Podcast: Safcoin – stay away

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Safcoin – stay away

I first saw them on my Google news feed, a promoted story on IOL.

Safcoin, not illegal but it is going to end in tears. That I am certain of. They’re pre-selling 500,000 in an ICO at R70, then there are another 5million. In short the market will be flooded with these coins that have no use and sellers will drive the price to zero.

Read their white paper and then compare it to the white paper for Ripple or Ethereum. This white paper is just marketing material.
Where does the money from the ICO go? A white paper should detail expenses etc. With Safcoin we can only assume that the R35million (500k coins at R70) goes to the founder (Neil Ferreira).

What of the other 5million coins? Who holds them? Again I assume Neil Ferreira. What I also don’t know is are the initial 500k ICO coins included in the 5million or added on top?

How do I mine them?

Who is the team behind Safcoin? On Twitter Neil Ferreira said they had a team of 12, but no mention of who this team is and typically one trumpets your team for their expertise.

Who are the auditors? Again on Twitter Neil Ferreira said they were SmartDec Moscow Russia but we have no confirmation of this, have asked them on Twitter, as yet no reply.

Coin limit is apparently 5.5million, but when you check the website he used to create them (yip not their own code even though they claim 12 people involved) it says 222billion coins. That’s about US$1trillion at R70 / coin! Heck out government should start a coin and clear our national debt.

Ask you self what problem does this new coin solve? If it is not solving a problem then why will anybody want to buy it? No buyers equals over supply and price crash.

Consider the fact that over half of new ICOs fail, and this is a conservative estimate. I have seen stats that suggest less than 10% of ICOs ever get to market.

Scams, Scoundrels And Multimillion-Dollar Frauds: How To Check An ICO Isn’t A Con

They mention they will list on local exchanges. Which?

Smarter people then me asked on twitter (with no answers);

  • What mining algorithm does your blockchain use?
  • What is the consensus algorithm used by the project and how was it picked?
  • Where do the tokens fall on the Howey Test?

You get paid a 5% referral fee if you send people. Referrals always bother me, they smack of pyramid schemes.

As I said up front, not illegal. But before you rush off with your hard earned money, do some homework and 5 minutes on this coins offering and it is not going to make anybody a single cent – except for Neil Ferreira. On listing Neil Ferreira could use his income from ICO sales to be an active buyer pushing the price higher, but this never works for long as eventually one runs out of money and real demand reverts to what it really is – and here it likely is zero.

I could go on and on with the issues about this new coin. Short version remains – stay away.

As this podcast goes live I will offer Neil Ferreira a right of reply (within reason) for next weeks show or on Twitter.

Perhaps the best comment is below.

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