Topic: ███ Stay away from GAWminers.com / Paycoin / Paybase - Mineral - SCAM ! ███ - page 12. (Read 38271 times)

Sold my hashlet prime after reading this earlier. Now i kinda regret it 

Sure, but these cloud operations have been going for a longer time and it is a pretty good indicator that it is legit if they prove the hashrate for 6+ months. But I agree with what you are getting at, this should only be one indicator amongst multiple.

No, not at all. Because I (being the scammer here), would rent not much more than the hashrate I already sold, or even less,  and rent it only for a (very) limited time (until I run), while taking in revenue for contracts that are pretty much perpetual. Thats where my margin is, and its pretty big.

edit: almost forgot, the rented hashrate actually brings in mining revenue too of course, so the real cost is relatively minor. On a lucky day I might even profit just from renting rigs alone.

True that's why they all turn into scams even legit ones, it's just so easy

Proving their hash rate by renting the hash just makes running their operation fraudulent more difficult as they have a middleman to pay out and thus have extremely tight margins(so tight they may as well just buy the equipment themselves) . You are essentially correct that it doesn't conclusively prove they are indeed hashing directly, but it is a very strong indicator that should be considered alongside your other variables.

Not sure I follow. As I understand, if I rent hashrate on nicehash, I can point it to any pool I want, even my own bitcoind and sign my blocks however I want, or point it to any pool and prove my control of the worker/account. I could rent the hashrate for as long as my scam is profitable, and increase the rented hashrate as my combined sales grows until I reach the point where I maximized my profits. How would you ever prove or even guess I dont have a datacenter in my basement?

Any company that does not prove its hashrate by showing the blocks is of course, extremely suspicious, but one that does 'prove' it this way, might just be a more clever scammer. Its not a guarantee afaics.

Everyone must mine to their own pool so rented hash must be sustained

How would you distinguish rented hashrate pointed at your private pool from actual owned hashrate?

Another salient point, but I was suggesting permanently and transparently showing a sustained hashrate or newly minted bitcoins deposited before payouts. Their are certain security concerns about this but they can be mitigated.

There are two kinds of 'forced shutdown' points; there is the point where the ponzi or fractional reserve mining operations actually runs out of money and is forced to close. But (long) before that,  is the point where new sales < dividend payouts, and a ponzi operator would benefit from stopping right there and running away with his maximized loot.

The first point, it may take a very long time for most ponzi's, and potentially never for some that sold at high prices, and/or if difficulty growth picks up again with the next generation miners.
The second point, applicable especially to all the anonymous ponzi's,  we will see many of them run off in the coming weeks and months, but thats gonna happen regardless of what difficulty does IMO


I wish it was that simple, but its not. In fact its trivially easy for a scam operation to 'prove' hashrate it doesnt have. They can just rent it from nicehash for the duration of the scam. That would reduce their profits, but not to the point of being unprofitable since they would rent only for a few weeks or months, but sell contracts for x years. So be careful accepting blockchain proof of hashrate alone as sufficient. Instead, I tried listing 7 criteria  and applying them to most companies in the link in my sig. Its not waterproof either, but complying with most or all of those criteria is certainly a significant burden for a scammer to overcome.

Thanks for the great info guys

By the way all are built to scam around

Good point. This is one reason why cloud mining is the perfect medium for ponzi's. The question that one has though is are the affiliates and interest in mining enough to sustain the higher payout for a flat or decrease in difficulty? I believe that some of these operations will be forced to shutdown because they cannot attract enough contracts from new and existing clients to fulfill their past contracts. There is a limited supply of people interested in mining and a large amount of options so this may prove fatal to them.

The fact that the difficulty has tapered off is a sign that most of these company's are indeed ponzi's or use fractional reserve mining. They cannot simultaneously boast about new clients and increases in hashing power and the network not support these claims.

It is trivial to securely prove they have the hashing power to sustain their clients contracts even without any effort or audits. I suspect the reason they don't do this is because all cloud mining schemes at minimum partially oversell their hash rates.

Unfortunately, flat difficulty also has an inverse effect where it lures in new investors or new investments from older investors because of the apparent profitability.

That's not how ponzi schemes or fractional reserve mining operations work. Mining is a very competitive industry with narrow margins and the math doesn't add up to any sane person. They have employees, rent , utilities, taxes, maintenance , and affiliate costs to payout.

If difficulty remains flat for a little while longer you will start to see many of these cloud mining operations pop because the fresh new victims won't be able to sustain the payouts of existing miners.

GAW miners may hold out a bit longer than other cloudmining operations because they can use profits from their paycoin IPO scheme to sustain their business but eventually the truth will be revealed. 

Well they make money out of it and if they let a part of their profit go they may pay it so it wouldn't be scam.

and the majority will lose all of their money. and thats the whole purpose of that scam.

Good for you. I can't take any of the payouts out of my account. It's been 2 weeks since I opened a ticket with them, support keep saying "it will be fixed". They forced Authy on all accounts, which I think it's great, but it can't be enabled on my account.

I jumped out a month after hashlets were released and quadrupled my BTC 

Wait, there's more where that came from... oh hang on, nothing times nothing equals nothing... my bad 

one week is over and Josh said there was an audit of his company. he said he wanted to report the results one week after the audit.

here are the results: