Cryptos Land: Detecting The Bitcoin Ponzi Schemes

Monday, 25 September 2017

Detecting The Bitcoin Ponzi Schemes

A ponzi schemes also known as HYIP (High Yielding Investment Program) are the center of bitcoin investments. Ranging from 15% daily to 1000% or more in three days these schemes lure people by offering high return on investment with in few days. Imagine you have $100 today and after three days they turned into $300 or more.

A Ponzi scheme is an investment scheme where the return on investment for old investor are generated by the funds from new investors. These type of scheme rely solely on new investment and massive advertising campaigns. Once the new investment stops coming the schemes fail. Sadly, the Bitcoin ecosystem is filled with such schemes marketed almost on all Bitcoin ads network.

How to detecting a Ponzi scheme?
Detecting a Ponzi scheme is not hard. Just know that if it sounds too good to be true it might be a Ponzi. Some of the specification that might indicated a Bitcoin Ponzi Scheme website includes.

1. A new domain
Ponzi scheme website can be detected by their domains's age. Domain age refers to the period of time a website has been online or active. Usually, Ponzi website domain age mostly range for few months some even one month. You can easily check a Domain age using this tool. If the domain age is three to four month it is one of the sign of a ponzi scheme.

2. Offers high return
The main ingredient of a Ponzi scheme is its abnormal return on investment. A Ponzi schemes offer lucrative investment offers. This attracts people into investing in the newly made program. New users entering into Crytpo currencies usually see Ponzi website banners on various Bitcoin related sites telling them that their money will double triple in Bitcoins with in a matter of few days.

3. Offers low investment plan and even a lower withdrawal threshold
This is one of the main reason why people are attracted to to Ponzi and HYIP's scheme. You can start with as low as 0.0001 Bitcoins and see your money grow. Withdrawals are even more lower usually 0.00005 Bitcoins. Once the user is able to withdraw part of his investment he start to believe that this is a legit website paying to its users. He start to promote the website and many other follows creating a flow of money in the scheme.

4. Claims to be a registered company
The HYIP's and Ponzi Bitcoin schemes use this tactic to make investor believes that they are a legit and recognized company specially in United Kingdom region. Kindly know that it only take 20 GBP to register a company in UK and you can do it online. Similarly the website also provides a fake phone number and address to which can be tracked on Google maps to determine the authenticity of company which usually turns out to be fake.

If you find these signs in a website rest assured that the website is using a Ponzi scheme and will end soon with investor funds being stolen. You should not deposit any of your money in such programs except you want to loose them. Kindly know that these type of investment programs are also making their way into Telegram. There are other better ways to invest your Bitcoins you can check such as Hashflare.io or Genesis Mining or if you are looking to buy something in return for your bitcoins why don't you try crediting your mobile balance with this Android App

Bitcoin is like a real money like dollars except that it doesn't have a physical existence, it can not be multiplied in a matter of days or weeks
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