A scam is haunting Europe (and the rest of the world) — the scam of Onecoin.
Anybody who has even a shallow knowledge of cryptocurrency will recognize the Onecoin scam at first glance. Their claims are so preposterous to be simply unbelievable.
I was therefore dumbfounded when I discovered a lot of people were pouring money into this hoax. How could that be?
To find out, I decided to attend one of their recruiting meetings. There I discovered the obvious: the vast majority of people doesn’t have a shallow knowledge of cryptocurrency! This was evident to me as soon as I saw the other participants. I’ve been to many Bitcoin meetings and their population was invariably 100% young geek males. The Onecoin meeting sported a lot of seniors. The younger people were in their forties and clearly totally unaware of the cryptocurrency investment scene.
This is due to the recruiting mechanism Onecoin exploits, which I’ll explain later.
The meeting was held in a hotel convention hall. Just to get there you have to register to their website. On the contact form you have to type in the name of your sponsor, that being the person who introduced you to Onecoin. I typed in the name of a sponsor I found on the web, who lived in another city and so I guessed wouldn’t attend. I was lucky and snug in.
The first half hour was taken by the screening of video material. Basically how the world bank system is rigged against common folk, how governments all over the world are banning cash, how people need to take back their financial freedom, how the cryptocurrency is the solution to all problems.
If you’re even weakly connected to cryptocurrency community you’ll recognize all of this as too much familiar. I was really pleased to see how people reacted to all this. The arguments Bitcoin community put forward are still fresh and powerful today as they were years ago (or even more so). People really responded well to this material.
Introduce the professional marketer. The guy comes in, begin making jokes. Then opens up with a chart of the Bitcoin price from 2009 to present. It is all scripted and he follows up showing pictures and figures of tremendous gains made by Bitcoin early investors.
Then the punch line lands: you missed the Bitcoin train, but what if you had a second chance?
The hook sinks in. Then comes the bullshit.
Just a short list:
- mining of Onecoins is done by transforming the tokens you buy from the Onecoin company. Those tokens are the raw material of the mining process;
- there’s no live network and no transactions occurring whatsoever, so what exactly are they supposed to mine?
- miners are at work in some undisclosed location, far, far away, where energy costs are really thin;
- there’s no exchange to buy tokens or Onecoins, they cannot be purchased over the counter, off market or directly by other users, they live just on your Onecoin account, ready to skyrocket to unbelievable heights once released in the real world.
- The price is set by the Onecoin Company and they often practice what they call “the split”; basically when the price of the tokens double, the company halves their price and you double the number of coins you hold, waiting for a renewed price increase and a fabulous profit. Of course the number of “splits” you are entitled to depends on how big is the token package you purchase.
If you’re not convinced, please take a look at their exchange.
This is basically a static page, where no exchange ever takes place. The most appalling piece of evidence is, their FAQ page. A total copy&paste from Bitstamp FAQ page after the hack they suffered. Pay close attention, they not even bothered to change Bitstamp name with their own.
The most interesting thing about Onecoin is anyway their affiliation program.
To get in, of course you have to purchase a token package. There are different sizes that range from small to a lot of money. But to qualify for the juiciest rewards you have to purchase the largest. Then, for every person you convince to purchase a package, you’re entitled to a 20% of the price they paid. Then you can move on to create your own network of affiliates, you can earn 20% of every purchase of people under the ones you put in the network, and so on and on forever. A back of the envelope calculation shows that at least 60% of all money raked in by Onecoin is distributed to promoters. This alone is a clear indication that the price they claim for their coins is just bullshit.
The parting lesson is sad, at least in my view. A lot of common people are fed up with the current financial system and are ready to put money into cryptocurrency. But, for some reason, the actual cryptocurrency community was unable to reach out, leaving people at the mercy of crooks.
For a full list of references you can look into this.
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