WARNING: Cryptocurrency Scams and Ponzi Schemes Everywhere!

The growing number and size of elaborate pyramid schemes in this space is terrifying. Be careful out there.

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Thanks for the update. But seriously, there is nothing new here. Scams and Schemes have been around as long as money has been around.

I'm reminded of that scene from the movie Casino where Nicky Santoro first arrives in Las Vegas and he and Ace Rothstein are out for a drive on the strip. Nicky turns to Ace and says:

"Look at this place, it's made of money. You know what the best part is? Nobody's gonna know what we're doing"

All the stock market scam artists, the Ponzi-Scheme builders, and the Amway disciples are migrating to the crypto world to pull all their old tricks. The louder you scream "It's a Scam", the less they will believe you because the allure of "passive income" and living the lifestyle of "6 Saturdays and a Sunday" is just too great for them to resist.

I agree with you that those kind of schemes are Risky and definitely un-ethical (though some claims to be based on pure trading)... But how could you treat Bitcoin different? Bitcoin also depends upon continuous money coming purring in.. to raise its value and demand.... Moreover un-necessary energy is used to generate a bitcoin that has NO real worth behind..

Do you know the basics of cryptography? You never needed bitcoin to design the way it has been designed... (Etherium and NEO may have better models and features). If you think deep, then, you will not see a big difference between Bitcoin and the schemes that you are pointing too.. Those schemes are also the reason to raise huge demands of bitcoins...

...And another thing, please also investigate the working models of Steemit echo system and Bitshares echo system. It will help us to understand better. Do you find some differences and similarities? How they work? Why they work the way they work? How they differ from others?

Bitcoin doesn't and has never promised the users of their product or advertised their project as a vehicle of guaranteed profit. Bitcoin can go up and down and the ecosystem won't collapse. The 2014-15 decline of Bitcoin would have destroyed schemes like these as money was leaving the ecosystem. Money left Bitcoin for over a year, yet Bitcoin survived because of no promise of profit. Bitcoin is simply an asset like gold. It's value is determined entirely by the market, but does not rely on money coming into the asset. Bitcoin would still exist if each Bitcoin cost a penny. You can also sell your Bitcoin whenever you feel like it, these schemes usually require you to lock up your assets for some period of time.

A pyramid scheme requires constant cash flow to pay those at the top of the pyramid. If these schemes existed in 2014, they would have all fallen apart or exited because they couldn't give money out as money was leaving the space. That being said, one could argue that Bitcoin is in somewhat of speculative bubble and may be due for a significant correction, but I am quite confident that when that does happen, these schemes won't be able to survive the bear market as money will quickly exit the space and all those at the bottom of the pyramid will be left holding the bag.

Bitcoin is nothing more than a cryptographic based process to share value (or convey data) between two (or multiple) un-trusted parties where majority has the power to decide about the integrity (correctness) of the data.

i agree that bitcoin also have some risk

@louisthomas Hello, I just wonder what are your views on STEEM Power up and Power down? I am not 100% sure but it is probably 13 weeks lockup time (step-by-step Power Down). Did you try/use it?

I'd like a video about the depths of Steemit, how it works really... =)

cough Bitconnect cough

Pressure needs to be put on coinmarketcap.com to de-list that thing.

Could you mean Arthur P. Ponzarelli
Arthur-P-Ponzarelli.gif

Hey Louis, great informative video. It always helps to advance the digital currency movement to highlight potential scams.
I just wrote a post on governments regulating digital currencies and attached your video on what you would do if the British government regulated digital currencies. Take a look: https://steemit.com/bitcoin/@dcasia/governments-looking-at-regulating-digital-currencies

Great content Louis. Very concerning to see these pyramid scemes popping up... One of the many great things of crypto originally is that these did not exist in the ecosystem originally. As the space is expanding we need to be ever more vigilant about what we invest in. Everyone is responsible for their own due diligence

do not go near the water till you learn how to swim it

There have been scams and ponzi schemes before cryptocurrencies so people should not blame cryptocurrencies for having scammers. Cryptos are a useful a tool that can be un-ethically used.

Great video. Currently, I would say the majority of business models/ blockchain applications are scams. It's all just too fresh and totally hyped. For example I really wonder what you need 257 million $ for to create a crypto currency. As far as I know, the Bitcoin developers got it done for free and I kind of understand that in this kind of environment shady people try their luck.

Therefore the market and the platforms like steemit are in need for some regulation. Hopefully, this will be self-regulation, but I kind of do understand (and hope) that governments will do something.

I will follow you now.

edit

I'm still wondering what I should think about Qoinpro, where you only have to get yourself an account and then you get a few crypto coins every day - seemingly without having to do anything else - and where you can get more if you get others to sign up via your referral (which I added). Is this kind of thing a scam too?

What do you call a Ponzi scheme in which all of the participants are other Ponzi schemes?

The banking system.
:D

@louisthomas It's ironic that while crypto set out to sort real-life problems with fiat currencies, it has introduced a new set of problems such as these on their own - who'd have 10 years ago that you could create Ponzi schemes out of currencies?

The paradox here is that while deregulation is an advantage of crypto, it is this very trait because of which these ponzi scheme currencies have come up.

Apart from this, another problem one can see is that companies are raising way too much money easily (even if they legitimately wanted to create a real service) via ICOs - with all this money in place upfront, what would even give them motivation to meet their original goals?

Crpto and blockchain may be groundbreaking technology but this kind of stuff might just prove to be its Achilles heel.

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It is terrible how they have prospered these sites, they discredit the community cryptocoins

hi,louisthomas,nice to read about you.
am jeevansantoshi from india,am also new on steemit and welcome you to steemit.
i have followed you.So,can also follow me.
Best of luck!

Totally agree. When one of these ponzi schemes does collapse (and I'm thinking of one top ten crypto in particular) this will generate a massive amount of FUD and negative crypto headlines.

I think there's a lot more growth before a crash though. And it's gonna be massive when it hits!

For someone with their head screwed on though it could bring a great buying opportunity if it drags down other cryptoccurrencies with it.

Think Ethconnect will be as successful as bitconnect or total scam?

bitpetite is a total scam!!!!