The myth of Bitcoin and Dogcoin has led to a variety of “digital currencies” with different names. A kind of Pi coin (Pi) that claims to be able to be “mined” by cell phones has recently caught fire in the circle of friends, and news of Pi coin “pulling heads” can be seen everywhere on Weibo and WeChat’s circle of friends.
The phone can be “mined”, is such a blockchain technology can be achieved? Several industry insiders said that mainstream “mining” projects need to spend a lot of arithmetic power and design complex algorithms to achieve the purpose of cryptographic security, which is difficult to achieve by cell phone “mining”. Investors should be wary of the “Ponzi model” of virtual coin projects, and should be wary of the risk of being “smashed” and “leeked”, or even falling into the trap of illegal fund raising, or being The “wealth code” of mobile phone mining
The “Wealth Code” of Mobile Mining
Mining Bitcoin requires a large enough number of mining machines, and the way to mine Pai coins is very simple. According to the PaiCoin Chinese website, coin users can “mine” for free by downloading the PaiCoin app, which doesn’t consume electricity or traffic and only requires one click per day to mine PaiCoin.
According to a PaiCoin Chinese website staff, PaiCoin has more than 18 million active miners worldwide, and the foreign barter consensus price is about $100 per PaiCoin.
In other words, at this stage, the PaiCoin launch organization has managed to get nearly 20 million active users simply by “painting a pie”. Currently, PaiCoin has 652 million Google search results, which is close to Bitcoin’s 833 million search results.
A group of friends told reporters that their efforts to “mining” for two years, for the project side contributed a lot of traffic. There are also groupies who say that they have 8,000 pie coins and are “rich” miners. They think, “Anyway, it’s 0 yuan to gather wool, digging a dig also does not hurt”.
Can cell phones be “mined” or not? The Chinese University of Hong Kong (Shenzhen) Institute of Advanced Financial Studies researcher Wu Haifeng said, blockchain, digital currency and other emerging technologies depending on arithmetic power as the core competitiveness, cryptocurrency “mining” needs to consume a lot of arithmetic power, taking up a lot of storage. In order to “mine”, many blockchain projects have started to build supercomputers, and the geographical distance between the arithmetic power provider and those who need it, network congestion, and signal collision problems are all challenges in the field of distributed computing.
“Even if the phone can really ‘mining’, that also means that the bottom layer of the project’s algorithm is relatively simple, certainly not like bitcoin, ethereum (ETH) such as intentional design algorithm, the latter code more than a million lines, are dependent on mega arithmetic mining machine to maintain mining. ” He said.
He dismissed the application value of pie coins, “Mining one bitcoin consumes so much power that its cost would have to cover at least the price of electricity. If cell phones can also mine coins without storage, it means the cost is very low and the marginal cost is negligible, and considering this aspect, it is destined to have a very low market value.”
He said the reason cryptocurrencies emerged was to ensure security, and thus organizations and individuals with particularly high security requirements would only consider them. The simplicity of PaiCoin’s algorithm also means that it can be easily hacked or decoded, and therefore lacks credibility in the cryptocurrency world.
What is the “wealth code” of PaiCoin? In April 2020, the PaiCoin app was launched with an intentional advertising survey, and after a while, many mobile game ads appeared on the home page of PaiCoin. The Pai Coin project side has advertising revenue coming in every day, but it has been vague about the main network launch time and exchange launch time. Many people think that the daily mining is contributing traffic to the project, and this model is not very different from the “daily sign up to receive points”.
Is it a pyramid scheme or an air coin?
In the opinion of many people in the cryptocurrency circle, the model of PaiCoin expansion is highly similar to a pyramid scheme. To determine whether a project is a pyramid scheme, two characteristics are usually taken into account: firstly, whether an entry fee is charged and whether money is required for investment; secondly, whether “headhunting” is required to develop a downline, whether the upline receives benefits from the downline, and whether the hierarchy of benefits exceeds two levels.
According to a number of coin users and Pai Coin Chinese assistant, Pai Coin does not require any monetary investment. However, the assistant said that money can be made through the hierarchical relationship. “Pai coin can be traded on the exchange one day, it is recommended to invite more newcomers, establish a contact group, and when it is possible to trade OTC, provide a guarantee for the group to trade Pai coin with each other, thus getting a guarantee fee.” He believes that as the price of pie coins rises, organizers will be able to liquidate the pie coins in their hands.
According to industry insiders, the so-called air coins are almost all concocted with the same business set-up. The first is to create a coin, the founding team registered a shell company, relying on the industry’s common technical solutions to complete the “white paper” and spend months debugging code; second is packaging, through the circle of friends, lectures, celebrities stand to blow up the project; third is to pull private, through internal private and find external investors, and then spend some “The fourth is to pull up the price, publicize the soaring market to attract investors to enter; finally, early players shipped in large quantities.
Whether Pai coin is an air coin is inconclusive, but the reporter checked the information and found that Pai coin’s U.S. official website was not filed, and the open source code could not be found on GitHub, while the mainstream blockchain is open source technology.
Data from blockchain security company PeckShield (PaiShield) shows that virtual currency-related fraud reached 151 incidents in 2020, up 37 times from 2018 and four times from 2019, causing losses of more than $3.2 billion. There are few air coins among them, and the most typical cases that have been officially judged or investigated include Five Elements Coin, Asia Eurocoin, Vika Coin, Hero Chain (HEC), etc.
The risk behind the fog
Wu Haifeng said, in the coin circle, this kind of virtual coin “like a cow’s hair”, in the end can survive only one in 10,000, and later to join the investors may encounter “smash” risk. “I learned that there are at least hundreds of thousands of coins being mined, but only a few of them can really be traded on the exchange. Many virtual coins are yellowed without waiting for the exchange to list them, and some coins are held to a certain number, and the rule makers will say that the holder has violated a certain regulation and forcibly clear the coins in the account, causing investors to spend a lot of energy mining, and finally the coins in their hands are worthless.”
Wu Haifeng is also worried that “mining” with cell phones may also lead to the user’s privacy in a “naked” state. Most of the cryptocurrency apps rely on overseas IDs to download in the app market, and borrowing someone else’s ID may upload files from your own phone. Moreover, these virtual currency apps may also upload users’ privacy information in the process of use.
Yu Jianing, the rotating chairman of the Blockchain Special Committee of the China Communications Industry Association, reminded investors that a few scams in the guise of blockchain will set very low thresholds for users in the early stage, with simple operations and low (free) capital thresholds, and raise the heat for the project through the “headhunting” reward model and a lot of publicity. In the beginning, the project was essentially designed to build a multi-level distribution system. At the second stage, the project owner announces that the virtual coins can be transferred or traded, and there is a possibility of capital circulation, and then they are looking for opportunities to sell the virtual coins in large quantities, and the investors’ risk will be greatly increased.
Yu Jianing summed up four methods for investors to avoid mines: First, be wary of risk-free and high-return blockchain projects, as the price of crypto-assets frequently rises and falls, and air coins may go to zero in extreme cases. Second, avoid projects that rely on “headhunting” and multi-level rebates to realize cash. Third, learn to look at GitHub’s open-source program, which can be found on the blockchain browser for its parameters and mode of operation, and all accurate information about the issuance, circulation, and transfer records of assets. Fourth, blockchain projects that use over-the-counter trading or specific exchange trading need to be carefully screened, as it is highly likely that the price is highly manipulated and cannot be freely charged.
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