Ice Rock Mining, A Controversial Project with Bogus Claims

Ice Rock Mining

Ice Rock Mining has been in focus these past days when some investors started complaining that the project’s Telegram channel admin removes investors for complain of inconsistencies in the company’s present policies contrary to its pre-ICO promises.

These days, it is not surprising to see that a project that held an ICO and did everything right turns out a scam. When a project couldn’t get its acts together or hype its token sale, it is easy to suspect that you’re dealing with another crypto scam.

Passive Income Promise

The Ice Rock Mining project sold its token promising to expand its commercial bitcoin mining project while simultaneously promising investors passive income.

The project raised concerns among skeptics over its whitepaper statement that investors would reap 400 percent profit, an assertion which mining experts say was very unrealistic. This was despite the fact that mining difficulty of Bitcoin during the planning phase of the Ice Rock Mining ICO was not as high as it presently is.

In an ideal condition, the website content may have made some sense because the team claimed that they wouldn’t be paying rent. According to them, the building housing the mining facility belongs to Malik Murzashev its CEO who donated it to the company.

All Profit for Investors?

The marketing slant of the ICO focused mainly on profit for investors even though the whitepaper could not present a fool-proof cryptoeconomics plan with which to realize the promised gains.

Among the factors it based projected gains on was low temperatures of the Kazakhstan region where the mining facility was located. The team said this eliminates the need for a cooling system claiming that the facility has a year round ambient temperature of 12 degrees Celsius.

According to the team, the cost saved from electricity bills would be ploughed into the overall profit shared with investors promising them a stable income.

More Whitepaper Claims

Among other bogus claims, the whitepaper stated,

“Because of our dividend distribution of 20%, we are able to compound returns and reinvest that money into new ASIC miners, our investors continue to hold ownership in those new mines and thereby see continued returns for years.”

Lure of Big Profit

Ice Rock MiningEven though many analysts were not impressed with the figures rolled out by the Ice Rock Mining team, promises of quick wealth has always been an attraction for many investors so the ICO managed to garner substantial funds for its expansion purpose.

Ice Rock which claimed it had more than 100 miners at the start of its ICO, it has since acquired 400 more bringing its miners to about 500 yet no dividend payments were paid investors. The company said its target is to accumulate 5000 S9 miners but the figures shown by the company indicated that its 400 percent dividend payment is near impossible based on current market conditions and mining difficulty of Bitcoin.

Bitcoin Mining Profit

One analyst said that he was sure that the project was a scam after analyzing the figures put forward by the team. Hexmann who posted an analysis on Bitcointalk stated,

“When Bitcoin first hit $10000 (December 2017), the difficulty was 1,347,001,430,558, with 9,642 PH/s hashing. These have both increased by a factor of ~4 in the last seven months.
Before operating costs, 1 TH/s would gross ~$15 per month at current difficulty if the price was $10000, whereas at Dec’s lower difficulty that would have been ~$57.

It is extremely unlikely that we will see December level profitability again, certainly in the near future. That anomalous (freak) rate of return was what IR decided to use as typical for the future, with their 357% etc.”

He maintained that the profit allocation for each token is dependent on the number of deployed miners and how much has output allocated to them saying that the expectation that investors would make any profits is wishful based on the number of miners so far installed by the company – less than 500 are working according to data released by the Ice Rock team.

Big Mining Profits Are almost Certainly Scams

One fact that investors have always overlooked is that when mining businesses promise outrageous ROI, they are either misrepresenting the facts, mistaken or scams.

On its fund allocation, analysts say that it is practically impossible that Ice Rock Mining could run its business with working cost of 20 percent revenue allocation.

With the pressure mounting on the company to start paying dividend, they have few options left since they are already one year behind the schedule of their roadmap which stated that dividend payments would begin in February 2018.

Another Ponzi in Making

Since 20 percent of the funds generated by less than 500 miners cannot pay for the company’s operation cost, they most likely are using funds contributed by the investors to run the business and may even use it to pay dividend just to pump up the coin price and investor confidence. This is not different from what ponzi schemes do.

Most IRM Investors are already fed up with the situation. Increasing number of complaints in the company’s channel has resulted in removal of vocal members.

Exit Scam?

The admin of the Telegram channel reportedly deletes posts that are critical of the project as investors express displeasure over delay in roadmap execution. Some investors deleted from the Telegram group called the project a scam.

A member of the group, Pieter Haddock said that the channel which was public is now private as the team strives to keep their activities shrouded in secrecy with increased disenchantment. These are features that characterize projects classified exit scams according to him.

Lifeline…

There are investors who still believe in the project mainly because of its listed token, but this is beside the point since the 400 percent ROI was never possible. Investors are advised to pull out their funds if they could.

The option left for the team (if the project is not a scam) would be to pump the coin a few times with accumulated funds to calm the investors.

Investing in any HYIP in the guise of mining results in losses. Investors will continue losing money to quasi-scams unless they stop seeing crypto mining and investments through the prism of minting money out of thin air.

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Author: Jofor Humani

Peddling words has been a passion beneath the surface. I speak less than I write...naturally. Aside speaking and writing, I walk too...good for your heart they say. I sometimes do not feel like writing. Then I enjoy quiet times which I use to think and stay with family.

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