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Topic: ▁ ▂ ▄ ▅ ▆ Cloudmining 101 (ponzi risk assessment) ▆ ▅ ▄ ▂ ▁ - page 86. (Read 361524 times)

legendary
Activity: 980
Merit: 1040
We got this from Zeushash today.

Due to the surging of Litecoin minining difficulty, the daily payout of MHS
fails to cover the maintenance fee today. According to the term of MHS
contract, "the payout allocation will be terminated in case the daily mining
return is lower than the maintenance fee for 10 days in a row".

We are sorry to inform you when this continues for 10 consecutive days, we'll
have to terminate your MHS contracts. We are now on day four..
We didn't expect this happening so soon but we have no other choice.


A quick look at their fees and litecoin difficulty suggests what they say is entirely plausible.
Or I should say, was, because difficulty seems to been dropping again, so there might be some more weeks of payouts to come.

This however, is in no way evidence of a scam, but it does serve as an illustration of why mining in general is usually a bad idea: any apparent or excess profitability will quickly be gobbled up by extra deployments, causing difficulty to rise to the point where revenue and costs are in balance and cloud mining contracts become worthless. Unless you have a significant competitive edge (low costs), mining can appear to be profitable, but it will almost never end up being profitable. Its been like that since the very first asic, but people still get fooled by the short term %'s.
legendary
Activity: 980
Merit: 1040
One thing I missed in criteria in the OP (it might have been said already, didn't have the time yet to read the rest) is plausiblity check on the promised (and delivered) returns.

Ive deliberately ignored profitability for a few reasons already explained, but also because it doesnt really tell you much about if a service is a scam or not. A ponzi can arbitrarily set perceived profitability. Setting it for low profitability will make for a slow, longer lasting ponzi, setting it high will make it collapse faster, but its not even obvious to me which will earn the scammer most. So I dont want high prices to become a false indicator of legitimacy, nor penalize a legitimate service for having highly competitive price, nor give ammo to those that accuse legitimate mining services of being scams just because the contracts are no longer able to pay dividends.

That said, nice job on the website. I generally ignore all cloudmining "review" sites because they are simply a vehicle to push referrals. Its nice to see one that actually tries to tell the truth.
legendary
Activity: 1890
Merit: 1031
We got this from Zeushash today.

Due to the surging of Litecoin minining difficulty, the daily payout of MHS
fails to cover the maintenance fee today. According to the term of MHS
contract, "the payout allocation will be terminated in case the daily mining
return is lower than the maintenance fee for 10 days in a row".

We are sorry to inform you when this continues for 10 consecutive days, we'll
have to terminate your MHS contracts. We are now on day four..
We didn't expect this happening so soon but we have no other choice.


I am happy i only have referrals there  Shocked Sad Lips sealed
newbie
Activity: 5
Merit: 0
for cointellect i believe they are using the hash power for something else, it can explain profitability. their payback is indeed very good to be true, however they are paying for the last 3 months.
newbie
Activity: 22
Merit: 0
One thing I missed in criteria in the OP (it might have been said already, didn't have the time yet to read the rest) is plausiblity check on the promised (and delivered) returns. I've done some cloudmining (product) reviews in which I mainly focus on the returns, and based on that I dare to draw even stronger conclusions than the OP did (for two companies).

CoIntellect and ltcgear are both listed as "(very) suspicious". For these two, their product offers are truly absurd.

For LTCGear (full review) I determined that they offer the equivalent of at least 30% ROI per month (take a moment to consider how fast you'll be a millionaire if that holds), and for Cointellect (full review) I even found that they promise (and deliver) more mining income than mathematically possible.

And of course this makes sense for a Ponzi scheme. After all, it is required to attract not only new users, but also keep drop-off rates low and reinvestment rates high. In order to achieve that, the outlook needs to be better than anything else. Hence excessive returns should be one of the criteria. Certainly not the only one by the way, I limit myself to this because I'm reviewing products - not exposing scams (well I end up doing that for some, but that's not the goal). Smiley
legendary
Activity: 980
Merit: 1040
Howdy,

Found another one - btcslice

Lifetime hash contracts, and no maintenance! Guess that's a 1+2+3+4+5+6+7 Smiley

That one might warrant an "8" as well; it seems they dont even pay out in bitcoin, but in $  Shocked

http://www.btcslice.com/forum.php?topic=19

I assume via paypal?
legendary
Activity: 2072
Merit: 1049
┴puoʎǝq ʞool┴
Why do they have the number 4 alongside their name? They state that have a maximum of 1PH at the moment no?

Yes, but at this time, I cant see or verify how much of those 1PH they sold, so they could be doing fractional reserve mining without anyone noticing.

Quote
Curious as to why it would mean anything to cex.io?

cex.io used to be where bitfury sold their hashrate, or so I thought.


Alright, thanks for the reply.
legendary
Activity: 3808
Merit: 7912
they could easily have paid out even without the benefit of new money - think about it; they have next to zero expenses and their payout is dependent only on difficulty and hashrate.

They could, but why on earth would they, given that most of them are anonymous ? You're assuming a "benevolent scammer" who will keep paying out according to the contract even though he is well past his peak profitability.  I think thats a rare breed.

 No I'm not really even saying scammer let alone benevolent!  What I'm saying is they were operating using a business model that would have paid out but nobody was ever going to ROI when diff was screaming up.  Nobody!  In much the same way as people never expected house prices to decline which cause the huge problem in the US when people couldn't pay their inflated mortgages.  They also had the major flaw of extremely long term contracts with no maintenance fees...
newbie
Activity: 15
Merit: 0
Howdy,

Found another one - btcslice

Lifetime hash contracts, and no maintenance! Guess that's a 1+2+3+4+5+6+7 Smiley
full member
Activity: 153
Merit: 100
"ltcgear               1+3+4+5+6          => 5/7 = (very) suspicious (info welcome) "

Who's the asic vendor that endorsed ltcgear?

I assume they endorse themselves, since they sell hardware too.




Thank you.  That doesn't instill confidence.  Wtf did I get myself into!
legendary
Activity: 980
Merit: 1040
they could easily have paid out even without the benefit of new money - think about it; they have next to zero expenses and their payout is dependent only on difficulty and hashrate.

They could, but why on earth would they, given that most of them are anonymous ? You're assuming a "benevolent scammer" who will keep paying out according to the contract even though he is well past his peak profitability.  I think thats a rare breed.
yvv
legendary
Activity: 1344
Merit: 1000
.
Finally got some real pictures of HashProfit: https://forum.btcsec.com/index.php?/topic/8524-hashprofit-maining-dlia-vsekh-200-khs-na-7-dnei-besplatno/?p=179951 Cheesy

Are pictures from there start, so back then it wasn't that big.

Lets find out where they're mining.

I don't think that they are mining. I think they launder money from different busyness through cloud mining. Scrypt mining is not profitable today, but they are giving away A LOT of btc. It is definitely not a ponzi, guy just need to make their income clean.
legendary
Activity: 3808
Merit: 7912
I would say, that there are enough idiots standing up every morning to drive a successful ponzi scam.

 These so-called Ponzis really weren't Ponzis until difficulty stagnated.  When difficulty was increasing exponentially, they could easily have paid out even without the benefit of new money - think about it; they have next to zero expenses and their payout is dependent only on difficulty and hashrate.  They could easily undercut real mining companies. The fly in the ointment is the stagnation of difficulty otherwise they would be thriving.  (Barring the exposure by Puppet of course)
legendary
Activity: 1513
Merit: 1040
I would say, that there are enough idiots standing up every morning to drive a successful ponzi scam.
legendary
Activity: 980
Merit: 1040
Ah man, the poor people who invested there.... The cynical ones among you will say everyone who invested there is just gullible and greedy and they got what they deserved, but I disagree. People are just trying to make a buck, which is not at all implausible in the Wild West that crypto-land is.

Its implausible to me, that someone would be investing on a site that provides absolutely zero evidence of anything, not even competence,  and actually believe its anything other than a ponzi scam. And if the money was sent based on the assumption it was a ponzi, as I assume most investors did, then you're right that I have zero sympathy for them. In fact I consider them complicit for trying to steal bitcoins from later investors.

hero member
Activity: 1132
Merit: 818
ltcgear and bit-x are both listed. Common guys, the list is getting long, but not so long you cant find those.

In other news, looks like cloudmining.website is running on its last legs. It stopped automatic payments and enabled 100% reinvestment for everyone without even asking:

We have launched the settings page. Now you can hold your payment and re-invest automatically. Both these features have been turned on for all existing customers as well as new customers. If you want to turn them off, you can do that immediately from the settings page. Re-investment will take place everyday starting from coming Monday.

Thats pretty desperate.

Ah man, the poor people who invested there.... The cynical ones among you will say everyone who invested there is just gullible and greedy and they got what they deserved, but I disagree. People are just trying to make a buck, which is not at all implausible in the Wild West that crypto-land is. But I do hope that people lean something.
legendary
Activity: 980
Merit: 1040
Finally got some real pictures of HashProfit: https://forum.btcsec.com/index.php?/topic/8524-hashprofit-maining-dlia-vsekh-200-khs-na-7-dnei-besplatno/?p=179951 Cheesy

Are pictures from there start, so back then it wasn't that big.

Lets find out where they're mining.

Good find. But I count 100 GPU's there. Am I right saying thats typically good for ~100MH ? Thing is, closest cached version of the website I can find is from september, 2 months later, and there they claim to own ~1400 MH:
http://web.archive.org/web/20140912014413/https://hashprofit.com/

Today its 5300 MH.

Id really need to see something more substantial tthan 100 GPU to grant them a point for this.
hero member
Activity: 644
Merit: 500
Finally got some real pictures of HashProfit: https://forum.btcsec.com/index.php?/topic/8524-hashprofit-maining-dlia-vsekh-200-khs-na-7-dnei-besplatno/?p=179951 Cheesy

Are pictures from there start, so back then it wasn't that big.

Lets find out where they're mining.
full member
Activity: 172
Merit: 100
legendary
Activity: 1890
Merit: 1031
Hello guys  Smiley

I just got 2 terrahash sinds two weeks whit pbmining, is it any good?
How do i get a payout request there?

I am new in the mining bizzz

I can't tell if you are being serious or not

If you are being serious check out this thread
https://bitcointalksearch.org/topic/recovery-program-beginning-in-january-for-pb-mining-customers-887871

or the last 20 pages of this one
https://bitcointalksearch.org/topic/pb-mining-5-year-mining-contracts-418183

Or page 1 of this thread or search pbmining on BCT and look at the numerous thread stating pbmining is a scam

but I'm assuming you not being serious

No i am not.
Telling people from the last two and halve months PBMining ain`t good, its even on my cloudmining page.
Got the 101 warning on there to. There is no cloudminer out there making huge roi`s.

Only the Referral guys making real money  Wink

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