Virtacoin Is A Ponzi Scheme………

By Divine Sewornu Dzokoto

In the last few months, articles have been published in both print and online media about a cryptocurrency called VIRTACOIN. The writer(s) have promised very high returns for those who acquire a few coins today. This has led to comments that virtacoin is a Ponzi scheme, a Pyramid Scheme or cryptopyramid. This article will try to differentiate virtacoin from a Ponzi scheme and argue that cryptocurrency is a new invention that few people know of but are unwilling to know more about.

A Ponzi scheme is named after Charlse Ponzi , who perfected and operated this scheme in the 1920s. It is defined as “a form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors, money invested by later investors. Elsewhere, it is described as a fraudulent operation in which an individual or an organization, pays returns to its investors from new capital paid to the operators by new investors rather than from profit earned by the operator.” The operators usually entice new investors by offering higher returns than other instruments in the form of short-term returns that are either abnormally high or unusually consistent.

A typical Ponzi scheme has some characters, a few of which are enumerated below.
Firstly, a Ponzi scheme promises unbelievable returns on the original investment.
Secondly, the scheme uses vague words like “hedge futures returns”, “high-yield investment” or “offshore investment.”
Thirdly, the promoter sells shares to investors by taking advantage of their lack of knowledge.
Fourthly, some Ponzi schemes start as legitimate investment instrument vehicle but later degenerate into Ponzi schemes.
Fifthly, the promoter pays out high returns to attract more investors and to lure current investors to put in additional money. This is reminiscent of the days of “Resource 5000” and Pyram in Ghana.
Sixthly, it encourages investors to leave their investment in the scheme for more returns. This way the promoter does not have to pay much to investors, he only has to send a statement to customers showing how much has been earned.
Finally, the promoter discourages withdrawals by offering new plans to investors. This helps to freeze money in the scheme.

In cryptocurrency, there is a promise of very high return therefore; this fits the label Ponzi scheme. Cryptocurrency actually pays very very high return on investment but this is not necessarily short-term. For example, bitcoin was launched in 2009. Anybody who acquired 10,000btc is now rich by $2,360,000. However, it took it took four years for bitcoin to hit a high of $1250 in November, 2013. (It did not take two years to hit the magical $1.00 mark. Now, virtacoin is between $0.00000200 and $0.00000800. If in the course of the years you are able to collect 10,000virtacoins and one virtacoin is valued at $1.00. This is money you can catch at any ATM all over the world.

A Ponzi scheme promoter encourages investors to leave their investment in the scheme to gain more. In this sense, cryptocerrrency is similar to a Ponzi scheme. You need to hold onto your coins in the belief that it will gain in value in the future. In the view of this writer, these are the only similarities between a Ponzi scheme and a cryptocurrency like bitcoin or virtacoin.

A cryptocurrency does not belong to any single individual. It is available to anyone who can “mine” it. A miner decides whether he/she wants to sell or to keep it till a later date. There is no single promoter or organization as in a Ponzi scheme. Those who promote cryptocurrency act as individuals in multiple locations in the world, sharing ideas, tools and processes to help the particular coin grow.
One does not have to invest money in virtacoin, for example, because there are free bitcoins (satoshis) on the internet that can be converted to virtacoins. Companies abound on the net that pay people in bitcoins to watch adverts.
One cannot enter a Ponzi scheme without any investment, yet you can acquire 10000 virtacoins every Sunday for free just by following steps at http://www.zapit.nu/vtaforfree

In a Ponzi scheme, one would be discouraged from withdrawing from the scheme but virtacoin cannot prevent one from withdrawing investment. One can sell all coins and walk out at anytime.

In the light of the above, virtacoin cannot be labled a Ponzi, pyramid of cryptopyramid scheme.

This article may not be able to give all the answers to a readers’ satisfaction. For this reason, a critic must do a little digging around (due diligence). The internet is full of information about bitcoin and virtacoin. After reading all or a few of the materials available, one could decide what pseudonym it wants to label virtacoin with but surely not a Ponzi scheme.

One does not need money to create a virtacoin desktop or online wallet. One only needs an active email, a smart phone or computer with internet data to be able to do that. After that, go to http://www.zapit.nu/freevta and http://www.zapit.nu/700vta, follow instructions to grab 10000 virtacoin every Sunday free of charge.

In the light of the above discussion, how can crptocurrency be labelled a Ponzi scheme? There are 11.4bn virtacoins circulating in the world. As to how many one wants to grab for free, it is a personal decision.