The first virtual mining machine runaway incident in China has occurred. How far are we from a runaway wave?

Anyone who has experienced P2P knows that in 2016, there was a wave of P2P running away. There were thousands of platforms, large and small, running away across the country. The largest case, Ezubao, involved 60 billion yuan, which had a huge social impact. With the occurrence of these incidents, the country began to strengthen supervision of Internet finance, and Internet finance has also gone through a path from barbaric development to now becoming a financial management method recognized by people.

I once wrote an article titled "When the sleepless nights at 3 a.m. were hotly discussing blockchain, young people in small towns had already bought a large number of environmental protection coins." I hope to tell you that although the concept of blockchain has become popular, social awareness is not enough, and regulators do not want to kill new things with one blow. There must be a period of wild growth. With the development of real blockchain technology and companies, many scammers have emerged, and the main victims are in second- and third-tier cities and even rural areas, because in that environment, people cannot distinguish between real and fake Ethereum:

The URL of the website that ran away was eth56.com. It used Ethereum as a cover and gave itself a very similar name, ETH8, which made many people mistakenly believe that it was a mobile blockchain fork project of ETH, which is one of the world's top blockchain projects. In fact, they are two completely unrelated things.

As can be seen from the screenshots, this fake Ethereum is a standard online pyramid scheme. You can mine by investing in mining machines, and the cost of investment can basically be recovered in a dozen days. However, these are virtual assets displayed in your account. If you want to withdraw cash, you must invest in new mining machines or develop downlines to have a withdrawal quota. This system makes those who participate in it frantically develop downlines. It has to be said that the scammers' product logic design, including the user experience of the products, is better than that of some domestic Internet companies. There are tens of thousands of people who have been deceived, and there are dozens of groups of all sizes.

The mining machines sold by fake Ethereum are divided into 5 levels, with the lowest level being 50 yuan and the highest level being more than 10,000 yuan. The income is also divided into levels like MLM. The higher the level, the faster the payback period. However, if you want to reach the top of the MLM, you must constantly recruit downlines and purchase large mining machines.

The initiator of this fake Ethereum project is called Brother Mi. Under his promotion, dozens of WeChat groups with 500 people were developed in just fourteen days. As a result, the platform began to be unable to withdraw money when the project was concentrated on the payback period, and the routine announcement website was hacked. It reminded me of the routines of many P2P platforms running away in 2015. By the time the victims came to their senses, the scammers had already cleaned up the mess and ran away.

Please note that in order to promote the offline, the initiators such as Migo will actively provide materials, similar to this:

Why did Migo's Ponzi scheme attract so many people so easily? There are two reasons. One is that blockchain and digital currency are so popular recently that everyone is talking about digital currency. The second is that everyone wants to get rich quickly. These victims believe that most people understand the reason and still participate, but they think they will not be the last one to take over.

Now that the incident has happened, the victims have organized many rights protection groups, and even revealed the scammers' names, phone numbers and other information, and reported the case to the police, etc. The victims also need to use legal weapons to protect their rights. According to Article 266 of the Criminal Law, if the amount of fraud of public or private property is extremely large or there are other extremely serious circumstances, the offender shall be sentenced to more than ten years of fixed-term imprisonment or life imprisonment, and shall be fined or have his property confiscated.

If we are able to avoid common scams, then these scams in the cryptocurrency world are very clever ways of taking advantage of people's desire to get rich, disguised as blockchain, and taking advantage of the popularity to deceive many victims.

The mining method promoted by the teams behind these scams prevents investors from even seeing the physical mining machines. There is only a simple App where they can charge money and watch the digital assets on the virtual mining machines grow every day. They then continue to encourage their friends and family to join in to get more promotion rewards, ultimately forming a pyramid-like system.

The vast majority of users involved do not know concepts such as increasing mining difficulty, hash value, computing power, or over-the-counter transactions. They cannot even explain what "mine" they are mining. They only care about how long it will take to get their investment back and when ten thousand will become twenty thousand.

It is expected that in the near future, the virtual mining machine will run away in a concentrated manner. Everything the regulators are doing now is to prevent this risk . Maybe when the society is able to distinguish between true and false Ethereum, the bad news will be over. I hope everyone can learn more and improve their ability to identify.