Scam Coin First Coin - We need to stop these coins

I am relatively new to the world of cryptocurrencies. I have fallen in love with the technology underlying bitcoin and other blockchain ventures. It has taken me months of relentless research and education but I think I am starting to understand the cryptocurrency landscape.

Having become an advocate for cryptocurrencies I was pleased to find out my family had begun investing in some coins, rumors were some had invested big and were on course for a big payout.
My cousin approached me at a party and told me his dad was holding a "lecture" about cryptocurrencies for who ever was interested. With a little probing I found out it would be a promotion night for a smaller coin called FirstCoin. I kept an open mind and did some research when I got home. I couldn't find any reviews on the coin from impartial sources and any video or literature I could find was produced by FirstCoin itself. Their website was flashy and looks a lot better than most cryptocurrency websites. My uncle is a smart man so I thought he might have found a diamond in the rough.
"Cryptocurrencies are booming! You can get rich quick, but you have to invest now before it is too late! Look at how much money I have made, you could to, I'll tell you how. You are guaranteed to make money, with no risk. FirstCoin offer daily compounding interest at 1%, passive income, that's over 20x return in less than a year by doing nothing!" There were more promises of passive income for mining mixed amoungst talk of crowdfunding startups, green projects, ATMs, proposed travel agents and community rewards.

"You can earn even more, 3% a day, by recruiting 10 members, thats a 7000x return on your investment in 10 months and thats even before you factor in the price increase of the coin. A member who invested 3 months ago have to date has experienced a 50x increases in their investments, and this is all possible by the magic of cryptocurrency. At the moment the price of each coin in $15, and we envisage the price of each coin in 6 months to be $100, which is a conservative estimate given how we have over delivered on all our previous predictions so far. So for a $1000 investment today you can have $100,000 in 6 months without lifting a finger. If you would like to recruit family or friends, they can become rich too, you could very realistically turn your $1000 into a million dollars."

WOOOOOWOOOOOOWOOOOOWOOOOO!
My spidey senses were tingling. Alarm bells were ringing in my head. Another cliche indicating that something was wrong.

I knew something wasn't right. How could they afford to pay all this interest? I assumed the interest payed out to members were a cut of profit generated by the coin, but how does the coin create this profit?
I asked the presenter, who was an uncle married into the family, and in return I was told that profit was generated through ATM withdrawals, ethical deforestation and a plan to create a travel agent - notice no mention of the community rewards.

ATM withdrawals have been done already, haven't got a clue what timber has to do with the blockchain and the travel agent idea seemed like a pipe dream. But the worst was yet to come.

Being new to the crytpocurrency world, I wasn't confident enough to call bullshit on this idea in front of other potential investors so I kept my mouth shut whilst the presenter waffled on. To save a bit of self-integrity I voiced questions which would hopefully raise doubts in other investors minds. I asked whether this was a network marketing event, whilst my braver wife asked outright whether this was pyramid scheme. A quiet mumur broke out as she had said the dreaded "P" word.

Everything about this pointed to something dodgy but even I doubted myself as the two men organinsing this presentation were two of the most honourable, stand-up, charitable characters we knew. Pillars of the community and role models to society. Well behaved and well spoken. Religious, refrains from intoxication and gambling.
These two men were in turn sold the get rich quick dream, and being ethical men believed they had to share this new found knowledge on how to become wealthy. They bought as much as they could afford and were told how to get even more money. With a rise in price they were thinking of early retirement, inheritance for their children, charitable projects they could fund. Recruiting people to invest using their programme boosted their returns whilst simultaneously allowing their friends and family to join them in this new voyage of wealth.

I asked at what point do you lose money. They did not understand the question. So I rephrased the question. "What price does the need to fall to for me to break even in 6 months time if I were to invest now?" The answer I received was that "this is impossible". I was told that if I looked at the charts and the trend, it can only go up. They seemed to believe that the worst case scenario was the coins increase in value stagnating and the price remaining constant. This is when I knew we were in deep trouble. These people did not have a clue about cryptocurrency and have markets works and were prepared to bet their savings on this working.

There was a point in the evening when the newly turned salesmen had to trim the herd to route out the compliant dreamers from possible dissenting voices. The presenter was moving from Phase 1 -Passive Income, to Phase 2 - Active Income. If you wasn't interested, you were allowed to leave. I knew I was not going to invest so I left knowing Phase 2 would be about recruitment of other members and how that could significantly enhance your earnings.

I believe my scarce words on the day stopped a couple of people from investing in FirstCoin, my wife words a few people more. But plenty of people did end up investing. I have now confirmed FirstCoin to be a scam. A baby brother to BitConnect for those who know.

What shocked me was how little fundamental research people put into understanding the blockchain technology,how it works and why it was created before investing. FirstCoin is a premined coin that you buy in exchange for Bitcoin and "lend" back to the FirstCoin club in return for interest. Your coins are LOCKED IN for a minimum of 6 months and you don't receive significant interest unless you invest a minimum of $ 1200.

The price since December, the day of the presentation, has plummeted from $15 to 50 cents, a 97% decrease!

They don't realise that cryptocurrency was never made to be a vehicle for making fiat currency millionaires. The recent market crash has seemed to flush out most of these scam pyramid coins like Bitconnect and FirstCoin, unfortunately at the expense of late adopting naive investors. Be careful of ICOs spreading this virus. I believe that regulation can be crucial in stopping these Ponzi schemes which are illegal in the "real" world but until then stay vigilant. Cryptocurrency, when done right is a way to escape the fiat sytem. A byproduct of its adoption will be gains in fiat wealth but the end game is always to disrupt and replace the fiat currency system. Fiat is king now. As crypto gets more popular the price will rise as is basic laws of supply and demand. Once crypto is accepted and fiat is denounced, we will see the first generation of a new global economy free from governmental and financial tyranny.

Thanks

TheIronFist