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What is Genesis Mining (Is Genesis Mining a Pyramid Scheme)?

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What is Genesis Mining? According to official sources, recent reports have claim

What is Genesis Mining (Is Genesis Mining a Pyramid Scheme)?

What is Genesis Mining? According to official sources, recent reports have claimed that “Genesis Mining” is a new project in the field of virtual currency. It is understood that in the process of Bitcoin mining, it generally requires certain programs and specialized computer systems to perform calculations and processing in order to mine virtual currencies such as Bitcoin and various digital assets. Due to the anonymity, high security, and vulnerability to hacker attacks, virtual currencies are often seen as a form of financing similar to ICOs.

However, in reality, this method is not truly an ICO financing, but rather the entire process of token issuance and trading is carried out simultaneously through ASIC devices. Currently, a domestically launched ASIC-based Bitcoin mining hardware called Bitmain S19Pro has been introduced, which uses the latest generation of Samsung 7nm chips.

Is Genesis Mining a Pyramid Scheme?

Recently, some internet users have claimed that Genesis Mining is a pyramid scheme. In response to this, Odaily Star Daily has conducted analysis and interpretation on this matter.

1. Does Genesis Mining belong to a pyramid scheme?

2. What funds are needed to participate in “mining Bitcoin”?

3. How does the model of “mining gold” differ from traditional pyramid schemes? Why develop a virtual asset trading platform using blockchain technology?

4. What does “coin issuance” mean? Why can’t the money be handed over to someone else?

5. Is “selling digital currencies” a form of financing? Although this is the first occurrence of such a situation in China, there are still many similar issues abroad, such as:

1. To mine Bitcoin, a certain amount of cash flow is required for investment.

2. To purchase a specific cryptographic token, one must first register an account and raise a certain amount of money through ICO. If the price is high, one can receive corresponding equity returns.

3. Where can your money be used?

Because the project has issued a token called BTCS, and the price of each project’s token is determined by the project itself, this allows for corresponding returns.

4. All token values in this project are owned by the users, and no one is willing to sell.

5. You are buying a token of a certain project, but you are not the token of that project, so you can purchase it with ETH or USDT.

6. If you want to purchase a product or service, you can only use your own wallet or App.

7. If you want to join an exchange or organization, you should apply for membership and become a member, and invite more friends to join.

2. Why did such negative impacts arise?

1. From a legal perspective, such companies do not have legal status and are not subject to any restrictions, nor are they regulated by financial supervisory agencies. Since emerging phenomena like ICOs often easily cause market fluctuations and risks, there is a greater possibility of significant losses for investors.

2. When participating in ICOs, investors should be aware of potential dangers.

3. “Mining Bitcoin” – As a new economic system, ICO is not a new form of investment, but merely an innovative investment method to attract more people, and it has also given rise to various other illegal activities. For example, if one person’s wealth converges towards another person’s, it will form a large consortium in hopes of obtaining huge profits, ultimately leading to the continuous spread of rags-to-riches mythology. However, ICO has not truly transformed the entire industry, but rather increased the occurrence and cost of black market activities.

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