jyap808/cryptodouble_ponzi.md

## cryptodouble_ponzi.md

      
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              cryptodouble_ponzi.md
            
          
    I've noticed that people still contemplate how a Ponzi scheme such as a site called Crypto Double works.
Wikipedia defines a Ponzi scheme as: A fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator.
Here is an overview of a series of tweets I made which illustrates how this site works.  Please note that there is nothing complicated about this site.  There are no magical investors on the receiving end.
1) A Ponzi is "funded"
A large investment is put into the Ponzi scheme which can then fund the earlier participants.
In this tweet I noticed that someone had deposited 92,311 SDC (Shadowcash).

2) The dump of an alt coin to Bitcoins
In this tweet the corresponding dump occurred.  Around 71,244 SDC was sold around the price of 0.00021200-0.00025222 BTC.  Roughly 16.54 BTC was generated in this dump.

3) The pitch
The 16.54 BTC is then used to pay out some earlier participants in the Ponzi to make it look legitimate.  Word spreads, affiliate links are tweeted...
4) The anticipation
In this tweet and this I speculate that the Ponzi will not pay out in the next 10 hours.
Image shows 10hrs and 58mins left to pay out.  Pay out is set to Shadowcash address: SaosEyN6Ji7G75Fe1X32ZAyZBPyKWbJUHy

5) The "Pending" fail
In this tweet I check back to see if there has been a payout... Obviously "Pending" means there has been no payout in the guaranteed 100 hours.

6) The collapse
Here is the payout address of the original funding source which was the 92,311 SDC: http://explorer.shadow.cash/address/SaosEyN6Ji7G75Fe1X32ZAyZBPyKWbJUHy
As you can see it is empty.  184,622 SDC was never paid out.
I've advised not to get involved with obvious crypto Ponzi's with my Jumbucks coin community and the greater crypto community.  There is obviously "money to be made" but participating in such schemes also gives a sense of acceptance that they are welcome in the crypto world.  Promoting Ponzi's through affiliate links can also tarnish your reputation when a Ponzi collapses.  If a large deposit is made of a particular cryptocurrency, then a straight dump of that coin means value is removed from the market cap.
Once you know the truth to how things work, you can't claim ignorance.  It is up to you as to whether you want to participate, endorse or encourage obvious Ponzi schemes in the cryptocurrency ecosystem.