Bitcoin Ponzi Scheme - An Effective Way to Detect Them

A Bitcoin Ponzi scheme broadly known as HYIP (High Yielding Investment Program) was once a center Bitcoin investment and continues to exist in the Crypto sphere. Boasting of returns ranging from 15% daily to 1000% or more in three days, these schemes lure people by offering a high return on investments.

Imagine you have $100 today, and after three days they turned them into $300 or more by doing absolutely NOTHING! A Ponzi scheme or Bitcoin pyramid scheme is an activity, where the funds from new investors generate the returns for the old investor. Such schemes rely solely on new investment and massive advertising campaigns. Once the new investment stops coming, the schemes plummet leading to loss of funds.

The Cryptocurrency ecosystem is rampant with Altcoin and Bitcoin scam schemes marketed on the majority of the Bitcoin Advertising network. Factually, I was also a victim of such platforms during the early days of my Crypto life. However, I quickly came to know about the various methods to detect Bitcoin Ponzi schemes and did never ever lose my funds again.

Detecting a Bitcoin Ponzi scheme

Detecting a Bitcoin pyramid scheme is not hard. Just know that if it sounds too good to be true, it is definitely a Ponzi scam. It is also advisable to research about the company before investing with them. If they are new and boasts of lucrative returns, then there it is likely for you getting scammed. Some factors that might indicate a Bitcoin Ponzi Scheme website include.

A new domain

We can easily detect Bitcoin Ponzi schemes by their domains’ age. Domain age refers to the period a website has been online or active. Usually, the Ponzi website domain age ranges from one to four months. You can easily check a Domain age using SmallSeoTools or WebsiteSeoChecker. If the domain age is under six months, it is among the signs of a brewing Bitcoin Ponzi scheme.

Moreover, many scammers are now also taking advantage of expiring domains to counter this factor. There are thousands of expiring domains getting sold on places like Godaddy and, choosing any one of them to run the Bitcoin Pyramid scheme would likely lure many novice investors.

Offers high return

The main recipe for a Ponzi scheme is its abnormal return on investment. Ponzi schemes offer lucrative investment offers. This attracts people into investing in the newly made program without performing due diligence.

Millennials entering into Cryptocurrencies usually come across Ponzi website banners on various Bitcoin and Micro Earnings websites. Such websites make exaggerative claims to lure people entering into Cryptocurrency ecosystem by offering them insane profits within a few days. Some even go extreme and claim to double or triple their Bitcoins within few hours of activity.

Offers low investment plan and even a lower withdrawal threshold

This is by far the main reason for people burning their money in the Bitcoin Ponzi scheme. You can start investing in Ponzi sites with 0.001 in Bitcoins and see your money grow with no effort.

Withdrawals are even lower, usually 0.0001 in Bitcoins to attract more investments. This also convinces investors to re-enter the program with larger deposits. Once the user can withdraw part of their investment, he starts to believe that this is a legit website paying the users and will run forever. Further, investors also start to promote the program using their referral link, in turn, creating a flow of money for the Bitcoin pyramid scheme operator.

Claims to be a registered company

The HYIP’s and other Bitcoin scam website use this tactic to make investor believe that they are a legit and recognized company, especially in the United Kingdom region. Factually, it only takes 20 GBP to register a company in the UK, and you can do it online. Similarly, the website also provides a fake phone number and company address to provide authenticity to the company. However, the majority of the times, these details are fake to lure investors in their program.

Bitcoin Pyramid Scheme – Final Thoughts

If you come across a website that offers high returns within a short period and claims to be a UK or Singapore registered company then the chances of this website ceasing to exist within a few months are very high. In short, before investing in any online Bitcoin program, make sure to perform thorough research into the platform and mitigate the chances of fraud.

Cryptocurrencies have become a great source of attraction since they provide financial freedom and greater control over one’s asset. Even though, people such as Goldberg Peter Schiff have termed Bitcoin as a pyramid scam it still continues to make headlines with rapid adoption.

As a novice investor or a person looking to get started with Cryptocurrencies, it is essential to learn about the Bitcoin Ponzi scheme and ways to detect them and avoid Bitcoin scams.