
Bitcoin Ponzi scheme - runn1ng
http://ponzi.io/
======
mmaunder
_snip_

Ponzi Scheme Enforcement Actions

Curtailing Ponzi schemes and holding those responsible for these scams
accountable is a vital component of the SEC's enforcement program.

Since fiscal year 2010, the SEC has brought more than 100 enforcement actions
against nearly 200 individuals and 250 entities for carrying out Ponzi
schemes.1 In these actions, more than 65 individuals have been barred from
working in the securities industry. The SEC also has worked closely with the
U.S. Department of Justice and other criminal authorities on parallel criminal
and civil proceedings against Ponzi scheme operations.

 _snip_

Source: [http://www.sec.gov/spotlight/enf-actions-
ponzi.shtml](http://www.sec.gov/spotlight/enf-actions-ponzi.shtml)

Keep in mind that BTC or virtual money is just another asset class.

~~~
gburt

       A Ponzi scheme is an investment fraud that involves the 
       payment of purported returns to existing investors from 
       funds contributed by new investors. Ponzi scheme 
       organizers often solicit new investors by promising to 
       invest funds in opportunities claimed to generate high
       returns with little or no risk. With little or no 
       legitimate earnings, Ponzi schemes require a constant flow
       of money from new investors to continue. Ponzi schemes 
       inevitably collapse, most often when it becomes difficult
       to recruit new investors or when a large number of 
       investors ask for their funds to be returned.
    

Surely this isn't an "investment fraud" if it is completely honest about how
it works. I wouldn't count on the SEC being reasonable about that though.

~~~
mmaunder
Yeah IMHO it walks the line between ponzi and pyramid scheme, so you'll either
have the SEC or FTC coming after you. e.g. FTC has been hassling MLM schemes
for years and they argue the differentiator is the fact that there's a product
involved, but this clearly does not have a product, so best case the FTC shuts
it down, worst case the interested agencies will include FTC, SEC, U.S. postal
service and local and state equivalents.

Bit more data on the FTC's opinion:

[http://www.ftc.gov/public-statements/1998/05/pyramid-
schemes](http://www.ftc.gov/public-statements/1998/05/pyramid-schemes)

Incidentally a pyramid scheme almost took down the Albanian economy and
sparked the 1997 rebellion.

I suspect BTC investors are a little more sophisticated, but given the pseudo-
anonymity behind cryptos, I wouldn't be surprised if something like this
doesn't wreak a respectable amount of havoc in the future once cryptos are
more widely held.

PS: If the site author's reading this, I'd start hitting the 5x5 stronglifts
hard with a good bulking nutrition regime. You really want to hit the ground
in federal prison with a size advantage. So I'm told. Can't wait for the AMA.

~~~
eschaton
If you've been following what's actually gone on in the Bitcoin world for any
length of time, you'd know that "BTC investors" aren't "more sophisticated" \-
they tend to be less so.

For one example, take a look at the people in the community who claim BTC
exchanges are unregulated, and who "invest" in "stock markets" in BTC and the
like: Just because you're not following the law or regulation doesn't mean
you're not subject to it. It just means your hoping you don't get caught.

Another example? The pirateat40 Ponzi scheme and the creation of "Pirate pass-
through" schemes. He claimed to offer 7% interest WEEKLY and Bitcoiners ate it
up despite its obvious impossibility. And again they tried to securitize that
by selling "shares" in and/or "insuring" their investments, and so on—all
without acknowledging there's any form of legal or regulatory process to go
through when doing such things.

Bitcoin is a total clown show, the history of economics repeated in fast-
forward so anarcho-capitalists/libertarians can learn first hand why laws and
regulations were invented.

~~~
JumpCrisscross
> _If you 've been following what's actually gone on in the Bitcoin world for
> any length of time, you'd know that "BTC investors" aren't "more
> sophisticated" \- they tend to be less so._

Part of this is Bitcoin self-selects against those with a rigorous
understanding of monetary economics, capital markets, and foreign exchange.

~~~
hisabness
Can you prove this?

~~~
JumpCrisscross
No. It is, however, a very profitable asset to make markets in,. That implies
huge market inefficiencies and a large population of low-infomration market
participants. The problem is the low size and liquidity make other markets
more profitable to think about, since 10% of ten or twenty billion is less
than a few basis points [1] of trillions.

[1]
[http://www.investopedia.com/terms/b/basispoint.asp](http://www.investopedia.com/terms/b/basispoint.asp)

------
bernardom
This is a beautiful piece of art/social experimentation/I-don't-know-what.

~~~
TheAnimus
It's brilliant, and it will work, and continue to work until people don't
believe in it.

~~~
ryanjshaw
That's the fun part. Watching to see how big it will grow. It's almost like
putting an exact dollar value on the amount of greed present.

~~~
eterm
I don't find it fun at all, I find it a bit tragic. Looking from the chat it
looks like it's a bunch of kids who don't have the sense to not engage with
this kind of site.

------
RyanZAG
I'm trying to work out if this is some grand statement on the similarities of
Bitcoin to a Ponzi scheme in the way it's deflationary, or just a quick way
for someone to make a few BTC. Maybe it's designed as a way to teach people
about Ponzi schemes?

Got to say, I pity the person who eventually deposits too much money at once,
causing the payments to pause while they build up enough to cover his large
deposit, in turn causing everyone else to think that the money has stopped
paying out and causing no further money to be deposited. That seems like the
likely end of this eventually...

~~~
downandout
IMO, this was built to demonstrate one of the unique characteristics of
Bitcoin. The ability to track transactions linked to addresses not owned by
you, in this case, lets all participants see in realtime whether the owners
are living up to their promises. Had Bernie Madoff used Bitcoin, his reign
would have been over in a few minutes.

~~~
ohashi
Minutes? Really? Because that's how most people measure their investments. The
only way you could see if 'he was living up to his promises' was if he just
speculated on more bitcoins, which would be dumb.

~~~
downandout
The point was that you could see where the money was going. If there were a
Bitcoin based stock exchange and it published its addresses for stock
purchases, when money from pooled funds started going to addresses outside of
those known addresses, people would immediately know that the money has gone
somewhere it shouldn't have.

~~~
hueving
>money from pooled funds started going to addresses outside of those known
addresses

What? It's a stock exchange. By definition the money is immediately going to
go to the counter-party in a trade. So it's going to be an unknown address.
Stock exchanges aren't the ones selling stock...

~~~
downandout
Yeah, no kidding. But you're saying the counterparties couldn't register those
addresses publicly with the exchange so that everyone knows where the money is
going? Alternatively, the exchange itself (a trusted party) couldn't receive
the coins first and then send them to the counterparties?

------
lucb1e
Should have known! Like ten minutes before I expected 1.2x to be gathered and
my payout to be done, the site reports "The experiment is over." Come on guys,
just let it run. I would have accepted it if it just 'died of natural causes'
and I lost all I put in (which is not much, 0.03); that was my gamble. Not
that you'd pull the plug.

Somehow their pulling the plug just really bothers me much more than losing it
would have been. Especially because at the rate at which it was going, payout
was more or less ensured (300btc * 1.2 = 360. They quit 16 coins short). Right
now, two hours after they supposedly would pay everyone back, I still got
nothing.

~~~
acchow
> At the rate at which it was going, payout was more or less ensured (300btc *
> 1.2 = 360. They quit 16 coins short)

I think you misunderstand how ponzi schemes work.

~~~
FiloSottile
I don't see the flaw in his reasoning, can you elaborate?

EDIT: I will, then. If when he put money in when there was a total deposit of
300, the total owed by the system was 300 * 1,2 = 360. So it would all be
payed when the total deposit of 360; he considered that at the rate it was
going at the moment it would have been reached quickly (here is the gamble)
but instead they closed the site 16 BTC short of that target.

Are you sure you did understand? Or am I on the wrong path?

~~~
acchow
And the people putting in those last 16 bitcoins - what do they get back?

There are always losers in every ponzi scheme.

~~~
ramblerman
Nobody is denying that, but _you_ are misunderstanding his argument.

There is a difference between a ponzi scheme collapsing from lack of new
"suckers" vs pulling the plug on the site. I think what he is trying to say is
that there were plenty of suckers left, and the loss now feels artificial.

Somebody is going to pay though. I'm sure (I hope in this community) everyone
knows that.

------
FiloSottile

        The experiment is over.
        We will pay back everyone we can. We are not making money from this.
    

And it's down.

~~~
curiousgeorgio
I'm curious - anyone know what happened to cause the (inevitable) end? From
what I can tell, it doesn't seem to be the lack of new interest/money.
Possibilities I can think of:

\- Author got scared (of legal repercussions)

\- Author got greedy (pocketing much of the last deposits)

\- For some reason (research?) it was intended from the beginning to only run
to a certain point

\- Technical scaling issues

Anyone know?

~~~
rangersanger
What makes you think it ended? People are still paying in and it appears to
still be paying out.

~~~
curiousgeorgio
I'm looking at the huge text on the home page saying "The experiment is over."
If that can't be trusted, then why in the world would anyone expect to receive
a payout at this point (as if it weren't already incredibly risky)?

~~~
rangersanger
I was seeing a cached version. Wonder why they chose to do it that way.

------
runn1ng
What I realized now: if you look at their BTC balance

[https://blockchain.info/address/1ponziUjuCVdB167ZmTWH48AURW1...](https://blockchain.info/address/1ponziUjuCVdB167ZmTWH48AURW1vE64q)

plus

[https://blockchain.info/address/14ji9KmegNHhTchf4ftkt3J1ywmi...](https://blockchain.info/address/14ji9KmegNHhTchf4ftkt3J1ywmijGjd6M)

their "debt" \- meaning, what other people have to bring into the system - is
their balance + 20%. Right now, their debt is about 42 bitcoin.

~~~
eterm
Isn't their acrued "debt" actually 20% of what has been paid in? That's about
48 bitcoins as of now.

(Or perhaps that's what you meant?)

~~~
runn1ng
Hm, you might actually be right.

I am not sure what the balance actually represents.

~~~
maxerickson
There is some list of unpaid 'investors'.

If they are operating as they say, the balance should always be less than 1.2
times the amount put in by the first entry on that list (or so, they could be
combining payments or what not).

------
dwaltrip
No one finds this repulsive? People will lose money to this. Yes, they are
dumb, yes it is obvious. But those who participate are still morally
complicit. Enabling others who suffer from serious issues (addiction,
gambling) seems like a pretty shitty thing to do.

~~~
gojomo
It's as repulsive as state-run lotteries.

The expected return to entrants, over all entries through its collapse, is
likely even better than lotteries.

At least this isn't advertising on TV and YouTube to attract even more
vulnerable and unsophisticated players!

~~~
Tohhou
I love people like you who think they are smarter and better than anyone who
would do things they don't like. Kudos.

~~~
gojomo
I don't think you understand my comment.

What activities do you think I don't like?

------
legojoey17
I deposited the minimum just to give it a go (80c... Can't hurt?) and the
Ponzi sent me back an absurdly larger amount of bitcoins... Not quite sure
what happened, but hey. When this hit the top of Hacker News the site wasn't
loading any bitcoin stats or such so I feel the load must have had something
to do with it possibly. (That or I just got double spent on, which would be a
real sneaky trick to get a user to send back the 'perceived' amount, but
coming out of their pocket.

This is personally why I wouldn't trust any programs to handle currency so
openly on the web. The inability of the average user to stress test or put
proper testing through applications can cause quite a fault. Having
experienced the methods that banks undergo for software cycles there is a tiny
chance someone would have the resources to properly engineer something so
fragile (relative to money) properly.

Because of this I would assume the main reason the author actually shut the
site down (or at least so suddenly) was because of scaling technical issues.

------
runn1ng
I will add, since this hit the frontpage: _nobody post any big money there_.
It's a Ponzi scheme. It says so in the title.

~~~
mikkom
Ponzi scheme is ok if you are in at the beginning of the scheme. That's what
makes this interesting - it's basically a bet that other people will also
believe this will go on.

~~~
sklivvz1971
Unless someone runs off with the money (and in any case, unless you are the
first, you never know if you are at the "beginning")

------
ryanskidmore
Something is not quite right.

Deposited 0.05859407 BTC (
[https://blockchain.info/tx/c5411ae7ad41d6dab5dd879c158cb81f0...](https://blockchain.info/tx/c5411ae7ad41d6dab5dd879c158cb81f0ae6d20b066bd4e0c5e6d1dfb69553ae)
)

Recieved 0.0599 BTC back (
[https://blockchain.info/tx/ef7f32df518dabb104812ea4a12719026...](https://blockchain.info/tx/ef7f32df518dabb104812ea4a127190266c4d4700b2d147e669353fe484bd824)
)

1.2 * 0.05859407 = 0.070312884 BTC

So, somebody owes me 0.010412884 BTC

~~~
datphp
0.05 * 1.2 ~= 0.0599, maybe they round to 2nd decimal?

------
udfalkso
So how do the creators of this make money from it?

The best solution is one that doesn't infringe on the "correctness" of the
game, and it's a simple one. Simply play the game yourself. Send money in, let
the system send money back. Do it a lot. Many small transactions. You will
never lose, because when the game ends you are the owner of the actual account
and won't get screwed like everyone else.

Right? So, perhaps many of the transactions we're seeing go into this are
suspect and the total amounts aren't to quite be trusted?

~~~
judk
The creators buy the first N shares, for guaranteed no-loss.

~~~
udfalkso
Yes, but they can keep playing as it goes in addition. Making money and
reinvesting it.

~~~
DelightfulScone
Or you know, take the currency since this is a ponzi scam and ponzi scammers
don't want to let pay-outs go to anyone but themselves.

Why is HN giving traffic to scam sites now?

------
shalmanese
If you think Ponzi schemes won't work if you tell people that they're a ponzi
scheme, MMM-2011 was a Ponzi scheme in Russia that hooked people despite
nakedly advertising that it was a scam:
[http://www.bloomberg.com/news/2012-06-06/is-global-
finance-a...](http://www.bloomberg.com/news/2012-06-06/is-global-finance-a-
ponzi-scheme-ask-a-russian-expert.html)

------
sashazykov
[http://bitcoinpyramid.com/r/230](http://bitcoinpyramid.com/r/230) is 3 years
old (and still paying :))

~~~
dclara
scammed: ponzi is a SCAM

I copy-pasted from the site.

BTW, any pyramid scheme is bad and should be prohibited, right?

But the site is cool though.

~~~
tobz
I wouldn't recommend a pyramid schema. You'll run into migration problems down
the road. Better to keep it flat.

~~~
dclara
I guess we are talking about difference things.

Sorry, I meant Pyramid scheme:
[https://en.wikipedia.org/wiki/Pyramid_scheme](https://en.wikipedia.org/wiki/Pyramid_scheme)

But regarding pyramid schema, you mean hierarchical structure, right? I have
the same concern, but flat tagging does not help much as we can observe from
many sites.

Let people browsing from multiple levels of the category is fun. The rule of
thumb is: don't expect perfect structure and don't need to have everybody
agree on that. Ad hoc hierarchy should be good enough like Amazon product
list. Also keep it away from people who don't need to browse it.

~~~
plumeria
I think it was a joke?

~~~
dclara
It's a nice practice and showing people how he can manage this type of thing.
Couldn't be serious about it, even the real-time data might be fake.

There are a lot of people like to participate in the BTC game, it's not bad.
But if people take it seriously, it may impact on BitCoin's credibility.

------
tommorris
I'm sure the Dogecoin Ponzi scheme will be better.

~~~
bendoernberg
Ah, you mean Dogecoingem.com? Been up for over a week :)
[http://dogecoingem.com/](http://dogecoingem.com/)

~~~
amark
Dogecoin's already innovating faster then bitcoin!

~~~
haakon
Bitcoin had these "gem" and "diamond" and "treasure" sites ad nauseum a year
ago or more.

------
sillysaurus2
Here's someone who recently sent 1 BTC to this ponzi scheme:

[https://blockchain.info/address/1Gh2tRaqaPWFbQVabVD9rPsN1nm9...](https://blockchain.info/address/1Gh2tRaqaPWFbQVabVD9rPsN1nm951iRD5)

[https://blockchain.info/address/1BYbqzLvAN9PCC4LqNPPG2dHSyTn...](https://blockchain.info/address/1BYbqzLvAN9PCC4LqNPPG2dHSyTnN4Jim8)

I'm going to watch and see what happens to them. If they don't lose their 1
BTC, then that's at least slightly interesting.

EDIT: It's been more than an hour; no repayment yet.

~~~
magic8ball
The payout system does not seem to be FIFO, that is, just because you put in
money before person B does not mean you'll get paid out before person B. I
also put in 1BTC (far before these people) and followed it up with a small
transaction. The small transaction got paid back (also incorrectly) whereas my
1BTC was never returned. Oh well, it was fun to watch.

~~~
jacob019
such a great attitude for losing USD $700

~~~
corin_
I've lost more in casinos and left with a "oh well" attitude too. Pretty sure
plenty of people have. Of course, I've also left casinos with "fuck that
sucked" attitudes, and also "look at all the money I just won" attitudes.

------
tobz
Why bother with a faceless ponzi scheme? Send your bitcoin directly to me, and
I will invest it by hand, making sure to maximize your return:
1HbNxRhrv5Jocr7Q9ZqbbqCwuNNy4UsR77

This is totally legit. Seriously.

~~~
jaekwon
I have sent you $50 though coinbase.

I expect you to honor your word.

Return address: 1JEGu8qiaKbLgheAWCjRkeZNyEqhhaFVY3

~~~
blantonl
He really did:

[https://blockchain.info/address/1HbNxRhrv5Jocr7Q9ZqbbqCwuNNy...](https://blockchain.info/address/1HbNxRhrv5Jocr7Q9ZqbbqCwuNNy4UsR77)

So far, no such honor has been extended from the OP:

[https://blockchain.info/address/1JEGu8qiaKbLgheAWCjRkeZNyEqh...](https://blockchain.info/address/1JEGu8qiaKbLgheAWCjRkeZNyEqhhaFVY3)

This is one of the beauties of Bitcoin - complete transaction transparency.

~~~
logicallee
how is that "beautiful". what business is it of yours what these two posters'
financial histories are?

------
jccooper
Looks like the operator had seconds thoughts--or plain got scared. I was
interested in how trackable he is.

The domain is registered under a fake name and DNS is from Namecheap. It's a
funny whois entry, lacking all the usual boilerplate, so I'm not entirely sure
it's Namecheap; some sort of reseller? Doesn't match what I see from Namecheap
itself, but Namecheap does take bitcoin now, so it seems plausible.

Hosting is libertyvps.net, a bitcoin-paid host. Hosted "offshore"; company
appears to be in US.

If a US authority leans on libertyvps, they can get an email and blockchain
address, and maybe an IP. Tracing the person would be hard if Tor was used for
setting up (and using) the email and all host access, and a decently anonymous
acquisition of the bitcoin.

A US authority could also get to Namecheap. Using the registrar safely
requires about the same precautions, notably access via Tor and acquiring the
payment BTC (or pre-paid card) in a non-traceable manner. Done right, they
could shut the domain down, but not find the person.

Anyway, looks like the top-level bases were covered. But there's a lot of
links in the chain. Perhaps the operator got nervous that he didn't cover all
of them--and it only takes one. (Against a determined LE agency with
jurisdiction or no scruples.)

------
Kiro
"The experiment is over. We will pay back everyone we can. We are not making
money from this."

------
dror
This is almost perfect except for not including a warning:

"Warning, if people stop depositing money, you won't get 120% back, and you
could lose all your money."

Also, it seems like the person running the site is not taking a cut. If that's
right, he's not making a profit, and he's less likely to get in trouble when
things collapse.

~~~
judk
Or the feds will convince a judge that the runner owns the anonymous addresses
that got paid.

------
coherentpony
Oh jesus fucking christ. People have sent over 200 BTC to that. :/

------
bbosh
It is either a scam or very poorly coded. I've seen one transaction in the
blockchain for 7BTC from yesterday that hasn't been paid. But, people sending
0.01BTC today are being paid. Any proper Ponzi scheme would pay back in time
order, not by order of value.

~~~
bbosh
I found this at
[https://bitcointalk.org/index.php?topic=447831.80](https://bitcointalk.org/index.php?topic=447831.80):
"Actually, I set it up to prioritize the small transactions. The 1 BTC
depositor will have to wait a while, and everyone else will get paid out as
soon as their transaction confirms (this makes sense since the 1 BTC guy is
making more money anyway)." Clearly doesn't understand the concept.

------
pmikal
Website shows they've shut it down.

"The experiment is over. We will pay back everyone we can. We are not making
money from this."

~~~
runn1ng
well, that was quick.

note: I did _not_ post the website to make money or anything (and I was not
affiliated with the author in any way). I thought it was funny, and I thought
nobody will seriously put money into it. I was probably wrong.

------
a3_nm
This would be cooler with one of those other cryptocurrencies that feature a
Turing-complete scripting language: the code of the scheme could be public and
run in the blockchain so that everyone would know the system is fair.

~~~
tobias2014
Which cryptocurrencies have such a feature?

~~~
a3_nm
There's
[http://www.ethereum.org/ethereum.html](http://www.ethereum.org/ethereum.html)
but I'm sure there are others.

------
breeezzz
I threw some old satoshi-dice coins at it (0.25) and was saddened at the
header mocking that "The experiment is over.".

1.5 hours later 0.30BTC showed up in my wallet! Wow, did not expect that!

~~~
lucb1e
Spent 0.03 saw 0.0 in return so far :S

------
makomk
There have been a few Bitcoin sites like this, I think the original one was
Bitcoin Gem. Most of them turned out to be scams (and I don't just mean that
they were Ponzis).

~~~
runn1ng
Well, (1) they weren't so hilariously open about their scam nature, (2) they
weren't so nicely done and so transparent.

On the other hand, this is going for just a few days, it might go south
quickly.

------
CurtMonash
To be technical, there are multiple inaccuracies in "Get 120% back when the
next person sends".

First, as per the central problem of Ponzi schemes, it is missing an "... if
ever" at the end.

But further, it is oversimplified, because people can submit different amounts
of bitcoins. Covering up that uncertainty -- which while apparent is not as
clearly disclosed as the "Ponzi" aspect -- makes it harder for people to
assess the likelihood they will get the promised return.

~~~
FiloSottile
I think the completely honest thing to do would be to show another number
(total sent * multiplier), explaining that if you send now, you will get the
amount back when the total counter reaches that amount.

~~~
CurtMonash
Sounds like it might work.

------
refrigerator
If I had any Bitcoin, I would definitely play this once or twice

~~~
lucb1e
> once or twice

That's what they all say

~~~
thret
That's why it works. Get 1.2x on your penny, in for a pound.

------
kokey
I've always been fascinated by ponzi schemes, or other pyramid and chain
structures. Most of the legislation against it that I've looked at, attacks it
from a deception angle. So, basically, if it's honest about what it is and
your chances are to make or not make money from it, it may be within the law
of many countries. I have never looked at it from a cross border legal
perspective, that might make it even more interesting.

------
randomflavor
Just tried sending .2, and got back .119 - so therse a bug or he's skimming.
lol, anyway interesting to make this

[https://blockchain.info/address/1MeDEWdpJRdSiRXaVFJK6b6m7Bv2...](https://blockchain.info/address/1MeDEWdpJRdSiRXaVFJK6b6m7Bv2SiKcHT)

------
ck2
I'm impressed by the vanity address, must have taken a lot of cpu power to
hash that one out.

~~~
GigabyteCoin
CPU power, maybe. Vanitygen works with GPU power now, however.

[https://en.bitcoin.it/wiki/Vanitygen](https://en.bitcoin.it/wiki/Vanitygen)

------
Kiro
A bit OT but how do you build automatic Bitcoin services like this?

~~~
guard-of-terra
Using RPC API of the official client? Unless you do something smarter like
bitcoin lottery (I forgot how it is called).

~~~
runn1ng
If you have just a few transactions then yes, _but_ the official client has a
few caveats that can show up as problematic.

I would write it myself, but there is far better explanation here on reddit

[http://www.reddit.com/r/Bitcoin/comments/1x93tf/some_irc_cha...](http://www.reddit.com/r/Bitcoin/comments/1x93tf/some_irc_chatter_about_what_is_going_on_at_mtgox/cf99yac)

basically:

\- the difficulty of finding available addresses is quadratic to the number of
unspent transactions

\- someone can slightly change the transaction so it's still valid, but have a
different transaction ID - that can mess up clients and break chains of
unconfirmed transactions

------
3rd3
How does that work exactly? I pay in X BTC and two other people pay in say 0.5
X and 0.7 X then I get these BTC back? How exactly will my X BTC be
distributed among other gamblers?

~~~
sp332
You don't get the original money back at the end, you just get the 1.2x BTC
that other people gave you.

~~~
maxerickson
It's interesting that this is exactly what a 'high risk' mixer looks like.

~~~
dzhiurgis
Or money laundering scheme. Genius idea.

------
loucal
I'm wondering though how they can afford to pay some people 400% Kind of seems
like a bug might be making this less sustainable than it normally would be.

[https://blockchain.info/address/144PHT3EDfKcDreSGHHS3uND52GT...](https://blockchain.info/address/144PHT3EDfKcDreSGHHS3uND52GTWDiEeG)

~~~
loucal
make that 500%... the original 79mBTC got refunded to it 2 hours later...

------
harrigan
This was tried out about a year ago:
[https://bitcointalk.org/index.php?topic=138749.0](https://bitcointalk.org/index.php?topic=138749.0).
The rules were originally very similar to the website above; then the owner
modified them so that the gem randomly "reset".

------
agent462
First, I fully understood what I was getting in to.

I first deposited .1 bitcoin to see if it was real and got 0.11978 back.

Ok, this will be fun.

I then deposited .8591 and got back 1.1999. Ha this is hilariously fun. More
gambling!

I then sent 1.2001 and got back 0.8589. Wait what..

The game ended and he skimmed from me to hopefully pay someone else back and
not pocket it.

~~~
jacob019
So you actually have 0.01938 more than you started with, 0.01938 of someone
elses coins who didn't get them back and you feel that he skimmed you?

~~~
agent462
I think you're missing my point. I'm not saying I feel skimmed. I'm just
stating what happened.

What I'm saying is that he skimmed from my last deposit. I'm hoping he did use
it so others got their coin back.

~~~
jacob019
kind of seems like he purposefully gave you just enough to cover your deposits

------
fnsa
shameless plug: my ncurses thin SPV bitcoin client for linux/mac:

[https://github.com/bit-c/bitc](https://github.com/bit-c/bitc)

    
    
      * 100% C code,
      * support for linux and mac platforms,
      * console based: uses ncurses,
      * home grown async network i/o stack,
      * home grown poll loop,
      * home grown bitcoin engine,
      * supports encrypted wallet,
      * supports Tor/Socks5 proxy,
      * multi-threaded,
      * valgrind clean.
    

You'll need basic dev skills to install it: check-out the code, install
dependencies then build. It's all in the README file. I'm interested in all
kinds of feedback you may have: feature requests, bugs, etc. Thanks!

~~~
fnsa
it looks like this:
[http://i.imgur.com/IJJU14s.png](http://i.imgur.com/IJJU14s.png)

------
sunshinerag
I bet this ponzi scheme will be much short-lived compared to the one run by
federalreserve.io.

------
epmatsw
Huh. I got paid back. I'm actually somewhat surprised. Well, I made 0.0002.

~~~
yownie
same here, made .0999

------
yatakaka
Careful. I just sent .3, complained in the chat and was subsequently
blocked...

------
RobinL
What a great illustration of how investment bubbles can rationally occur.

~~~
aestra
[http://en.wikipedia.org/wiki/Greater_fool_theory](http://en.wikipedia.org/wiki/Greater_fool_theory)

The greater fool theory says there are fools who know their purchase is either
worthless or overpriced but purchase it anyway in order to sell it to greater
fools at a profit.

------
thrush
How much does creator make?

~~~
hackinthebochs
The creator makes what's leftover in the end of non-payouts whenever he
decides to pull the plug.

~~~
judk
Why would there be any leftover? If creator isn't flat out stealing (which is
a possibility, but _obviously_ illegal and risks penalty), all payins would go
to payouts.

------
jasonvolpe
[http://coincurious.com/](http://coincurious.com/) is a more interesting
experimental art piece as it's not a blatant scam.

------
n1c
Funny, I also built something like this in December.

[http://pyramidofcoins.com/](http://pyramidofcoins.com/)

------
RRRA
Can anybody tell me how you come I've sent close to the minimum and got almost
100 time more? (this is not a joke, algo. fail?)

~~~
mmaunder
_cough-bullshit-cough_

~~~
RRRA
Well, it seems the experiment is over and they tried to pay back everyone, but
have a look at my wallet: [http://imgur.com/10nx0DG](http://imgur.com/10nx0DG)

I sent 0.0012408 + 0.0001 fee and got 0.1199 back... So I just tried again
before seeing that it was over and probably will not get anything back from
that payment.

So, in total, I "lost" 0.0013408*2 and got 0.1199. That's 76$ profit, at
current rate anyway!

~~~
bbosh
I don't know why you've gone to the effort of blacking out the other
addresses, when the blockchain is public. Here's a definitive proof of the
transactions:
[https://blockchain.info/address/1B45zbsPXDDwoCsY11NGmX7useg1...](https://blockchain.info/address/1B45zbsPXDDwoCsY11NGmX7useg1TcJAja)

~~~
RRRA
Good point, I guess I'm still new to this, I just bought some BTC from the new
Montreal's ATM yesterday. I guess that by blacking out the time or part of the
amount I would have made it "uncertain"...

So yeah, point is, it's true, ponzi.io screwed up big time in my favor (and I
just got the 6th verification).

And ... it's Saturday, and I've just got some "money" for free booze.

cheers! ;)

------
Kiro
I just tried and got paid within 30 minutes.

------
erikb
I would not wonder if it was posted by the actual author and if his
advertisement here is actually successful.

------
kolev
So, ponzi.io is a Ponzi scheme squared?

------
leugim
Cool cool cool

The human stupidity in one web, from the same Carlo Ponzi to Bernard Madoff.
All Ponzi scheme portrayed in a web.

I love it.

------
amenghra
A few small teaks could make this into a money laundering / mixing money trail
tool.

------
magic8ball
Just received my 1BTC back. The "experiment is over" seems to be legitimate.

------
xcyu
Refresh the page to see some "live" action.

------
dogewow
Looks like the fun has moved to
[http://dogepound.l8.lv/](http://dogepound.l8.lv/)

Who wants to make some money before the prices get too high ;)

------
jheriko
whatever happened to ethics and demonstrating problems without victimising
people?

its not big or clever. :/

once again disappointed in the community...

------
melarina
> Transparent Bitcoin Ponzi scheme

needs more parentheses

------
gorteks
A clone is already up at ponzi.tk

------
vezzy-fnord
Charles would be proud.

------
tzakrajs
A ponzi scheme on top of a ponzi scheme. Brilliant.

------
avodonosov
very good idea

------
97s
This is amazing.

~~~
kenrose
What is amazing is that (at the time of this writing), they've had 205 BTC
deposited. At today's value, that's $140,000 USD. For a site that looks to be
just over one week old.

In a way, this is almost sort of like gambling. You either get 1.2x your
money, or lose it all. Odds depend on the hype of the site.

Cute whois information too: Owner : Charles Ponzi

~~~
BobMarin
You do realize that the site is a joke, don't you?

~~~
kenrose
What do you mean a joke? Looking at the blockchain, it seems to be a full
fledged, serious, Ponzi scheme. They're taking in BTC and paying it out again
to the early investors.

EDIT: +1 to ryanjshaw for showing the blockchain:
[https://blockchain.info/address/1ponziUjuCVdB167ZmTWH48AURW1...](https://blockchain.info/address/1ponziUjuCVdB167ZmTWH48AURW1vE64q)

~~~
BobMarin
wow did not expect that, my bad...

I just glanced over and saw all the automated responses and figured it's a
joke. I'm actually still not convinced it's not an elaborate joke

~~~
BlackDeath3
The lesson - don't leave sarcastic, condescending responses to people before
doing your own research.

~~~
cozuya
No one deserves the horrors they face by being on the receiving end of the
dreaded #828282.

------
smartistone
Well, this is how folks get rich in the smartist era, by creating schemes like
this. Or buying facebook & google stock. Or creating/investing in the next web
2.0 billion dollar company. A 9-5 chump would have to work for years to make
this kind of money, assuming he paid off all his college loans.

------
yatakaka
17gHYULi7cvfUdyJspiV7acRACJrvmVK3k

------
breaker05
I'd love people to donate a few BTC that I can use for more noble causes.

1P6yGa6nerZZ7jFDVPtFuXUPvLSfku4kWj

------
powera
This is quite possibly the worst post to ever hit #1 on Hacker News. Why are
you people voting it up? Just because it admits that it's a scam (and "get
your money plus 20% back for nothing ALWAYS ENDS UP A SCAM") doesn't mean that
it should get posted here.

~~~
sehr
Because it's interesting?

~~~
powera
"On-Topic: Anything that good hackers would find interesting. That includes
more than hacking and startups. If you had to reduce it to a sentence, the
answer might be: anything that gratifies one's intellectual curiosity." \- I
maintain that a "good" hacker wouldn't find a blatant scam interesting.
Especially not "just because it uses bitcoin".

~~~
GeneralMayhem
It's beyond blatant; it's unabashed and self-aware. That's interesting - who
would make such a thing? Who would pay into it? Will it still work even when
people know what it is?

~~~
powera
"Every time you send money to the Ponzi address, you'll get back 1.2x what you
put in." \- honestly, it sounds like a normal Ponzi scheme to me. It's
probably targeting people who don't realize that Ponzi schemes by their nature
always end up as scams.

"All of our activity is is open and public on the blockchain. It's impossible
for us to cheat anyone out of their payout without everyone knowing." \-
completely ignores the point. 15% of the people who put money in WILL lose all
of it. Period.

~~~
peeters
> "Every time you send money to the Ponzi address, you'll get back 1.2x what
> you put in."

You're cherry picking a quote from the FAQ section answering what the payout
ratio is. All prior mentions of the 120% payout are clear that the payout
occurs only if people invest after you. Such as the "How does this work?"
section:

>Send bitcoin to 1ponziUjuCVdB167ZmTWH48AURW1vE64q, and you'll get back 120%
of the deposit. The returns on your investment come from other investors, _so
as long as people invest after you_ , your payout is guaranteed!

Or the main page:

>Get 120% back _when the next person sends_.

