Richard Heart’s Hex Token is a Brilliant Scam
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Updated on December 2nd, 2021
Before you research how to buy hex crypto, you should read this whole article before deciding if Hex is worth investing in. It is clear where I stand from the title and will provide you will all the reasons why in this article.
Is Hex crypto a pyramid scheme? No. Is Hex crypto a Ponzi scheme? Not in the SEC pre-crypto defined legal sense. But don’t let that fool you into thinking that Hex is a legitimate investment product.
The Hex.com token should go down in the crypto textbooks as one of the greatest cryptocurrency scams in history because it is heavily marketed, has a large shilling army, has a ‘hook,’ and its main product feature is to create resistance to getting out of it.
99% of cryptocurrencies are scams, so there isn’t really anything new here, but most cryptocurrencies sell themselves to average crypto speculators as being some utility token for an ecosystem that is going to be the next great thing (which rarely ever pans out). These buyers are generally aware that they are gambling, and that is fine if they accept that.
Hex is different because it’s being sold as an investment furnishing returns, uses bank terminology, and is being heavily marketed to people who don’t generally buy crypto. It’s the only cryptocurrency that I have ever heard of to use ads to market in magazines, buses, taxis, physical mail and TV trying to bring in a whole new class of victims outside the regular cryptocurrency investors.
Why Hex Is and Isn’t a Ponzi Scheme
The legal definition of a Ponzi scheme is that newer investors pay interest to the older investors. That’s not quite what is happening here with Hex as it controls its own seigniorage and the interest comes from nowhere, through inflation. You aren’t being paid with Dollars or Euros as a Ponzi scheme would.
When Ponzi schemes were defined 100 years ago, private currency ones didn’t exist, so Hex doesn’t meet the legal definition. That’s where Richard Heart and his followers stop the discussion: “See, not technically a Ponzi, therefore not scam!”
Hex can mint new tokens until the end of time, but herein lies the gist of the problem: what will those Hex will be worth when it is time for you to cash out?
A Ponzi scheme requires an increasing number of investors to maintain the interest payouts and will eventually collapse when it runs out of new investors. In contrast, Hex requires an increasing number of buyers to maintain the token price, which ‘interest’ is paid through, otherwise the token price collapses. This is what what makes Hex analogous to a Ponzi scheme, only that there is one additional step in the process.
Your true interest rate will not be what is advertised; it will depend on what you can sell the tokens for when you close out your account, which may be higher or lower depending on how much additional capital is being brought into the system at that time.
This is why the marketing effort to lure in new buyers is enormous for Hex compared to typical cryptocurrencies, as shown below.
Get Rich With Hex Media Blitz
Then watch this comical TV commercial that aired on MSNBC with yachts and money flying around with the spokesman saying “people are getting rich, truly rich” before it even officially launched. Hex is designed to cater to your greed.
What Is Hex Crypto?
Hex is a token on the Ethereum network executed by a smart contract and the website advertises itself as a place to earn 40% per year with “certificates of deposit.”
You think that the 40% per year “interest” is your first clue that this is a scam?
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Hex bears a lot of similarities to the Bitconnect Ponzi scheme that failed in 2017. In fact, it’s almost as if the scammer behind Hex used Bitconnect as a springboard to make an improved scam. Hex has been very careful with the marketing language on the website and product design features to both appear legitimate and to avoid legal trouble.
There is even an entire page on the Hex token dedicated to why the product isn’t a scam and generously educates the reader on what technically constitutes an illegal Ponzi scheme and a Pyramid scheme and why this product doesn’t legally qualify.
Usually legitimate investment products don’t need an entire section educating you on scams and why their product doesn’t meet the technical requirements.
I think this page is actually targeted towards any SEC or financial authority law enforcement officer that happens to come across the product rather than everyday readers to preempt an investigation. Crypto is largely unregulated at this point in time so a lot of sketchy stuff continues to exist out in the world. The SEC only really seems to perk up when a product fails and lots of investors start to complain.
As mentioned above, Hex may not fit the legal definition of a Ponzi or Pyramid scheme only because this is the first time in history that the schemer has controlled the seigniorage that victims were receiving as interest. The scam wouldn’t work if the advertised returns had to be paid in any other asset that Hex didn’t control.
Since Hex is marketed to lots of everyday people, I want to make a distinction about what an audit on a cryptocurrency means, since Hex mentions frequently in its marketing materials that three different auditors have audited its contract.
To a layman, they might think that the statement means that a professional auditor like PricewaterhouseCoopers came in and reviewed it and found out it’s not a scam, or something to that effect.
But that’s not what it means. Auditing in crypto-land means evaluating the computer code for bugs. Having sound code doesn’t absolve it from being a scam if the code is written to be… a scam.
Who Founded Hex?
The founder who goes by Richard Heart for marketing (his real name is Richard J Schueler). There’s nothing wrong with using a pen name except when the point is to hide a long history of shady businesses involved in spamming Viagra and anti-aging pills (which he was successfully sued for in the early 2000s) and legal trouble in Panama.
He was even spamming courses on “how to spam” and avoid paying taxes on the spamming earnings. Fear of Missing Out (FOMO) is a great sales tactic that Richard Schueler uses continuously in everything he is involved with. Here in 2003 he offers up that he was a 23 year old multi-millionaire from spamming.
Furthermore his own blog documented other shady businesses such as selling stereo equipment he didn’t own and then turning around and giving the buyer sub-par equipment.
Does a scammer ever reform, or are they always out looking for their next mark? Do you want to put your money in a product created by a conman?
It is no surprise that since the crypto world is largely unregulated and is like the Wild West, that he would have gravitated to this space to enrich himself.
And enrich he has. Another one of the ways he promotes Hex is by flashing his riches and comically attributing the success to his own product.
Well, yeah, Hex.com has been amazing for HIM. Bernie Madoff’s scam business was amazing for him and early investors as well for dozens of years.
Social Media Shill Army
He has had a pretty public persona for the last few years doing podcasts, and showing up to cryptocurrency conferences and harassing presenters about their cryptocurrency backgrounds. For instance, when Craig Wright falsely claimed to be Satoshi Nakamoto (anonymous Bitcoin founder), Schueler, who was sitting in front, very aggressively called him out on this in front of the whole crowd. This led to a big surge in social media followers.
Ironically, he has called basically anything other than Bitcoin a scam until he launched his own offering.
Since his large group of social media followers were the first ones to get into Hex and have the most to gain from its success, his product came with its own army of Hex shillers and defenders, who call themselves ‘Hexicans.’
Hexicans are a pretty toxic group and seem to take it personally if you say anything bad about Hex. Of course, this makes sense, since if you get in early enough on any scam, you too can make a lot of money at the expense of later investors and you want to protect your pile of gains. They roam around on social media advertising it to others and attacking anyone critical of it, usually in coordinated brigades.
They follow the ABC‘s and are always looking for additional ways to market Hex to others, including creating thousands of YouTube videos and even commissioning a documentary (whose creator recently reached out to me) on Hex and Richard Heart. The funding was only trickling in for the first 50 days until someone (guess who!) contributed about $450,000 in one go, which greenlighted the project. That contributor’s account balance shows more than $330,000,000 in value, 90% in Ethereum.
What Is Interest?
When banks offer certificates of deposits they refer to federally insured bank notes and the saver is required to lock those funds up for an agreed amount of time to receive a higher rate of interest. Banks offer these because they can plan better around their federally mandated reserve requirements and lending portfolio. Everyone is familiar with them: you put in dollars, and you get dollars back later.
The Hex “certificate of deposit” is based on a smart contract on the Ethereum blockchain that follows a programmed set of rules. Similar to banks, the longer you lock up your funds, the higher your interest rate is.
But that’s where the similarities end.
You must first trade another cryptocurrency for Hex using a decentralized exchange and then when you lock up your Hex, you get more Hex tokens later.
Do you see where this is going?
This whole scam could not work if the requirement was to lock up an asset and get paid interest in that asset for an asset that Richard Schueler didn’t control and create out of thin air.
Where’s the certificate of deposit that pays 40%, or even 20%, in Bitcoin or Ethereum? It can’t exist.
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How Does Hex Crypto Make Money?
In short, it doesn’t.
When banks give you interest, it stems from economic activity. The bank takes your money, loans it out, gets a return on the money, and then pays you part of that return. A commercial bank’s business model is to capture a spread between short term and long term interest rates. They borrow short, and lend long. That’s the core of their business and why they offer savings and checking accounts in the first place: They leverage other people’s money.
With Hex, there is no underlying economic activity happening at all. It’s not even real interest.
All the Hex contract code does is mint new inflationary tokens every year and then distributes the inflation to those who have agreed to lock theirs up for an chosen amount of time (technically Hex converts to T-shares, which is just a computational efficiency that reduces circulating supply figures but isn’t germane to the criticisms I make in this article).
Those who lock up tokens also get half the penalties from those who unlock their funds early, or get this, forget to unlock their funds within two weeks of the agreed upon period. Richard Schueler generously gives himself the other half.
So in other words, the sole purpose of the Hex contract is to redistribute value from some token holders to other token holders primarily through dilution, but occasionally when someone requests their money back earlier or later.
Why Is The Hex Interest Rate 40%?
The 40% number comes from the requirement that only people who lock up their funds get paid the inflation and currently only about 10% of Hex token buyers have locked up their funds. The inflation rate is 3.69% arbitrarily, for undisclosed reasons.
You have to wonder why only 10% of Hex buyers have locked up their funds if to get the ‘interest’ you have to do so and whether that percentage will increase in the future.
Well the main reason is that Schueler owns a disproportionate number of the tokens (shown later) and has not locked them up in order to keep the advertised rate high. Since he didn’t pay for these tokens, losing 3.69% of the value every year to inflation is of no consequence if it attracts more buyers clamoring for the 40% APY and therefore drives up the price of the token far higher than his inflation losses.
This is a two way street of course. Since 90% is freely available, your bigger risk is that large quantities of Hex will be dumped and the price of the token will drop to a level far lower than your cost basis and inflation earnings. With 90% of the tokens ready to be sold at a drop of a hat are you ready to lock yours up?
We need to discuss Schueler’s use of the word ‘stake’ here when referring to locked Hex tokens.
Older cryptocurrencies like Bitcoin and Ethereum require millions of computers (i.e. ASICs) running specialized number guessing hardware all competing against each other to secure the network. It uses up an enormous amount of electricity and only those who can afford the hardware get the rewards. This is referred to as Proof-of-Work.
In contrast, the staking concept where investors lock up their funds for a period of time is the norm with newer Proof-of-Stake styled cryptocurrencies. It’s democratized as anyone can participate in rewards with any amount of money and is more energy efficient because people bet on datacenters which don’t require random number guessing hardware.
The staker needs to research the datacenter to make sure that it has a legitimate group running it, won’t behave against the interests of the network, and doesn’t have long periods of inactivity, because if it does, the staker’s money will be slashed. Therefore, it is a decentralized way for people to put money where their mouth is and as a reward, they earn a portion of the datacenter’s fees from processing those transactions.
When you ‘stake’ with Hex, you aren’t securing a network, voting on governance or facilitating any underlying economic activity at all. It’s a complete misuse of the term and there is no Proof-of-Stake at all. You are just agreeing to lock up your funds so that there won’t be selling pressure.
What a convenient product feature.
Inflation is never a good thing, but in the case of Proof-of-Work (PoW) cryptocurrencies like Bitcoin and Ethereum, it is a necessary evil to incentivize miners to secure the network. You couldn’t have PoW without it. As cryptocurrency adoption multiplied over the last decade, the growth in demand vastly outweighed the effects of inflation so people really didn’t notice it.
However, the inflation in Hex does not stem from computer work in the form of electricity like in the case of Bitcoin or Ethereum. Inflation in the Hex system is completely arbitrary, unnecessary and solely exists to create funds out of thin air to pay people. Likewise, if Schueler and the Hexicans can rope enough new buyers into the scheme to drive up the token price or keep it level, they won’t notice the effects of inflation either. Now you can understand the vast marketing and shilling efforts.
Everything else being equal, the expected return to total Hex capital from inflation is 0%.
It’s like cutting up a sandwich into smaller pieces – you don’t have a bigger sandwich.
When an equity security conducts a 2-for-1 stock split, there exists twice as many shares, but the total capital stays the same because the share price is halved.
Hex is like buying a foreign country’s currency that only printed extra bills to pay “interest.” At some point you have to convert it back to your own currency to spend it. When you make that conversion, supply and demand will reduce the value of what you thought you earned.
There’s nothing magical about the 3.69%; it could have been 1%, 2%, 5%, 10% or anything in between to create a different perceived rate of interest with a differing level of token dilution.
Richard Schueler could have written the smart contract to say that every year a zero will be added to every locked account balance. Would anyone actually believe that they were 10x richer? Of course not, so why does the more subtle way that Hex uses this principle fool so many people?
Fool’s gold does not turn into real gold.
In this section we take a closer look at some of the aspects of the Hex crypto token.
How Hex Started
Hex was carefully crafted to avoid the various legal tests of typical pyramid or Ponzi scams. For instance, it can’t be considered a multi-level marketing program or pyramid scheme because it only had one level of referrals built in to the adoption phase.
It doesn’t technically constitute a Ponzi scheme because it’s not only new investors that are paying off old investors.
Hex also doesn’t promise returns, it says that its returns are “designed by the code” as if simply decreeing investment returns could work in the real world.
If you cruise over to the very bottom of the page, you will see the disclaimers page where Richard Schueler has put in a copious amount of them.
It’s not a security, I swear!
I’m not selling you anything, it’s just code out on the blockchain!
He can personally decree that it is not a security but that does not constitute what a legal authority would ultimately rule on what it actually is. It looks like he is attempting to thwart the SEC from knocking on his door by carefully explaining why it doesn’t adhere to their tests.
The Richard Heart Initial Coin Offering (ICO)
During the first year’s claim period, you’d send Ethereum to the contract address, known as the origin address, and you were sent Hex tokens. If you wanted to change your Hex tokens back to Etheruem, you’d have to go to go somewhere else. You don’t ever get a refund from Schueler’s origin address. He keeps everything you send him, scot-free and if you want out, then you are on your own to find an exchange offering liquidity.
In interviews he always dodges the question of who owns the “origin address” that receives Ethereum and also receives half the penalty for people who unlock too early or late.
The reason why he will not answer that question is because the ICO was deemed a security by the SEC and he basically conducted an illegal one without a filing and registration. He can’t deny that he received an asset and traded it for another asset of his own product. He knows it was technically a year round ICO.
About $7 million of Ethereum was withdrawn from that origin address about a month after launch. It was conducted with 36 transactions of 1,337 ETH. 1337 is “leetspeak” for leet, which means “elite.” Hackers in the 1990s referred to others as elite if they had the best hacking skills being able to infiltrate corporate servers and websites. To me this looks like a cocky message basically bragging about how he bilked millions of dollars out of suckers.
Also, during the first year, there was nothing stopping Richard Schueler from creating a continuous loop by sending Ethereum to the origin address, receiving Hex, then sending the received Ethereum to a different address (through a laundering mixer to obfuscate this activity), and then sending it right back to the origin address for more Hex. He could mint himself as much Hex as he wanted and he did (more on that below).
How could anyone ignore that fact alone and not see how much of a scam it is?
This is really the crux of the brilliance of this scam. It’s like Hotel California: Your money checks in, but doesn’t check out.
By incentivizing Hex buyers to lock up their tokens for a number of years, it removes selling pressure and reduces the float, allowing the marketing efforts to have a more powerful effect of luring in new buyers and pushing up the Hex price.
The goal of course is to create so much FOMO that the price skyrockets and attracts an even larger set of buyers so that there will be enough salmon swimming upstream to counteract the selling pressure of early promoters.
Early investors in every Ponzi and pyramid scheme make money along with the pinnacle scammer and they will defend the product without bounds to protect their newfound wealth.
It started with lots of marketing through traditional print and online media as I showed at the beginning of this article. Schueler also paid for professional press releases to show up on financial news sites with comical claims that Hex has the potential to “eradicate middlemen payment companies such as PayPal and Venmo, as well as impact credit card companies like Visa and MasterCard.”
So which is it, a payment app or a certificate of deposit? In fact, Hex doesn’t have the ability to do any of that because the infrastructure for sending tokens or payments comes not from his token, but the platform his token is built on, Ethereum. It’s simply more grandiose claims to lure in buyers hoping to jump aboard the next Bitcoin, Tesla or transformative technology.
As stated before, this is unusual for a cryptocurrency project to advertise because search engines usually outright ban any advertisements related to crypto and print media is expensive.
Finally, the original name of the project was called “BitcoinHEX.” Remember in the previous article how I stated that usually crypto scammers seek to exploit name recognition and legitimacy by using another crypto’s name? Hex has absolutely nothing to do with Bitcoin, since it is built on the Ethereum network. But most people have heard of Bitcoin and its massive success, so he wanted to give the allure to newbies that it was somehow related.
No scam would be complete without advertising how rich people are getting along with some Lambo shilling. In addition to a bunch of exotic cars purportedly paid for with Hex winnings, there is a whole cache of items on the webpage. Clearly this is a marketing technique to bring in ‘get rich quick’ hopefuls.
Instant User Base
To get it started with an instant user base, Richard Schueler offered free Hex tokens to anyone who had Bitcoin by a deadline and then submitted a claim to the website. As I also mentioned in my previous article, it’s much easier to grow a community when you instantly mint thousands of people who didn’t have to actually commit any new money to be a part of it. And since those Hex tokens were minted out of thin air and locked for a year, it didn’t actually cost him anything to give them out.
Shortly after launch he could claim that thousands of people had staked Hex in his “certificates of deposit” even though they didn’t put a dime into them. People are herd animals and feel more comfortable if there are lots of other people already involved in a product.
Adoption Amplifier & Referral Program
Schueler incentivized people to “act fast” to get a bonus.
And users were incentivized to bring in others through their referral program. Your users become your marketing shillers for free. A few websites started up Hex affiliates just for the purpose of getting the 20% referral. They didn’t have to commit any of their own money to shill the product and earn.
Richard Got a Copy of Adoption Bonus and Referral Bonuses
During the early adoption phase he also got a copy of what everyone else got. In other words, when someone exchanged Ethereum to Hex, Schueler got half of the Hex value and 100% of the Ethereum value.
He already got the Ethereum in the exchange, so why did he get additional Hex too?
And when someone was referred by another Hex user, he also got a copy of what both the referrer and referree got. Gee that’s fair.
In case it’s not obvious, each time someone used the adoption method or was referred, it was further dilutionary to the Hex token pool by 2x the claim amount.
It should be pretty obvious the only significant whale in the Hex system is Schueler himself.
The Hex Token Distribution
Which brings us to the next point.
In an effort to pretend that there are more investors than there really are and to obfuscate the distribution of tokens, Richard Schueler created a huge number of wallets to hold his Hex stash and create an illusion of a thriving community.
One redditor analyzed the distribution of wallet addresses and found that one single address sent HEX to 173k addresses in large batches, mostly small amounts of 100 and 101 HEX and the addresses have no further activity. These are throw-away accounts since the Ethereum gas would cost more than the value of the wallet addresses to move the Hex out. Schueler loves to brag about how many unique wallet addresses have Hex, so here’s your reason why.
Furthermore, the distribution of Hex shows that it is highly centralized. This shouldn’t be a surprise given how much goes straight to Richard Schueler’s personal origin wallet and that he had an entire year to mint himself as much as he wanted with ETH recycling.
How Much Hex Does Heart Control?
Etherscan provides a tool to look at the top 500 token holders. Almost all of them were created in blocks on the same day, within the same hour. Try to find a single account in the top 150 that wasn’t funded by the origin account. Furthermore, there is a whole block of accounts that all have the same exact amount in them.
Yup, you guessed it, all funded by the origin account.
In fact, I couldn’t find a single Ether account in the list of 500, from randomly clicking, that had any activity beyond just funding Hex. Geee, suspicious.
Then check out this Ethereum address, with funds originating from a money laundering mixer all paying the gas fee on 200 accounts each with 350-400 million dollars in Hex tokens. See for yourself and do the math.
These simple observations show that Richard controls more than 50% of the entire supply of Hex. His laziness to use a single account to fund the gas fees on 200 other massive accounts is much appreciated because it made the analysis much easier to collate.
So how much Hex does he control in total? I originally speculated from the above points that an automated account analysis program would show his ownership of up to 80%. Well as it would turn out, someone has actually managed to collate the addresses funded from the origin address and found Heart controls 88% of all Hex! 88%, just wow!
If Richard himself didn’t want to pay a 20% founder’s tax on a coin, why does he deem it acceptable for you to pay an 88% founder’s tax? He didn’t even attempt to make the product remotely fair and he’s playing anyone who buys into it for fools.
I’ll note that he can’t get that value out of the system unless lots of future suckers buy in to prop up the price while he is unloading, which is why the marketing efforts are more broad than you typically see for cryptocurrency.
But why obfuscate his holdings? Would there be fewer Hex token buyers if everyone knew he controlled so much and the main point of the token was to enrich himself? I think you know the answer.
Problems With The Size of Hex
Hexicans love to brag about how Hex is a ‘top 3 coin,’ currently worth $159 Billion (their preferred coin ranking site, whose owner has admitted to investing in Hex, recently de-ranked them down to 9).
- Hexican’s preferred coin ranking list is basically anything other than the gold standard, CoinMarketCap, because it lists Hex at #201 instead of #3.
- Not only does CoinMarketCap have an evaluation process that attempts to weed out low quality projects, one of their main requirements to list in the top 200 is that a token must be listed on a centralized exchange with material volume, such as Coinbase or Binance.
- It’s curious why these retail exchanges will list dozens or hundreds of other tokens, but specifically exclude Hex when it is so large. We can only speculate as to why, but exposing their customers to all the risks I have brought up in this article could be a risk to their regulatory obligations if it ends badly for their customers.
- It’s so large, but Schueler and Hexicans always invoke the low price fallacy: “It’s pre-viral because it is only $0.26.” Bank of America could split their shares 100-to-1 and have a stock market price of $0.47 but that wouldn’t make it any less of a $250 billion company. Price has no bearing on future opportunity or cheapness without considering how much supply exists along with it.
- If Hex were to 4x in size at this point, it would exceed the valuation of the platform it’s built on, Ethereum (which reminds me of the Palm Pilot craziness of the Tech Bubble).
- Having a large market cap combined with permanent inflation is an issue. Think about how $159 billion*3.69% is about $5.8 billion in new tokens a year that must be absorbed from new buyers, and that is only if the price stays where it is currently at. Presumably many will ‘re-stake’ again and again keeping the supply off the market for a while, but that is only delaying and stacking up the eventual unwind.
- Trading volume for a token of this size is quite low. Price discovery comes from volume and basically any other coin in the top 100 has multiples more. You can compare apples-to-apples by taking the volume and dividing by the marketcap to get a ratio. A typical trading ratio is around 0.02-0.06 or more. As of this writing, Hex’s volume ratio is less than 0.00035 which means it has 1/57th of the trading volume of its peers.
- This low volume ratio is NOT a reflection of Scheuler’s outsized ownership interest or the lock-in product feature keeping supply off the market because CoinMarketCap’s volume calculation only considers the circulating supply of $43 billion.
- If you consider the entire supply in the ratio, it’s 0.00009522, or about 1/210th its peers.
- This volume disparity is somewhat of a result of not being listed on centralized retail exchanges, but it is uncertain exactly how much.
- The point being that low volume anythings are easier to manipulate.
Schueler will tell you that market cap and volume do not matter, because “you can’t make money from the market cap or volume,” but of course it matters. Market cap is essentially the “account balance” of all token holders in the system and the volume is the capacity to unload those balances.
Watch a few Youtube videos of Richard Heart getting interviewed by someone critical of Hex and see his replies. When he takes a break from all the name calling and insults, you’ll find that he is very adept at manipulating semantics and introducing red herrings into his arguments.
False Analogy to Bitcoin
His favorite rhetorical device is his comparison of Hex to Bitcoin. He claims that Hex offers the best opportunity to buy now because it’s ‘just like Bitcoin in the beginning.’ In its beginning, Bitcoin had:
- Low liquidity.
- Large founder’s share.
- In hindsight, those who held the longest had the best return.
And Hex has low liquidity, a large founder’s share and had a quick initial gain! See, same same! Buy, buy, buy!
But cryptocurrency was in its infancy 11 years ago: few people had heard of Bitcoin, it was the only digital currency available, you could only trade it peer-to-peer, and you could mine it on your own home computer. It was a big gamble that cryptocurrency would even have any value at all many years into the future because digital currencies had been tried before and failed.
When you only had a handful of people experimenting with a new technology that had a limited practical value at the time, of course, there is going to be low liquidity and a large founder’s share. However, Bitcoin wasn’t engineered to have those features like Hex was.
There are now over 10,000 cryptos covering $2 trillion in value, dozens of retail crypto exchanges, ETF like trusts that buy and hold Bitcoin, and futures contracts on it: cryptocurrency has not been in its infancy for 5+ years now.
Additionally, Bitcoin exists by itself. Hex depends on another cryptocurrency, Ethereum, because it isn’t even an independent coin; it’s a token.
To make the jump that Hex is like Bitcoin because they both, well, use blockchain, is completely nonsensical, but it has the contrast about the size of the Grand Canyon.
Ask yourself, what innovation does Hex add to the table aside from being a self enrichment scam?
Bitcoin’s purpose wasn’t to furnish its users with investment returns, which is Hex’s only purpose.
Bitcoin was invented to facilitate digital payments and solved a double spending problem for digital money. Bitcoin was the genesis of cryptocurrency and it didn’t require sending the founder money to participate in it. Bitcoin also has a fixed terminal supply.
Hex is none of that and anyone can clone it with a few mouse clicks.
What does Hex do? Spawns more Hex.
Schueler saw that other scammers were getting rich creating scam-coins and just wanted in on the action. He only put a little more thought into the storyline of why you should buy.
Hex.com Coin/Token Review Summary
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Hex is the most blatant scam coin where it is written right into the contract that the founder could mint himself as much as he wanted for the first year of the contract’s existence, that he got a copy of referral bonuses and adoption claims, and that he still gets half of all penalties and fines in the entire Hex system leading to an obscene founder’s share of 88% of all Hex tokens.
As such, Richard Heart has total control of the ‘interest’ rate everyone receives, has the ability to front run every large ‘stake’ that is ending, and his greed led to an enormous amount of capital that must be brought in to absorb the freshly minted tokens to keep the price level (around $6 billion per year, the entire size of Cosmos, every year).
I’m pretty sure that Richard Heart won’t ‘rug pull’ because a smart parasite doesn’t kill its host, but he will dump his massive holdings onto the masses over time in order to cash out if he is successful in gaining wider adoption.
The most common (only?) rebuttal by Hex shillers is it is not a scam because their account balance has gone up or they’ve actually sold and made money. Yes, you too can make money with scams if you buy earlier than the majority. People also thought that they were getting rich with Bitconnect, but only those that sold before the bottom fell out one day, actually made any money. Early investors also profited with Bernie Madoff.
Anyone who buys into this scam will feel confident about their wallet balance until the token begins a downward death spiral as a result of freshly minted tokens being unloaded and overwhelming new investors (are we at that stage now?).
Since there isn’t an economic driver underneath the Hex covers, those that actually understand the mechanics of the token are just betting that a greater fool is going to come in later and buy not only their tokens, but an additional 40, 80, or 120+% of them at a higher price years later. Anything can happen in the short term, but it requires a huge expansion of Hex buyers over time for that fantasy to materialize.
A little marketing does wonders in the crypto world, so Richard Heart and the Hexicans use that principle extensively to find these buyers but at some point the smoke and mirrors will be evident to everyone else that remains and there won’t be any buyers left.
When a token has gained 2,000x in two years as a result of marketing and manipulation, there are a lot of people who have contributed minimal amounts of their own capital, but are showing a huge account balance and are counting off the days until they can sell to someone else and realize that massive gain. These are people who are not going to tell you to hold off on buying it. It’s best not to ask the ones who benefit from your ignorance whether you should buy.
It’s right in the name: You are being Punk’d.
Feel free to comment below, but skip the insults, as they’ll be deleted.
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FREE service that masks your financial details with single use or locked to a particular merchant credit cards. They allow you to use any name and billing address on the payment to preserve your privacy and defeat mass marketing lists. Essential privacy tool. Free $5 bonus with this link. Combine with Tello and buy an anonymous phone service for maximum privacy.
Offers a completely FREE Health Savings Account (HSA) and commission free investing. HSAs have been one of the biggest fee grabs since they were created in the early 2000’s.
Offers loans as low as 1.9% APR and give you a rate without affecting your credit score.