Would you trust a heart surgeon who only knows that a ventricle and an atrium are both heart chambers, but doesn’t know the difference between the two?
Well, then you shouldn’t trust Mirror Trading International (MTI)
They claim to use Bitcoin a “base currency”, meaning it lies at the very center of their business model, and yet their publicly advertised understanding of Bitcoin is grossly lacking.
First of all, I understand that this post might upset some people. So, before I go any further, a few disclaimers:
Just because you (or people you know) have received payouts, that does not make it a legitimate operation.
People incorrectly assume that calling something a scam means that invested funds are immediately lost. Therefore, if they (or someone they know) are receiving payouts, they assume it cannot be a scam. But Bernie Madoff ran his scam for 20 years before it collapsed. And all the while people kept receiving their payouts. Scams are identified not by how long they can (or cannot) maintain payouts, but by their underlying structure.
My only focus here is their (MTI’s) openly displayed lack of understanding for Bitcoin.
There are many other reasons to be suspicious of MTI and even considering just one of them with a sober mind should be enough to raise some concern. There’s the ongoing investigation by the FSCA (Financial Sector Conduct Authority) in South Africa, and similar investigations in Texas, USA, and Canada. There’s the unrealistic (claimed) trading performance which, if it’s extrapolated over time, would turn R2,000 (ZAR) into a whopping R185.4 million (ZAR) within only 10 years.
And there’s the simple fact that, since getting involved with Bitcoin in 2013, I’ve never encountered a scheme that traded Bitcoin on behalf of users that did not end in tears.
But I don’t really need to address any of these. Because the obvious lack of understanding for Bitcoin displayed by MTI is more than enough to prove that (at the very least) it’s a highly suspicious operation.
If I get into some technical detail, it’s not because I’m splitting hairs. If an investing company is going to claim to use Bitcoin as their “base currency” it’s fair to expect a high level of technical competence.
Bitcoin is a completely new technology, unlike anything the world has ever seen before. Among many other things it solves one of the longest standing problems in the world of computer science. So it’s complex and therefore not yet well understood by most people. Which is why responsible Bitcoin companies go out of their way to explain Bitcoin to their users. Here, here and here are great examples (among countless many) of what that looks like.
The MTI website, however, features a glaringly obvious lack of information on Bitcoin. Reading through the entire website, other than a few catch phrases practically no effort is made to actually explain what Bitcoin is, or how it works.
And the statements they do make about Bitcoin are misleading if you scratch the surface.
It simply isn’t good enough for a heart surgeon to only have a vague idea of where the ventricle and atrium might be located.
“… each Bitcoin is a computer file stored in a “digital wallet””.
In reality bitcoins (or, rather, fractions thereof) are NOT stored in a digital wallet. Bitcoin is stored on the blockchain and it NEVER moves off of it.
This UTXO is essentially your bitcoin, it denominates the balance of your bitcoin wallet address. The private key stored in your wallet allows you, the owner of the wallet, to reassign ownership of a UTXO balance to someone else. This essentially moves your bitcoin from one address on the blockchain to another. But it never leaves the blockchain.
“So what?” you might ask. “Is this really so important?”
Well, yes. For a complete novice it would be OK to understand Bitcoin in terms of “… computer files stored in a digital wallet” but that level of understanding simply won’t suffice for an investment company claiming to use Bitcoin as its base currency.
Because Bitcoin’s entire value proposition hinges on it having a verifiable supply.
In Bitcoin, anyone with an internet connected device can verify the supply by literally adding up each and every single bitcoin balance in existence. This lets anyone confirm with absolute certainty that the programmed issuance schedule is being followed. And this is only possible because individual bitcoins are NOT stored in wallets, but on the blockchain. With thousands of identical copies of the entire blockchain stored on thousands of different computers, all around the world, it’s easy to verify the supply by connecting to only a few different nodes.
If Bitcoin’s supply wasn’t so easily verifiable, all confidence in Bitcoin as a store of value would be lost and it would collapse overnight.
“Ok, but what if MTI just wanted to keep their website simple, with minimal information, so as not to confuse newcomers?”
In that case they could have copied one of the the many short (but completely accurate) descriptions widely available from knowledgeable sources. Such as the one on bitcoin.org, the original domain registered by Satoshi Nakamoto:
“Bitcoin wallets keep a secret piece of data called a private key, or seed, which is used to sign transactions”
Think about it.
Why would an investment company, who claims to be centered around Bitcoin, make such obvious mistakes in describing Bitcoin?
The MTI website also says nothing about private keys, cryptography, proof of work, etc., etc. All the information they needed to create a perfectly simple website that accurately represents all the key components of Bitcoin is made freely available, by hundreds of sources. Yet, none of it is featured on their website?
And it goes on.
“… to grow your Bitcoin and make it work for you, instead of leaving it in your wallet where it will do nothing.”
Leaving your Bitcoin in your wallet and letting it sit there, ‘doing nothing’, is in fact doing more than 50% of what Bitcoin was created to do.
But don’t take my word for it. Look at what the creator(s) of Bitcoin had to say shortly after its launch:
“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.“
— Satoshi Nakamoto, February 11, 2009
Bitcoin was created, first, to be a trustless store of value and, second, a means of transferring that value. A form of scarce electronic money that can retain its value, free from central bank mandated inflation, and which can then be transferred over a computer network, directly between individuals and without the need for third party involvement.
Saying that Bitcoin, which is kept in your wallet, is “doing nothing” is as ignorant as saying that the record 650 tonnes of gold bought by the world’s central banks in 2019 (and now stored in their vaults) is also doing nothing.
Central bank gold might not move very often, if ever, but it fulfills the same purpose today as it has done for the past 5,000 years:
When the proverbial sh*t hits the fan, gold is the only money any of the world’s central banks will accept. During a crisis therefore, a central bank with more gold reserves is in a stronger position, relative to other central banks with fewer gold reserves.
Which is precisely why the world’s central banks stockpile gold. And why some of the world’s largest publicly traded companies are now beginning to convert their cash reserves into Bitcoin.
And with the Bitcoin-as-digital-gold narrative having been around for as long as Bitcoin itself (new Bitcoin is created through a computational process referred to as mining) even the most rudimentary understanding of Bitcoin would imply understanding that safely storing Bitcoin, letting it sit and do nothing, is in fact doing exactly what it was designed for.
Now, there are two possible explanations for why MTI does not make any effort to educate their users on Bitcoin and why they display an inadequate understanding of Bitcoin.
Either they’re innocently ignorant, meaning they really don’t know any better and truly just don’t understand what they’re dealing with. Or, more likely, they’re intentionally misleading people, as a proper understanding of Bitcoin would inevitably lead to a healthy skepticism surrounding any custodial service.
But either way, it doesn’t really matter.
Because whether they’re woefully inadequate and in over their heads, or being more devious, why would you trust them with your money?
Do I know for a fact that MTI is a scam? No, of course not.
But they publicly display a gross misunderstanding of Bitcoin, despite claiming to use it as a central part of their business model.
And don’t take my word for it.
There are many comprehensive guides, such as this one, maintained by some of the most experienced people in the world of Bitcoin. And even if you only understood the absolute basics, you’d already have a far better understanding than what MTI seems to have.
I’m not an expert, but if it turns out you know more about surgery than your heart surgeon, well, I’d imagine it’s a good idea to reconsider your operation.