Anatomy of a cryptocurrency scam

The vast majority of alternative cryptocurrencies (also known as altcoins) are either pyramid schemes, scams, or both.

This does not mean that cryptocurrency itself is a scam. Blockchain technologies and decentralized cryptofinance are, in my opinion, essential for the future. They provide insurance against government and social tyranny in an ever-changing and dangerous world.

Unfortunately, most Chetcoins (and dirty tokens) are marketing schemes that aim to create value from nothing and then split that “nothing” like stock. The “none” stock is then distributed to the owners’ community, with a strong bias towards a minority group of “early adopters”.

Bitcoin and Ethereum myths have made it “general knowledge” (note: these are ironic quotes) that the cryptocurrency is safe and backed by proof in the form of mining.

In fact, most altcoins are either “pre-mined” or simply backed by their inherent value like Beanie Babies. A simple rule to remember is that coins are money and tokens are property.

And this, dear readers, brings us to Mariquin. Cryptocurrency Code which recently entered the testing phase in the Chueca community in Madrid, Spain.

What’s interesting about Maricoin is that its name sounds like a play on words. The word “maricon” in Spanish is similar to the English pejorative fagot. It is meant to be offensive and dismissive in a homophobic or hostile manner. It is hate speech.

I will make a slight concession. It’s possible, in a way, that the gay entrepreneurs behind Maricoin have a perfectly innocent reason to call it – the “Mari” part is probably short for “marinero”, which means “sailor” – but it’s hard to imagine they don’t understand the point.

It is worth noting that many LGBT people use terms considered colloquially derogatory among themselves.

However, as an outsider, I can assure you that not all of us find this use appropriate.

But let’s move beyond the name.

Anytime I evaluate a cryptocurrency, I begin my research by looking at three things:

  1. Project research paper
  2. History of the founders’ work and cryptocurrency
  3. How will the owners earn money?

In the case of Maricoin my work was very easy. There is no trace of the paper anywhere I can find it online, and it looks like the founders are first-time cryptocurrency developers.

They have a website, but it’s useless. There is no mention of who the “Maricoin” team is or any details on what exactly it is.

The only real source of information on Maricoin comes from a Reuters article about Maricoin’s launch which ironically begins with “It might sound like a marketing gimmick, however.”

The article’s glowing coverage is as optimistic as it is empty: there’s no sniff of due diligence in the author’s reprint of Maricoin’s questionable claims.

Maricoin, for example, is certainly not the first cryptocurrency project that claims to have been created by members of the LGBT community for the LGBT community.

So what do we actually know about Maricoin, on a technical level? Emoji Poop, that’s what. But that doesn’t mean I didn’t get some ideas.

A link on Maricoin’s website takes visitors to the Goalseeker website where we can see that “mcoin” is an asset listed on the Algorand blockchain. We can clearly see that there are a total of 10 billion Maricoin units in circulation:

And we know that Maricoin is definitely not a coin. It is a symbol. Algorand, and by extension Maricoin, is not a cryptocurrency backed by work (mining). It’s an icon, like the kind you get at Dave & Busters. It’s backed by “proof of stake”, like stocks.

In other words: the more you own, the more valuable your possessions will be. This is because your proof of stake can be used to win great prizes!

As per Algorand’s listing on Coinbase:

Algorand network participants (or nodes) can participate in some ALGO in exchange for the chance of random selection to propose a new block of verified transactions. A new ALGO winner is awarded.

Let’s be very clear here: I’m not saying Algorand is a scam or a marketing scheme.

I’d say Maricoin, allegedly being built atop Algorand, is either a pyramid scheme, a marketing scam, or the most underpowered legitimate financial commodity I’ve seen in all my years covering technology.

The website listed on Algorand’s assets page, Maricoin.coin, does not exist. 🤷‍♂️

Here’s the thing: We have no idea how the Maricoin entrepreneurs actually intend to tokenize their Algorand properties. Building a centralized token-based economy on top of the existing economy involves more than just conducting a set of transactions.

We know that the initial holdings will be distributed to a chain of clubs, bars, restaurants and other gay-friendly establishments in the Chueca district of Madrid. After this exchange, the first 100 people who pre-register to purchase tokens will receive a two-to-one discount, after which the remaining tokens included in the initial drop will be distributed to 10,000 final applicants at a three-to-two discount.

Therefore, whatever the market value of the people who sell Maricoin Choose To create this, it will be used to create the discount with which second and third tier users can buy and spend their coins. It is done in this way so that there is no possibility that the first class holders will lose their money when the said discounts are distributed.

And because Maricoin is 100% centralized, top-tier investors are guaranteed a return on their investment in the short term. And even if things go wrong quickly, they still have a good chance of getting long-term compensation if second and third tier users are rescued enmasse.

Second tier users who know how to pump and dump and/or really do social media and shitcoin magazines can also potentially earn a little bit of money.

After that, the only real value that Maricoin will have is within the local institutions in which the owners hold a stake. They are able to make money from their owners three times for each transaction.

They get paid when they sell you tokens, they get paid when you spend your company coins, and then they get paid when you eventually empty your wallet for one reason or another. All of this contributes to the ultimate goal: putting money into the Algorand holdings of key players.

Is Maricoin a scam? It depends on whether you are at the top or bottom of the pyramid.

Either way, without a research paper or a reputable cryptocurrency developer, it’s impossible to know what’s really going on.

Maybe maricoin is legit. Maybe it’s an inside joke between friends just meant to drum up some business for their shop. But no matter how you look at him, he feels taken advantage of.

Adding an extra layer of centralization does not help the LGBT cause or provide a secure medium of transactions for LGBT people. It is, in essence, monetizing the idea of ​​gay-friendly networks.

At best, Maricoin is a legal tax on weirdness that anyone smart enough to exploit can participate in.

At worst, it’s a troll job orchestrated by people who know it’s better to provide very little information than a lot of nonsense. I wouldn’t be surprised if we find out that this is some kind of joke.

I also wouldn’t be surprised if we didn’t. The math should work out really well for the founders and they’ve already got enough hype to warrant having a few dollars to spread.

In this case, I’m betting on the secret of whether a scam will work in their favour, more than any attempts to make it clear.

But we’d like to see a research paper and a coherent explanation rather than guesswork.

Do whatever you want with your money though, nothing written in this article is meant to be advice.