Is StrongBlock a ponzi? Should you be worried about buying STRONG tokens?

Have you read or heard about the cryptocurrency project and platform named StrongBlock? Have you read messages on Twitter from investors who are really happy about their investment and now they encourage everyone else to join the party as well? Or have you seen an article or a tweet stating exactly the opposite? It is possible to buy STRONG tokens and just sell them as the price increase, or you can buy 10 Strong tokens (currently worth almost $10,000) and buy a node that will generate a passive income for you in the coming months and, hopefully, years! But, is the entire project a giant Ponzi?

Many people will say a lot of things on this topic, but before we continue, let us just quickly understand what a Ponzi scheme is all about.

is strongblock a ponzi

What is a Ponzi scheme all about?

A Ponzi scheme received its name from a man named Charles Ponzi. He fooled people into trusting him with their money. He claimed that he bought postal products at a lower price and then sold them at home in the USA at a higher price. The difference between the two prices made him able to pay back investors with really high interest, way better than you would normally be able to find elsewhere in the world. This was really tempting and lots of people trusted him with their money.

The only problem was… there was no buying or selling really happening with these postal products discussed. That was just something he claimed, but it didn’t really happen. Instead, he paid the early investors with the money invested by the new investors. In other words, there was no real product involved, only a “fake product” and in reality, the scam could go on until someone discovered it all, or until the number of new investors declined, meaning that he had no way of paying out the promised interest to the early investors.

The definition of a Ponzi scheme according to Wikipedia

A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. The scheme leads victims to believe that profits are coming from legitimate business activity (e.g., product sales or successful investments), and they remain unaware that other investors are the source of funds. A Ponzi scheme can maintain the illusion of a sustainable business as long as new investors contribute new funds, and as long as most of the investors do not demand full repayment and still believe in the non-existent assets they are purported to own.

Source: Wikipedia

Now, let us return to the world of cryptocurrencies and to StrongBlock. It has been accused by many of being a Ponzi scheme, while you have no trouble finding people defending the project and not only defending it, also claiming that it is the total opposite. What is the truth?

The structure of StrongBlock today

Currently, StrongBlock is operating more than 170,000 Ethereum nodes, and more than 1000 Sentinel dVPN nodes, and since December 7th, they are also running Polygon nodes and a Ethereum 2-pool where you can stake Strong tokens and receive Ethereum rewards as Ethereum 2.0 is launched. These are real nodes, and you can use the access points of any of those nodes if you’d rather use them than the default access points used by MetaMask and other wallet services.

To run such a node, you do not need any technical knowledge. All you need is 10 StrongBlock tokens in an Ethereum wallet, and a nice portion of Ethereum ready in order to pay for the transaction fees and also the monthly $15 fee for running the node.

  • There is a total of approximately 500,000 Strong tokens.
  • You need 10 Strong tokens to launch a node.
  • You are currently earning about 0,09 Strong per day with a node.
  • With more than 130,000 nodes active, that is close to 12,000 Strong tokens given out each and every day.

The math here looks very simple. If people would stop buying nodes, the project would be doomed within a month, as they wouldn’t have any tokens to use to pay the node holders. In other words, the project is only sustainable for as long as new nodes are created at a high rate.

And this is where most people stop and call StrongBlock a Ponzi. But, does this mean that StrongBlock truly is a Ponzi scheme project?

Does all this make StrongBlock a Ponzi scheme?

Do you remember Bitconnect? Many people called it a Ponzi… and it was. But, how many times did you see an interview in which the actual creators and leaders of Bitconnect answered the questions with honesty and came with transparent answers about the situation? Never!

The StrongBlock CEO, David Moss, is having weekly AMAs (Ask Me Anything) on Telegram, and every single week he is receiving questions about Ponzi-related questions, and of course, about the sustainability of the project. And you would be surprised to see how much they are working at making the project sustainable.

The sustainability question

If you own a grocery store, you are able to pay your employees and investors regularly. But, what would happen if customers stopped coming to your store? You would be in trouble and you would have trouble paying investors and employees. It isn’t strange to hear that a crypto project would be in trouble paying investors if new customers stopped showing up. It has to be some sort of circulation. But, the team is working very hard at coming up with more solutions that can help make the project even more sustainable, and not as dependent on new investors as it is today. David Moss wrote the following regarding sustainability in his latest AMA.

For sustainability, we’ll be adding new protocols, creating fractional Validators, deploying treasury funds whose yields will support rewards, creating new pools based on rewards from Validators where locking STRONG yields higher rewards (ETH 2.0 for example).

Our vision for sustainability is to have a “basket” of different kinds of rewards, using the treasury to supplement them alongside STRONG. We are not ruling out creating our own chain and a second token as well; that would allow STRONG to move toward its stated purpose as a governance token. We’re actively exploring that right now, actually.

What does all of this mean? StrongBlock is working at making the entire platform more stable and sustainable. This is something they work on, something they discuss, something they debate, and something they speak openly about with the community. That is also why they did a halving of rewards at the start of summer 2021. This caused the daily rewards for node holders to go from 0,2 Strong per day to 0,1 Strong per day (which is now approximately 0,09 Strong per day due to fewer Ethereum blocks per day).

They later planned on going through with one more halving, lowering the daily node rewards from 0,1 Strong per day to 0,05 Strong per day, but after closer discussion with the community, they decided to abandon this. However, it shows that they are working on this, and the goal is to have a platform that will be around, ready to bless the Ethereum blockchain and also other blockchains in the coming months and years.

One of the solutions might be to reward node holders not only with Strong tokens, but tokens from the chains that StrongBlock will bless with nodes in the future (like Polygon and Fantom), and also from maybe a chain run by StrongBlock on which they can give out other tokens created by the project itself. This would also be a natural thing to happen, as the Strong token then will be able to turn more into a governance token (as it was originally supposed to be).

david moss strongblock founder ceo ponzi

Once again, the sustainability question is something StrongBlock is working with daily, and it is something every business in the world has to deal with!

It should also be mentioned that David Moss is a lead figure in the blockchain world and he has been so for many years. I don’t think such a blockchain celebrity would want his name connected to what went down in history as a giant Ponzi scheme either. If he was planning a Ponzi project, he wouldn’t add his face to it on a daily basis. He might be bald, but he isn’t stupid!

Important December 2021 update!
On December 6th/7th, StrongBlock launched their Polygon nodes. Do you know what that means? They have received actual funds and support from Polygon for this purpose (meaning that they have an actual business relationship). They have also gone through several audits for the contracts running the StrongBlock platform and the different pools and node options available there. They have also launched a reward model in which rewards will decrease over time in order to make it all the more sustainable. Those who accused StrongBlock of being a Ponzi never thought StrongBlock would ever launch the Polygon nodes (and they just called it a promise of nothing). It took a while for this to happen, but it has happened, and it is a big step for StrongBlock and the so-called node-army. This cooperation has been confirmed by the co-founder of Polygon in this press release. StrongBlock has also been confirmed as an official partner with Fantom for which they will launch nodes later.

What do we make of all this information about StrongBlock?

I am not trying to convince you, but being someone who has followed the project closely for more than a year, I am convinced that this is a project that you can trust just as much as any other crypto project, and probably even more. I dared to become an early investor because I trusted the team and the project, and I can still say the same, more than one year later.

But, feel free to be skeptical, do some more research, and no matter what you decide, you should never invest more money than you can afford to lose.

An important 2022 update on this article about StrongBlock

Whether or not StrongBlock is a Ponzi remains a question. But, it is a fact that 2022 has been a terrible year for the protocol and they can blame themselves for that. They did crucial changes to the protocol in order to make it sustainable. That is okay. But, in the midst of this, they stopped communicating with the community and it seems like they have just left it all to dry out and die. That is unacceptable. You can read more about all of this in the following article.

Earlier in this article, you can see an image saying that “David Moss might be bald, but he isn’t stupid.” Well, I am starting to have some doubts about that seeing the actions (or lack of action) from the StrongBlock throughout 2022.

What are your thoughts? Do you have any remaining questions or comments? I would love to hear from you!

13 thoughts on “Is StrongBlock a ponzi? Should you be worried about buying STRONG tokens?

    • Thomas Stein says:

      You don’t have it all in the start… I suppose! And also it was born out of a dream to support the blockchain, that is why it all started with ByoN nodes, that means, people created and ran the nodes themselves. Then they have made changes along the way, all for the sake of making the protocol sustainable.

  1. Serge says:

    Hey ddocrypto.eth. Really liked the logic of your response. I too think the math does not add up. No investor in startup ventures requires a 328% yearly return. People should beware.

  2. TestingSaucer (@TestingSaucer) says:

    I can’t wait for global regulatory compliance taking over this market in order to wipe out crypto-keyboard lions like you.

  3. Matt A says:

    No risk no reward. An investment that triples every year should have inherently high risk. We are entering a new frontier of digital currency. Grow a pair or be relegated to mediocrity.

    • Thomas Stein says:

      You are right about that… but still, Polygon clearly knows about this and have noticed that more than 1000 new Polygon nodes have been created the last week. They also know why (StrongBlock). If this was something that wasn’t real, was fake, or the quote itself was fake, then I believe they would have given notice about it. And even more, why would StrongBlock fake this, when all the other things they have confirmed has been true? The partnerships with Sentinel and Fantom have both been confirmed clearly officially from both sources, so why would StrongBLock suddenly come up with lies about Polygon?

    • Thomas Stein says:

      They just released news about the Ethereum 2.0 staking pool that should be released very soon, just like Fantom and Polygon nodes… I know they have been delayed, but I do hope we will see at least one or more of these before Christmas this year!

  4. Ddocrypto.eth (@DDOcrypto) says:

    There is a big difference between a grocery store and strongblock mate. When a customer in a grocery store buys something the grocery store ends up with profit. The grocery store doesn’t owe the customer any interest on that money. If this profit is used to pay off investors the result is that the grocery store decreases its debt and thus the interest they have to pay decreases aswell. The net result of a new Strongblock “customer” buying a node is an increase in interest they have to pay, in stead of a decrease. For every 10 STRONG that strongblock receives they have to pay 32,85 STRONG per year back (328,5% interest per year) without having any income at all. For every 1 dollar of “profit” that strongblock makes they take on a debt of $3 per year without an end date. At it’s current state this is a ponzi scheme, but technically it is possible to change that. The only thing they have to do is come up with a plan to make 7.8 million dollars per day of profit (rougly the same as Coinbase) out of thin air.

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