Autosurf Central

Tuesday, June 14, 2011

10 Bitcoin Myths

Myth: Bitcoin is a currency

It is just an online wallet and transaction system for a commodity.
In the current shape, Bitcoin trading is not different from trading baseball cards. Scaled to millions of cards and tens of thousands of traders that is.

In the same spirit, used to be a place to trade fantasy cards online:

MagicalTux, owner of
initially it was "Magic The Gathering Online eXchange", it was adapted to bitcoin a while ago, and now changing the name would make the exchange lose part of its charm

Myth: Bitcoin is secure

Only as long as enough people use it.
Those who control the majority of the network control the Bitcoin network itself. It's one of the biggest strengths and flaws of the system.
As long as hash rates remain high, it is unlikely for a single individual to reach 50% of total hashing power. But once there is not enough interest into Bitcoin anymore, expect hell on earth.
The same goes for the arrival of quantum computing. When that happens, nothing is secure regardless of hashing power.

Myth: The Bitcoin network created a "perfect market"

The flea market around your block is a better market.

To make it simple, let's look at the Wikipedia definition of a perfect market:

  • Perfect market information
  • No participant with market power to set prices
  • No barriers to entry or exit
  • Equal access to production technology

Perfect market information?
Let's just look at the exchanges which play a main part in today's Bitcoin universe anyway.
While many consider Bitcoin Charts to be a perfect source of information, it is basically the only information we have. When it is down for maintenance we know nothing.
But BTC traders have a different problem: They are mostly amateurs who never had the money or training to go on the stock market. Given the vast amount of different exchanges and slow transactions, they can easily be fooled into wrong buys and sales by lack of information.
There is also no intra-exchange protocol which could even out the differences between markets.

No participant with market power to set prices?
Black Friday taught us a different lesson.
The difference between "early adopters" and June 2011 starters is so big that one early miner could crash the BTC price by dumping.
This is why enforces a daily limit on sales (which can be bypassed easily by the way). They know about the flaw.

No barriers to entry or exit?
To trade Bitcoins, you need a computer with fast internet access.
That pretty much rules out all third world countries.
But you also need a way to fill your Bitcoin wallet to get started. I would call international wires which take 5 business days to process a pretty huge barrier.
With the current trading set-up, it will take at least a week (or a $100 graphics card) before you can start using BTC.

Equal access to production technology?
This one is fulfilled at least.
It does not mean "production" of BTC by mining, but production of goods which can be traded using BTC. Mining should only be seen as a way of initial currency distribution, not as a "free production of money" which some miners believe it to be.

Myth: Bitcoin can be THE new virtual currency

e-gold, Stormpay, Bidpay, Bidpass. Many tried, they all failed.
The Bitcoin Wiki seems to imply that it cannot fail because it is P2P. It is just an advantage, it comes with many disadvantages such as scalability problems and generally means nothing.
You may remember Kazaa being peer-to-peer as well.

Myth: Bitcoin cannot be shut down by governments because it is P2P

Shutting down "single point of failures" (exchanges, pools, miners) would be enough to stop it.
Right now, 90% of BTC exchange volume is being processed via If a government shuts it down, all money from the wallet is lost forever, both "virtual" BTC and "real" US dollars and Euro.
Once investors' trust into open exchanges is broken, it will be very hard to establish Bitcoin

Myth: Bitcoin exchange rates will always rise because Bitcoin is deflationary by design

Bitcoin suffers from too much perceived value to know for sure. Nobody knows how many coins will be needed to satisfy the market in the future.

As long as the "Silk road" drug website on TOR remains to be the #1 use of Bitcoins, 21 million coins are more than enough.
There is no need for hundreds of millions of USD floating around in darknets. Buyers will realize they don't need it, sell coins and the price will go down.

If, on the other hand, Bitcoins become a huge success, they will run into scalability problems.
With hundreds of thousands of people downloading blockchains from a P2P network, it will come to an halt. In the end, Bitcoin should be seen as an experiment rather than a "Paypal alternative".
Even the developers acknowledged that.

Myth: Bitcoin is in the media so prices will go up

"Pump and dump" strategies will nullify the gains from temporary high buyer interest.
There are lots of miners and traders who got into Bitcoin when it was easy. These "early adopters" hold the vast majority of BTC right now. They must have dollar signs in their eyes and cash out on "Bitcoin victims" who believe the media hype to BUY BUY BUY.

Myth: Major online businesses will accept Bitcoins and boost their value

They cannot afford to do so.

At least not as long as BTC-USD and BTC-EUR remain highly volatile currency pairs which they currently are.
If Amazon started selling books for 1 BTC each, BTC value drops by more than ??% before they can cash out Dollars (like on "Bitcoin Black Friday" for example), they lost money.

Myth: Buying a mining rig now can be profitable

You are better off trading BTC than mining.
If the price falls, you will not have made enough money to justify hardware costs. Also your rig will not be worth much on Ebay because everybody and their grandma will dump their AMD HD 5850 cards.
There is also another benefit of trading in case of loss management:
If you are daytrading and see a downward spiral coming, you can almost instantly react.
As a miner, you have no choice but to hoard your BTC while the price goes down and hope for better days. Once prices rebound to an acceptable level, you can finally unload all your BTC into the market.
Thousands of other miners will do the same. Guess what?

Finally, if the price goes up, there seems to be the misconception that miners profit more from rising BTC prices than traders.
How could they? Miners always have the extra costs of hardware and electricity which is way more than mtgox charges for incoming wire transfers and trades.

Myth: Difficulty will fall when it becomes unprofitable to mine coins

There is too much "free electricity" around for difficulty to fall.
Short-term, mid-term and long-term.

Short-term: Look at University-backed student homes, hotels, work, parents' basement - there are so many places where mining will never become unprofitable because you don't have to pay a dime for electricity.

Mid-term: Expect tens of thousands of gamers and "computer enthusiasts" to throw their GPU hashing power at mining just for the sake of it. They have a long tradition of doing useless work despite of their electricity bills (SETI@Home, Folding@Home, etc.).
Also botnets will mine into the wallets of their vicious programmers for free, using their victims' electricity.

Long-term: Electricity will basically become free as we approach 100% power generation from inexhaustible natural resources such as wind and solar power. This might sound fictional to some of you but there are already a couple of miners using all solar power for their mining rigs.

+ Bonus Myth: Bitcoin is the greatest Bubble on the Internet

Far from it. With the USD inflation worries millions of dollars of "dumb money" are being pumped into useless Internet start-ups.

When those "real-life" tech bubbles burst, they leave unemployment, a housing crisis and crashing financial markets behind.

If Bitcoin bursts, nobody loses anything except the money people voluntarily gave to support a new idea of freedom and democracy.
Nobody of us should be ashamed to be part of the Bitcoin universe.

About Bitcoin

Saturday, August 18, 2007

The Autosurf Demise - A Summary

In my last post I explained that "get-paid-to" Autosurf sites are not nearly as attractive today as they were two years ago.
In case you have not been following the industry lately, here is a quick breakdown of the Autosurf demise:

October 2005
StudioTraffic (ST), one of the largest autosurf programs in 2005, expands to China and invests in several subsidiaries around the world in what turns out to be a last attempt to secure their business.

Late 2005
ST runs into financial problems. Their in-house payment processor StudioPay cannot keep up with outstanding payments. StudioPay accounts are frozen to prevent customers from withdrawing money.

December 2005
Many other Autosurf programs which depend on the StudioTraffic investment have to close doors. Most programs are abandoned, sold or rendered useless in another way. Even traffic-generating Autosurf sites come to a halt with the exception of some "evergreens" like BreedTraffic and which are still rock-solid programs to generate traffic in 2007.
INTGold, a huge payment processor which has been offering a card to withdraw money from online accounts, is subject to a raid and is forced to close down business.

February 2006
It is hard to keep track of the market, bad news arrive hourly. The StudioTraffic/StudioPay bubble bursts. A hacker gets access to the customer database and sells it via email. Website is defunct, nobody is able to withdraw money. Company is subject to an investigation by the FBI.
An FBI investigation is also started against another major player in the Autosurf business, 12dailypro.
After INTGold, another major payment processors becomes a victim. Being accused of supporting pyramid schemes due to the FBI investigation against 12dailypro, Stormpay decides to freeze accounts of all Autosurf program members. Even after an agreement with 12dailypro is made, both companies soon find themselves unable to maintain a business relationship.
Stormpay is out of business as an autosurf payment processor, yet "survives" as a payment processor for online auctions only.

March 2006 - Today
After that, everything went downhill. The two major programs were already taken down and most of their members lost 100% of their investment.
The smaller Autosurf programs had themselves invested in 12dailypro to be able to maintain their high interest programs. After 12dailypro went down, most programs were unable to pay their own members resulting in a collapse of the Autosurf economy.
Some members were able to get their money back by withdrawing it before the crash or by the use of legal means, but most were left with nothing but the sore feeling of "being ripped-off".

The U.S. Securities and Exchange Commission (SEC) subsequently created a set of simple "rules" based on U.S. law that Autosurf programs in the United States have to follow in order to stay in business. An advisory paper concerning Autosurf websites has also been released by the SEC to help customers understand the risks of investment programs with pyramid schemes.

Since 2006, few new Autosurf programs hit the market and even fewer old programs managed to survive the shutdowns of February 2006.
Foreign programs which do not follow the SEC rules seem to have a hard time attracting new members. Apparently, the SEC measures against fraudulent Autosurf businesses were successful to some extent.

Compared to Autosurf, FOREX trading websites as well as HYIP s(High Yield Investment Programs) picked up a lot. These businesses both show a higher amount of new members. Customers who want to invest money properly rather than getting scammed by trusting a company with a non-existent investment plan (or in one word: actual Investors) are more likely to be busy with FOREX trading than willing to join another Autosurf program nowadays.

Related Tags:
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Friday, August 17, 2007

Autosurf Blog Relaunch


After over 1 and a half year of silence, I decided to relaunch the Autosurf Blog - with a twist. Instead of just focusing on Autosurf sites, the blog will now expose more ways to make money online other than Autosurfing. I will also comment on one or the other "traffic gem" which I hope proves being useful to those of us with a website.

That being said, the blog will be restructured in the near future with the following categories in mind:
- Making money online WITHOUT a website for everybody with an internet connection ("Get-paid-to" programs)
- Making money and generating traffic WITH a website for webmasters ("Traffic gems", Link sales, affiliate programs, "Traffic exchange Autosurf" etc.)

In fact, when it comes to "making money online" there have been huge changes since 2006 and I feel that the slight direction change will be a benefit for all readers.

In my opinion, classic Autosurfing (as in "get-paid-to-surf" programs) has dwindled up to a point where it is not worth the effort to join any Autosurf website anymore. However, the traffic generating programs still prosper and I will continue to comment on those and recommend the ones I still use - some of them for over 3 years straight!

From now on, I strive to regularly present you the best opportunities to make money in a compact format.

Tuesday, February 21, 2006

StudioPay hacker sells personal data via e-gold

And so the payment processor madness continues...
StudioPay, StudioTraffic's very own withdrawal option, has been hacked. Appearantly, the hacker was able to collect the personal data of all members and it seems that they were not encrypted.

I don't know what to say. Every site can get hacked, but you cannot have data like bank statements and passports lying around on some hard disk completely unencrypted. Breathtaking!

I just received this mail from "Hack990" via a yahoo email adress:

All member identifycation data has been stolen

read full story at:

Offer :
1. Completed cheerleader / studiopay staft identification
for sell...

1 set , including :
- passport scan,
- Bank
statement and bank information.
- Bill statement
- Credit card front and
back image scan
- Photo Id
guarantee : name and address is same for all

Only $50.
Make payment to account number
: ******* ( hack990 )
in memo, place your email

Remove Identification .

If you feel, you have submit your identifycation
at , send me $25, And I'll remove your identifycation in my
hardisk, and will not sell to anyone.

inform me what is your full name,
address, and what identifycation you have submit at studiopay. I'll search your
type identifcation in my hardisk, and will deleted it.

Only $25.
Make payment to account number : ******* ( hack990 )
in memo,
place your email.

3. 322500 email studiopay pay user. (very good for
advertising your hyip program )

only $500
Make payment to
account number : ******* ( hack990 )
in memo, place your email.



Outlook Screenshot:

Saturday, February 11, 2006 facing 19,000 customer complaints

Internet payment processor is currently facing over 19,000 complaints by members of various autosurf programs.

The storm arose when StormPay froze about 40,000 accounts in an act of "Consumer Protection" as the word was out that 12dailypro and other paid-to-surf programs did not pay their members for over 3 weeks. On Feb. 1, StormPay smelled fraud and froze accounts of owners and members.

While members were left shocked or clueless because of the weak information about the whole case, a dispute between StormPay and 12DP about the 12dailypro business model and paid autosurfing in general started. Many sources say that the program is currently under investigation by the FBI but there this cannot be confirmed thus far. Supposedly it is investigated for being a pyramid scheme but there is no valid source available to confirm this either.

The situation got out of hand when was hit by a DDOS attack (Distributed Denial of Service) and was rendered useless for more than 2 business days.
The story was picked up fast by various online newspapers and the autosurf business once again hit the news in a negative way.

Appearantly LifeClicks, the company behind 12dailypro, and StormPay are in the process of coming to an agreement regarding the frozen member accounts right now. Before, 12dailypro was believed to contribute to about 2% of all StormPay transactions.