S-Coin: The New Cryptocurrency, or Another Scam?

You might not be able to find anyone who hasn’t heard of bitcoin by now. It’s the most popular cryptocurrency on everyone’s lips. Bitcoin made its debut in 2008, and it was created by Satoshi Nakamoto. His vision was a currency built on ‘a system of electronic transactions without relying on trust.

Bitcoin wasn’t the first (and won’t be the last) cryptocurrency ever created. Today we have many digital currencies, such as Litecoin, Peercoin, Namecoin, QuarkCoin and more.

Bitcoin and other digital currencies do have their associated risks. But they’ve also got innovative technology behind it.

If you were to transfer bitcoins from one person to another, you could do so via the blockchain. Think of it as a public ledger which records all transactions ever made. The creation of more ‘blocks’ (transactions) allows the ledger to grow, thus increasing the size of the blockchain.

The reason I say this technology is innovative is because of all its possible uses.

It can track ownership of digital and physical assets. It can be an alternative voting system. It can create digital contracts for marriages, financial contracts and ownership. And it could even track the supply chain of various products.

Oh, and the best part, the blockchain doesn’t need oversight by some governmental authority. Rather, it’s maintained by the market. Miners, who maintain the blockchain, do so in exchange for bitcoins.

Each time a miner validates and creates a new block, they receive bitcoins. This is how new bitcoins enter the system. Miners receive 50 bitcoins for the first 210,000 blocks they create. For the next 210,000, they receive 25 bitcoins. The reward continues to halve for every 210,000 blocks.

But bitcoin might not be the be all and end all when it comes to cryptocurrencies. There might be an undiscovered digital currency which takes over bitcoin and even the US dollar.

But it likely won’t be the latest digital currency, S-Coin (or Scoin).

S-Coin from CoinSpace

Scoin is the next ‘big thing’, according to its creators, CoinSpace. Scoin launches in January 2017, and registration is now taking place for investors.

According to Cryptocoins News: ‘Basically they [CoinSpace] are building a pyramid scheme (sorry, I mean binary member system).’ Coinspace is Malta-based, with a variety of websites to watch out for. A video released by Coinspace states the company will mail coins to buyers.

The smallest buy-in amount is 300 euros. But they also have bigger packages ranging up to 12,000 euros.

Coinspace bears all the hallmarks of a scam,’ Cryptocoins News stated.

One of their videos explains what cryptocurrency is and offers a weak explanation of why Scoin will be so valuable. The site gladly doesn’t mention Bitcoin very often, and strangely does not appear to encourage people to send bitcoins in exchange for Scoins. Again, one of the strangest things about this project is that they promise to mail the coins to the clients — a fundamentally awkward thing to say about any cryptocurrency. Why not just send them over the blockchain?

Marketing Xtreme shares the same views as Cryptocoins News, stating: ‘The company is pretty much a Ponzi scheme because the only source of income that goes to this company is through affiliate investments and not any retail sales.

The cryptocurrency scene has its fair share of scammers and con artists. CoinSpace is one more that you might want to stay away from.

But proceed with caution when entering into any cryptocurrency market. Remember, these markets aren’t regulated. The value of digital coins is dependent on supply and demand. Ultimately, investing in cryptocurrencies is a speculative punt.

Härje Ronngard,

Junior Analyst, Money Morning

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Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

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