Identifying these Ponzis is not easy for the lay person and this is why even highly suspicious programs can operate until they collapse and expose their Ponzi nature. These can be believable enough that even those that have a cursory understanding of how cryptocurrencies work can be fooled. However there are certain distinctive hallmarks of these types of crypto Ponzis and although such a scheme may not tick all of them, the more suspicious traits it has, the more likely it is a Ponzi scheme.
1 .Huge and consistent returns If it sounds too good to be true, it probably isn’t. This is in general the biggest telltale sign of a Ponzi scheme. In general, the greater the rate of probable returns, the higher the risk. Whether cloud mining, investment programs or altcoins, no investment can consistently generate high returns with no risk or guaranteed returns. Remember all Ponzi schemes always begin with paying out or else they will not attract new recruits.
2 .Returns highly dependent on referrals: If the primary way of earning is through referrals or commissions, your alarm bells should be ringing since it means that the business model on its own is unprofitable. This is one of the primary differences between genuine multi level marketing programs and Ponzi schemes.
3 .Unclear Ownership: Are their founders anonymous or their company undisclosed on their webpages? Usually a quick Google search of their founders’ names can uncover any dodgy history.
4 .Need to join to get more information: To go under the radar of authorities, many websites of such schemes pose as legitimate businesses such as a coin wallet service, marketplace, cloud mining but the investment and referral portions are hidden until you sign up or go to their seminars. As such the website’s material and focus appears to be different from what their main focus which is recruitment and ‘investment’.
5.Closed source and non public blockchain: For scamcoins, almost all of them are closed source meaning their code is not up for public review. Similarly their blockchain is private though more advanced ponzis have a simulation of a blockchain within their own internal websites. You can do a quick check to see if they are listed on coinmarketcap.com (although many scam coins are listed there so it’s only a very cursory check) which requires coins to be a genuine cryptocurrency, traded on a public exchange with an API available and must have a public URL that shows the coin’s total supply.
Source: https://blog.bitmain.com/en/rise-of-cryptocurrency-ponzis-and-how-to-identify-them/
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