Edit: Less than 2 days after I bought some and posted this, it collapsed! Not by being dumped, but by an exploit. See here. What a ride.
The premise of POWHCoin (Proof of Weak Hands) coin is simple, if you want to create a blockchain ponzi scheme, why not just be honest about it? Take a look at their front page
It's comedy gem. The whole site is filled with references and in-jokes to ponzi schemes (aka pyramid scheme hence the pyramids in the background). The thing that got me laughing most was their whitepaper, check it out!
So why did I buy this obviously-scam coin? Well, the coin mechanics is quite interesting. Read if yourself but it can be boiled down to 2 parts:
- Every Time a Token is purchased, the contract increases the price of the next token by a small percentage (about 0.25%). Every time a Token is sold, the next Token is valued slightly less (about -0.25%).
- When someone purchases a token, 10% Of the buy-in-price is split by the total number of coins and given as locked-in dividends to each previous investor based on how many coins they own.
And it's all done through the smart contract.
The first bullet will most likely ensure that price swings wildly, so there will be volatility. The second bullet means if you just buy some and leave it there you earn "dividends". And if you've read my previous post on KCS, you'd know I love dividends.
So these 2 bullets together mean that prices are almost guaranteed to swing wildly once there is a big buy/sell, and every buy in will net some dividends. Neat idea but time to give it a try.
I bought a very small amount of POWH just to test it out, about 0.02 ETH worth. After 3.5 hours, my dividends were 0.0002 ETH. So that's about 1% capital recovery after 3.5 hours, which if I extrapolate (which I know I shouldn't) means I should breakeven in 2 weeks.
Even when it's obviously set up as a joke, the smart contract has already gathered ~800ETH at pixel time. Even more than UET which raised 300k. And someone has even created a chart of the ETH amount in the contract!
So I'll check back in 2 weeks and give an update!
As usual, this is not investment advice and especially for this coin which is obviously set up as a joke, please just treat it the same. Said best by the site itself: "Any value you deposit into this smart contract should purely be placed because you enjoy the concept and social experiment and wish to participate. "