What Happened To PoWHCoin Cryptocurrency
If you’ve had some remote dealings with occupational hazards, you’ve probably heard of a Ponzi scheme in the realm of the listed horrors of business bogeymen. When it comes to the definition of a Ponzi scheme, Powhcoin fits the bill. Talk about every investor’s worst nightmare.
When visiting the official Powhcoin website to investigate, it was devoid of any trace of a virtual platform. Due to the fact that the scam had caused such an uproar, the issue was elevated to which the SEC (Security Exchange Commission) raided Powhcoin internet royalties and slapped an official Ponzi scheme title on its’ homepage. Ouch. There are no official statements from the creator of Powhcoin, who have hidden themselves away on a forum on the Discord virtual chat app. Their only known action at this time is they are currently in progress of creating new contracts from scratch.
Since the website was dismantled, in order to extrapolate the full story of Powhcoin’s downfall, the curious mind had to do some non-corporate espionage work, so here’s what the digging revealed: On January 28th, 2018 the seemingly not-so-humble beginnings that were Powhcoin were hacked and siphoned dry of all personal tokens which had come from crowdfunding efforts. Originally, Powhcoin had featured their virtual currency Ponzi Tokens in a rapid pay Pyramid set up, which in turn was supposed to be able to convert the tokens to Ethers (ETC) … in theory, anyways.
To further add to the shady aspects of Powhcoin, it was all developed within the framework of an ‘instant pay-off’ MLM scheme, or Pyramid scheme, as some of you may know. For the record, Powhcoin’s Ponzi Tokens could barely pass in terms of proper setup according to the ERC-20 standards.
Apparently how the disaster went down was one of Powhcoin’s users was able to utilize a ‘bug’ to create a blockchain contract which drained out all the wealth that had accumulated in Powhcoin’s account.
Rumor has it that the amount funneled out was approximately 2,000 ETC. How was this individual able to pass through the security encryptions? How did all of this happen in the first place? According to recon, most programmers were both humored and appalled at the lack of the security the nodes had for the blockchains in the Powhcoin platform. Amusingly enough, a particular contract was utterly unreadable to the database, although used taglines one would recognize if they associated with 4chan.
In layman’s terms, the issue in Powhcoin lain in the aforementioned ‘bug’ if you will; a user uncovered this glitch and was able to find a chink in the encryption armor to extort the entire ETC cache. The first step of the process was the data miner used a command chain to enable “approval” for a token transfer from another user. This process was done via nodes requesting a withdrawal from their primary account.
The pirate in question then created a secondary account in which said thief could easily transfer the Ponzi Tokens. The next step involved selling the acquired tokens to account #2, then commanding account #2 to transfer the Ponzi tokens to an Ethereum-based wallet. The final task required converting the Powhcoins to ETC, selling the ETC for USD (or desired currency), ergo continuing the chain to create an untraceable type of cryptocurrency laundering.
All things considered, Powhcoin sounds legit, right? Sure, if you’re into losing hard-earned capital that you’ve invested. What’s entertaining to note through all of this (unless you are one of the unfortunate consumers who was robbed of their livelihood), even after all of this colossal stockpile of disastrous ends, somehow the Ponzi Token is still available. The virtually worthless crypto-coin can be bought or sold in one location titled Ropsten Testnet. Do yourself and your funds a monumental favor and wait until there is a final verdict and recourse for this disaster.