MLM Absurdities: Does essential oil diffusion actually clean the air?

There was a series of wildfires in California in recent weeks, and the air quality around SF Bay Area suffered as a result. The woo peddlers and the oil slick huns decided to use this opportunity to push pseudo-science, such as the idea that "diffusing essential oil will clean the air". 

Here is one example: 

Smoky House? Helpful tip: simmer pot of water on stove w/ 
cedar, fir, thyme, sage, or rosemary (or any combo of them!)
it attaches to smoke particles pulling to the ground to help clean the air and make it more breathable
Add drops of peppermint oil every 20 minutes for extra soothing relief

Note the specific claims, and alleged mechanism "attaches to smoke particles pulling to the ground to help clean the air". 

If you google "essential oil clean air", there's no surprise you'll find doTerra on top of the list. 

However, the mechanism was not discussed. 

Doesn't stop others from making vague generalizations though. Some even used pseudo-science babble... 

Let's go through the claims one at a time, shall we? 

Scam Psychology: Antivax Alternative Facts redux

Antivaxers are well known for bogosities and inability to admit defeat. I've covered this previously but recently, some more bogus facts pushed by antivaxers simply chafed me wrong.

On 27-JAN-2019, in a bit of debate on flu vaccine, someone brought up the "Bill Gates is antivax" hoax. I quickly replied with a rebuttal citing.

Politifacts tracked down the source to a website called Yournewswire, who have NO citing at all. No name, no proof, nothing. Indeed, it is a fake news clickbait site.

Not that it matters to the claimant, who simply dismissed the rebuttal, so I called him out on it.

So he jumped over to Google and pasted the first link he found that supposedly proves it.

Which leads to this article:

At the bottom, the "source" is cited as Transcend Media Service, where a virtually identical article can be found, but the ORIGINAL source was revealed to be YourNewsWire... the very source debunked in the article I linked.

Indeed, YourNewsWire has a long history of publishing fake news clickbait later debunked by Snopes that now number in the dozens.

Sample headlines published by YourNewsWire includes:

"Katy Perry: 'Human Flesh is The Best Meat; Cannibalism Got A Bad Rap'"

"George Soros Orchestrates Devastating Plan to Kill 100000 Haitians"

and so on.

But none of this bull**** has any effect on the original poster.

Guess we have to consider him an antivax troll.

Overpromise and Underdeliver: the HELO band

Those of you who have diabetes or pre-diabetes may have been spammed on Facebook or similar social media sites by someone marketing the HELO band. At first look, it is basically something like a Fitbit or such. However, it had promised in Jan 2017 something that had never been achieved by anyone: non-invasive continuous blood glucose estimation. See press release dated Jan 10, 2017.

PRNewswire press release from WRMT where it claimed it will
launch blood glucose estimation tech in its "Helo" wellness band
dated Jan 10th, 2017

However, it is interesting to note that NO SUCH FEATURE was mentioned on World's official website, worldgn.com

worldgn.com shows no blood sugar feature on their HELO device as of JUN-28-2017

Now isn't that interesting...

HUMOR: How to get rid of people who want to rope you into "make money fast" schemes

Feel free to utilize these pointers to counter sales pitches next time people come up to you and want to recruit you for some sort of income scheme they tout as "can't lose", "risk free", and so on.

#1

• Wow, sounds amazing. Is your entire family in? I'm sure blood is thicker than water and all that. Is/Are your brother / wife / papa and mama / etc. in? How many relatives did you recruit?

#2

• Wow, that sure sounds impressive. Did you quit your job and go full-time? Sounds like you can do a lot better in this (insert name). 

#3

• That's certainly interesting. However, I'm a bit empty in my wallet now. Tell you what, lend me the seed money. I'll split any profit with you 50/50. What do you say? 

#4

• I thought you said you made plenty of money? So you don't have any money to lend me? 

#5

• You thought your scheme was impressive? Let me tell you about mine... 

(Inspired by a post from JusticeAlwaysLate, a scambuster on Facebook) 

How to be a cranky troll: Guide to IGNORE all useful feedback

(Author's note: This is written as a contrarian piece... The advice is BAD for you, and you are meant to do exactly opposite of all this. Got that? Okay, enjoy.)

Do you have absolute belief in yourself, that you can do no wrong, therefore, everybody else must be wrong? Are you surrounded by people who intend to change your mind even though you know YOU are right and they are wrong, despite all evidence pointing to the contrary?

Here are six tips to help you silence the world and live only within your head where you are always right:


1. Reinterpret specific advice to be personal attack on you, your business, your "family"

Any and all advice that you don't like is obviously an attack on you, your "family", your business, and your way of life, no matter where it came from, including your dear mama. They obviously... "don't understand" about how you work, how you think, how you live and therefore they have no business giving you advice!  In fact, anything other than "great job" is an attack on your beliefs!


2. Ignore advice until they are no longer relevant, then rant about how the advice is useless

Ignore all advice until it becomes "overtaken by events"... i.e. completely useless, then claim the advice is useless. Go ahead and insult the advice giver as useless and worthless, never mind you never took the advice any way. That's merely some inconvenient truth to be swept under the carpet.

Commentary: How "Ultimate Guide to Network Marketing" illustrates what's wrong with Network Marketing

I often browse used bookstores, and one day I came across "Ultimate Guide to Network Marketing" edited by Dr. Paul Rubino. As the MLM Skeptic, I read it with a skeptical mind...  Overall, I am rather... disappointed. While several of the authors out of 37 did dispense practical advice, such as how to utilize modern tech like autoresponder and such, while others laid out do's and don'ts on what to say in a sales speech, ZERO discussed what's legal and what's not legal.

"Pyramid scheme" was NEVER discussed, other than as an resistance to be overcome, as doubt in a prospect that must be quashed, and so on.

Product-based pyramid scheme was never mentioned.

In fact, the entire book is devoid of definitions other than odd backronyms like WOO = window of opportunity. There is no glossary, just an index.

Consider the implication: how would the network marketing noob know what's legal and what's not if it was NOT discussed in a so-called "Ultimate Guide to Network Marketing"? How "ultimate" can this guide be if legal stuff was not discussed at all?

Furthermore, many of the chapters were about belief / faith. Belief in oneself, belief in product, belief in company, belief in team...  Belief involves TRUST. What happened to due diligence? Common sense? What makes the company, product, or team members WORTHY of trust?

This is basically a collection of "business porn"... written by network marketing "leaders" who claimed success through effort even though they can't prove that their success was a result of their effort. Anything they wrote are results of survivorship bias and self-serving bias, but people starting in network marketing believe these to be words of wisdom, and indeed, many of the 37 articles advocate "just ape what I do" or "create system that can be easily aped"

In fact, one article is about how to CREATE business porn... awards, recognitions, newsletters, mailing lists, podcasts, Youtube videos, and so on, as marketing vehicles.

Would you really consider "monkey see, monkey do" to be wisdom?  The entire book is thin on actual practical advice. Most are motivational talk and how to customize such for your particular market (i.e. your prospects). Again, it's business porn, and it does NOT help.

Just as porn is not sex but sexual fiction designed to titillate, business porn is NOT business advice, but sales pitch designed to motivate.  Porn is fine in moderate doses, but porn addiction is serious problem. Similarly, business porn is fine in moderate doses, but business porn addiction will simply depress you as you constantly choose to compare yourself to leaders, trying to ape them, without understanding WHAT made them successful (often, it's just luck) and what price did they pay (which is NOT depicted).

The book basically is all about trust, and duplication, with a few bits of sales techniques and marketing vehicles covered, but has ZERO advice on what to look for, how to spot good from bad, and how to spot legal from illegal.

The implication is very troubling: if this is the sort of book written by top network marketing professionals, network marketing is about faith and recruiting, not about sales and earning trust.

How to be an online marketing idiot: arbitrary DMCA takedown notices and SLAPP

English: Very poor sketch of a desired icon for DMCA takedown notices on articles, emphasizing Wikimedia's submission... created for conversation at Commons:Village pump#DMCA takedown templates and material. (Photo credit: Wikipedia)

It seems some people have NO concept of copyright, and think that issue random threats to sue is somehow a valid tactic in "reputation management". Such idiots should never be allowed to do marketing online, but this is a democracy, with freedom to do all sorts of things, including making a total fool of oneself.

Recently, Techdirt, a tech news website, highlighted a particular idiotic DMCA takedown notice. The story basically goes like this. in 2015, Techdirt writer Tim Cushing put together a list of "stupid DMCA takedown requests" because, well, they are stupid, like DMCA takedown notice to Google... about images cached on Bing (which belongs to Microsoft, not Google), or DMCA takedown on news coverage about one's crimes by self-publishing a book about it, and so on and so forth.

One of these... online marketing idiots, instead of acknowledging mea culpa, doubled down and issued a DMCA request to Techdirt claiming their copyright were violated because Techdirt used a couple of the images offered by the company, called Andromedical, as example, complete with Andromedical's prominent watermark. Oh, and the same copy apparently posted random comments online claiming Techdirt is owned by some company nobody ever heard of, is a patent troll, claiming various bogus misdeeds by the writer, and more. It's a basic slander campaign... all because they can't admit they were idiots.

The idea that TechDirt, a news website, can be liable for copyright violation for "covering" Andromedical (whose product is a penis pump, named... AndroPenis (tm), really imaginative, guy) as a news item is simply hilarious. It's even MORE hilarious that Andromedical's complaint also claimed that Techdirt is a "counterfeiting operation" and the violation is being reported "to INTERPOL".

The bottom line is actually quite clear: "we don't like what you say about us, STFU!"

But the world doesn't work like that. There are exceptions to copyright called "fair use", and using the company logo and publicly available photos provided as promotional material by the company to illustrate the company, and in no way asserts being the company, is obviously fair use.  If you put info out in the public, you can't control what people do with it, be it positive or negative.

Yet some scams and suspect schemes are quite fond of using these bogus copyright and/or trademark claims as well as threat to sue or outright lawsuits in hopes of silencing critics as a part of their "reputation management" strategy.

MLM Basics: Why a MLM Comp Plan is MORE important than the product, not less

One of the biggest mistakes a MLM "noobs" makes is put all the emphasis on the product, without analyzing the business model itself, i.e. the compensation plan, or in jargon, "comp plan".  (Or perhaps there's only a cursory glance). They are all enthusiastic about the product. OMG, it totally works. I (blah blah blah blah),  product is (blah blah blah blah). You have to try it! It's totally legit! I didn't believe at first but now I do! (blah blah blah blah)

When critics / concerned friends/family told them the company is likely a pyramid because of X, Y, and Z, the first thing out of their mouth is "it can't possibly be a scam, the product works".

They are suffering from the "blind men and an elephant" problem... They cannot understand that what they experienced  may be true for them, but is NOT the WHOLE truth.

Here's a very simple analogy... Take a look at this car:

Those of you who know cars should be able to tell, by the GT-R badge on the hood, that this is an older generation, Nissan Skyline R34 GT-R (or a reasonable facsimile thereof), which is a two-door coupe.

Except this is not a coupe. It's a station wagon. A five-door station wagon Nissan GT-R, and no, it's NOT photoshop(ed).

The point is if you ONLY look at the nose of the car, you'd have assumed it's a GT-R. But it's not. You have to see the entire body to realize this is NOT a coupe but a station wagon.

Similarly if you ONLY look at the products of a MLM, you could not have gotten "the whole picture", on whether the company may be a scam or not.

That's why the compensation plan, i.e. what you need to do to get paid by a MLM, is FAR MORE important than the product... It is the PRIMARY indicator on whether the company is a pyramid scheme... or a real MLM.

So how do you determine which is which?

Commentary: How MLM affects the current presidential campaigns

While politics is usually quite far from the world of multi-level marketing, presidential campaign is big enough that anything anybody ever did figures into the equation, and in this case, two of the presidential candidates have direct ties to MLM... Donald Trump, and Ben Carson.

Those of you who had watched "Celebrity Apprentice" should recall that ACN, the MLM telephone company, was featured on the show... twice.  And Donald Trump even had his own MLM, "Trump Network", which nobody hears about any more.

What you may not remember is Ben Carson previously offered testimonial that Mannatech stuff helped him in his battle with prostate cancer... since 2004.

And let's not forget how big some of these MLM businesses are... and they donated HEAVILY to Republican candidates of all levels. It's already documented that co-founder of Amway, Richard DeVos and two family members donated 25K per person to Scott Walker's campaign AND unknown amounts to Jeb Bush's campaign. When Mitt Romney ran he had support of Amway, NuSkin, and Xango, all big name MLMs.

So, what are some facts about ACN and Mannatech, and perhaps, related to Donald Trump and Ben Carson, that you don't know, but should?

Let's start with ACN and Trump

ACN / Trump

Did you know that in 2010, the average ACN Canada participant takes home about $41.00 per month? That's directly off their website:

"The average ACN Canada active IBO in 2010 earned approximately $500." -- ACN Canada website 

As it is 2015, and there is no update, clearly the figure had not risen (and may even have FALLEN!)


Did you know that despite ACN having sponsored Celebrity Apprentice twice, Donald Trump was quoted by Wall Street Journal of saying, "I (Trump) know nothing about the company (ACN) other than the people who run the company, I’m not familiar with what they (ACN) do or how they go about doing it, and I make that clear in my speeches."

This is also interesting considering that Trump allegedly boasted to WSJ that for a speech at an ACN event he got $2.5 million back in 2008, and pocketed another $1.3 million for 3 more recent (and presumably shorter) talks at ACN events.

Scam Psychology: How Context Makes You Irrational (even though it made sense to you... at the time)

Obamacare Protest at Supreme Court (Photo credit: southerntabitha)

We are all affected by context of a question than we care to admit, and by presenting certain things with the wrong context, scammers lead us into making irrational decisions, such as join a scam and hand over money.

Let's take the subject "Affordable Care Act", for example, otherwise known as "Obamacare".

Did you know that more people support "Affordable Care Act" than "Obamacare", even though it's the SAME THING? 46% oppose Obamacare, but only 37% oppose Affordable Care Act. People even protested at the US Supreme Court.

[Source: USA Today quoting CNBC poll]

This is ignorance. And this is in the general public.

Scammers LOVE this, which is why there are Obamacare scams.  Just as there are scams about everything.

So why are more people against "Obamacare"? Because the term was used by Republicans as as derogatory term. Never mind that it's actually Mitt Romney (Republican) that really came up with it for his own state of Massachussetts, leading to a new term, "Obamneycare".

In short, Affordable Care Act doesn't have the "context", the derogatory meaning that Obamacare has.

The lesson is very simple: you have to be knowledgeable and ignore context to make rational decisions.

In business and investment, that's called due diligence, which is really just "fact checking" and "critical thinking". You get all the facts and look beyond the context.

And scammers want you to throw due diligence out the window... by hitting you with slogans to ignore due diligence as well as give you skewed context (that are half-truths, misunderstandings, embellishments, conflicting info, logical fallacies, outright lies, etc.) to lead you into their scam.

What do you repost? Think about it a little...

Specifically... did you fact check it first?

A: "Did you fact check this before reposting it?"
B: "I don't need to. It agrees with my preconceived views and biases so it must be true!"
from thelogicofscience.com

Scam Tactics: How Do Scammers Identify What You Need?

How does a conman pick up on what does the victim needs, and thus, tailor the scam to fit?  There are five different techniques. If you are aware of these techniques, then you can watch out for when they are used on you.  Let MLMSkeptic explain the five techniques.

The techniques are:

1) Pre-screening

2) Probing questions

3) The tease

4) The Please

5) Trial Close / Seize


Pre-Screening

Your identity is known on the internet. Somebody out there has a profile on you, more than one if you have used multiple names and/or multiple identities. Credit agencies definitely have one on you (and there are several of them). If you're a professional you have professional profiles somewhere. And those can be accessed. That's just your public profile.

Then there's your "hidden profile". Your behavior online is part of your profile. If you give out your name and email address at capture pages that goes into a profile somewhere, and shady businesses will share that info (even if they promise never to do so) with other shady businesses and that's a part of your profile.

If you ever applied for a loan you will get solicitations for loan offers for MONTHS. They shared your info. And they're legit. Imagine what the ILLEGITIMATE scammers and conman will do...

If you ever asked for more info on suspicious "make money fast" type schemes, or clicked on teaser videos that says "sign up for my ____ for more info" and entered your email for "more info", your name is now on a "sucker list" to be marketed with more **** in a similar genre, because you have shown a preference for such topics. 

Scammers (and legitimate salespeople) pay $$$ to buy leads that may be interested in such things, and the lead list is pre-screened for people who are at least interested to whatever s/he's trying to sell. As the joke goes, you don't sell ice to Eskimos or sand to Arabs. By pre-screening the prospects, conversion is much easier.

The prospect generally doesn't see this step, as it's done long before the scammer meets the prospect. To counter this, simply don't be surprised when you got invited / solicited for sales pitch which seems to be exactly what you want. People already "know" you.

Probing Questions

Probing questions are pretty easy... Ask them what *do* they want. Due to pre-screening, you already have a decent idea on WHAT they want. However, there can be a little distance between what they say they want, vs. what they will settle for now. And asking questions will clarify that. 

If the presentation is pretty much a monologue, then the salesperson will be asking rhetorical questions, like "Are you looking for financial security in an insecure world?" "Are you looking toward better health?" then answer them him- or herself, "the answer is ________!"    And scammer will watch the reactions and see if s/he needs to change the speech. 

The salesperson will almost always frame the question so the answer is "yes". By answering things in the affirmative, prospect will have influenced him- or herself to answer "yes" later. 

The prospect should remain neutral for this part, not only to deny the presenter any clues on how to proceed, but to remain neutral mentally rather than "psyched up", in order to evaluate facts rather than emotions.

The Tease

The tease require a bit of mystery, and a commitment from the prospect to find out more. A "capture page" where the prospect watch a video and enter their info is such a tease if there's no details. The idea is to pique your interest, without telling you much. 

Tease works on relatively naive people who are not used to the various sales techniques, but not on veterans. Veterans will simply demand the information they need to make the decision, and will not waste time waiting for your "big reveal". 

The prospect should again, remain neutral when confronted with the tease. You are after facts, not teases with no solid info.

MLM Basics: Critical Thinking for MLMers -- Errors in Perspective

Previously MLMSkeptic have pointed out various reasoning problems of many participants in MLM, but someone pointed out why don't I have a guide on what *should* be done instead?

So here's the effort, called it "How not to argue for MLM" series. You can also think of it as "Critical Thinking for MLMers".

Many of these have been covered previously as "Bad Arguments".

There are many kinds of errors in your thinking process. As the old saying goes, "To err is human." However, one must learn from the errors to improve oneself. Today, we will discuss "Errors In Perspective".


What is Errors in Perspective?

Errors in perspective basically means you have a biased perspective of the world; you don't see the world as it really is, but only as you saw it. It's as if you've been wearing a bad set of tinted glasses all your life that you didn't even know it was there. And that's why they are very dangerous for you to think critically... You may *think* you are doing so, but you're doing it from the wrong perspective / viewpoint.

If you are not in MLM, keep in mind that many MLMers will accuse you of having the wrong perspective, with bad argument such as "unless you're in it you don't have the right perspective" (i.e. "you have to try it to know it / criticize it")

There are many different types of errors in perspectives.


Unwarranted Assumptions

One of the hardest errors in perspective to detect are unwarranted assumptions, because they are usually implied, rather than stated outright, and thus, you almost have to read between the lines to see them. A lot of "folks wisdom" or "commonly held facts" are actually unwarranted assumptions.

Not all assumptions are unwarranted, as you can't live a life without some assumptions, like the guy you pass on the sidewalk is not going to jump up and stab you, or your car will start in the morning, and so on. You may be wrong sometimes, but most assumptions you made every day are based on your knowledge or experiences. It is when you assume too much, more than justifiable by the circumstances or experiences, that you get unwarranted assumptions.

One of the most frequent unwarranted assumption held by victims of scams is "because Scheme X paid someone, therefore Scheme X will pay me (in the future)." When you think about it, this is basically "the sun will come up tomorrow" assumption. It makes sense for the sun, but it makes no sense for Scheme X, no matter how good / honest / rich Scheme X appears to be.  Furthermore, pyramid schemes and Ponzi schemes always pay a few people and make them "judas goats" to draw other people in. Some people (even you) getting paid does not prove everybody will continue to get paid indefinitely.

So how do you stop making unwarranted assumptions? First you have to FIND the unstated assumptions, THEN you have to logic check them to determine if they are warranted or not.

Scam Tactic: Love Bombing

Sun Myung Moon
 (Photo credit: Wikipedia)

This is the start of a new subtopic called "Scam Tactics" where I attempt to document certain approaches used by unscrupulous people on unsuspecting victims.

Today's topic: Love Bombing

The term "love bombing" originated in the 1970's from the "Unification Church" lead by Sun Myung Moon. If you don't recall the name, you may have heard of the Moonies cult. In a speech in July 23, 1978, Moon gave a speech, which is transcribed and translated below:

Unification Church members are smiling all of the time, even at four in the morning. The man who is full of love must live that way. When you go out witnessing you can caress the wall and say that it can expect you to witness well and be smiling when you return. What face could better represent love than a smiling face? This is why we talk about love bomb; Moonies have that kind of happy problem.

It sounds simple, but the way it works is a bit more insidious. As explained by professor Margaret Singer, a cult expert:

As soon as any interest is shown by the recruits, they may be love bombed by the recruiter or other cult members. This process of feigning friendship and interest in the recruit was originally associated with one of the early youth cults, but soon it was taken up by a number of groups as part of their program for luring people in. Love bombing is a coordinated effort, usually under the direction of leadership, that involves long-term members' flooding recruits and newer members with flattery, verbal seduction, affectionate but usually nonsexual touching, and lots of attention to their every remark. Love bombing - or the offer of instant companionship - is a deceptive ploy accounting for many successful recruitment drives.

Basically, the members fluff up your self-esteem by paying very close attention to your every action and appearance, and only give you positive feedback.

MLM Mythbusting: Is MLM really a growth industry? (The Numbers May Surprise You)

When you listen to MLMers / Network Marketers, you're often told that MLM is the big thing, it's "experiencing record growth", it's "amassing fortunes for millions of people each year", it's "#1 millionaire producing industry", big companies are going MLM, and so on and so forth. They'll dazzle you with numbers such as

• Every week 150000 people join network marketing around the world (but how many quit?)
• Worldwide sales of MLM is estimated to be 90 billion (still less than 1% of world economy)
• DSA estimates 200 million new distributors in next 10 years (again, how many quit?)

Is MLM actually growing that much, when compared to other industries? Let's look a little closer. 

Is MLM the "next big thing"?

Claims have been made since the 1990's that MLM is the next big thing.  Back in 1990, Richard Poe wrote in Success magazine that network marketing is "the most powerful way to reach consumers in the 90s". He also wrote a few books, specifically, Wave 4.  This quote was reproduced ad infinitum by various MLMers trying to legitimize their own little niche. You can see this example where the author changed it to "21st century economy".

Basically, they've been saying it for THREE DECADES (going into FOURTH) and it STILL haven't come true. 

Those claims had not come true. Internet soon surpassed network marketing as the way to reach consumers, with online shopping, and ready access to review sites, peer reviews, and more. E-Commerce is a 289 BILLION dollar industry in 2012. For comparison, direct sales and network marketing is a 31.6 Billion industry in 2012, as per DSA. (see below)

One more point of comparison... Total US retail for 2012 is $4.9 TRILLION.  That makes direct sales 0.64% of stuff sold. It's a niche market, and it's not growing much, and hadn't done so for decades. 

Is MLM "experiencing record growth"? 

A lot of places repeat big words like "record growth"... 

The problem is... relative to what? DSA itself reports that sales has been down since 2006 and only just recovered in 2013 or 2014 (not counting inflation). See for yourself (all graphs courtesy of DSA.org):

1991 to 2000

2000 to 2008

2008 to 2012 (latest data from DSA)

So "record growth"... In relation to what, exactly?  It's now 2014 and they probably did break their old 2006 record... but that just means they are not as recession proof as they claimed to be... 

Also, is 31 billion a lot? Again, in relation to what?  Franchising is a 740 billion industry as of 2011, according to a PricewaterhouseCoopers analysis. And franchising started at about the same time as network marketing.  In fact, franchising may have success rate of up to 95% (the stats are old, per 1991, and no new data had been compiled since)

"Record growth" statement is meaningless. 

Scam Alert: Bitcoin as disguise for Ponzi scheme

EDITOR'S NOTE: I counted the difficulty wrong. It's FAR MORE HOPELESS than I ever imagined. See revision throughout the last half of the article.

In the past 6 or so months there has been a plethora of suspect Ponzi schemes that involves Bitcoin as its disguise. Some of them are basically pure HYIPs (BitClub Network, Bitcoin Zones), while others are existing schemes that decided to incorporate Bitcoin as part of its various schemes (GetEasy, Paymony) Here's description from one of them:

XXXXXXX costs $99 for your membership. 

You can then buy shares in their three mining pools for $500; $1,000; and $2,000 per share respectively. 

Every share you purchase will pay you daily payouts for 1,000 days.

This, gentleman, is an unregistered security, as defined by US law known as the Howey Test.

A security in the US is defined as:

1. investment of money due to
2. an expectation of profits arising from
3. a common enterprise
4. which depends solely on the efforts of a promoter or third party

You "buy shares", you expect "payouts", you buy into "pool" which is obviously a "common enterprise", and payout solely depends on some unknown "mining pool".

This is OBVIOUSLY an investment security, and it's ILLEGAL to offer in the US of A.

"Now wait a minute", I hear you ask... "Are you telling me Bitcoin mining is illegal?"

NO! You see, in a *typical* bitcoin mining operation, you contribute CPU POWER ONLY (think of it as labor or material), not actual money. For example, this is how you join the BitMinter pool:

1. Register
2.  start bitminter clientBitminter client: Hit the start button to start Bitminter client. You get bitcoins for the work it does. Works on Windows, Linux and Mac. Requires updated Java. Other clients: bfgminer, cgminer, etc. Connect to the pool at stratum+tcp://mint.bitminter.com:3333. As user name put your Bitminter user name, an underscore, then a worker name, e.g. DrHaribo_asic3. In case you have firewall issues, port 443 and 5050 (Stratum) are also available. There is no password check, any password is accepted.
3. Get a wallet to transfer your coins to. Make sure you secure your wallet.

Other actual MINING pools are the same: you join by contributing CPU / processing power, NOT actual money.

In fact, you can join one now, using your regular desktop PC. It won't do much compared to dedicated hardware that costs THOUSANDS of dollars, but you can do it for FREE (and your payout will be negligible).

Ah, but you say, but *maybe* they really are buying the hardware to do the mining with the money you gave them?

Then it'd be a stupid investment, and I'll explain to you why by crunching some numbers.

MLM Basics: Why are there so many names for MLM?

Have you ever wondered why are there so many different names for multi-level marketing? Here are most of them:

• 

  Network marketing? Multi-level marketing?
  Home-based Franchising? Direct Sales?
  Concentric Marketing? Affiliate Marketing?
  Referral Marketing? Inline Marketing?
  WTFIsIt Marketing?
  (Photo credit: Wikipedia)

  Multi-level marketing, the main term
• Network marketing (most often used alternative)
• Home-based Business Franchising -- WARNING: franchising is NOT multi-level marketing
• Direct sales -- selling direct to consumers, related to but NOT equivalent to MLM
• Affiliate Marketing -- now used by Vemma, often plagued by fraud
• Seller-Assisted Marketing -- mostly a "business opportunity" scam
• Referral Marketing / sales -- marketing via word of mouth; some forms may be illegal
• Dual Marketing / Dual-Level Marketing -- mainly used by Mary Kay, still MLM
• Concentric Marketing -- used by convicted pyramid scheme Burnlounge, replaced "levels" with "circles", but otherwise, the same as MLM
• Consumer Direct Marketing -- the consumer is doing the marketing, potentially illegal if recruitment heavy, as it becomes recruiters recruiting more recruiters. 
• Inline Marketing -- trademarked by "Nutraceuticals Inc", it's still MLM

There are probably a few more I missed. If you spot some new ones not on this list, as a something-marketing, feel free to let me know via the comments.

Any way, why are there so many fancy names for the same thing?  Fraud experts, such as Tracy Coenen say this is an attempt to obfuscate and distract from the bad reputation multi-level marketing had picked up over the decades it had been in existence. However, I think this is also a symptom of how the decentralized nature of MLM became a sin, not a virtue. People are just appropriating terms that sounds SOMEWHAT similar to multi-level marketing, and in some cases, inventing them out of thin air.

First, let us define multi-level marketing... a marketing strategy where the sales force is compensated on multiple levels... direct sales profit, and portion of sales profit achieved by other salespeople they recruited (downlines). Remember, MLM = direct sales + commission based on downline sales.

But first, we have to clear up a few myths...

Bad Argument: The "We shall see" parting shot and how it's linked to cultism

When defenders of a certain scheme ran completely out of viable arguments, they will often depart with a throwaway comment:

"we shall see"

It has several variations, like

"Time will tell"

"History will be the judge"

"Truth will prevail"

and such.

This is a pretty lame departing shot, as it basically demonstrate they have *faith* that they will be vindicated eventually, but they don't have any evidence to support their opinion right now, which makes that a BELIEF.

faith

fāTH/

noun

1. 1.

   complete trust or confidence in someone or something.

   "this restores one's faith in politicians"

   synonyms:

   trust, belief, confidence, conviction; More
2. 2.

   strong belief in God or in the doctrines of a religion, based on spiritual apprehension rather than proof.

   synonyms:

   religion, church, sect, denomination, (religious) persuasion, (religious) belief, ideology, creed, teaching, doctrine More

Note definition #2... "based on ... apprehension rather than proof".

That's exactly what happened here... they have only their own apprehension of how the scheme will make them rich, rather than actual proof. It's religious, rather than evidence-based.

The fact that many scheme promoters behave in a religious fashion have lead to cult experts in calling such schemes "commercial cults".

Scam Psychology: How Scammers Push Your Buttons through your personality disorders

The Age of Uncertainty
(Photo credit: Wikipedia)

As the MLM Skeptic, it is rather interesting to see many people who are defending their particular scheme from criticism suffer from personality disorders (not that I am a professional of any sort regarding psychology). They are often self-obsessed and arrogant as well as intolerant of ambiguity, and lack of empathy.

Many unscrupulous multi-level marketers and scammers play to these personality disorders by claiming they are VIRTUES, not disorders. These disorders are, instead, presented variably as confidence, conviction, certainty, and "they are not us".

People develop coping mechanisms when their self-image was diminished. One of the most common coping mechanism is retaliation: when they feel devalued, they devalue others as a response. Scams often play up this personality disorder by encouraging it with "they are not us; they don't think like us; they just don't understand us". It is then followed with epithets like "They have JOB -- just over broke", or "they will stay wage slaves while we achieve financial independence".

Any one who questioned the person's choice (the scam, in this case) will be devalued, even if they are best friends and family, and even spouse. That's why "intervention" when it comes to scams rarely succeed.

Another coping mechanism people develop is equating conviction with certainty. Conviction is a collection of your strong beliefs about the morality of your choice and/or behavior. If you don't really have much conviction, you'll often adopt certainty as if it is conviction. Thus you'll also develop certainty about other people (and what you believe to be THEIR conviction or lack thereof). This comes across as arrogance and intolerance. Scams play up this aspect by creating fanciful stories about the critics asking questions, such as "you're just jealous; you're just out looking for hits for your blog; you must have hated the owner; you're the 1% out to fleece us the 99%".  After Zeek Rewards ponzi scheme was shut down in 2012, some started floating fanciful stories about "SEC doesn't have a case because they privately admitted to our lawyers". Others even explained to newspapers that Security and Exchange Commission does not know what securities are.

However, what people don't understand is very often, certainty is an ILLUSION.

Scam Psychology: is Positivity Training perpetuating Mental Illness symptoms?

A recent Dilbert comic had this quote

"Certainty about the future is a sign of mental illness."  (NOTE: There's a second lesson here about "we shall (not) be vindicated".)

Why? Because only the self-delusional are absolutely certain about anything... including the future. And self-delusion is a mental illness.

Therefore, thinking only positive thoughts about yourself (well beyond what's needed for self-esteem) and your future is also self-delusion.

But wait, you say, are you saying that I can't give myself a compliment? A thumbs up to myself in the mirror?

No, I didn't say that. Going OVERBOARD with such compliments to the point of ignoring reality is dangerous, and so are anyone trying to dissuade you from reality.

But to explain that, we need to explain how the brain works when it comes to social interactions.