Special: Possible $500, 000 Bitcoin Cloud Mining Ponzi Scheme Uncovered

Harshly nine months ago, Bitcoin Foundation Chief Scientist Gavin Andresen made a rather interesting comment on Reddit ter which he claimed, &ldquo,I suspect many [cloud mining companies] will turn out to be Ponzi schemes.&rdquo,There have bot a few cloud mining scams uncovered overheen the past year or two, and it emerges that another one could unravel ter the near future. An anonymous source has provided information to Bitcoin Tijdschrift regarding the possibility of a Bitcoin cloud mining ponzi scheme involving Bitcoin Cloud Services (BCS), which is presently one of the largest cloud-mining providers on the market.

Founded by a known scammer with Photoshop

One of the common attributes of a Ponzi scheme te the Bitcoin world is a reliance on anonymous owners. BTC Cloud Services LTD is registered to Gabriel Kleiman and Esteban Amador Soto Martinez.While the very first name does not bring up any identifying information online, the 2nd name is associated with another bitcoin-related scam, bitcoincloudhashing.com. This information is available publicly on the bitcointalk forums thanks to Puppet&rsquo,s Cloudmining 101 thread, but it hasn`t stopped an estimated Four,300 users from signing up at Bitcoin Cloud Services. BCS also claims to be a silver member of the Bitcoin Foundation on their webstek, even however the foundation recently dropped the cloud mining company spil a sponsor.

Further, the pictures of a supposed mining facility on the Bitcoin Cloud Services webstek contain no information about the mining facility or its owners besides a single banner dangling ter the background. Compare to the photo below from Genesis Mining showcasing CEO Marco Streng te one of the company`s mining farms.

Editor`s Note: This photo of Genesis Mining CEO Marco Streng is provided courtesy of Genesis Mining and provided for comparison and reference only. Genesis Mining is not connected to Bitcoin Cloud Services ter any way.

The &ldquo,company&rdquo, also released a poorly made movie based off the Photoshopped pictures ter an effort to bring more legitimacy to their activities:

The supporting evidence on the blockchain

One of the key chunks of gegevens provided by the anonymous source is a spreadsheet compiled via publicly available gegevens on the Bitcoin blockchain but wij do not know the specific bitcoin mining software used. By watching Bitcoin Cloud Services&rsquo, payout address, the anonymous source wasgoed able to estimate the number of customers receiving payouts, along with BCS&rsquo,s profits and losses. BCS seems to have commenced to operate at a loss near the end of April. How did BCS react? By suggesting an reserve year on their presently available mining contracts. Typical behavior of a Bitcoin cloud mining ponzi scheme.

This opoffering could be an attempt to keep a Ponzi scheme going for spil long spil possible. After all, it will last only spil long spil fresh money is coming te. The back-of-the-envelope math based on the spreadsheet indicates that the operators could run off with spil much spil Two,500 BTC ($570,000 at current prices) with a bitcoin mining scam.

Going back to Puppet&rsquo,s Cloud Mining 101 thread, it seems clear that he understands the likelihood that BCS is a Ponzi scheme. The thread lists seven different criteria that are usually found te a Ponzi scheme, and BCS fits the bill te six out of seven criteria. The only test that BCS seems to have passed is having pictures of their mining facility on their webstek. Of course, spil Puppet notes te his thread, &ldquo,Pictures can be faked.&rdquo, This seems to be what has happened ter the case of Bitcoin Cloud Services. Puppet presently has BCS listed under &ldquo,Likely Ponzi scams that have yet to collapse,&rdquo, and it&rsquo,s unclear how long BCS will be able to keep up the charade. Up to this point, Puppet has bot juist with 95 procent of his calls of a probable Bitcoin cloud mining ponzi scheme. Bitcoin Tijdschrift has reached out to BCS for comment.

Related movie: Bitcoin Mining- Very first Payout | EpicReviewGuys CC


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