Industry News Ponzi Games are appearing the Ethereum Network

Ponzi Games are appearing the Ethereum Network

July 24, 2018

Right now, the most popular apps that are coming about on the ethereum network seem like some of the previous Ponzi schemes. For now, it appears to be the consensus on PoWH 3D and Fomo 3D, which are the two of the three most popular apps. The data has been provided by DappRadar, with both games surprising 20,000 ETH in trading volume over the previous 24 hours. This places them on par with the top digital currency exchanges and over the volume produced by CryptoKitties, so far the most popular viral app on the network.

Both projects feature schemes that allow users to get rewarded for bringing in new users. However, both of these can also collapse fast if the levels of user acquisition begin to falter. All of this seems symptomatic with a regular Ponzi scheme, even though both provide a setup that the analysis have labeled much more complex systems.

On the surface, they seem similar to the concept of pay-per-bid auction models that were the rage back in 2009 – 2011. Now, instead of selling the real products for a particular bid price, they provide nothing that is tangible or has any real value. In so-called penny auctions, people place real money but in tiny amounts to bid on a real-world item.

The final bid winner will possibly get a great deal, but the organization that is running the auction will earn many times the price of any item from collecting the fees. With physical items, the auctioneers had some risks like operational costs and the price of the item. With these ethereum games, there are absolutely no costs like that.

Same Owners

Both of these projects are apparently owned by the same group. It is named TeamJUST and the people behind it are willing to provide their real names. In the crypto community, however, both products have produced an outrage. Now, many developers are warning buyers not to engage in processes that are apparently pyramid schemes. Some of them took to social media and clearly stated that no one knows when these will end, but when they do, it will happen in a bad way.

Others, like JP Konig, a financial blogger, said that it is in the human nature to look for more risky options and follow that gambler’s instinct. In this environment, the Ponzi schemes on ethereum blockchain are at least, in the words of the same blogger, cleaner.

As he underlines, these things are nothing new not just in the field of cryptocurrency, but in finance in general. Bitcoin and any other cryptocurrency can be used for anything from online betting to high-level investment, which makes it accessible to schemes of all types as well.

Yet, some have pointed out that there is a new sense of development surrounding these projects. PoWH 3D has been on a blockchain network for some time, but only with the appearance of FOMO 3D did it begin to accumulate value in such a rapid manner.

The PoWH 3D Game

The name of this project stands for a term which is “proof of weak hand” and it uses a token by the name of P3D. On the app’s custom exchange users can buy and sell it. Every time anyone holding a P3D gets paid is when new users are either coming in or going out. It also rewards players who generate affiliate links for new players and those who simply stay in the game. These are called staking and mining.

As the app explains, these are humor-based jabs at the whole concept of cryptocurrency and something the creators find more fun. At the same time, the creators have a clear message to those who would call it a scam. Instead, they point out that everything about them is transparent and the rules are honest and provided to the players up front.

The Fomo 3D Game

The new version of a TeamJUST game is much more interesting. It launched on July 8 and it has a lot of similar elements as the Button experiment on Reddit from 2015. In it, the players are required to press a button and keep a timer from reaching 60 seconds. Every press of the button restarts it and Fomo 3D plays on a variation of this concept.

Here, pushing the button has a small price. This means that every setting back of the timer has to be paid in ether – so far, the game generated over 21,400 ETH tokens. The game ends when the time runs out but their beneficiaries are unclear, but this has not deterred many new players from coming in. This made Fomo 3D a lot more successful than PoWH 3D was when it was launched sometime before.

A Scamming Essence

While there is a refreshing level of humor and creativity in these ventures, most feel this is not enough to brush any concerns aside. Instead, it simply provides the gambling-minded with a chance to gamble in a new and novel way. At the same time, analysts believe that the joke-in-joke approach does not negate the fact that many will lose their funds and then believe they have been wronged by the apps – something that the apps cannot do thanks to their complete transparency.

Additionally, there is a potential for the same stakes end up gone is the game’s data gets stolen. In that case, the users will be left with nothing and again, have no one to blame for it except themselves. However, there is a sense that many users will simply ignore this idea or be aware of it, but not act accordingly. The modern world has provided many new forms of online and digital playing of games – these include things like eSports and mobile gaming.

But, it has also clearly provided a space for savvy scammers to muscle in to. This time, the same concept includes the notion of humor where the users are almost warned that the venture they are entering is a scam. The creators of these things provide their products that are better suited for the new generations, but in spite of this, the end results will still be scathing as anything seen before in the Ponzi domain.

Source: CoinDesk