Ponzi Scams – Digital Currency
Online porn helped water the growth of the Internet in its developmental years. Not something to be proud of, but facts are facts — even the hideous ones.
Ponzi scams have likewise helped stoke the use of digital gold currency for years. Ponzi scams have been mothers’ milk to big trade players. E-gold is a special preference of online Ponzi schemes, and nothing could better describe the problem than a recent government indictment, which says:
“Because of the lack of controls as compared to those present in other payment systems, E-GOLD has been a preferred method of payment by operators of investment scams, which suggests pyramids, ponzis, HYIPs (i.e., high-yield investment plans) and other “get-rich-quick” plots. These scams promise a high short-term return on investments, but instead of rewarding investors any actual returns on real investments; the scams pay investors with new, incoming investment money from other participants in the con. Sooner or later, the perpetrators of the scam either vanish with all the money or the scam fails because funding naturally lags as the scam increases and the operatives are unable to sustain payouts of promised returns. E-GOLD has been promoted in this area.”
The latest e-gold challenge occurred in May. Since then observers are wondering if there have been major changes in the Ponzi/e-gold cash flow. One e-gold statistics page shows the “Distribution of e-gold Spends Over 24 Hours.” Those figures show that out of 35,000 “spend transactions,” 21,000 had a value of less than 100 mg — or less than $2.16.
In plain terms, 60 percent of all e-gold spends that occurred on August 13 were below $2.16. Ponzi “interest” payments are always extremely small values and fall well within this range. The 21,000 August 13 e-gold spends were not micropayments for digital downloads such as e-books or subscriptions — they are all HYIP Ponzi payments.
Despite years of use, operators of e-gold know that e-gold has not worked against any campaign to stop or prevent the Ponzi schemes built on e-gold.
While it is safe to assume that if 60% of one day’s e-gold transactions are Ponzi payments, then the remaining 40% must be legitimate online commerce. The information is public and is discussed widely on bitcoin and e-gold forums.
Ponzi schemes will continue to thrive as long as new patsies put in money. Where is that money deposited? A3Union accept e-gold, e-Bullion, and Pecunix.
Possibly one day it will be finished, but regardless there will be a tipping point where Ponzi operators have fewer investors placing funds in the scheme than they can put out in interest. When this happens, the operation will fold. As the operation collapses, all of the proceeds the scammers haven’t stolen already will disappear.
For further, accurate information, a Google search using keywords e-gold, HYIP or e-gold investment will yield hundreds of the HYIP scams that accept e-gold and other digital currencies.
Investment forums and blogs will also often have posts promoting a Ponzi scheme, so be careful even when looking for legitimate investment opportunities. The sites — and operators — are slick and remember, they are always looking for fresh patsies to feed the e-gold machine.