How to tell if a virtual currency is a scam? Uncovering the "get rich quick" trap of a virtual currency scam that looks like Bitcoin

Since the advent of Bitcoin, virtual currency has begun to enter the public eye, and the rising price of Bitcoin has also attracted the attention of investors. Currently, the price of Bitcoin has risen to a high level. People who want to speculate in Bitcoin have begun to look for things similar to Bitcoin, trying to seize the opportunity and become the first batch of people to get rich.

There are already many virtual currencies available for investors to "dig for gold", but investors are still pouring in, especially when new currencies are launched. There are always investors who are willing to "take the lead" and enter the market from the first wave and wait for their investment to double. The idea is good, but more people fall into Ponzi schemes in the pursuit of profit. Here, Rong360 editor will sort out what these virtual currency scams under the guise of Bitcoin are all about.

The difference between Bitcoin and virtual currencies in Ponzi schemes

1. Is the total number constant?

Bitcoin is generated through a large amount of calculations based on a specific algorithm. The biggest difference between Bitcoin and other virtual currencies is that its total number is limited. For the investment demand of the whole world, it can be described as "scarce". The total number is always limited to 21 million. Since the total number is constant, the more people mine, the higher the value will be. In addition, the cost of mining Bitcoin is also getting higher and higher. Some industry insiders pointed out that the motherboard and graphics card suitable for "mining" may cost thousands of yuan to buy.

The total amount of virtual currencies in those scams is unlimited, and you can mine coins every day by spending a few hundred yuan to buy mining machines. For example, the First World Digital Gold Mine FIS bought 10 mining machines for 5,000 yuan, and mined 50 gold coins every day, and it had 1,500 gold coins in the first month.

2. Whether the value is set artificially

Bitcoin did not have a set value at the beginning. It was completely determined by market factors and fluctuated with market conditions. In 2013, when Bitcoin was at its craziest, 1 Bitcoin could be exchanged for 7,000 RMB, while now it is around 3,000 to 4,000 RMB.

The virtual currencies in those scams will be given a specific price, for example, 1 coin is equal to 1 RMB. Then when the value of the virtual currency rises, it will be split when it rises to 2 RMB and then become 1 RMB, thus doubling the profit.

3. Pyramid Scam

The virtual currency in the scam is divided into static income and dynamic income in terms of income. Static income is earned by digging with excavators, while dynamic income comes from developing downlines, which are divided into many levels. The more downlines you have, the higher the income rewards you can get. However, Bitcoin does not have this model.

How to identify whether virtual currency is a scam

1. Look at the difficulty of mining virtual currency. Only limited ones are valuable . If you buy a machine to mine gold coins, you can easily mine unlimited coins. That is very dangerous. Things that are not valuable will not always be chased by people.

2. The price of currency rises unilaterally, and the platform blindly promotes profits . The international market has classified Bitcoin as a commodity, and its price is determined by the market. If the virtual currency platform promotes unilateral price increases, promotes high returns, and promotes wealth and dreams, it can be considered a scam. For example, Wanfu Coin claims to "connect to Bitcoin" and "definitely make all investors make money." Investors pay 10,000 yuan to become members, and they can save money when the price of the purchased Wanfu Coin rises, and the annual rate of return is guaranteed to be 3 times!

3. Is there any dynamic income (development of downline) ? This is a pyramid scam, a pyramid scheme, and the money earned is from the downline, not from investing in virtual currency. Let's take Wanfu Coin as an example. The dynamic reward (dynamic income) is to develop members. The membership level is divided into star, gold and diamond levels. Each level is divided into five levels. The more members you develop, the more rewards you will get.

4. Raising the flag . Have you ever heard of what entity is behind Bitcoin? Probably not, but many virtual currency scams describe it this way, giving investors a feeling that they can earn a return on their investment. When promoting Wanfu Coin, it was advertised that buying Wanfu Coin meant buying original shares, and the final investment destination was the Future City project in the United States. The connection with the entity made investors feel that it was not a non-physical pyramid scheme. But how would investors know whether Future City would be launched, and it was a Future City project far away in the United States. At the same time, it was advertised that Wanfu Coin would be listed on the international trading market, and the company would support the price after the opening, which was just a pie in the sky. The deadline for the so-called "listing on the international trading market" was repeatedly postponed. In addition, Wanfu Coin also stated in its publicity that it "formally applied for a digital currency license in China", but in fact, there are already relevant regulations in China's supervision, and it is impossible to obtain a license.

Relying on the bait of high returns and generous rewards, this Wanfu Coin attracted 2 billion in less than 2 months, involving 130,000 investors, and was finally investigated by the police.

In fact, there are still many virtual currencies that are operating in this way. Those who get returns on their investments are eating up the capital of those who followed them in investing. But no one knows when this scam will collapse. In order to avoid being deceived or becoming a bag holder, Rong360 financial analysts remind everyone to stay away from such virtual currencies. This is not an investment but gambling!