- 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.
- 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.
- 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.
- 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.
- 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.
- Amount of Onecoins in the OneCoin Account = Number of submitted Tokens divided by the Mining Difficulty (value 79 during this investigation).
- 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.
- 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.
- 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.
- 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.
- 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."
- "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:
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."
- 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.
We used the following procedure during this analysis:
- 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.
- Check on the Tokens Account whether the Tokens are submitted for mining at which points of time and which Difficulty was applicable.
- Check on the OneCoin Account how many Onecoins are mined at which points of time and which Difficulty was applicable.
- Check on the Blockchain and Mining pages which transactions for mined Onecoins are visible. Four transactions are expected if all mining actions are succesful.
- 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:
- All transactions in the Tokens Account and OneCoin Account were visible immediately after submitting Tokens.
- Mining pool data "YOUR POOLS" and "COINS FOUND" became visible with some delay, after the transactions on the Tokens and OneCoin Account became visible.
- Transactions in the OneCoin Account first got status "mining" and after some time status "escrowed".
- Because we used an IMA account with a CoinSafe Account with the "Auto-Saving" feature, all OneCoins were automatically transferred to CoinSafe.
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