On October 21st, 2017, FirstCoin had a market cap at USD $177,678,782 (a market cap high) for the equivalent of 30,103 BTC with a circulating supply of 12,400,981 FRST at a price of $14.33 per coin. Today, on a day when many altcoins are down and BTC is going parabolic, FirstCoin is in the red and lower -1.50%.
On October 2nd, 2o17, FirstCoin was hardly a blip on the map and didn’t even rank in the top 50 cryptocurrencies by market cap. Today, though, FirstCoin’s market cap brings it to crypto #30 on the lists. What’s the deal with the explosive market cap growth, and why has FirstCoin knocked-out other contenders?
Here’s the thing: there’s a LOT of chatter in the crypto community about FirstCoin potentially being a scam coin. I didn’t start out producing this post with the intent to refer to FirstCoin as a scam, but of ALL the coins I’ve looked at so far, this one seems the most sketch.
I’ll say this prior to digging into the research: FirstCoin does NOT have a Twitter page… to me, that alone is SUPER sketchy. Oh… and here’s one last thing: the social channel FirstCoin DOES have in Facebook. OK, fine. BUT the feed is inactive with no posts for one month. Not only that, but the posts FirstCoin does have contain comment threads that read like scam central:
With comments such as:
Anyway, let’s dissect the FirstCoin website, forums, whitepapers, and any other juicy content that comes out way in determining what FirstCoin is, what purpose it serves, and what makes it special. I can already tell you that this isn’t a crypto I’d HODL, but maybe there are great trading opportunities because of the momentum?
FirstCoin: The New Cryptocurrency Economy That Connects And Supports Startups… Or Just Another Scam?
OMG: RED FLAG: THERE IS NO WHITEPAPER FOR FIRSTCOIN! BUYER BEWARE!
FirstCoin is a special project with an exchange rate protection and eco-sharing program, which is planned to coordinate the sharing economy and crowdfunding, greatly supporting startups.
FirstCoin is also special because income is generated by ATMs and participating businesses – currently no other cryptocurrency offers anything similar. Income is also provided by sources related to the sharing economy.
Sharing economy means greater efficiency and sustainability, such innovative community solutions that can quickly transform industries even at a global scale – as seen with AirBnB and Uber.
“We primarily involve those communities, associations, groups and sharing economy startups in our project who can contribute to the long-term stability of Firstcoin through their openness and large numbers.”
“Join the FirstCoin community and you can receive additional coins, which you can freely forward, exchange and at any exchange place, or even continue collecting.”
FirstCoin: Next-generation digital currency inspired by the success of Bitcoin. FirstCoin is an alternative digital currency that differs from Bitcoin, characterized by faster transactions.
Eco Sharing: Our goal is to use FirstCoin to connect, coordinate, and support startups showing great potential. Under the FirstCoin aegis, project participants receive varying shares of sharing economy and crowdfounding company successes.
ATMs: Purchase FirstCoin or sell other digital currencies through ATM’s. Soon, a startup operating a crypto currency ATM network will join us, providing project participants with varying shares.
Education: Why are crypto currencies the future of financials? Why are they special? What advantages do they provide for you? “We believe crypto currencies are the future of finances and consider them indispensable in acquiring comprehensive knowledge on the subject.”
Community: The FirstCoin membership allows you to be part of the success story of the newest crypto currency. Popularizing the club provides you with rewards. The more club members help popularize the club, the more your FirstCoin will be worth.
Coin type: POW/POS Hybrid.
Algo: Scrypt.
Block Time: 60 seconds.
Firstcoin simulates the value adding limitation of gold. At most 110 million can be mined, so it cannot inflate like real currency, which countries have a tendency to print in large quantities.
According to Who.is, www.FirstCoin.Club was registered on July 15, 2016, to a private owner. You will find at the bottom of the home page though an address that clearly states that First Coin Club is situated out of Dubai and has “Dynamic Global Marketing Ltd” listed. However, there is no information on why or how Dynamic Global Marketing Ltd is involved with First Coin Club.
When you look further into the address you will discover that the company may in fact not actually be located in Dubai. You will find that the address is an entirely different company called “Freemont Group” which provides business services in Dubai.
There are three ways for you to earn with FirstCoin Club.
The first way is to invest in the company and earn a passive 3 to 7% monthly ROI. This opportunity offers four plans to choose from.
The first plan is called the “Basic” and you are required to invest a minimum of $200 to $1,999. The “Basic” plan will then allow you to earn 3% monthly ROI.
The second plan is called the “Silver” which requires an investment of $2,000 to $9,999. With the “Silver” plan you can earn a 5% monthly ROI.
The third plan is the “Gold” plan and requires an investment of $10,000 to $24,999. With the Gold plan, the site states that you can earn 7.5% monthly ROI.
Lastly, there is the “VIP” plan that requires an investment of $25,000 or more. Like the “Gold” plan you will earn 7.5% monthly ROI plus receive a 10% one-time bonus on the amount you deposited.
The second way for you to earn is through recruiting.
You will earn commissions for every person you have signed up and invest in FirstCoin Club.
You will earn 10% for each and every person you personally have signed up until you reach five people.
If you happen to sign up six people or more, you will then earn 20% referral commission.
You will also earn commissions from your downline at a rate of 7.5% on the second level. So if your recruits build a downline for themselves, you will earn from them as well.
The last way you can earn is through the Pool Income.
This is for the go-getters who recruit more ten or more people.
In order to qualify though, your recruits must have a combined investment of at least $5,500.
If you happen to reach this mark, you will then be eligible for the Pool Income bonus that is made up of 5% of the investment volume company-wide.
There are no technical white papers explaining the technical decisions nor any form of community developing this cryptocurrency except:
1 minute block targets
subsidy halves in 2.5M blocks (~5 years)
110 million total coins
6 confirmations
1 Satoshi per block
Most important (and missing in this description): 109,999,999 coins are already mined.
Bad design or Fraud by design?
“FirstCoin has a supply of 110,000,000 coins. I suspected the mining algorithm is similar to Bitcoin, where the number of coins generated per block is set to decrease with a 50% reduction every 210,000 blocks (Starting with 50 Bitcoin for the Genesis block).
Bitcoin has chosen this decreasing-supply algorithm because it approximates the rate at which commodities like gold are mined. But things are different in the world of Firstcoin: The reward is fixed to 1 Satoshi (0.00000001 FirstCoin) for every single block to be mined!
So there is only 1 Coin left to mine and the inventor of Firstcoin sent the 109,999,999 to himself.
This is obviously not the way a healthy cryptocurrency should be designed. There is no incentive to mine because there is actually no reward. This is also reflected in the current mining difficulty: 0.0042.
There is no mining software available for download (nobody would use it anyway) and I suspect only the inventor keeps mining blocks to keep the network alive.
So taking over the mining (to prevent transactions to happen or reverting history) should be easy.”
FirstCoin.Club: Ponzi at work
FirstCoin Club seeks to remedy the problem of Ponzi point “cryptocurrency” MLMs (ala OneCoin) being not publicly tradable.
They do this by requiring affiliates purchase firstcoin before investing it in FirstCoin Club.
An affiliate can only acquire firstcoin via a public exchange.
On the surface this creates the impression of a cryptocurrency with legitimate supply and demand, until you scratch the surface.
The FirstCoin Project website reveals that there are 110 million firstcoins, of which 109.9 million are pre-mined.
Who owns the 99.9% of available firstcoins? Why, none other than the anonymous owner(s) of FirstCoin Club.
When a prospective affiliate puts in a buy request for firstCoin on a public exchange, they’re in reality just buying the coin from FirstCoin Club.
Once acquired, a FirstCoin Club then parks their firstcoin with the company and collects a monthly ROI.
From here it’s the same old Ponzi points business model.
FirstCoin Club take funds they receive for selling pre-mined firstcoin they generated at little to no cost, to pay FirstCoin Club affiliates a monthly ROI.
The funds are sourced from new and existing FirstCoin Club affiliates buying firstcoin to invest.
The usual “we’re gunna be the next bitcoin!” comparisons are made to market FirstCoin Club, further encouraging affiliates to keep their firstcoins parked in FirstCoin Club.
Referral commissions add an additional pyramid layer to the scheme, as they directly reward FirstCoin Club affiliates for bringing new affiliate investors on board.
As with all Ponzi schemes, a slowdown in affiliate recruitment means a slowdown in new funds entering the scheme.
This will manifest itself by way of a decline in buy orders on exchanges for firstcoin. This in turn starves firstCoin of its only revenue source, leaving it unable to meet its ROI obligations.
The FirstCoin Club compensation plan states that ‘to buy firstcoin is possible only with bitcoin‘, so recovering stolen funds from FirstCoin Club’s admin scammers is realistically unlikely.
Although convoluted through the use of public exchanges and MLM business model, firstcoin is simply yet another pump and dump altcoin.
The problem is firstcoin was created solely to facilitate Ponzi fraud, in much the same way bitcoin can be used to power Ponzi schemes.
The biggest issue Firstcoin will challenge soon is the source of their money, because they were founded by defrauding the Turkish people who invested in Coinspace on turkish market.
Since they used several private and even business accounts, this will be revealed with criminal investigation going on in Turkey.
Among people connected with Firstcoin are: Selcuk Ozkan, Ahmet Altun, Ali Dinler and bunch of other people previously working for the same company, among them Ante Kelava, Siegfried Boschieri (they were supposenly also involved in the management of the previous company) and Alexandru Saiu, Cristina Cattaneo, Armando Perna and all others who were participating in the already mentioned ponzi scheme which was operating in Turkey named Coinspace.
Now they switched to this new Ponzi operating scheme and what is more interesting is that they are using the live blockchain, which seems legit on the first impression, but when you check all the facts behind, you will see that they are really using the blockchain to operate the Ponzi pyramid scheme.
Their ROI of 7.5% or more monthly cannot sustain the long term business operation even if they think that due to the recent boom of the cryptoindustry will hold still for a long time.
The primary market for FirstCoin is Livecoin (currency pair FRST/BTC), at 97.03% of daily volume.
Market cap history:
April 26th, 2017: FirstCoin ended the day at $1,960,500.
June 21st, 2017: FirstCoin reaches market cap $10,583,500.
August 14th, 2017: FirstCoin reaches market cap $27,815,600.
September 13th, 2017: FirstCoin reaches market cap $50,561,600.
October 1st, 2017: FirstCoin reaches market cap $110,520,000.
October 13th, 2017: FirstCoin reaches market cap $153,922,000
Thanks for reading!