitcointalk thread?

This looks a lot like a Stock Generation style scam.
http://en.wikipedia.org/wiki/Stock_Generation

Ponzis commonly explain their revenue source as due to "arbitrage" or "investments", but they never describe their actual operations in any kind of detail. They commonly explain that doing so would let others steal their secret sauce. Which is more likely -- that someone with such a great secret sauce (who needs no help from you) would let you in on it, or that someone would claim to have a secret sauce to separate you from your money?

[TimonPeng]

Anyone got recommendations for good, technical, analytical books on ponzi schemes? 

http://www.amazon.com/The-Vigilant-Investor-Fraud-Proof-Investments/dp/0814417507

wow!It look good!Thanks!

[nrd525]

Bitcoin Trader stopped paying out.
https://bitcointalk.org/index.php?topic=393570.2020;topicseen

Esoteric Invesments also stopped paying out.
https://bitcointalk.org/index.php?topic=829885.0

Madoff investors are getting back some of their money (from the people who profited off the scheme)
http://news.yahoo.com/madoff-trustee-recoups-nearly-500-million-more-customers-193438295--sector.html

[memai]

Keep away from Ponzi site or you'll lose all your coins

[nrd525]

Any new major Bitcoin ponzis?  I haven't been following the forums that much recently, so I've been missing out!

10 year German bonds - probably not a ponzi.  The 0.08% interest rate is a dead give away =)

[nrd525]

I found this website dedicated to ponzi tracking:
http://www.ponzitracker.com

Also - the LTC price increase from $1.40 to almost $9 was possibly related to a major LTC ponzi:
http://shitco.in/2015/07/14/the-ltc-pump-dump-and-a-post-mortem-for-both-bulls-and-bears/
and
https://bitcoinmagazine.com/21199/chinese-bitcoin-exchanges-litecoin-price-volatility-driving-bitcoin-gains-not-chinese-stock-market/

[DuckDuckBlues]

I found this website dedicated to ponzi tracking:
http://www.ponzitracker.com

Also - the LTC price increase from $1.40 to almost $9 was possibly related to a major LTC ponzi:
http://shitco.in/2015/07/14/the-ltc-pump-dump-and-a-post-mortem-for-both-bulls-and-bears/
and
https://bitcoinmagazine.com/21199/chinese-bitcoin-exchanges-litecoin-price-volatility-driving-bitcoin-gains-not-chinese-stock-market/

That website isn't directly related to Bitcoin, but I guess it gives an insight into how ponzi-schemes are run in the million-dollar industries (Here's a hint, about just the same way as you think).

[nrd525]

Pirate pleads guilty!
http://www.newsbtc.com/2015/09/22/pirateat40-pleads-guilty-to-4-6-million-bitcoin-ponzi-scheme-charge/

[Stephen Gornick]

If your "investment" solicitation makes claims like

"1,000 times bigger than the birth of the Internet"

or

"gemcoin has millions of users around the world today"


then you might be running a ponzi.


https://www.youtube.com/watch?v=NkpFpXmnBwc

http://arstechnica.com/tech-policy/2015/10/feds-raid-cryptocurrency-startup-accused-of-scamming-32m-from-investors/

[nrd525]

The MMM (2.0) ponzi has been getting more news recently.  They might be using Bitcoin to help fund it.  Is there more detailed information on the Bitcoin connection?

https://www.reddit.com/r/Bitcoin/comments/3p4kuf/mmm_global_republic_of_bitcoin/