Is it smart to invest in a pointless digital collectible? The people over at Bitfuy sure hope someone with access to capital will think so.
Bitfury has been one of the best purveyors of the BTC illusion in the industry. In the absence of mass adoption, they are now enticing high net worth clients to back the decaying network masquerading as Bitcoin.
With big tag-lines shouting “Strong Financial Profile” and Optimal Energy Locations,” Bifury is now going after large investors and family offices through an institutional investor program called the Digital Asset Infrastructure Investment.
The scheme claims to offers an “attractive investment alternative” for those who want to profit from block reward mining without having to do any work. Bitfury controls the process within its closed ecosystem, acting as hardware supplier, hosting provider, and administrative aid. In light of the recent market conditions, this program raises many ethical questions about their tactics.
Bitfury minimizes the risks in a sector marked with different cycles that are often difficult to predict. Bitfury says participants can track their financial “progress and profitability” on-demand online. Ponzi scheme operators often use similar verbiage, and BTC can lose its value rapidly.
Left unmentioned is the wide range of risks that many people aren’t aware of when contemplating investing in the block reward mining industry.
Bitfuy advertises that its partnership models offer strong resiliency to digital asset price volatility, yet it doesn’t seem to factor in the recent block subsidiary reward halving. They claim not to profit on the initial investment, but they benefit indirectly by offloading a portion of the operational cost burden onto new investors intoxicated by the opportunity to make easy money.
Block reward mining is a high-risk endeavor that has a limited shelf life and thin margins.
BTC derives its value from asset holders looking to get rich quick, not from utility or adoption. Selling the token is the only way you can get your money back and profit from your investment. This impetus often leads to quick plummets in price that instantly wipe out equity or, worse leave the asset holder suffering a significant financial loss instead of hitting the jackpot.
The possibility of a total collapse on the market value of BTC is always right around the corner.
Bitfury has found another vehicle to transfer risk to unwitting investors as they keep their dead-end business model on life support. Their bespoke investment plans are a fancy way of risk pooling to reduce their exposure to market volatility without diluting shareholder value.
The turnkey scheme is fraught with criminal risk. BTC has struggled with criminal enterprises using the network for money laundering purposes. There is nothing listed on the website which reaffirms that the scheme comes with the same level of oversights and protections as a traditional passive investment opportunity such as a hedge fund.
Bitfury continues to evolve, having so far survived the market downturn and stalled community growth within BTC. It has yet to develop into a sustainable business building on top of an ecosystem and technology that has intrinsic value and real-world utility. Consumers are wising up to the BTC hoax, leaving Bitfury’s operating strategy living on borrowed time.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.