We cannot write about crowd-funded crypto-mining schemes without mentioning the perhaps biggest one on a global scale – the BitClub Network! Launched 2014, the crypto-scheme already counted 17.000 members in July 2016 according to some reports. Thanks to the 2017 crypto-hype the number of accounts (an average member has 4 accounts) exceeded the psychological mark of 1 million according to Russ MEDLIN, one of the supposed co-founders of the BitClub Network (April 2018).
Russ MEDLIN is a dazzling figure with an interesting past, to say the least. He is supposed to be a U.S. citizen and known sex-offender. Medlin was convicted for attempted rape, possession of child pornography and numerous other crimes. That doesn’t sound good, but it doesn’t say anything about the quality of BitClub Network.
Bitclub Network Members are not only promised a share in the crypto-mining income but above all, they receive a commission for referring new members. Hence BitClub Network (BCN) definitely qualifies as a crypto-MLM-(Multilevel Marketing) Scheme. You pay $99 just to get access to BCN and be registered as a member. You then can choose between 3 crypto-mining packages – $500, $1000 and $2000. Depending on which package you chose you will get a percentage of the mining pool earnings. For example, if you purchased the $500 package you will get 50% of your respective share in the pool. The remaining 50% will “be used to fund the mining operation and to purchase additional mining shares”
If you are interested to learn details about the terms and commissions please visit the BCN website.
BitClub Network indeed operates a quite huge mining pool which makes it rather difficult to finally judge the legitimacy as well as the sustainability of the business model of the network. According to BitCoinity the hashing power of the BitClub Network Pool currently amounts to approximately 1,8% of the total Bitcoin hashing power. Hence, its market share remained largely unchanged since 2015 according to a Business Insider report.
In May 2016, BitClub stopped to accept US citizen to join the club so BitClub´s playing field mainly is Europe as well as emerging and developing countries.
In May 2018, the founders announced that the legal entity Bitclub Network Inc. was set up in Nevis, a small island in the Caribbean Sea. According to whois.com, the domain bitclub.network was registered in December 2014 by BitClub Network from 13 Banul Andronache St Sector 1, Bucharest, Romania 011663. Their telephone number is +40.212319481 and email [email protected] Up to May 2018, only rumors about the founders (see above) were available. Nevis is famous for having quite relaxed rules on corporate accounting and disclosure requirements for corporations set up on their isle. That said, it’s fair to assume that the incorporation will probably not result in any more information about the background or about the actual operating results of BCN. BitClub Network Inc will most probably continue the stealth operation of its predecessor organization.
With Russ MEDLIN pretending to have more than 1 Million active accounts we can do some maths here:.
- total BTC mined per day (10 min block time and 12.5 BTC per block): 1,800 BTC
- BitClub’s share with 1.8% of total hashing power: 32.4 BTC or US$ 220,00 (BTC 6,400)
- Daily Mining Income shared equally amongst 1 Million accounts equals: USD$ 0,22.
- Only 50% of the daily earnings are actually paid to investors: US$ 0.11
- So if you invested US$ 500 it would take 4,545 days to only earn back the investment, let alone profits!
That’s not too impressive, right? On the contrary! You could perhaps do much better with traditional banks. If this calculation is only close to reality, then the BitClub business model is not really high-yielding. In other words – the high returns (at least pretended to be be paid out) to the investors must come from other sources. Most likely, fresh investor money will also be used to pay returns on existing investments.
By the way if we take 1 Million accounts with an average investment of $ 1.000,- the total investment amount (neglecting the reinvestments made) of the Bitclub Network amounts to $ 1 billion, that is quite a lot of money! and probably one of the biggest crypto-mining schemes on a global basis. So just let us hope all together that this MLM-system will finally work out and not just implode some time soon due to the falling bitcoin prices!
But we propose to listen to some people with experience and their warnings:
Evidently, crypto-mining has been proven not to be profitable in the BitClub Network. The only way for a member to truly make money is via the referral program.
After digging into research for BCN it has to be granted that if BCN is a Ponzi-scheme it is for sure a professionally set up indeed. It has quite a few aggressive pushers on various forums where proper wars of words have been fought over the legitimacy of the service.. These promoters are much better prepared than most of their ilk, and they are quite skilled at addressing the concerns of those who know what Bitcoin is and how it works, but are less versed in the ways of mining service-based Ponzi-schemes. Fortunately, the same forums host quite a few people knowledgeable enough in this regard too, some of whom did indeed take the time to dig deep and come up with what can indeed be accepted as proper proof to the fraud claims they have made.
In any case please do your own research before investing into BitClub Network Inc.!