58.com’s “magic mine” uses blockchain to attract people for only 40 cents

58.com, a magical website." This brainwashing advertisement endorsed by Yang Mi is well known to everyone.

Recently, DeepChain discovered that this “magical website” has created a magical blockchain application – “Magic Mine”.

“Your friend is the XXth magical miner, and is sharing XX million in cash. The million-dollar prize pool is open to all miners. Blockchain technology supports security and transparency.”

Invite friends to get ores, share posts to get ores, compete for lucky miners, and share the bonus pool...

Behind the attractive advertising slogans, exquisite interface design and complex game rules is a low-cost customer acquisition "conspiracy" that uses the concept of blockchain.

And because the ore in this activity can be exchanged for cash (the official statement said it can be exchanged, but it has not yet been carried out), it also faces certain legal risks.

58.com’s “magic mine”

"Magic Mine is made by 58.com. Scan the QR code on WeChat to download it and share the million-dollar prize money together!"

A message popped up in a QQ group, accompanied by a poster with a blue background. The three big characters "神奇矿" were very eye-catching, and the poster also had the following copy: Your friend is the XXth magical miner, and is sharing XX cash; a million-dollar prize pool, every miner can claim it; blockchain technology supports security and transparency.

There is a line of small gray-white words below the QR code on the poster: The final interpretation right of this event belongs to 58.com.

Recently, DeepChain discovered that this project called "Magic Mine" was spreading on various social media.

Long press to identify the QR code in the poster, and the web page will automatically jump to the download interface of the 58.com APP. When the APP is downloaded and opened, the interface of the Magic Mine will appear in front of you. In addition, old 58.com users can also easily enter the interface of the Magic Mine by clicking the three words "Magic Mine" under the avatar in the personal center.

Therefore, it can be confirmed that "Magic Mine" is a product launched by 58.com.

The official introduction of "Magic Mine" states that the Magic Mine is produced based on the underlying technology of blockchain, with a fixed total of 21 million grams of "ore". As the issuer, the platform initially owns 20% of the "ore", and miners can obtain a certain amount of ore through mining tasks. The ore can be auctioned or cash in the prize pool can be obtained after meeting certain conditions.

According to the official introduction, there are two ways to obtain ore, inviting miners and sharing posts.

Users can invite new miners to join the "Magic Mine" through WeChat posters. New miners need to log in and bind WeChat. After each successful invitation, users can get a certain amount of ore rewards. The maximum number of ore rewards a single miner can receive through invitations is 50 times per day.

Although a reward cap is set, the "Magic Mine" rules also set up "lucky miners". The so-called "lucky miners" refer to the five people who are the most active in inviting new users in the "Magic Mine" and stay on the inviter's dynamic window for a long time by continuously inviting new users.

When each prize pool is drawn, the lucky miner one day before the draw will win the lucky grand prize. Each person can get 0.1% of the prize pool, and no ore will be deducted.

Sharing posts means sharing posts posted by users in the 58.com tribe. Miners can get a certain amount of ore after their posts are viewed by others every day. This ratio is 1% of the reward for inviting new users, and the upper limit of sharing ore is 10 times. Click on the shared post to find a link to download 58.com.

Therefore, according to the rules, whether it is inviting new miners, sharing posts or competing for "lucky miners", the ultimate goal is to help 58.com attract new users to get rewards.

Especially the "Lucky Miner", the purpose of this design is obviously to let users compete with each other to attract new users. Whoever attracts more people will have the chance to win the lucky prize.

Only 0.4 yuan is needed to acquire customers

How to convert ore into cash? How to divide the bonus?

"Magic Mine" has set up the concept of a mining pool, that is, for every new miner joining the "Magic Mine", the prize pool will increase by 0.4 yuan accordingly. In other words, every time a new user joins the "Magic Mine" game, 58.com will put 0.4 yuan into the prize pool until before the prize is drawn.

According to the official introduction, after each prize pool reaches the prize draw conditions, users can redeem the ore they hold for cash in the prize pool at 12 noon on the prize draw day. However, the official has not formulated a unified rule for the prize draw conditions. Currently, the first prize draw time is when the last digit of the closing price of 58.com stock is 5.

The amount of cash exchange is (the ore held by the user/all the ore mined) * the amount of the prize pool. However, cash exchange is only possible when the cash exchange exceeds 1 yuan. The method of exchange is that the system will transfer the money to the user's bound WeChat account through WeChat.

Taking the first phase as an example, as of press time, 8,981g of ore has been mined, with a total prize pool of 277,520 yuan. Each person brought in gets 0.0544g of ore.

If a miner recruits 50 new users, he can get 2.72g of ore as a reward, which is equivalent to about 84 yuan in cash.

From the user's perspective, a reward of 84 yuan is given for bringing in 50 people, but in fact, because many users participating in the game did not enter by scanning the code, they did not bring ore to other users.

Therefore, for 58.com, the customer acquisition cost is 0.4 yuan, whether the user enters by scanning the code or by entering on their own.

Based on the total prize pool now, more than 690,000 users have participated in this event, and about 160,000 of them came through the "Magic Mine" invitation event.

In addition, in the column of core technology introduction of "Magic Mine", it is stated that "Magic Mine" is a value ecosystem based on blockchain technology. Once created, information such as ore, prize pool, and transaction records will be unique, irreversible, and unchangeable. User behavior information will also be encrypted and stored using blockchain technology and will be kept strictly confidential. Information such as prize information and prize pool amount is open and transparent.

Although "Magic Mine" claims this, in the user's personal center, there are only block numbers and incomplete block addresses. In other words, users have no way to find the relevant records of ores, prize pools, and transaction records on the blockchain.

Therefore, it remains to be seen whether this is a blockchain product.

Today, with the cost of acquiring customers getting higher and higher, for 58.com, which relies heavily on traffic, using concepts such as blockchain and mining to acquire customers at low cost is indeed a "magical" business.

58.com’s blockchain customer acquisition strategy

58.com has always positioned itself as an information classified website, covering information on all aspects of various industries such as recruitment, real estate, second-hand, local life services, etc. After merging with Ganji.com, 58.com has also become the largest classified information website in China.

58.com's financial reports from 2015 to 2017 show that although its revenue has increased every year, the growth rate has slowed down year by year, with revenue in 2017 only increasing by 32% compared to 2016. Its stock price soared from US$28 in January 2017 to US$89 at the end of May 2018, and then fell all the way.

In fact, in addition to the problems of slowing revenue growth and falling stock prices, as an information intermediary, 58.com has always faced a long-standing problem - the proliferation of false information.

According to The Paper, among the 60 fraud cases in recent years that were found on the China Judgments Online website, 248 defendants committed fraud by posting false recruitment information, defrauding more than 5,500 victims and defrauding nearly 100 million yuan, with some even falling into prostitution dens and fraud rings. In the case with the highest amount of fraud, more than 2,000 victims were defrauded of a total of 62.7 million yuan in agency fees.

On August 20, 58.com’s official microblog, 58 Group Blackboard, announced that 58 Group launched the blockchain service platform 58BaaS. 58 Group President and CEO Yao Jinbo also shared the news in his WeChat Moments, and commented that “trust can create a better society.”

But just one month later, the website of Beijing Municipal Housing and Urban-Rural Development Commission issued an announcement stating that 58.com, Ganji.com, Anjuke and other products under 58 Group failed to effectively fulfill their platform supervision responsibilities, resulting in a long-term large number of serious illegal and irregular housing information such as the sale of "small property rights housing" and the rental of "group rental housing" and "black intermediaries" engaged in real estate brokerage business on the platform. After supervision, the rectification effect was not obvious, and ordered to rectify and suspend all Beijing housing information release during the rectification period.

For 58.com, the proliferation of false information is closely related to its single monetization profit model. As an information intermediary, 58.com's revenue mainly comes from advertising and membership services.

According to 58.com's financial reports over the past three years, its membership service revenue has been decreasing year by year, while its online marketing revenue has been increasing year by year, accounting for 59.4% of its revenue in 2017. The so-called online marketing refers to services such as real-time bidding, priority display, market expansion, and display advertising.

Therefore, 58.com is faced with a contradiction. If it wants to maximize traffic and revenue, it will inevitably encounter the "minefield" of false and illegal information.

As early as 2017, Yao Jinbo revealed in an interview with the media that blockchain and 58.com might be naturally combined, and 58.com would take the initiative to embrace and explore blockchain.

In fact, as Yao Jinbo said, the technical characteristics of blockchain such as decentralization and immutability can naturally solve certain problems related to information authenticity and trust, which is also what 58.com needs.

However, the blockchain product "Magic Mine" created by 58.com has now embarked on the path of frantically grabbing traffic.