With thousands of streams I also mean any "payments" coming in. A friend of mine who I referred got a free Genesis 10Gh/s and bought another one. That 0,018 BTC is inflow for GAW. They don't collect all those bits and pieces until they need 475 Gh/s extra and order 1 Ant S3 (for example).
According to the latest CCN advertisement, they should be getting thousands of BTC per day in new purchases that can immediately be spent on hardware.
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If they for example are pointing their mining income to a cold wallet address it could just stack up there and be spent on new hardware once BTC goes up a bit. With low rates it makes no sense to convert BTC to USD and into hardware. Waiting for BTC to raise 10% in value will give you 10% more mining speed for the same BTC.
If all streams coming in are big enough to fund the outflow in payments and withdrawals, then yes, effectively newcomers pay the income for older clients. Difference in that sense with a ponzi is that there is the actual mining result that's flowing into the cold wallet. So by itself having "payments in" being used for "payouts to other clients" isn't by default a bad thing.
If all streams coming in are big enough to fund the outflow in payments and withdrawals, then yes, effectively newcomers pay the income for older clients. Difference in that sense with a ponzi is that there is the actual mining result that's flowing into the cold wallet. So by itself having "payments in" being used for "payouts to other clients" isn't by default a bad thing.
Yes, they technically could have a secret mining address but I find it incredibly unlikely.
I would say it is definitely by default a bad thing that they are using new customer payments to payout "mining earnings". (i.e. mimicking a ponzi scheme)
Why can't they payout from actual mining earnings? Why can't they disclose their mining address? What benefit does it provide them to mimic a ponzi scheme?
Might be a very good reason from a bookkeeping perspective. If they'd rent out hash power in USD instead of BTC (or payments through CC in USD) they would have 0 reason to start converting back and forth. They've probably bought a lot of BTC with USD when it hit the bottom a few weeks back.
It's not that they try to mimic a ponzi scheme, if they had 3 bank accounts they could still pay you out from the same where you paid to.
From a "bookkeeping perspective" they've made their system several times more complicated than other companies who just payout directly from their mining address.
The currency people used for payment is irrelevant because it should not be used to payout mining earnings.
At any given time GAW has X hashrate that produces Y BTC for customers daily. They should be able to pay out Y BTC daily without ever touching new customer payments. It's much harder to try to allocate Y BTC daily from new customer payments.
A ponzi scheme defined as: "a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator."
So they are without a doubt mimicking a ponzi scheme.
If anyone can come up with a logical reason why it might be beneficial for GAW to payout "mining earnings" from new customer payments instead of from actual mining earnings, I will reward you with 1000 jimmothypoints. (keep in mind it has to outweigh the downside of looking like a ponzi)
Well only thing I can think of is HashKing has declared that the payouts are not from mining. But from a few different sources. So in this case, it would make sense if your payout got traced back to a "holding wallet" (which wouldn't point back to a recent block creation).
Maybe your payout was from a lucky streak HashKing had at PrimeDice? :grinning:
) think he is fooling? I believe all this paid-for PR is reaching deaf ears at this stage. 