{"id":157,"date":"2021-08-24T19:06:32","date_gmt":"2021-08-25T02:06:32","guid":{"rendered":"https:\/\/theplandanhollings.com\/?p=157"},"modified":"2021-10-07T14:13:18","modified_gmt":"2021-10-07T21:13:18","slug":"cryptocurrency-mlm-understanding-and-avoiding-them","status":"publish","type":"post","link":"https:\/\/theplandanhollings.com\/cryptocurrency\/cryptocurrency-mlm-understanding-and-avoiding-them\/","title":{"rendered":"Cryptocurrency MLM: Understanding and Avoiding Them"},"content":{"rendered":"\n

If you\u2019ve spent any time on the cryptocurrency side of social media recently, you\u2019ve likely seen at least one person shilling the benefits of a cloud mining business, or \u201cone simple trick to multiply your Bitcoin overnight.\u201d<\/p>\n\n\n\n

It can be tempting to follow through on these \u201copportunities\u201d, but there\u2019s a problem \u2014 many of them are MLM companies, some of which could be hiding pyramid schemes. If you can\u2019t separate the wheat from the chaff, you could end up losing a lot of money.<\/p>\n\n\n\n

That\u2019s why I\u2019ve compiled a guide to understanding cryptocurrency MLM: what they are and how to find them.<\/p>\n\n\n\n

What is cryptocurrency?<\/strong><\/h2>\n\n\n\n

A cryptocurrency is simply a form of digital currency: you can use it to buy or sell goods and services, or even as an investment vehicle. Unlike the national currencies we\u2019re used to, cryptocurrency isn\u2019t backed or regulated by a central bank or government \u2014 the coin\u2019s holders have final authority. <\/p>\n\n\n\n

How is this possible? Every transaction or payment made using a cryptocurrency is recorded on a decentralized ledger. Those transactions are secured using highly advanced cryptography. Overall, the underlying infrastructure of cryptocurrency is called blockchain technology.<\/p>\n\n\n\n

What is multi-level marketing?<\/strong><\/h2>\n\n\n\n

Multi-level marketing (MLM) is an approach to sales that encourages the company\u2019s salespeople to recruit new members. A salesperson who enrolls a new member will receive a cut of their recruits\u2019 sales. Salespeople will also earn money from the sales of the company\u2019s actual product or service.<\/p>\n\n\n\n

While MLM isn\u2019t a scam in itself, many direct selling businesses have turned out to be pyramid schemes in disguise. In this kind of organization or company, profits are funnelled to the top members of the business, leaving very little for anyone else.<\/p>\n\n\n\n

MLMs, pyramids schemes, and Ponzi schemes have been around for decades. Still, the digital era has empowered them to expand: social media, online selling, and \u2014 the subject of this guide \u2014 cryptocurrency. The novelty of crypto can be confusing for many, making it a prime target for scammers.<\/p>\n\n\n\n

Cryptocurrency MLM Scams and Other Schemes of the Past<\/strong><\/h2>\n\n\n\n

Cloud Mining Scams \u2014 BitClub Network<\/strong><\/h3>\n\n\n\n

The minds behind BitClub Network got cash payments<\/a> from investors with the promise of purchasing Bitcoin mining equipment that would return profits for everyone. They also rewarded existing members for recruiting new ones.<\/p>\n\n\n\n

Cryptocurrency \u201cminers\u201d use powerful computers to validate transactions that happen on the blockchain. Executing the algorithms that make blockchain technology so secure is an energy-intensive process that few can afford \u2014 but those who can are rewarded with the currency they\u2019re mining. These are prime targets for cloud mining cryptocurrency MLM scams.<\/p>\n\n\n\n

Understandably, many people wanted to get their own Bitcoin, a fact BitClub Network exploited: the money was never used to buy mining equipment, and the guilty parties were charged<\/a>.<\/p>\n\n\n\n

Crypto Ponzi Schemes \u2014 OneCoin<\/strong><\/h3>\n\n\n\n

OneCoin probably fits the purest definition<\/a> of a cryptocurrency MLM. It was also a Ponzi scheme, where money from previous investors is used to pay new ones in a continuous cycle. To buy the fictional coin, investors deposited money into an internal exchange platform that was shut down in January 2017 before people could withdraw their money.<\/p>\n\n\n\n

OneCoin also sold plagiarized training and education materials and rewarded members for recruiting new participants. Their rewards were tokens they could use to mine more OneCoin. The kicker? OneCoin didn\u2019t have an existing blockchain network, so it was impossible to mine anything.<\/p>\n\n\n\n

Crypto Investment Funds \u2014 BitConnect<\/strong><\/h3>\n\n\n\n

BitConnect made headlines<\/a> at its 2016 ICO for its wildly energetic presentation. It made headlines again in 2018 for suddenly shutting down amidst countless legal cease and desist letters from government regulators.<\/p>\n\n\n\n

BitConnects promised to turn your Bitcoin investment into millions with 1% daily returns but had little evidence to back it up. In truth, it was another Ponzi scheme and cryptocurrency MLM that relied on members to shill the platform to new investors.<\/p>\n\n\n\n

Many people lost life savings in BitConnect, as its token (BCC) shed over 90% of its value after the shutdown announcement.<\/p>\n\n\n\n

What to Look For in Legitimate Crypto Resources<\/strong><\/h2>\n\n\n\n

Bitcoin, Ethereumm, and other coins still hold tremendous promise for the future of finance \u2014 despite all the MLMs, Ponzi schemes, and various other scams surrounding cryptocurrencies. Here are some things to keep in mind when validating legitimate crypto resources:<\/p>\n\n\n\n