In light of recent issues surrounding Game Vault Studios and their failed faucet games which are no longer paying, as well as the usual number of HYIPs and bitcoin faucets that aren’t paying, I started thinking about what the difference is between a scam site, and a site that doesn’t pay. Sounds simple doesn’t it? But, I believe there is one simple difference.
For me, it really comes down to the intent of the administrators of the site. In a legal sense, intent is also very important and it must be proven before a person can be convicted of a crime. In our case, the intent of the admin of a bitcoin site is often not as clear as we would hope.
A HYIP, or Ponzi site is clearly a scam from the start. The intent of the admin in this case is clear as they make many false promises, take money under these false pretenses, and then run when they reach their tipping point. This is clearly illegal activity, and it is the unsuspecting investor who gets dazzled and loses. These sites exist by the thousands, and I partake in them, but the difference here is that I go in as an informed investor and am prepared to lose the entire amount of money. Many people aren’t aware of these sites so I feel a mainstream campaign to expose these sites is long overdue.
A bitcoin faucet that doesn’t pay is a different story. Generally, the accepted intent of a faucet owner is that they will provide a small reward for a person to visit the faucet site, and perhaps even click on one of the advertisements. They seem to get into hot water when they over estimate the advertising revenue that they will receive. Although, there is typically no intent to deceive the user, I believe the faucet model is flawed and the intent of an owner can change quickly as they first overpay to gain a reputation, and then stop paying.
The case of Game Vault studios, who ran Farm Satoshi, Cannon Satoshi, and City Satoshi is a little bit different. The sites stopped paying in early February citing Google Adsense issues which many other bitcoin paying sites were inflicted with as well. The difference with both Cannon and City was that you could purchase upgrades to increase how much you could earn. This is along the lines of many HYIPs and is probably the reason that the admin disappeared completely from the face of the Earth (in terms of their loyal site users anyway).
I believe that this was a case of mismanagement and there was no intent to scam any users. However, it is a little concerning that they essentially created an investment site that could accept payments in return for something that didn’t exist, and then provide no company or legal information. It sort of confirms the HYIP theory. Anyway, it’s a shame, their sites were excellent and had a good reputation. Oh, well.
So, whether a bitcoin paying site owner is a scam artist or not is something we as users need to be able to work out for ourselves. However, this can be very difficult, and new users are at much greater risk of being scammed. At the end of the day, the only way to help these people, and hopefully begin to clean up some of the image issues facing bitcoin sites, is to educate and make people aware of the risks.
How can you help? By spreading the word and supporting excellent sites like badbitcoin.org. Oh, and my site of course!