A. Summary of Conclusions
- We found new absolute proof that the OneCoin “Blockchain” is a fake mimicry of the Bitcoin explorer on https://www.blockchain.com/explorer, in other words, it is a Blockchain simulation program.
- We found new absolute proof that OneCoin Founder 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 onecoin.eu and onelife.eu websites claim that the OneCoin Blockchain consists of every transaction ever performed in OneCoin, and that detailed information on each mined block and performed transactions is visible on the Blockchain screens.
- 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 Cryptocurrencyt/Blockchain pages on the other hand.
- New OneCoins in the Onecoin Account are the result of a straightforward division of the number of (Promotional) Tokens by the Mining Difficulty. This calculation is executed immediately after submitting Tokens, even when the “Blockchain” is down for maintenance.
- 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.
B. Objective of this investigation
- The author of this article has tried to execute an objective investigation.
- None of the data on the screenshots have been manipulated. Only personal data on screenshots are hidden. Some comments and rectangular boxes have been added to highlight specific elements.
The complete “mining” 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 and OneCoin CEO Pierre Arens during interviews and a live webinar 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 an 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.
On Thursday 13 July 2017 there was a live webinar with “OneCoin Founder and Visionary” Ruja Ignatova, OneCoin CEO Pierre Arens and Global Master Distributor Sebastian Greenwood. Pierre Arens claimed that OneCoin has a real blockchain (YouTube link) and that in the back-office (i.e. the onelife.eu website) members can see a blockchain viewer, which shows detailed information about the blockchain.
Ruja Ignatova added (YouTube link) that “OneCoin definitely has a blockchain” that is one of the fastest in the market with a block coming every minute, which is very valuable when they validate transactions. She also said “We cannot go public without a proper blockchain, because going public of course needs this technology”.
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 the Transactions are executed, and which Difficulty was applicable.
- Check on the OneCoin Account how many Onecoins are mined, at which points of time the Transactions are executed, 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 successful.
- 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.
Note: this Twitter account has been deleted.
At that moment it was more than 12 hours ago since the last block was created: Block #171066 (login required)
The hyperlink to the next Block was not available at that moment:
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 and had status “pending” for more than 11 hours:
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 submitted Tokens four times in a row 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 the status changed into “escrowed”.
- 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”.
Note: the Blockchain is fake, it is a cryptocurrency simulator, so this “mining” status is an artificial delay just for show.
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”
Note: even if OneCoin would have been a real cryptocurrency (it is NOT), the whole concept of Mining Pools would be absurd, because everything runs on central servers maintained by the OneCoin/OneLife company. This means that the Mining Pool data are fake for sure.
OneCoin Account, all Transactions “escrowed” and “approved” after a couple of minutes:
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, 26 hours and 23 minutes after the previous Block #171066.
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:
The next 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 after a maintenance period. 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
***** Transcript of “Ask Dr. Ruja Live webinar” on Thursday 13 July 2017 with Ruja Ignatova and Pierre “Pitt” Arens, then OneCoin CEO (YouTube link) *****
Next question is: can you provide more information about OneCoin’s blockchain, how exactly does it work?
02:29 Pierre “Pitt” Arens
Yes, it has already been described in the presentation in Macau, but for the people that could not be there, once again, how does the blockchain work. It is a closed source system, that is made deliberately closed source, so that there is no attempt for fraud or that there is no attempt for duplicity or forgery. It streamlines mining pools and every time when such a pool is being mined it yields 50.000 OneCoins per block and a block every minute.
Of course it stores the KYC information also inside the blockchain and in the back-office members can see a blockchain viewer, which shows detailed information about the blockchain. So it requires time for completed transaction to be reflected in the system, but the blockchain mines every minute.
03:22 Ruja Ignatova
Hello everybody, this is also Dr. Ruja. I’m very very pleased to see you all on the webinar and I would like to add some words on what Pitt said. Pitt has done amazing work since he is with us, on the coin, on the blockchain, on the IT system. I just would like to remind you actually of the special things of the OneCoin blockchain, that he already said.
We are not open source yet, before we go public. Today we published something very very interesting on the Facebook website of the company. I don’t know if you had a minute to read it, about the Bitcoin blockchain and the forks that might happen.
Now we are closed source blockchain, so forks, which means dividing the blockchain, and the blockchain goes one of them left and right, cannot happen to us.
So it’s a very very good thing actually that we are doing with our blockchain, not being open source, and a lot of experts actually are saying that this probably is the future of cryptocurrency. I believe that OneCoin actually has chosen a very very good approach and makes itself ready for the future, because we store in an encrypted way the KYC information of the users. You know the banking gets more and more transparent in the world that we live in. Information exchange and so on, and we prepare our cryptocurrency not to be anonymous and this is why we store this information actually in our blockchain.
Also very important for you guys is that the blockchain is one of the fastest outside in the market. It means that we have a block coming every minute. This is very valuable when we validate transactions. The blockchain is not only important for us to mine the coins, but also to validate the transactions. And for merchants who want to do quick transactions this is invaluable. So I would say this is very very important about our blockchain.
Now one question that Laura did not ask here is, we have been approached and people say “oh, does OneCoin have a blockchain, or is it true, is there no blockchain, what happened?”.
Yes, OneCoin definitely has a blockchain and I really would discourage people to spread rumors like this, because they’re simply not true. A blockchain is something essential for a cryptocurrency and we had invited independent auditors even to audit this. We cannot go public without a proper blockchain, because going public of course needs this technology. So I would like to tell everyone once again, yes we have a very proper blockchain and the haters claiming other people probably should go and look for something else to say on this. So the OneCoin blockchain is not only real, it has been assessed also by experts. There is a whitepaper, they we will speak a bit more about it and I think that the OneCoin blockchain currently is probably one of the most interesting one in the market, because it stores so much information and it’s so fast.