Is Bitcoin.com A Ponzi Scheme, And A Pretty Poor One At That?
Bitcoin is all the rage. Some might say Booming. The promise of quick riches and a safe, secure and anonymous way to send and receive money away from the prying eyes of government is inviting to millions of speculators and would-be investors.
Mining Bitcoin, or verifying the billions of transactions each day, is a critical element in the process. One method used is a Mining Pool.
Bitcoin.com started mining with its own pool and mined its first block, 430757, on September 21, 2016. Cloud mining contracts were added in May, 2017. The Bitcoin.com pool and cloud mining system was developed by Emil Oldenburg and Shaun Chong. In 2016, Bitcoin.com secured 1% of the global hashrate of bitcoins.
It all sounds great and yet, anyone who buys a contract from Bitcoin.com today will lose money.
As an example, a 3-month (free hosting) contract with an initial deposit of $102 promises a projected daily revenue of $0.46, or $41.40 over the term of the contract. You lose $60.60.
The company offers various terms and a sliding scale of initial deposits from $34 to a staggering $1,800,000. Whether you invest $34 or empty your bank account and send Bitcoin.com $1.8 million, you will lose money. All you need to do is to decide how much you want to lose.
WireNews wrote to Bitcoin.com to check the facts.
Luke replied saying: “Future earnings are very hard to predict for any bitcoin miner. Because the price is still quite volatile and it is averaged that BTC mining difficulty will rise around 5% every 2 weeks (2016 blocks), and BCH mining difficulty adjusts every block, the best we can offer is estimated revenues for our cloud mining contracts. We do have a Revenue Calculator on the site that you may find helpful.”
In other words, using the revenue calculator provided by Bitcoin.com, if you invested $1,800,000 in a 1-year contract (this term is described by management as the ‘most popular’) you would earn a daily revenue of $2,291.30 and it is projected by Bitcoin.com that over the 12 months you would lose $963,675.50.
You may not wish to lose so much… Adjust the contract initial deposit or investment to say, $6,000 and your daily return reduces to just $7.64, meaning you’ll lose only $3,211.40, which may be more to your liking.
On the other hand, Bitcoin.com uses the initial deposits paid by its customer (according to the company) to expand its network.
While not technically a Ponzi Scheme because everyone loses money, except for Bitcoin.com, the allure of profits is sufficient to brand this venture a Ponzi Scheme in my opinion.
Verdict: Stay clear of Bitcoin.com’s Mining Pool operation, unless you want to lose your money.