Till a few months back, cryptocurrency mining was in the rage. Many people wanted to invest thousands of dollars in cryptocurrency mining pools in order to make a great ROI.
However, these days the same cannot be said. A lot is also dependent on the mining pool which you choose. One such mining pool is BitClub network.
On the face of it, BitClub Network might seem like a legit cryptocurrency mining pool. However, when you look closely it seems to be pretty shady.
We will today answer the question Is BitClub network a scam? We will analyze the offerings of the network as well as the background details of the cryptocurrency mining pool in order to provide you with an accurate answer to this question.
What is BitClub Network?
Let us 1st start with the basics. So bitClub network is a cryptocurrency mining pool. It is focused on mining Bitcoin (BTC). It was founded in the year 2014. In order to ensure that it is decentralized, there is no single owner of the BitClub network.
It is owned by various stockholders like cryptocurrency experts, entrepreneurs, network marketers as well as programmers. Due to this very reason, ownership structure is very opaque and it is difficult to pinpoint the actual owner. Some of the names which crop up include:
• Russ Medlin who is a co-founder.
• Joe Abel is another co-founder.
• Joby Weeks is another co-founder.
When you delve into the background of these individuals, you will realize that they have extensive experience in the network marketing industry.
However, when you try to find out their experience in the blockchain and the cryptocurrency industry, they do not have any. The network claims that it is founded by cryptocurrency and Bitcoin (BTC) experts which does not seem to be the case.
Another red flag is that no physical address of the company has been provided on its website. There is virtually no information about the experts that run the BitClub network. However, the co-founders are expert at marketing and that is why they try pretty hard to pass off their company as a legit operation.
Details about BitClub Network:
Cryptocurrencies are becoming more and more popular. In spite of the significant fall from the start of this year, more and more investors are looking to invest in cryptocurrencies.
The top 5 cryptocurrencies by market caps are valued at over $1 billion in market cap each. That is why cryptocurrencies are attracting more and more investors.
BitClub, however, targets only a single cryptocurrency that is Bitcoin (BTC) when it comes to cryptocurrency mining.
The founders, as well as the members of the company, have invested their own money in order to purchase the cryptocurrency mining equipment. According to the company they own a plethora of cryptocurrency mining rigs which help them in mining Bitcoin (BTC).
Is there a legit money making opportunity offered by BitClub?
The business model of BitClub network revolves around getting investors for the cryptocurrency mining network. They are offering high ROI to all the investors.
The only bit of confusion is that why aren’t they keeping all the profits for themselves since they already have purchased the cryptocurrency mining rigs.
In addition to investing in the cryptocurrency mining network, BitClub network also relies on members to do recruitment. It also encourages the investors to invest back into Bitcoins so they can earned back into the network.
So ideally, you do not just have to get new members but also you have to invest your earnings back into the network. The network claims that later on, you will have multiple opportunities to make money.
As per another claim made by BitClub network, it has an exclusive software which allows the company to mine various cryptocurrencies and convert them into Bitcoin (BTC) within 24 hours of mining.
As a result, the company is able to minimize the cost and also diversify the entire network by mining different cryptocurrencies. However, very little details are actually available about the software.
The moment you bring the recruitment model into any business, red flags start to rise. More so, when you combine Bitcoin (BTC) with recruitment model, it becomes even more suspicious.
The reason for this is that Bitcoin (BTC) is not governed by any agency or any government body. That is why there is a high probability that Ponzi schemes, as well as various scams, can be formulated with the help of Bitcoin (BTC).
In a Ponzi scheme, the company pays out the older members with the investments which are brought into the system by the newer members. Eventually, when the pace of recruitment of the newer members slows down, the business becomes unsustainable and the scam comes out in the open.
In such a business model, only the people who run the scam are able to make any money. Generally speaking, a Ponzi scheme can be detected by the following 2 characteristics:
1. It does not have any kind of physical output to justify the earnings.
2. It heavily relies on the money brought in by the recruitment of new members.
If you have been following this article up until now, you will realize that BitClub network satisfies both of these requirements.
Money making opportunity advertised by BitClub network:
According to BitClub network, you can make a significant amount of money using its cryptocurrency mining pools as long as you are able to recruit new members. In order to do so, it advises you 2 different marketing methods which are:
• Word-of-mouth marketing
• Social media marketing
Chances are, someone among your friends and relatives might have forwarded you a link of BitClub network and that is why you are researching more about this so-called business opportunity. This is exactly the business model of BitClub network.
How much money do you need to invest in BitClub network?
BitClub network requires you to invest at least $99 as a one-time fee. Thereafter, you have to invest additional money depending on the cryptocurrency mining pool which you want to join. The different pools are:
• Pool 1 which requires you to invest $500.
• Pool 2 which requires you to invest $1000.
• Pool 3 which requires you to invest $2000.
• Founder Pool which requires you to invest $3500.
As you go higher up the pool, your share of the profit increases more. In pool 1 for example, you will get 50% of the profits whereas, in pool 3, you will get 70% of the profits. According to the company, the rest of the profits are invested back into the repurchase of cryptocurrency mining rigs.
The stake/share which you buy with the help of these investments will last you 2000 days. The first payment will be after 30 days.
Recruitment model of BitClub network:
BitClub network follows the binary recruitment model. You will have to just recruit 2 people. These members will be divided into your left team as well as right team. There are a few bonus options which you can earn when you recruit these members. These include:
1. Binary team cycle bonus:
When you recruit a member who invests $99 into the network, you will be able to place yourself in the recruitment network. The only condition is that you should have at least 1 share in the cryptocurrency mining pool. Once you are active, you can start earning from your recruited members.
The earnings are as follows:
• When you sell $500 worth of shares, you will get 3 credits.
• When you sell $1000 worth of shares, you will get 6 credits.
• When you sell $2000 worth of shares, you will get 12 credits.
When you accumulate 15 credits on your left cycle as well as on your right cycle, you will get 1 cycle.
1 cycle is worth the $200 which will be paid in Bitcoin (BTC).
2. Binary matching bonus:
When you get paid $200, your upline will be paid $80. This will be paid up to 8 levels high. There is no qualification requirement for the 1st level. However, in order to get earnings from level II onwards, there is a qualification criterion.
The earning mechanism seems to be laid out pretty well but it is complicated and when you combine it with the opaque details of the BitClub network, the red flags start to go off immediately.
Should you use BitClub Network?
We will highlight some of the ugly truths of BitClub network. When you combine them with the opaque nature of the business, you will realize that BitClub network is a company which you should definitely stay away from.
It will not be profitable for you. It is not worthy of your investments either. You should definitely stay away from it in my opinion.
Hidden Truths about BitClub:
There are a few hidden truths about BitClub network due to which, you should stay away from it. These are:
1. Lack of details about the owners:
If it is a legit company, it should have a transparent ownership. However, BitClub network actually hides its ownership. This is to ensure that there is no accountability at a later stage. No one even knows about the country from where the founders are running this network.
2. Founders might have a sketchy past:
Russ Medlin according to this Department of Justice webpage is a convicted sex offender. Thus, in all probability, the other founders of the website might have a criminal record as well. This is the reason why you should stay away from it.
3. BitClub network is nothing more than an investment program:
As we explained above, it has all the characteristics of a Ponzi network. It runs on investments from the newer members. This is another red flag due to which, you should avoid it.
4. Investor alert in the USA:
There is an investor alert for BitClub network issued in North Carolina. The investor alert clearly states that investors should be cautious about participating in this program.
As of May 2018, the Securities and Exchange Commission has initiated an inquiry against them which forced them to shut down their operations for the members in the USA. This is a huge red flag which potentially validates that it is a scam.
5. Vanishing investments:
According to BitClub network, your investments are only valid for a period of 600 days. After that, they will cease to exist. Most likely, this clause has been added to ensure that the founders are able to get away your investments.
Also, the company forces you to reinvest back into the cryptocurrency rigs which is just a smokescreen for the Ponzi scheme. The company does not provide you with information about this reinvestment. There are a lot of questions which are unanswered like:
• Which are the cryptocurrency mining rigs which are purchased?
• How many cryptocurrency mining rigs are purchased every quarter?
• From where is the company purchasing these cryptocurrency mining rigs?
In addition to this, there are virtually no reviews available on the Internet which state that money has been made by members from their cryptocurrency mining pool. This is a clear indication that it is nothing more than Ponzi scheme to bring in newer members.
Is Bitclub Network a Scam?
So, from what we have gathered up until now, not only BitClub network has all the characteristics of being a Ponzi scheme and a scam but the founders of the company might have criminal backgrounds as well. That is why it is a good idea to stay away from this so-called high ROI earning opportunity.
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