Study: Thousands of Pump and Dumps on Telegram

In an interdisciplinary study, researchers found that there are several pump-and-dump schemes on messengers such as Telegram and Discord. In the unregulated Bitcoin market, it is easy to make profits quickly without having to reckon with consequences.

The editors of the study “The Economics of Cryptocurreny Pump and Dump Schemes” found out what should surprise few. They examined the Telegram and Discord platforms and found that they contained a whole lot of the popular fraudulent method of making money quickly.

How are the Bitcoin news?

The schemata function according to the greater fool principle. The point is to invest in a coin in time while it is rising (pump). Then it’s about selling again at the best price, i.e. just before everyone gets out and the price falls (dump). The participants of such Bitcoin news groups are aware of this. In Bitcoin news, everyone who is a member of such a group knows that the initiators of the group benefit most from it. The hope is then, on the one hand, to be faster than the other members and, on the other hand, that a rapid rise in the share price leads to “outsiders” becoming aware of this and investing additional capital.

The telegram groups are mostly pure reading channels: One can read there only the announcements of the initiators. First they announce in advance the exact date and the stock exchange of the upcoming pump and dump. Then, shortly before it starts, the start signal is given: The coin is named. Who then invests in time and gets out again gambles the money off the next bigger idiot.

Bitcoin news: Lack of regulation favours gambling

The researchers of the Bitcoin news study now found out that a total of 3,767 different groups cavort on telegram groups, a total of 1,051 on Discord. Read more about it: The researchers identified a total of 300 different crypto currencies that were used for these methods.

Ultimately, the researchers concluded that it is usually smaller and less known currencies that are pumped and dumped. This is less profitable for the big ones such as Bitcoin, Ethereum, Ripple and the like.

The fact that such fraud is ultimately possible is due to a lack of regulation: it is simply not forbidden to participate. The next big pump and dump will take place on 23 December at Binance at 17:00 GMT. However, participation is strongly discouraged.

Podcast: Bitcoin vs. blockchains without coin

The blockchain is considered by many to be the groundbreaking innovation behind Bitcoin. But Bitcoin is more than just a chain of data blocks.

Does a blockchain without a Bitcoin code like asset make any sense at all?

Blockchain yay, Bitcoin code nay” is the attitude of many established companies to the technological phenomenon of the 21st century. On the one hand the big players want to be hip and innovative, on the other hand decentralized technology undermines established power structures. This is why Bitcoin code is usually actively hushed up in such circles.

Blockchain technology, on the other hand, is very popular. After all, blockchain technology is the essence of Bitcoin and the fundamental innovation with which many processes can be overhauled. In addition, efficiency can be gained without having to abolish middlemen. But is that true?

A Peer-to-Peer Bitcoin code Revolution

Bitcoin code is much more than just a blockchain says onlinebetrug. Because Bitcoin is a sophisticated, digital money system without a controlling institution. Participants can send money directly to each other as easily as they can send e-mails. These transfers are documented on the blockchain. Ensuring their integrity is the task of the miners, who compete with each other. In order for a transaction to be confirmed, a miner must provide the so-called proof of work.

As a reward for the demonstrably performed work, the miner receives a digital asset that is native to the blockchain: Bitcoin. The blockchain is therefore only one component in the electronic peer-to-peer cash system. In addition to the proof of work, the asset, Bitcoin, also plays an essential role. In other words, the digital asset serves as an incentive for the miners to do their job. What’s more, it gives the whole construct a unit with which value can be transferred and measured. In addition, Bitcoin is open to anyone and the computer code can be verified.

Therefore the genius of Bitcoin goes far beyond “the blockchain”. Consequently, the terms Bitcoin and Blockchain are not synonymous. That is why Onur and I are discussing this topic in today’s podcast episode.

Onur Akpolat is enthusiastic about crypto currencies and says: “This is the digital revolution I’ve been waiting for”. His passion led him to create the crypto hero podcast Hung Tieu. In today’s episode he is our guest in the BTC-ECHO podcast studio and philosophises with me about the sense of blockchains without coin.

Vitalik Buterin: Ethereum without its founder?

Ethereum founder Vitalik Buterin caused confusion last week with a series of tweets. In conversation with other users, he initially indicated that he might want to cut back in the future.

He could not think of leaving the Bitcoin formula in the near future

Like Apple with the late Steve Jobs and Tesla with Elon Musk – sometimes already compared to Jobs – Bitcoin formula is almost inseparably connected to his leading figure. But what happens should Vitalik Buterin, Ethereum Co-Founder and Head of the Bitcoin formula Foundation, step down and dedicate himself to other things? This question came up last Friday, October 5, in a sudden and unexpected way.

“Vitalik, how do you actually imagine your farewell?”
Twitter user Raz challenged Vitalik Buterin in a Twitter thread with the question if and when he would ever renounce Ethereum. “To Vitalik Buterin, any ideas as to how you would eventually break away from the project,” was the exact wording of the question.

Buterin answered immediately and said that he was already in the process of releasing himself slowly. In addition, he was no longer so deeply involved in the operational business, as much of the work was already being done by his team. “Already in progress, even most of the research is done by Danny Ryan, Justin Drake, Hsiao-Wei Wang and others”.

As if to reassure his fellow readers, he also adds that he is convinced that he is no longer so important for the success of Ethereum.

Ethereum would absolutely survive if Bitcoin trader spontaneously left tomorrow

“No plans to leave soon.” However, it does not seem to him to be that urgent. After the announcement had already made waves, Buterin spoke again on Saturday, 6 October. Of course, Bitcoin trader didn’t want to leave the Ethereum Foundation and the entire project in the near future. Rather, he was interested in the theoretical possibility of disappearing completely like this: Is Bitcoin Trader a Scam? Read This Review Before You Sign Up!

In addition, he made it clear that “to detach oneself” does not mean that he wants to get out completely. Instead, he wanted to free himself from always having to participate in all decisions and innovations. After all, Buterin didn’t build a project around herself, but a decentralized system that works independently of people. Nevertheless: “No real plans to disappear in the near future.” The Ethereum community will be happy.

Bitcoin God: New charity fork

As a symbolic gesture, a new fork will see the light of day on Christmas Day. The start of Bitcoin God is propagated by the Chinese investor Chandler Guo, who wants to make our world a little better with it.

But can the Bitcoin trader project really succeed?

In the near future we will have several forks of Bitcoin trader and other crypto currencies. As onlinebetrug expert Mirco Recksiek (KI Group) explained last Crypto Monday, it’s in the nature of things that an open source project constantly leads to completely new representatives. The blockchain is just as open source as some Linux distributions or programs, for example. A central institution that controls everything or forbids new forks does not exist there. This is not even planned. Only time will tell which of the new spin-offs will play an important role in the future, according to Recksiek. No one can control this and it has not had any negative effects on the Bitcoin course so far. But let’s be honest: Do we really need the Bitcoin Hot, the Super Bitcoin or a Lightning Bitcoin? Hard to say. They all have their raison d’ĂȘtre, but some observers are already quite annoyed because of the constant forking.

After all, there seems to be a fork for Christmas with the Bitcoin God, which at least contains a new idea. The GOD comes from the pen of the Chinese mining pope and investor Chandler Guo, who wants to found a completely decentralized and self-regulating, non-profit community based on the blockchain. In majority decisions, the community is to decide on the allocation of tokens to charitable projects. So it’s not just about speculation or earning money. Moreover, God is not someone abstract up there, but rather every single partner to a certain extent. The self-declared goal is to fill the world with love and to make our earth a better place with modern means.

It must also be clarified: What can be considered charitable for crypto trader?

Until Christmas there are only a few days left. However, there is a lack of detail on the crypto trader website. Not as far as the technical specifications are concerned, but for example how and where the votes are to be carried out from autumn 2018. Does this also mean non-governmental organisations such as Reporters Without Borders or Amnesty International, which work for more freedom of expression and assembly or against the violation of human rights? If the crypto trader community were to donate money to one of these NGOs, Bitcoin God’s figurehead, Chandler Guo Hongcai, would have a first problem. The government in Beijing would certainly not be happy about this.

Apart from expenses, a little attention and full-bodied announcements, nothing happened? Let’s have a look. We will continue to monitor the project, the idea behind it sounds interesting in any case.

Initial Coin Offering (ICO) – A New Way of Corporate Financing

On the evening of 31.08. a Meetup with the topic “Initial Coin Offering (ICO) – A New Way of Corporate Financing” took place in Berlin – BTC-ECHO was there.

Astratum, who had already organized a Meetup before, had organized a Meetup with the support of the Innovation Forum Blockchain and the Blockchain-Bundesverband, which took a look at the regulatory framework of ICOs.

He explained the function of a Bitcoin profit review

The event was opened by Sven Laepple, who first gave a basic introduction to the onlinebetrug topic of the Bitcoin profit review. Thus he explained the function of a token: In addition to value retention and investment options, an increasing proportion of crypto currencies, especially tokens based on ethereum, primarily fulfil the function of a means of payment within a platform, so to speak as the fuel of a project. An ICO therefore also serves the fundraising of the Bitcoin profit review issuing companies, which can finance its blockchain project with the revenues from it. In addition, it is characteristic of an ICO to address potential investors who are already crypto-users, as they have experience in the crypto market. It is fitting that within the framework of an ICO the new token is usually offered in exchange for other, classic tokens (Bitcoin, Ether). Sven also mentioned the difficulty of the masses to easily enter the crypto business. Just imagine how much the market capitalisation of crypto would increase if these hurdles were to fall.

The first lecture of the evening by Nikita Fuchs entitled “Bringing the masses to ICO” was also devoted to this question. He briefly and concisely presented the problems for potential new investors (high price fluctuations, availability, storage) and above all dealt with an entry barrier: Registration in an exchange in compliance with the KYC and AML regulations is an unbelievable deterrent for many. Since anonymity no longer exists through these regulations, Nikita encouraged the development of systems that enable and simplify the purchase of crypto currencies directly with a credit card.

Legal security for Bitcoin profit scam

The next lecture dealt with the topic The speaker was Alexander Lange from Early Bird Capital. He first spoke about the disadvantages of classic risk financing and the difficulties faced by founders. These include time expenditure, access to Bitcoin profit scam finance and the risk of investing incorrectly. In addition, potential investors tend to look at the short-term potential of the project, which is why a good idea with a stringent concept behind it does not automatically lead to a successful foundation. Instead, this type of investment would tend to promote the formation of monopolies and would result in an immense concentration of power among the investors of popular corporations (Facebook, Google).

On the other hand, crypto currencies, which have the advantages of high liquidity and universal accessibility compared to traditional financial products, are on the rise. In addition, many of them in the form of Smart Contracts are subject to their own legal security, independent of judgements. However, the lecturer sees problems in the too rapid capitalisation within the framework of an ICO as well as in the inconsistent regulation.

So is the classic venture capital model obsolete due to the emergence of crypto currencies? The most recent development rather shows the emergence of a hybrid structure in which traditional and institutionalised investors are also active on the crypto market and tokens are available the other way round not only through mining and crypto exchanges, but also in funds or through traditional financial market participants.

The legal situation of tokens in Germany was discussed in a lecture by Arnab Naskar and Dr. Nina-Luisa Siedler entitled “Self Regulation and German Legal Perspective”. The lecturers were absorbed in a very detailed way into topics of jurisprudence. Legal dimensions to be considered in relation to crypto currencies include security, data protection, financial supervision and consumer protection. A precise legal classification of crypto currencies becomes problematic: By definition, they are not bound by central banks or fiat currencies, but are accepted by users and merchants as means of payment and storage of value.

There is no overarching legal framework for crypto currencies, each country has its own – or none at all – legal security for tokens. For an approaching ICO it is therefore important to consider in which legal area the token is offered, since this is decisive for the legal treatment.

What is an ICO?

Cardano (ADA) Wallet Setup Create IOTA Wallet & Seed What is NEM and XEM? IPFS for Blockchains What is EOS? What are Oracles on the Blockchain? What is Ripple and XRP? What is Corda? What is a sidechain? What is an ICO? What is an ERC-20 token? What is Lisk (LSK)? What is Proof-of-Stake? How are Smart-Contracts? IOTA: The Blockchain for IoT What are Soft and Hard Fork? What is the Order Book? What is Proof-of-Work? Bitcoin Acceptance Points What is the Blockchain? What is Bitcoin (BTC)? What is Ethereum (ETH)? How does ether mining work? What is a 51% attack and how does it work? Creating a paper wallet How does a transaction work? Who is behind Satoshi Nakamoto? Keep digital currencies Accept Bitcoin payments

How does the Bitcoin news trader scam work?

An ICO is a method of Bitcoin news trader scam financing. The so-called Initial Coin Offerings are in parts comparable to an initial issue of securities on a stock exchange. An ICO is an opportunity to acquire Bitcoin news trader scam tokens for projects in the blockchain ecosystem via crowdfunding. Supporters or investors acquire the tokens of the project and speculate that later a higher value of these tokens will result, similar to a stock on the stock exchange with the prospect of price gains.

Typically, ICOs are used to finance start-ups and new businesses. The startup “generates” the digital tokens and then sells them. This means that the money goes directly to the company’s team. It is to be used to build up the company.

An important difference to IPOs (Initial Public Offering) on the stock exchange is that ICOs generally do not represent ownership of the company via the token. It therefore does not entitle the holder to a dividend, nor does it automatically carry voting rights.
There are two basic purposes of tokens:

Utility Token for Bitcoin formula scam

The token does not represent any rights to the Bitcoin formula scam project or company. Instead, it should be used by the users as a means of payment after completion of the project. If the project is successful, the demand for the tokens increases and it experiences price gains on Bitcoin formula scam trading platforms. The token thus has an inherent value.

Revenue Share Token
This type of token is more comparable to shares. It entitles the owner to receive dividends. It does not always fulfil a functional purpose. The token may not even be needed to operate the platform itself, but merely serves as an investment vehicle to distribute the profits.

Depending on how the token is technically implemented, it may be that the distribution is automated via Smart-Contracts. It is conceivable, for example, that a project generates profits in the form of ethereum. Investors who hold their own Ethereum-based token from the ICO will be credited a corresponding portion of the profit to their Ethereum wallet.

What are ICOs used for?
ICOs were initially used to bring new crypto currencies onto the market and to ensure initial financing through the ICO. The projects were usually blockchain-based and the tokens were real utility tokens. Increasingly, financing via ICOs is also becoming interesting for existing companies, for example project-based. For this purpose, tokens are issued as revenue shares, which serve to distribute profits.

ICOs are particularly interesting for companies because the highly complicated process of an IPO is enormously simplified and can be implemented with moderate effort, e.g. on an ethereal basis. In addition, the investment opportunities will be accessible to a broader target group and tokens can be traded in smaller quantities more flexibly than shares on the stock exchange. The ownership of the tokens is represented on a technical level by a block chain, so that these peer-to-peers can be traded on any number of marketplaces – for stock trading, on the other hand, a central authority is required to manage the possessions.

Nevertheless, the unclear regulatory situation of ICOs poses particular challenges for companies. In many countries it is unclear whether ICOs are treated like conventional crowdfunding methods, in some countries ICOs have already been banned or severely restricted.

Scapegoat Bitcoin

Grym tries to illustrate why a digital currency is a questionable idea using crypto currencies as an example. Because of its pioneering role and its distribution, Bitcoin has to serve as a whipping boy.

It even goes so far as to deny the blockchain its decentralized character:

“For all purposes and intentions [the blockchain] is a centralized ledger. The fact that there are several copies of it, synchronized and distributed over a network, is irrelevant because they all have the same data.

A sentence that can only come from a central banker. Grym generously overlooks the fact that the advantages of decentralization only really come to bear when someone tries to change something in his copy of the ledger. Admittedly, as a central banker you have little desire to speak out in favour of decentralising the banking system. That’s why it’s hard to blame Grym for not wanting to saw the branch he’s sitting on.

“No advantages over traditional banking”

The fact that blockchain-based transactions take place (pseudo-)anonymously is also not a strong argument for Grym:

“The Bitcoin system was only built in a decentralized way to ensure anonymity. However, this is at the expense of efficiency, so the Bitcoin system is much slower and more expensive to maintain than any other existing payment system.”

Of course Visa, PayPal & Co. play in a completely different league when it comes to the maximum possible number of transactions per second. Security, decentralization and transparency come at a price. It’s a classic straw man for the central banks when they talk about scalability and efficiency instead of the actual motivation.

In addition, a Bitcoin user at least has the opportunity to see his transactions processed more quickly. All he has to do is promise the miners a higher transaction fee. The customers of centralized payment service providers do not have this option and are at the mercy of their conditions. The question of scaling is as old as Bitcoin itself. Numerous alternative crypto currencies have already addressed the problem and the number of possible transactions per second (tx/s) is constantly increasing. A payment channel in Ripple can theoretically be scaled up to more than 50,000 tx/s and would thus be at eye level with visas. The Lightning Network developed for the Bitcoin could even exceed this value many times over.

Reading the analysis is nevertheless worthwhile

Grym concludes with the thesis that crypto currencies in their essence are nothing more than accounting systems for non-existent deposits. He justifies this with the fact that money must always be available in two forms: as coins or banknotes and as institutionally covered book money. If this money is only digitised, there will only be one unit of account in the end. Now we can only talk about institutional cover as long as citizens and investors trust these institutions – in other words: states and central banks. The cover consists of the supposed guarantee of price level stability. The United States and Europe have struggled more with hyperinflation for longer. However, this does not mean that confidence in central banks can be fully justified. Greek citizens, for example, who had only limited access to their accounts in the wake of the financial crisis in 2010, will confirm this.

First, Grym criticises that it is misleading to talk about “digital coins” because there is nothing in the Bitcoin system that resembles a coin. Instead, transactions form the core of the Bitcoin ecosystem. Since transactions have to be confirmed by miners, contrary to Satoshi Nakamoto’s assertion, they cannot do without a middleman.

Grym forgets that it is theoretically possible to mine his own transactions. In addition, the issue of new Bitcoins – unlike that of new banknotes – is subject to a decentralized consensus. Finally, the role of full nodes – also a role that any participant can have in principle – is completely ignored by him.

Grym is also not impressed by the blockchain as a transaction history:

“The underlying mechanism of recording […] does not differ from the general ledgers that have been used for hundreds of years.

Nevertheless, it is worth reading the study from Finland – even if only to question his understanding of money and to understand the thinking of Bitcoin opponents.