Qoin are hitting the market targeting Mum & Dad businesses with the idea of using cryptocurrency, and the blockchain, as a platform to exchange services. Essentially, for free, in exchange for their ’utility token’, Qoin. Think Bartercard. Well basically it is Bartercard, it’s the same people.
Sounds ok on the surface, doesn’t it? Apparently all businesses have up to 35% ‘spare capacity’ that can be utilised for this service. Capacity that would otherwise not have generated any income. Ok
But are they legit?
Well let’s have a look at the characteristics of Cryptocurrency scams and compare. I’ve written an article around this in the past, so first let’s refresh – no point reinventing the wheel, right?
MLM/Pyramid/HYIP/Ponzi, – Does Qoin have a referral bonus?
Yes, free coins for joining, free coins for buying packages of coins & free coins as payment for their tiered referral programme.
How are the funds that you have earned, through blood, sweat and tears working in your business withdrawn? How do you realise your gains?
If you look at the Qoin White paper (and you should ALWAYS read the white paper, always) you will see references to the ability to cash out using INDEPENDENT exchanges – plural.
Does Qoin have independent exchanges as promised in the white paper? There is an exchange available via their app BTX Exchange. But is it independent? The exchange is not available on the open market only via their internal app and its only trading pair is QOIN/AUD.
Will there be enough buyers in the Qoin space to purchase when you want to cash out? Qoin have no obligation to buy Qoin back from you and this is clearly set out in their fact sheet terms and conditions. What are these sell limits as identified in their BTX fact sheet? Does this set the scene for obstacles to withdrawals? Why would a business owner already in the ecosystem buy your QOIN at the exchange rate price that they set, if they can pick up a package of coins directly, for less? How do you ACTUALLY get your funds out?
Are there unrealistic and inflated promises of price increases and returns on investment? Not promises as such, no, there are disclaimers for that. However, how is their increase of price derived? Qoin are using an algorithm based on Metcalf’s Law. Baffled with Jargon yet? Let’s break this down.
Metcalf tells us that a network is more valuable the larger it becomes. Valuable in the way it exchanges information and the number of people it can reach, sure, but why does that effect the price? If a service is exchanged for X value, and X value in tokens is received, but then the price is increased by applying an algorithm to it, the service you then purchase next is worth less coins. A win for you, but not so much for the person left holding the bag. Their coins are now worth-less. The price is set to increases each time a new business comes on board and new coins are minted into the network. My basic understanding of economics 101 would indicate that printing money should actually lower a price?
Let’s talk about CGT – Capital Gains Tax.
Each time your asset (Qoin) increases in value it triggers a CGT event. This is not mentioned in their literature. Anywhere. So when you buy X service from ACME Plumbing with 100 Qoin valued at $3.67 each, but you RECEIVED them at $3.27 each when HYIP Motors used your services last month, you need to pay Mr. Taxman the realised gain for the price difference. Qoin does not integrate with any accounting software you will need to manually calculate this yourself, each time the price fluctuates.
Usually, the way to calculate this, is by checking the purchase price on coinmarketcap on the date you received the crypto, and then the price on the date you sold (used). Coinmarketcap is where every single crypto and the exchanges that support each one are listed. Have a search for Qoin and check the price for yourself.
Can’t find it? No, neither could I.
This is because Qoin use their own exchange, a centralised exchange, under their control and only accessed via their app, and only after you have signed up. Therefore Qoin can NEVER be priced using the free market and will only ever be the price they say it is. Which they can manipulate and change at any time. There are lot of people out there who are a lot smarter than I and who can explain their pricing process way better than I ever could, so again, let’s not reinvent the wheel. This article can run you through how Qoin currently price their asset Qoin-con Part 1
Does the project really require blockchain? What is Blockchain? Still with me – Baffled by the Jargon yet? In simplified terms, blockchain is an open ledger of transactions that can never be changed. The purpose of which is to instil trust around transactions. A blockchain will show which wallet holds which coins and how many, at any given time. So we should be able to look at the blockchain for Qoin and be reassured that everything is above board, right? Wrong. This snippet from the Facebook group Crypto Australia was subsequently removed. Andrew Barker is the CMO of Qoin. The Qoin blockchain is private and cannot be viewed, which kind of defeats the whole purpose of blockchain. imo.
Qoin’s marketing information and whitepaper has several references to using the Quroum platform for their blockchain which was built by JP Morgan, Chase and Co in partnership with Microsoft. But they don’t mention that this was subsequently on sold to ConsenSys, is this misleading? Do you feel that having these companies behind it lends legitimacy? Why is this mentioned?
So, to sum up. I’m not going to put my head on the chopping board and tell you what I think is going on here. And the opinions expressed above are my own. The information gathered is (mainly) freely available on the internet for you to find by yourself. I am not making any accusations. Yeh, we do live in that sort of world now.
I am merely relaying some information to you, so that you, as a business owner, can have a starting point for your own research, and to make up your own minds, if this is a project you want to be associated with.
Though I will comment that when an open discussion on a FB group, around some of the points mentioned above is deleted mid conversation, and the commenters are then blocked from that group, a FB group where the CMO of Qoin is freely available to answer and clarify any questions, it makes me wonder; what are they trying to hide? Things that make you go hmmmmmmmm.
#Qoin #Cryptocurrency #Scams #Ponzi