[BETA] Looking for Beta testers!

[ZettaByte Systems]

NOW IN OPEN BETA.

[1715533287]

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[1715533287]

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[-ck]

Nice ponzi-like payment scheme you have there.

[ZettaByte Systems]

Nice ponzi-like payment scheme you have there.

From our recent reddit post: http://www.reddit.com/r/BitcoinMining/comments/23q0wl/xpost_from_rbitcoin_bitprimercom_a_new_kind_of/

The best way I can prove it isn't is to compare the MLP system to Google's definition of a pyramid scheme. Google defines a pyramid scheme as "A form of investment (illegal in the US and elsewhere) in which each paying participant recruits two further participants, with returns being given to early participants using money contributed by later ones."

In BitPrimer, there is no initial investment. It's free to join, and the pool is paid through the pool fee. What makes us different is the tier and recruitment system, which is still free. A recruitment key is much like a private key. What it does is give the redeemer a spot on the tier below the recruiter, as well as connecting the two. The recruiter is then able to set a "tax." The tax is the amount that the recruiter gets paid from the redeemers share whenever a block is broken. Anyone is able to generate recruitment keys, which again, are all still free.

The incentive lies in early adoption, because it gives you a place in a higher tier, and as taxes work up the tree, you'll end up being paid the most.

[jonnybravo0311]

You give the definition of a pyramid scheme, then present your example, which exactly matches that definition.

Assume for a second that I decide to join this pool.  When I join, I will automatically be "taxed" because I'll be placed under some user's node.  I can then recruit two friends and tax them, thereby reaping the benefits.  Oh, and whoever my parent node's owner will now benefit even more because my earned income is higher, meaning my taxes paid to him are also higher.

That is a pyramid scheme.  The folks on the top get exceedingly rich on the backs of the folks under them.

If there is a way for a user to join your pool and not become part of this hierarchical structure, then you can state it isn't a pyramid scheme.

[eleuthria]

You give the definition of a pyramid scheme, then present your example, which exactly matches that definition.

Assume for a second that I decide to join this pool.  When I join, I will automatically be "taxed" because I'll be placed under some user's node.  I can then recruit two friends and tax them, thereby reaping the benefits.  Oh, and whoever my parent node's owner will now benefit even more because my earned income is higher, meaning my taxes paid to him are also higher.

That is a pyramid scheme.  The folks on the top get exceedingly rich on the backs of the folks under them.

If there is a way for a user to join your pool and not become part of this hierarchical structure, then you can state it isn't a pyramid scheme.

I'm was assuming you don't get placed under a random node, you start your own pyramid when you join.  But then again, that raises the question:  Why would anybody join on your link when they could sign up without paying for the privilege of being referred by you.  Which means this entire system is broken in one of 2 ways:

1) You join under a random person who is going to tax the shit out of you (higher fee effectively)
2) You join under a random person and then sign up a new account without being under anyone.


Either way, we've already had pools do this stupid shit before.  All it does is lead to forum spam of people trying to get others to sign up with their link.  There's nothing unique here other than it's a tax on the people who use your link instead of a straight bonus to yourself.


EDIT:  It's technically a Multi Level Marketing Scheme, not a Pyramid Scheme.  Not that it's much better.

[jonnybravo0311]

I'd argue it's a pyramid, and not MLM.  You aren't providing anything to those under you except the opportunity to pay you fees.  You are required to pay your parent node's tax.  No goods, no services, and the people on the top are the only ones to reap the benefits.

[eleuthria]

I'd argue it's a pyramid, and not MLM.  You aren't providing anything to those under you except the opportunity to pay you fees.  You are required to pay your parent node's tax.  No goods, no services, and the people on the top are the only ones to reap the benefits.

Hmm, good point.  MLM is "legit" because it's a distribution model (that is almost identical to a pyramid scheme).  A mining pool is not a distribution model though...it's literally paying a tax to somebody for giving you a link to sign up with and nothing else.

[ZettaByte Systems]

I'd argue it's a pyramid, and not MLM.  You aren't providing anything to those under you except the opportunity to pay you fees.  You are required to pay your parent node's tax.  No goods, no services, and the people on the top are the only ones to reap the benefits.

Incorrect, there are goods.

A pyramid scheme solely relies on recruitment without any benefits. However, in BitPrimer the goods and services are based on the aspect of mining and hashrate of an individual node. This is key. You don't recruit other users to join. You recruit nodes. We are distancing a user from mining with one account and we are turning nodes into a sort of "real-estate" for miners. Every user has the ability to buy and sell nodes. There is no locked structure.

Here's an example. Let's say your parent node decides to raise his Down Tax (aka your Up Tax). By doing so, you would lose revenue on your node and for the miners attached to your node. You have three ways of maximizing your revenue. 1. Raise your Down Tax. 2. Migrate your miners to a different node in retaliation. 3. Sell the node and migrate your miners.

We believe that these interesting set of variables will provide for some neat interactions within the freely flowing structure.

[ZettaByte Systems]

You give the definition of a pyramid scheme, then present your example, which exactly matches that definition.

Assume for a second that I decide to join this pool.  When I join, I will automatically be "taxed" because I'll be placed under some user's node.  I can then recruit two friends and tax them, thereby reaping the benefits.  Oh, and whoever my parent node's owner will now benefit even more because my earned income is higher, meaning my taxes paid to him are also higher.

That is a pyramid scheme.  The folks on the top get exceedingly rich on the backs of the folks under them.

If there is a way for a user to join your pool and not become part of this hierarchical structure, then you can state it isn't a pyramid scheme.

To clarify, your user isn't taxed, your nodes are. That's the key. Nodes, plural. A node is like property. You can buy and sell them, no problem. It has hashing power and a value based on scarcity. That right there should say it all. Scarcity. Scarcity is one reason for Bitcoin's success.

See posts below for further clarification...

[ZettaByte Systems]

You give the definition of a pyramid scheme, then present your example, which exactly matches that definition.

Assume for a second that I decide to join this pool.  When I join, I will automatically be "taxed" because I'll be placed under some user's node.  I can then recruit two friends and tax them, thereby reaping the benefits.  Oh, and whoever my parent node's owner will now benefit even more because my earned income is higher, meaning my taxes paid to him are also higher.

That is a pyramid scheme.  The folks on the top get exceedingly rich on the backs of the folks under them.

If there is a way for a user to join your pool and not become part of this hierarchical structure, then you can state it isn't a pyramid scheme.

I'm was assuming you don't get placed under a random node, you start your own pyramid when you join.  But then again, that raises the question:  Why would anybody join on your link when they could sign up without paying for the privilege of being referred by you.  Which means this entire system is broken in one of 2 ways:

1) You join under a random person who is going to tax the shit out of you (higher fee effectively)
2) You join under a random person and then sign up a new account without being under anyone.


Either way, we've already had pools do this stupid shit before.  All it does is lead to forum spam of people trying to get others to sign up with their link.  There's nothing unique here other than it's a tax on the people who use your link instead of a straight bonus to yourself.


EDIT:  It's technically a Multi Level Marketing Scheme, not a Pyramid Scheme.  Not that it's much better.

Regarding the possibility of spam. We are not implementing a link system. We have a marketplace where you can receive one free node, buy a node, or sell a node. You can own as many nodes as you want.

[eleuthria]

Alright, I've revised my opinion.  It's no longer MLM/Pyramid.

It's simply pants on head retarded (and a pyramid scheme).

[Cuslado]

which algorithm do you use? a little more precise plz

[jonnybravo0311]

Alright, I've revised my opinion.  It's no longer MLM/Pyramid.

It's simply pants on head retarded (and a pyramid scheme).

+1 

[ZettaByte Systems]

which algorithm do you use? a little more precise plz

The precise algorithm will be posted on our FAQ during Beta. You won't have to sign up to view it.