Saturday, 4 February 2017

Analysis of OneCoin blockchain - Part 7: "Mining" outside the "Blockchain"

A. Summary of Conclusions
  1. We found new absolute proof that the OneCoin "Blockchain" is a fake mimicry of www.blockchain.info, in other words, it is a Blockchain simulation program.
  2. We found new absolute proof that OneCoin Founder Dr. Ruja Ignatova lied when she said that all transactions that are done by OneCoin members are visible in the Blockchain.
  3. For none of the "mined" OneCoins a Transaction is visible on the Blockchain screens, while the onelife.eu website states that detailed information on each mined block and performed transactions is visible.
  4. There is no relation whatsoever between the "mining transactions" which create OneCoins in the OneCoin Account on the one hand, and the Block and Transaction data which are shown on the BLOCKCHAIN pages on the other hand.
  5. New OneCoins in the Onecoin Account are the result of a straightforward division of the number of Tokens by the Mining Difficulty. This calculation is executed immediately after submitting Tokens, even when the Blockchain is down.
  6. Amount of Onecoins in the OneCoin Account = Number of submitted Tokens divided by the Mining Difficulty (value 79 during this investigation).
  7. Even after a maintenance periode longer than 26 hours, the number of Transactions is very low. The first 100 Blocks contained only 1 Transaction for 50,000 newly "mined"OneCoins. This means that the software developers of the Blockchain simulation program failed miserably (or the users did not read the manual).

    NB: we will dedicate a special article to the Blockchain and Transaction data which are visible, i.e. the Blockchain simulation program.



B. Explanation of technical terminology concerning "cryptocurrency" and "blockchain"
Note: some of the information we present in this paragraph is - maybe surprising - consistent with the definitions we found on the onelife.eu website. However, it is NOT consistent with the actual behaviour of OneCoin transactions and Block and Transaction data visible in the "blockchain explorer"; these data are completely fake.
  1. Cryptocurrency exists in a data storage - shared ledger - called the blockchain. Without a blockchain there is no cryptocurrency, since the coins can only exist in the blockchain. 
  2. Mining is the process of finding new blocks which are added to the ledger, the blockchain. All coin transactions must be recorded in the blockchain. Miners are rewarded for their work by giving them newly mined coins and/or fees. Without mining, coins cannot be created and other transactions (with coins which have been mined earlier) cannot be recorded in the blockchain since no new blocks have been created. 
  3. In the deceptive "world of OneCoin" promotional tokens are used for mining (i.e. tokens are needed as the resource of the actual work of mining). Onecoins that are created in the process are paid to the owner of tokens that were spent in the mining process. Without mining nothing consumes the tokens and there is nothing to pay for since no tokens are spent.
  4. Despite all the facts above, when we executed this investigation it was possible to convert tokens to OneCoins during a period when no blocks were created.

C. Objective and Procedure
DISCLAIMER: the authors of this article have tried to execute an objective investigation. None of the data have been manipulated.

The complete procedure is step by step reproducible by anybody with a OneLife account with "promotional Tokens".

The aim of this analysis is to submit Tokens for the "mining" of OneCoins, to check the consistency and completeness of the block and transaction data which are visible in the Blockchain explorer on the OneLife backend website, during a period when the Blockchain (explorer) was down for maintenance.
The consistency with info presented by the company on the www.onecoin.eu web page and statements by Ruja Ignatova during an interview were checked also.

Information supplied by the OneCoin company
The Frequently Asked Questions page contains the following info:
  • "At OneCoin, we are able to execute your transactions in a minute thanks to the powerful blockchain – a technological innovation that stores cryptocurrencies. The OneCoin blockchain is based on protocols that authenticate, validate and store information in consistent, unbroken sequences."
This info on the cryptocurrency page is also relevant:
  • "OneCoin is not a pre-mined cryptocurrency, meaning that the OneCoin miners create the market. By mining the coin, transactions are added and recorded to the OneCoin ledger, comprised of all past transactions. The ledger resembles a chain of blocks, which confirm that a certain number of transactions have been made.".

Finally there is a relevant text underneath the animated GIF on the Blockchain page, especially the sentence in bold:
  • "IMPORTANT: The above graphics is used for pure visual purposes and should not be perceived as a real representation of the blockchain system. The blockchain is based on a pre-programmed mathematical algorithm which allows for finite amount of solutions to occur - also called mining. You can see detailed information on each mined block and performed transactions in the tables above."

Example of Blockchain page:


Statements made by Dr. Ruja Ignatova, Founder of OneCoin
During a recent interview published in December 2016 Ruja Ignatova said the following about transactions which are recorded in the "block" which is "running":
  • "We want to create something like Paypal, saying it very very simple, but in the cryptocurrency world, and we all know how simple PayPal goes, you just press a button and you send from A to B money for the merchant. It's quite expensive, but it's very simple. You know you join a big network and you just can take money in from all over the world. I can send money to Australia today if I decide to and it's very very simple, so for us this is also why we did the changes on the blockchain. We decided to make it a very fast blockchain, so it runs every minute, in average this means that every 30 seconds your transaction gets approved, because you know ... you know you join like within the block running, and this is as fast as Visa and Mastercard do transactions."
During another interview with Pehr Karlsson and Udo Deppisch, Ruja Ignatova gave the following answer to the question "What is the blockchain?" (Source: YouTube: Exclusive interview with Dr. Ruja Ignatova, PART I, May 2016)
  • Pehr Karlsson: What is the blockchain?
  • Ruja Ignatova: Well in the blockchain, Pehr, it is something that makes cryptocurrency very very transparent and a bit more tangible. So what you can see in the blockchain is all the transactions that are done by OneCoin members. So if somebody trades a coin, if somebody transfers a coin to another one, you see this transaction in the blockchain and all transactions are in this blockchain. So it's like a ledger where we record all transactions.
  • PK: So it means we can trace every transaction, from me to you, to him?
  • RI: Exactly, exactly. And the second thing that you can check in the blockchain is, every coin mined is recorded in the blockchain. So and this is also what our auditor audits every month, that all transactions that are done are really collected in the blockchain and that all coins mined are really also recorded in the blockchain.

Procedure
We used the following procedure during this analysis:
  1. Submit Tokens for mining, four times in a row, during a period when the OneCoin Blockchain (explorer) was down for maintenance. With the current Difficulty set on value 79, each Token should generate 1/79 = 0.01265823 Onecoin, or "ONE". The sequence of submitted Tokens was 1, 2, 3, 4 respectively.
  2. Check on the Tokens Account whether the Tokens are submitted for mining at which points of time and which Difficulty was applicable.
  3. Check on the OneCoin Account how many Onecoins are mined at which points of time and which Difficulty was applicable.
  4. Check on the Blockchain and Mining pages which transactions for mined Onecoins are visible. Four transactions are expected if all mining actions are succesful.
  5. Check on the Mining page if the "your pools" and "coins mined" data are complete and consistent with the other visible data.

B. Fact Finding and Analysis
B.1 Observation that Blockchain (explorer) was under maintenance
On 31 January 2017 around 20:00 GMT/UTC we checked the "blockchain explorer" on https://www.onelife.eu/backend/cryptocurrency/blockchain (login required) and observed that this page was "UNDER MAINTENANCE":


We made a couple of screenshots and posted a Tweet "for the record" , to register the timestamp of this observation: 31 January 2017, 09:23 PM GMT/UTC.


NB: at that moment it was more than 12 hours ago since the last block was created: Block #171066 (login required)

Screenprint of MINING page with hyperlinks for last 6 Transactions at that moment:

The last Transaction, Transaction ID starting with 7434b1c55 was not included in a Block yet (just as the last but one Transaction):

B.2 Submitting Tokens for mining
Nine hours later, 1 February 2017 around 05:10 AM GMT/UTC we found that the Blockchain (explorer) was still out of order and we decided to examine if submitting Tokens for "mining" was possible in spite of that.

The process of submitting Tokens started on 1 February 2017 around 05:15 AM GMT/UTC. We executed four submit actions with 1, 2, 3, 4 Tokens respectively. The entire process took about 15 minutes, including the production of a number of screenshots.

The following Observations were made during this process:
  1. All transactions in the Tokens Account and OneCoin Account were visible immediately after submitting Tokens.
  2. Mining pool data "YOUR POOLS" and "COINS FOUND" became visible with some delay, after the transactions on the Tokens and OneCoin Account became visible.
  3. Transactions in the OneCoin Account first got status "mining" and after some time status "escrowed".
  4. Because we used an IMA account with a CoinSafe Account with the "Auto-Saving" feature, all OneCoins were automatically transferred to CoinSafe.
During this process we made a number of screenshots to illustrate the procedure and findings.

MINING page, first Submit of 1 Token:

OneCoin account after first Submit of 1 Token, with Transaction status "mining":

OneCoin account after second Submit of 2 Tokens, with Transaction status "mining":

Confirmation dialog for third Submit, 3 Tokens:

OneCoin Account, transactions with status "escrowed", "approved" and "mining":

Tokens Account after 4 submit actions:

MINING page with "Mining Pool IDs":

OneCoin Account, all Transactions "approved":

B.3 Tweet to register timestamp of end of investigation
We posted a second Tweet "for the record", to register the timestamp of the end of this investigation: 1 February 2017, 05:38 AM GMT/UTC.


B.4 Blockchain (explorer) active again
During this investigation we were not sure if the complete blockchain (i.e. the database/ledger and all software updating it) was down, or only the "blockchain explorer", i.e. the front-end software which shows the Block and Transaction data on the onelife.eu website.

The answer came almost six hours later. Block #171067 was created on 1 February 2017 11:25 AM GMT/UTC.

This block contains three Transactions: one for 50,000 new "mined" OneCoins, and the last two Transactions which were registered immediately before the maintenance period started.

The last two Transactions, created immediately before the maintenance periode started, ended up in Block #171067:

Block #171068 contains only 1 Transaction for 50,000 new "mined" OneCoins:

Block #171069 contains only 1 Transaction for 50,000 newly "mined" OneCoins:


Block #171070 contains only 1 Transaction for 50,000 newly "mined" OneCoins.
Note: this block is created with a delay of 1 hour after Block #171069.

B.5 Investigation of Block numbers #171067 until #171175
We found that the first 100 blocks after Block #161067 had only 1 Transaction for 50,000 newly "mined" OneCoins. If the Blockchain explorer would represent real transactions, a relatively high number of other Transactions should be visible. This is new proof that the Blockchain explorer is nothing more than a blockchain simulation program.

This table contains an overview of the data of a number of Blocks from Block #171067 until #171175
HashHeightTimestampNumber of
Transactions
Output total
d34d4f7d9aedb5196169965c4b35651ab7db8207940654e73dfff0746a7419e517106701/02/2017 11:25:50356837.55273433
a324d12b9ebd2113bbb819585fa658defcaf88712acdd871214792f4aeba3fdb17106801/02/2017 11:26:52150000.00000000
a0c45591a6111fda3978d463bdae91f505ecaa2b73a6dca519d008135f669a0b17106901/02/2017 11:28:14150000.00000000
9de45940cdf96621d1ed05a2224d37b9667dc1e0f034cc1f6e5ae8bd9992a7f117107001/02/2017 12:26:36150000.00000000
5453d74e967e8eb725a603e7d533f4a3bd9303253692899f52c27f291f140d5b17107101/02/2017 12:27:41150000.00000000
2bf32292fba929ab043cf38fb997671e5e3b0f744a828762981dd7513aa1e9c217107201/02/2017 12:28:50150000.00000000
...............
e91ebdca594c8300896d5d6aa945ce2c380d875b90a8de6477fb199f8217d5cd17116401/02/2017 14:11:43150000.00000000
01cb90d8a9eb8b49384f648adb33b00a99d3c489e08a824163418a1d7340097117116501/02/2017 14:12:45150000.00000000
7dc9ff273c3ae77730cbcb7a1e23619be08df389303df68b2505465c8b342ae217116601/02/2017 14:13:45150000.00000000
2338dca3affd90a5aa6397f763c4b8cb836ad2c64544bd1fe142f70bdd6f071f17116701/02/2017 14:14:49254221.72413445
5c270e05cda9c7f8a42b9e967d1c10c3d5c0c96516bf154de3002da0a9b0364917116801/02/2017 14:15:49355378.65759623
b9815f1e28ab38aac5d2008fe078dd241b5fecd40c59885af251e0a1c82c0f6317116901/02/2017 14:16:49150000.00000000
f88ea5af259b294e7eeee195679fa01c322b4aabb050d2327a43473facbbb18517117001/02/2017 14:17:48474486.47337973
3360652e9f37b97f2a87371d0c920383b3637c01062435b3c651d53d8d8fe39817117101/02/2017 14:18:48362523.77384113
f40f8cda7b327f9b32b6b0d95cd7b03303e53948f6647b9c75f3174f8a4d4fb717117201/02/2017 14:19:47589493.71640023
3a878b17b9bdf32973424b13794913302a62416a1d1f709c7d77355d90cbdcf817117301/02/2017 14:20:52250821.87174169
a0638deb8865cfcbbd4ef6c49f14d702991caa2dd150d72051f59ff6a410908617117401/02/2017 14:21:54251653.60766685
8ab4e0a42d848a29e05ac92562fdb433f4ec9f4a6244a8f0fe6953d4016e341317117501/02/2017 14:22:53250180.82476305


2 comments:

deckfromacard said...

I think I should write here in English what I already wrote to MuroBBS:

Originally OneCoin web page had a funky number animation which was told to "show the mining in real time". It was pointed out to be just a looping video clip. The video was removed and the general comment on it was that "of course" it was just a mock-up because there is no way to show the mining in real time on a web page. (Even though they originally said they do exactly that!)

Or then the "shopping platform will open when 30% of coins have been mined". That milestone came and went without any news other than general cleanup of anything even mentioning the 30% milestone. The affiliates said that the 30% was "of course" just an approximation and company will inform about the merchants once they're on board. (Never mind the same affiliates advertised the incoming milestone in their recruitments!)

So I expect the same to happen with blockchain explorer; now that it has become obvious the blockchain explorer is just a facade, it will be removed from the backoffice, all the mentions of "the members can look at the blockchain history" will be removed and "of course" it was just for "illustrative purposes" and was never to be taken as it would reflect the real blockchain.

So far it seems the investors are capable of adapting to the changes that also affect the past. It is very much the same method that can be seen in Nineteen Eighty-Four by George Orwell. The newspeak word is "doublethink".

OneCoinOneLifeFacts said...

We would be very disappointed when they would take the blockchain explorer down completely!

Our next article will discuss the characteristics of the current blockchain simulation program. It will contain a number of hints and tips to make the block and transaction data more credible than they are now.

In fact we hope that they will use these tips to develop a new and improved "Version 3" of the Blockchain explorer. It wouldn't matter, this would only produce more evidence and the countdown to the collapse of this system has started anyway.