The phrase “an honest Ponzi” is an oxymoron. It’s a contradiction in terms. A Ponzi scheme is a fraud, or a lie.
Let me explain the title quickly, by sharing the story of when I first heard this phrase.
I was talking with an older Las Vegas businessman. He asked me about TEXITcoin. I explained it.
He said, “I hope you won’t be offended, but I wanted to ask you something”.
“No, I never get offended,” I replied.
So he asks, “This TEXITcoin thing is a bit like a Ponzi scheme, isn’t it?” He said it like it was in confidence — as if he was hoping he would get me to admit it or something.
I have learned to be diplomatic when I disagree, so as to try not to directly tell others that they are wrong, but to slowly help them see things more accurately. I gave an explanation very close to the following:
“I think that’s an honest and good question, and I’ve looked into that myself, so that I could help give the answer to others who may have that same question, so let’s get into the details. Let’s examine a Ponzi scheme, and see how it differs.
Bernie Madoff ran a Ponzi scheme. He took people’s money, claimed they had liquid investment accounts in his fund, and said they had about 10% returns each year. But he lied and made no investments. He claimed he had found arbitrage opportunities in the market, and nobody knew how he was generating his returns.
Ponzi schemes collapse because they promise an ever-growing liability of debt that can’t be paid, and they pay out the initial investors with the money from later investors.
In contrast, when you buy mining hashpower at minetxc.com, you don’t have a liquid investment account. If you buy the hashpower for $995 to $8955, that’s a sunk cost. It’s gone. So the company does not owe you that money back at all. The money is spent on computers, operating costs, and a good chunk is paid out in affiliate commissions.
The crypto TEXITcoins that you get are from the computers that generate them, and they are not in the form of dollars; instead, they are in the form of cryptocurrency. Also, the value of the TEXITcoin cryptocurrency is set by the open market.
So the company does not have an ever growing liability, since they don’t owe you your principal investment back nor do they owe you any interest or returns on that purchase. The purchase of hashpower is specifically not an investment account. Rather, it’s an opportunity.
With no ever-growing liabilities, it’s not a Ponzi. They have real expenses: to buy the computers, pay the electricity, pay staff, pay commissions, and promote the coin, etc.
Cryptocurrency is created as debt-free money. It is free from the burden of usury. That’s one of the main features. It’s not lent into existence. There is no debt to repay. It does not enslave anyone into any debt, not even the ones who create it. It’s wealth generation, because the substance, the cryptocurrency has value. Value is created because TEXITcoin has monetary properties that in many ways are superior to gold and silver. It’s harder to counterfeit, it’s faster to trade, it’s harder to steal, it’s cheaper to trade, it’s off the grid, it does not have to be physically shipped anywhere, it’s lighter, and can’t be stopped or seized.”
After my explanation, he replied, “So it’s an honest Ponzi”.
His reply was so funny. I think he was trying to make me laugh, or maybe get under my skin.
Not wanting to be disagreeable, I can’t remember what I said, but maybe I said, “An honest Ponzi. HA! Only because it’s not a Ponzi.”
Upon hearing this story briefly, Bobby Gray, founder of TEXITcoin, asked me to write it up, and to clarify the differences.
First, I found there is no legal definition of a Ponzi scheme. The law never mentions Ponzi, which is the name of a man who ran one of the most famous Ponzi schemes, hence the name. There are the basic elements, but they are prosecuted under the fraud statutes and laws, such as securities fraud, wire fraud, and mail fraud.
Grok3 noted: A widely cited description comes from In re Madoff Inv. Sec. LLC, 654 F.3d 229 (2d Cir. 2011), where the court characterized a Ponzi scheme as involving:
Promises of high returns with little or no risk.
Payment of returns to earlier investors from new investors’ funds.
Lack of legitimate business operations to generate promised returns.
Eventual collapse when new investor funds dry up.
Interestingly, Madoff, like Ponzi, both claimed to earn their high returns through arbitrage. And neither of them did any such thing. Arbitrage is when you buy in one market, and sell into another market. Doing this can quickly narrow the price, and eliminates the profit opportunity.
In further contrast, Bobby Gray regularly notes that the TEXITcoin project is filled with risk, saying that “this is crypto” and “this is scammy like an MLM”. But it’s really an affiliate program, not technically MLM, because payments are capped, which differentiates it from an MLM. In fact, the MLM professionals hate the cap, and don’t quite understand it at first, but when they do, they love it, because it means the company won’t collapse like pyramid scams collapse.
Again, in contrast, there are no promises of returns, because it’s crypto. Furthermore, only affiliate payments are from new investors, which is how all affiliate programs operate. It’s like a finder’s fee, or a payment for advertising after it has worked, and is perfectly legal, lawful, and legitimate.
Again, in contrast, there are legitimate business operations. There is the purchase of computers, the crowdsourcing of the 100 million megahash mine to operate and create the cryptocurrency known as TEXITcoin. Part of those operations include getting listings on exchanges, and engaging in market making services to help provide a more stable price for the coin on those exchanges.
Again, the final contrast is that the crowdsourcing to fund the growth of the computers to mine TEXITcoin is planned to end, and that is planned to be the beginning of the journey to higher prices for the coin.
Now. I’ll admit. With payments out to earlier investors via the affiliate program, and with money also being allocated to support the price of the cryptocurrency, it might feel intuitively like these are Ponzi-like elements. However, that is not the case. Because if we compare TEXITcoin to how companies issue stock through private placements, and engage in stock buyback programs, these actions are similar to those legal activities.
What is different here is that TEXITcoin is not a stock, and it’s not regulated by the SEC. Although the SEC has attempted to assert authority to regulate cryptocurrencies, the current Trump administration has put a stop to that, and has said that it is friendly to cryptocurrencies being issued in America.
What’s also different is that minetxc.com is regularly selling mining hashpower daily. There is no stock, there is no private placement to people who must invest a minimum of $50,000 to $250,000. Rather, it’s ongoing crowdsourcing to as many people as possible for wider distribution, and purchases are capped at 900 hashpower per person, or $8955. There also is no hold time period on the coins one receives, they can be traded immediately.
It’s almost as if Bobby is doing everything different, on purpose. It’s different than all the Ponzi schemes, and different even than how mining companies did business.
Instead, unlike silver mining stocks, which is what I was familiar with, which were extremely unpopular, cryptocurrency is extremely popular. Instead of letting large wealthy people buy in, who can crash the stock, Bobby is seeking widespread adoption to as many people as possible. Bobby is specifically creating a decentralized, widespread participation, right from the beginning.
I am no longer being paid to write specific articles. Instead, I’m compensated through the affiliate program. If you sign up to mine TEXITcoin, please use our sponsor ID: JHOMM
To start mining, you need to first purchase cryptocurrency, the stablecoin USDC is preferred, on another independent exchange, such as Kraken or Coinbase. We now recommend kraken.com
Then signup at minetxc.com
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