Are On-Line Currencies Virtual Banknotes?

By: Stephen F. Quinn and William Roberds

Cash is increasingly being displaced by private forms of payment. Currently the U.S. economy functions with a minimal stock of cash, probably amounting to less than 2.6 percent of its annual gross domestic product (GDP)[1] This figure is markedly less than historical estimates for the United States (for example, about 3.2 percent in 1960) or contemporary estimates for other countries (as high as 4.9 percent for some European countries, according to Humphrey 2002). Roughly three-quarters of all transactions still take place on a cash basis (Committee on the Federal Reserve in the Payments Mechanism 1998), but the average amount of a cash-based transaction is small, probably less than $10.[2] When payment technologies are compared on a value basis, payments based on the transfer of “inside money” (payments by check, payment card, or direct transfer) dominate, accounting for the vast majority of the value of transactions within the United States.[3]

Payment in inside money is, of course, hardly a recent phenomenon. By the fourteenth century, European merchants had discovered the essential advantage of inside money: Exchange using debt ties up fewer resources than does the exchange of costly coin.[4] Since not everyone’s debt is likely to be equally reliable, however, inside-money payment systems have historically singled out the debt of a select group of “strong credits” (banks) as closer proxies for commodity (or outside) money. These privileged forms of debt possess the moneylike property of finality—of being able to extinguish other debts by virtue of their transfer from debtor to creditor.[5] However, the limitation of this privilege to certain strong credits also imposes constraints on those parties whose debt does not qualify as money. Hence, there has been an incentive to extend the reach of inside money with payment devices of limited finality, such as the check. Such instruments can broaden the benefits of inside money but may also increase the risk of default or fraud.

Monetary history is punctuated by innovations deposit banking, checks, banknotes, credit cards—that have expanded the role of inside money. For example, in recent years technology has made it possible for virtually anyone with a credit or debit card to pay for any purchase (from a merchant with an account with a credit card company) anywhere with a relatively high degree of finality. In many situations, card-based payment systems have offered considerable improvements over their paper-based predecessors.[6] A merchant selling a good to an unfamiliar customer can accept a card payment with the confidence that such payment is usually, if not completely, final.[7]. Payment by check would not offer the merchant the same degree of finality, and requiring cash payment could deny customers access to credit.

The finality associated with card payments does not extend to every transaction environment, however. Payment cards, and especially credit cards, are often used in situations—such as mail order, telephone, and Internet transactions—in which the cardholder is not present and cannot sign a receipt. In such cases the risk of fraud is elevated, but little of this risk is borne by credit card holders because (under U.S. law at least) their liability is limited to $50 and in practice is often zero.[8] A credit card holder may also withhold payment if he believes he has been charged for goods or services that were not delivered or were defective. In such circumstances, offering blanket guarantees of payment finality to merchants would create an unmanageable risk for card issuers. Instead, merchants bear most of the fraud risk in the form of liability for chargebacks (debits to a merchant’s account resulting from disputed payments) from the card issuers. This risk allocation has made “cardholder not present” credit card payment more expensive and generally less attractive to merchants unwilling to accept the risk of chargebacks. Internet transactions seem especially at risk, and this riskiness is reflected in fraud rates for on-line transactions. Trade publications have reported rates of credit card fraud as high as 2.1 percent for Web-based transactions, roughly ten times the rate for face to-face transactions.[9]

The past few years have seen the debut of several new types of on-line payment arrangements, at least partly in response to the difficulties associated with card-based payment over the Internet. These arrangements offer the promise of making it possible for anyone to pay anyone on-line, even in situations in which card-based payment would be infeasible or uneconomical. The most innovative arrangements, sometimes referred to as on-line currencies, bypass the traditional, bank-based methods for clearing and settlement of payments in favor of a simple “on-us” funds transfer—that is, a transfer of a claim on the on-line currency issuer (in the form of an account balance) from payor to payee.[10] While the finality of such transfers has thus far been of a limited nature, the most successful on-line currency issuer, PayPal, now offers its users finality guarantees under some circumstances.

What is the future of this type of payment arrangement? To date, industry reviews have been mixed. Most observers concede that on-line currencies have offered a useful service for person-to-person on-line transactions, most typically those associated with on-line auctions. On the other hand, on-line currencies have seen relatively little use in purchases by consumers from businesses, and most of these exchanges have been restricted to small enterprises. This situation has led some analysts to believe that future use of on-line currencies will be, at best, restricted to the person-to-person niche.

This article examines the likely success or failure of on-line currencies by means of a historical analogy. Specifically, the discussion compares the introduction of on-line currencies to the debut of the bearer banknote, the direct predecessor to modern currency, in late-seventeenth-century London. Despite the obvious differences between these on-line currencies and everyday, physical banknotes, the argument presented here will show that they share some conspicuous similarities in the circumstances of their birth. In particular, the article argues that the key innovation of the earliest banknotes was to provide finality under circumstances in which extant payment systems either could not ensure final payment or could do so only at an unacceptable cost. The next section describes how on-line currencies may be able to fill the same role in the context of e-commerce. The discussion concludes with some observations about future prospects for on-line currencies, again using the (clearly successful) introduction of the banknote as a historical model.

Early Forms of Inside-Money Payment
An initial summary of the prebanknote payment system in Europe, which combined deposit banking, orders to transfer deposits, and transfer of those orders by endorsement, is helpful in explaining the innovation offered by banknotes and the potential for on-line currencies. The system began with deposit banking in Italy, where two merchants desiring to transfer funds would together visit a banker and have one account debited and the other credited. Such transfers in banco spared merchants the transportation, protection, assay, and opportunity costs of using coin the outside money of the time. The banker’s ledger formed a permanent record, and payment within the bank was final.

To avoid the need for both parties to visit the bank together, deposit banking developed payment by check or draft. Checks drawn on banks in early modern Europe, including the goldsmith bankers of seventeenth-century London, fulfilled a role similar to that of personal checks drawn on modern deposit banks such checks enhanced decentralized exchange. Then, as now, the convenience of payment by check created a risk of default because payment was not final until the bank honored the check, and then, as now, whether the bank honored the check depended on the adequacy of the check drawer’s account balance or the willingness of the bank to allow an overdraft. This risk was manageable, but only because checks were generally used by prominent personages and for local payments only.

To arrange the payment of funds outside the local banking system, one had to arrange for payment by bill of exchange. Much like a modern traveler’s check, a bill ordered someone in a distant location to pay a fixed sum to a payee at that location. However, a bill was different from a modern traveler’s check in that it was payable only after some fixed amount of time had passed. Bills of exchange were generally payable in the prevalent currency of the distant location. For a bill to work, the person who wrote the bill (the drawer) had to arrange for someone to pay the bill at the other end (the acceptor). This arrangement was most easily made if the drawer had a close relationship with the acceptor. For example, Renaissance Italians established international family networks to act as acceptors. Later, bankers used systems of agents or correspondent banks. Once the bill had been accepted (always indicated in writing on the bill), it became a legally enforceable claim against the acceptor. Or the acceptor could refuse the bill by protesting it (and indicating so in writing on the bill) and returning it to the drawer.

The transfer of checks, drafts, and bills of exchange extended the opportunity to use inside money beyond the immediate range of a deposit bank. Remote transfer of third-party debt had a beneficial netting effect, reducing a chain of obligations to a single obligation between the original obligor and the ultimate creditor. The benefits of remote transfer were especially pronounced for places that outlawed deposit banking, such as London and Antwerp (van der Wee 1997). Instead of checks and ledger entries, inside money in these locales had to take the form of circulating personal obligations.11 A key advance in promoting extensive use of remote transfer was recognition of the legal standing of parties who had been assigned the debt of a third party in payment. The London Mayor’s Court granted such recognition in 1436, and the concept spread to Antwerp (Munro 2000).

Even with legal recognition, the effectiveness of remote transfers without banks was limited because information was needed to assess the credibility of the debt issuer (the acceptor of a bill), and such information was often asymmetric and idiosyncratic. Transfer created an incentive to pass on high-risk or fraudulent debt. In 1507, Antwerp mitigated this problem by creating a legal obligation of contingent liability on anyone who transferred third-party debt (van der Wee 1997, 325). According to the new rule, when a payor paid in the debt of a third party, the payor was also obligated to accept liability for the debt should the original obligor (or previous transferors of the debt) be unable to settle. Contingent liability gave anyone who wanted to circulate debt a strong incentive to screen the quality of the debt he was attempting to circulate. In practice, the simplest way of recording who had transferred a debt was to have each party sign the back of the debt.12 The institution of endorsement (transfer with contingent liability by means of a signature) spread across Europe and was applied to checks and bills of exchange. Combining legal standing with transfer by endorsement gave rise to the concept of a negotiable instrument, essentially a freely transferable debt whose possession automatically confers upon its holder well-understood rights as a creditor.13 Amsterdam became the dominant hub of international finance by buttressing a payment system based on the exchange of negotiable instruments with a municipal exchange bank (Dehing and ’t Hart 1997).

Another distinctive feature of negotiable instruments was the idea that anyone receiving an instrument by means of endorsement became a “holder in due course.”14 Essentially this concept meant that endorsees almost always enjoyed full creditor’s rights, even in cases when the good that was supposed to be delivered against the original obligation was not delivered or was defective (with some exceptions for sham transactions associated with fraud schemes). This feature enhanced the “moneyness” of negotiable debt by ensuring that good-faith transfers of such debt were final, barring default of the original obligor.

A Model of Debt Transfer
Kahn and Roberds (2001) analyze debt transfer and circulation by endorsement in a formal economic model in which payment by transfer of negotiable debt results in a desirable allocation of risks among payor, payee, and outside parties. They consider a stylized example in which party A supplies an intermediate good to merchant B, who uses the intermediate good to produce a durable final good, merchandise. Merchandise is delivered to customer C in return for a promise of future payment (see Figure 1). However, C may default on the promised repayment for one of several reasons (C may change his mind about the value he places on the merchandise or may be subject to an event such as fraud). Of course, knowledge of his own propensity to change his mind is C’s private information. Knowledge of the customer’s susceptibility to fraud risk is also private information, but the merchant may have some better knowledge of this information than the supplier does. All contracts between parties are subject to limited enforcement in the sense that assets held by a party defaulting on an obligation are not always attachable by creditors.

Optimal payment arrangements in this environment have two salient features. First, overly risky customers (those who have decided they do not want the merchandise or those too susceptible to credit events) should not receive merchandise. Second, in cases in which the merchandise is delivered, some portion of the promised payments by the customer should flow directly from the customer to the supplier, bypassing the merchant. In the latter case, an optimal allocation of risks can be implemented by a pair of debt contracts, one from the customer to the merchant and the other from the merchant to the supplier, as long as the merchant can discharge his debt by transferring the customer’s debt to the supplier (see Figure 1B). In other words, the merchant uses the customer’s debt to pay his own.

A potential problem with this type of arrangement is “adverse selection.” That is, in cases when the merchant deals directly with the customer and the supplier does not, the merchant is apt to have better information about the customer’s creditworthiness than is the supplier. The merchant may then have an incentive to pass on the debt of less credit worthy or nonexistent customers to the supplier. To guard against this temptation, the merchant must accept contingent liability for (endorse) the customer’s debt should the customer be unable or unwilling to pay. For this endorsement to be meaningful, the merchant himself must have sufficient wealth at stake. The intuition behind this result is straightforward. Payment by transfer of debt is desirable because it short-circuits the credit chain from customer to merchant to supplier, thereby limiting the possibilities for successive defaults. Transfer, however, creates an adverse selection problem, so adding endorsement gives the merchant an incentive to avoid transactions with overly risky customers. Enter Banknotes The combination of local deposit banking and circulating debt via endorsement created a successful system of inside money for the commercial elite but left out many people. Merchants, nobles, and others with sufficient standing could pay local obligations by means of checks drawn on a local bank, but these checks were useless for trading at a distance. Prominent firms could pay obligations incurred in long-distance trade by drawing bills payable on their overseas branches, but this option was out of the question for smaller firms. Likewise, large players could introduce others’ bills into circulation by endorsing them over to their creditors, but such players had to have sufficient wealth (and sufficient information regarding the creditworthiness of the acceptor) to have their endorsements valued.

Reliable HYIP Investment Guide for good hyip investing

HYIP Explained

H High
Y Yield
I Investment
P Program
As obvious from its name,it is an investment programme where you get high returns(higher than your local bank accounts offer).High yield is attatched with high RISK also.These are usually online programmes which claim to process your invested amount in forex,offshore trading,commodities,etc and give away a portion of their profit as a high interest to its investors.Some of the HYIP programmes even work out the invested amount in other HYIP programmes and share the profit with you.
These are basically online programmes (websites) and they may provide a postal contact address where their office is located.
You invest in these HYIP online through their websites with e-currency.
HYIPs pay back interest to you on a daily/weekly/monthly basis as per their policies for a specific time period into your ecurrency account
You don’t have to do any kind of activity in return of interest money from them.Thus investing in HYIP means a passive income source where you just invest and sit back & relax while extra money is flowing to you.

It sounds quite very attractive!But there’s the caution:
This passive income system is associated with a huge range of risks,because maximum of these programs are just scams which collect hyip investment from visitors and then close down their HYIP programme,and there is no profitable way to get back your money once you are scammed.
But when you have become an experienced investor,you can easily spot out bad scam HYIPs.Good HYIPs also exist and you may even make profit with scam HYIPs by intelligent investing.
Let me give an example of imaginary HYIP-
3% daily for 50 days
Min deposit-5$
Max deposit-5000$
Referral bonus-5% on all 1st level referral investments
Payment- paid daily,automatic
Payment methods-egold,stormpay

This imaginary HYIP is explained below:

And supposing you invest 50$, then this patricular HYIP will pay 1.5$ daily for 50 days(or in other words you will get 75$ after 50 days)The minimum & maximum deposit that can be made is 5$ and 5000$ respectively.This HYIP has automatic payouts,so you will get paid daily automatically in e-currency account without requesting for your payouts.The e-currencies accepted are egold and stormpay only.And you will get a referral benefit of 5% on your referred investors.In referral system,after joining the particular HYIP you will be given a unique referral url.If somebody else invests in this HYIP by following your special referral url then the HYIP will give you a gift of 5% on the amount invested by this new member.So this is an extra profit that you get in addition to your regular interests.

HYIP Risks

HYIP is invariably associated with risks.There are around hundreads of new HYIPs opening every month but most of them are scams and only a few last for a bit long time.And many a times,even a good reliable programme turned hostile and taken away all your money.So your investment is quite vulnerable to getting scammed! But if you are wise(or lucky) you even make a hefty profit of it.Anyhow, you may be scammed once/many times either now or later.You must always even be ready to suffer a scam attack.And HYIP investor masters always say-
“Don’t invest which you cannot afford to lose”
So you should be ready to lose at all times because you can never say when a HYIP turns a scam & when you have lost money in any HYIP programme you cannot either complain your e-currency account authorities to repay back the lost money or file a case against the HYIP owner(because that would cost you more on lawer charges,etc. than invested amount!)
Investing in HYIP is almost like gambling-the only difference is that if you invest wisely then your chances of losing is reduced…

How Much To Invest

This depends upon the following:
I-You just want to experiment with how HYIPs work
II-You want a part time income
III-You need a full time residual income
IV-You are a person who earns from online GPT programmes(online get paid to programmes)

For the category I-Invest 10$-50$ in few HYIPs to learn various aspects of investing in HYIPs, managing e-currencies, etc

For category II-Invest 100$-500$

For category III-Your hyip investment should atleast be>1000$

For category IV-I personally know how precious are those few dollars that you earn after several days of online surfing.Remenber me-
You will really feel dis-hearted if you get scammed of your hard earned little money by a bad HYIP.If at all you decide to invest,then you must learn all aspects of successful HYIP investing so that you can minimise loses.

If you are a newbie then definitely you fall in the first category.So start experimenting in this HYIP world with a investment of around 10$-50$.Even if you lose,I suppose you won’t become a bankrupt with such less money,but definitely you are going to learn something.

Then you are promoted to the next stage of making yourself earn a part time income.by this time you must have gathered some personal experience as well as borrowed some other’s experience in due time.You might have already made sufficient research work on HYIPs.So I assume you have quite a fair average knowledge about various HYIP aspects & can confidently take wise decessions on which HYIPs & how much to invest.The time required for such experience may be 6-10 months.

If you successfully make a part time earning for some stable months/years then you would like earning a full time earning.All those who make full time income through HYIPs become a kind of HYIP professionals.You will be having a lot of information and can easily spot possible scam HYIPs.You will have developed a personal investment portfolio and an analysis trend.Most probably you will also be helping others invest in HYIPs and giving them advices.You can use your full intelligence & expertise to invest and earn a decent full time income.
Whatever be,HYIP risks are never diminished.So there are chances that you can become bankrupt if you redirect to full time HYIP income without appropriate wit & long experience.It is best advised that HYIP investors restrict themselves to just part time earning,because investing with larger money is equally proportionate to losing larger in scams.

Getting Started

Now that you have decided to invest,you have to make the following steps to get started-
Decide upon which HYIP(s) to invest in.
Make an online payment at the particular HYIP site through your e-currency account.
Receive payments (automatic/manual) to the same e-currency account.
Follow up maintenance.

The decision to join any particular HYIP depends upon many factors.You will learn about these later in this website.

Receiving and sending payments online are done through e-currencies.It is same as real money,except that is can be traded online only.You have to create an online account(for free!) and then fund it through your bank account or credit card.Then using this amount in your e-currency account you can do all the money transactions online.Some examples of e-currency accounts are like paypal,egold,stormpay,etc.Most of the HYIPs accept egold because of the flexibility of maintaining account.And once you have a e-currency account,you are on the threat of several hackers who can illegally get into your account and steal away all your money.So you must follow some security measures as mentioned in article section of this website.

Follow-up maintenance is important for any serious investor.it includes analysis and maintenance of personal HYIP records based upon the performance of each HYIP that you invest in.This will help you in becoming a well organized and well experienced HYIP investor.Details are described in article section later in this site.

Where to Find A HYIP

here are many resources where you can get information about HYIPs.But before I start enumerating them,a word of caution-
You may find several HYIP advertisements in your email inbox.Please don't give much importance to them as they are mostly scams(just think over why would any good and reliable HYIP engage in email scamming!)
Now coming back to our topic-
The major HYIP sources are HYIP monitor websites, discussion forums,news sites,advertisements in any other websites,etc.
HYIP monitors are websites that list a large number of HYIPs with their current status as paying/not paying.These monitor websites are owned by experienced HYIP investors who put their techniques of assessment to determine whether a HYIP is paying or not.I will give you a list of some 19 such websites arranged according to their alexa traffic ranking below:

www.goldpoll.com,www.hyipranks.com, www.hyipinvestment.com, www.hyip-recommendation.com, www.goldrater.com, www.aurumgames.com, www.gold-hosting.com, www.hyip-navigator.com, www.gohyip.com, www.myhyip.com, www.hyipfarm.com, 365money.com, www.allhyip.info, www.worldhyip.com, www.hyip-help.com, www.hyips-analysis.com , www.hyip-assistant.com, www.hyipranking.com, www.hyipexplorer.com, www.thehyips.info

Forums are another source of HYIP information .You will find several experienced and newbie investors hanging around HYIP status discussions in many forums.You can come to know about the personal experiences of other investors who have invested in any HYIP programme.Many investors also post scam reports on any HYIP they had invested in.This information is of great help to you and you must prevent investing in such warned HYIPs.Some good forums are like talkgold.com,HYIPdiscussion.com
You will find many active forums in almost all the HYIP monitor sites also.

HYIP news sites are also a good source of HYIP information.Thes sites collect latest HYIP information and give you a daily updated HYIP related news and issues.Scam news can also be found out in these sites.Some examples of HYIP news sites are like HYIPnews.com,HYIPmailer.com,etc.HYIP news is also a regular feature in many of the HYIP monitor sites.

Another large source of HYIP info are advertisements.You will find such ads almost everywhere on the web & in emails as scam messages.But ads can be very deceptive also.So you must make a detailed research on such advertised HYIPs before investing.

Choosing A HYIP

From the previous mentioned sources,you may have got many HYIP programmes in which you would like to invest.But remember – never invest blindly.You must follow the following steps before you take any decision-

See if the HYIP is listed in any HYIP monitoring website.If so then what is the current status?If the status shows “not paying” or “problem” then straight stay away from it.You must also look for its feedback in forum of the respective monitoring site.Notice its rating, & the user votes will help you determine the standard of the HYIP.

Other large forums contain posts on many new and old HYIPs.Donate some time in researching through the posts made by members of that forum.This will give you many much needed information.Secondly you may also post you experiences of any previous HYIPs or even ask other members to help you in taking a decision.

Look into HYIP news data and stay away from those HYIPs which are declared/suspected scam.

Nevertheless to say, make a search on Google.You may use the following search terms-
HYIPname(the name of the HYIP which you want to research on),HYIPname paying, HYIPname scam,HYIPname problem,etc.

Due Deligence

First you should know that due deligence is different from due diligence.The later refers to a business term used for accessing the credibility of a client during sanctioning loans,etc.Due deligence applied in the sense of investing is however used to refer to certain techniques of self analysis made before actual investing.When you have made some research on your HYIP programme,make a little more effort in checking out these following points.And if you are intending to become a part-time earner,then you must learn to gain efficiency in these following-

Begin with the website name of the HYIP.Check if the domain name is free or a paid domain name.Free domains names(sub-domains) are like HYIPname.something.com whereas paid domains are just HYIPname.com(note the extension may also be something else like .net,.info,etc).HYIPs hosted at free hosting are pure scam.Aviod them at all costs.

Look for contact info of the HYIP administrator.If the contact email is a free email account such as yahoo.com/hotmail.com/gmail.com,etc ,then resist yourselves from investing in such a HYIP.If a HYIP which cannot even afford to get a paid hosting/email, then how can it pay high interests to you!

See in the contact information if they give you a postal address/telephone number.if not,then may be the HYIP administrator does not want himself to be revealed to the public.Don’t trust him, the HYIP may not be very reliable.

Notice the websites design of the HYIP.If the design looks unique & professional,then it’s a good sign.If the site is built on similar looking common cheap template design with an indifferent faqs section,then probably the HYIP is not intended to last for a long time.A good HYIP should have a professional design with fast and well responsive customer care.

Read through all the text in their website.ther should not be much spelling errors.And they must not over-emphasize again & again over their high interest returns.

What is their interest return rate?Any HYIP which claims to pay more than 3% daily is probably a scam & will not last for a long time.Many HYIPs promise to pay high rates such as 10% daily for 30 days or 50% daily for 3 days,etc.They cannot possibly be genuine because it is not very possible to make so much profit from actual forex/trading in such little time!

Do they offer referral income?If so then this is a bad sign.Because giving referral money means asking investors to recruit others to their HYIP.If a HYIP is good then it will eventually gain reputation & people will invest in it without the help of referrers. Anyhow small referral money is usually given in many good HYIPs also.So a HYIP with no referral is a good sign.

Mark what is the minimum investment required.Many HYIPs have minimum investment as less as 1$,5$,10$ or so.Just ask yourself ,what kind of trading will any HYIP do with 1$ or 10$ from you! Actually they don’t trade at all.they are just ponzi schemes.Dont invest large amounts in them.A good HYIP should probably have a minimum investment of around 40$-60$.

Check out if the payments are daily,weekly or monthly.Daily payouts are best preferred because with every day of the programme’s existence,your chances to be in profit increase.

Many HYIPs offer investors with an internal account on their sites wherein the interest is deposited.Later on the amount is transferred to your online account(e-currency) on request.Others have no internal accounts and pay you directly to your egold account.The second is preferably better.

Check for whios information about the HYIP domain name.If you find irrelevant information such as random meaningless words or controversial contact information ,then it is better to avoid.The whois data shows domain name,registration date,expiration date,administrative contact,etc.If the HYIP says it has been in this HYIP industry for a long time,but domain name was registered a few months back only ,then its reliability is in doubt.You can use whois.ws to see the whois information for free.

Respectable HYIPs never spam or let their users spam with their links.So if you came to know about a HYIP through a spam email then be careful!

Look up in the about us/faq section in the HYIP site.If it provides a similar set of information that you see in most other HYIP sites then,it has got an uncustomised cheap script.The HYIP may not be genuine.

Email the administrator of HYIP and ask him questions like “how can you make pay so high interests?” , ”Who are you and where do you stay?” , “Can you have a telephonic conversation with me sometime?”
If the webmaster dosent bother to reply,or replies in a very awkward & non-convincing manner then he is trying to hide away facts from you.He will never say that he is running a ponzi scheme,but you have to identify it! You amy also ask for previous business history to evaluate the ability of the HYIP owner to make the desired profits with your investment.
You will get experienced in all these aspects as you spend more time in this HYIP world! So never worry if you cant make a final conclusion from accessing the above factors, you woll gradually learn them with time.It is very strongly recommended to read our free hyip investment guide first before developing your actual due deligence skills.

Investment Strategy

he key to a profitable hyip investment is just a single word-
“diversify”
It means you divide total investment among several different HYIPs so as to minimize risk.Investing in a single program is risky, because if the program collapses, you lose all your money. But if you put your money into many programs, if one of the programs fails, you will still have money in other programs.So by diversifying you virtually decrease the % of lost money in your portfolio.
Profits can still be made from investments in other HYIPs that are operating simultaneously.So it is quite possible that with a wide and wise portfolio you will always make a NET profit.
How wide should portfolio be?
It should be as wide as possible.For example if your total investment is around 500$ then portfolio should include atleast 5-10(or even more) different HYIPs.Invest about 50% in long term good old HYIPs and the rest 50% in new HYIPs.These may include –
Long term HYIPs are those that give around 1.5% daily and have a good track history over 1 year with good customer support,professional web design,etc.These are real HYIPs and actually pay customers.
New HYIPs include those who pay around 2-3% daily with unique professional web design & certain degree of reliability in other factors.
You may invest in ponzi schemes that give 3-5% daily,but join them early to be in profit.
If you like to take more risk(or try your luck) then join in pure scam programmes such as 10% daily for 30 days or 25%daily for 5 days,etc.Join early during launch of the HYIP and invest very less amount to minimize risk.
Scam HYIPs are run on ponzi schemes.A ponzi is an illegal pyramid system in which higher level members are paid with the investments from newer members.They actually have a short life time.Many people lose money in these scams.Their websites are made from cheap old regular common templates(not a professional & unique design),anonymous contact information,give high interest rates(>3% daily is suspected as a ponzi),have an attractive referral system,etc.

The average life cycle of ponzi HYIPs can be stated as:

Extra Long term HYIPs(ponzi & real HYIPs)
Such HYIPs pay about 1-1.7% daily or around 25% monthly interests.They usually last for a long time over upto a year.Invest in these only if it has a good history for about a year because profit recovery is very slow.

Long term HYIPs(mostly ponzi)
They pay 2-3% daily and last for about 4-5 months.Some even last for more than half a year.These are the most optimal HYIPs for investing.

Medium term HYIPs(ponzi)
Pay around 4-7% daily.Last for about a month(sometimes 15 days) to a couple of months.

Short term HYIPs(ponzi)
Pay >10% daily.Last for few days to few weeks.

In conclusion of this section we can summarize:
Don’t invest in new programmes thet pay less interest(around 1%daily) with a poor non-professional web design,etc.It is a scam ponzi where you cannot get much profits because the programme may close before you are in profit over your principal.

Invest in long term HYIPs which pay less(around 1.7% daily),but have a unique professional web design,and other positive features of a good HYIP.Invest in them if they are already over 1 years old with good track history.

You may invest in HYIPs which pay 2-3% daily,have a professional template design & other good features.Chances to be in profit is good.

If you like to take risks then invest in ponzi schemes that pay 3-5% daily.But you should invest while the HYIP is still new so that chances of profit recovery is good before the HYIP closes.

Invest in still higher interest paying HYIPs if you can risk higher.HYIPs such as 7% daily for 60 days or 50% daily for 3 days are real scams.however if you are lucky,you can be in great profits provided you invested while the HYIP was just new.But risk factor is also very high and I suggest not to invest more than 40$-60$ in such high risk HYIPs.Its always better to avoid them.

Getting Scammed

Unfortunately there is no way to assure that you won’t lose money when you join a HYIP.Basically don’t expect to get back your money,but you can definitely take your revenge by labeling the HYIP owner as a scammer and making an online(free) suit against him.You can also warn other innocent investors to be aware of that particular HYIP. If you find a HYIP site and wish to invest in,then you may follow the following steps-

Use Whois Lookup sites to find out the Web Owner details information such as IP address, Web hosting company name& address, name& registered address of the HYIP website or country of origin,etc.After you find these ,save the information for future use.

When you make payments to this HYIP then it is very important that you keep all confirmation emails containing information about amount of money deposited ,to whom you paid & on what date you paid. This is very important testimonial required whenever you want to file a case.

If you got deceived then The first things that you should do is to report about it throughout the internet.You may report it in sites such as HYIPnews.com,etc.Also make forum postings in as many forums as you can.Make sure you make a post in large forums like talkgold.com, HYIPdiscussion.com, moneymakergroup.com,etc.Be bold in your statements and give the actual details.I am sure people who read your report will definitely thank for your help.

Then report to egold authorities.Although they wont give back your money but still they may freeze the scammer’s egold account so that he cannot make any more transactions.Send complains to the web hosting company of the HYIP asking them strongly to suspend the hosting of that HYIP on charges of scamming.Try to give all your testimonials to convince the fact.

Finally make a fraud complaint to legal authorities.You can file a complaint at www.ifccfbi.gov the official website of the Internet Fraud Complaint Center, administered by the US National Bureau of Investigation and the National White Collar Crime Center.Any body can file a complaint(nationality is not a bar) and its absolutely free of cost.Once they receive your complaint then they will immediately start investigations and take any necessary action as required.

Simultaneously also make complaints to other similar authorities such as www.web-police.org, www.scamwatch.com, www.fraud.org.

By following the above steps you may not get back money but ofcourse you will feel satisfied by taking revenge and prevent others from falling into their scam hands!

Recovery In Scam

Unfortunately there is no back-up if ever you get scammed.This is mainly because of the system flaw.Let me explain this in detail
Now supposing that you invest some amount in a HYIP and after sometime you suddenly discover that you have been scammed of your money.You would probably straightway make a complain to egold authorities about this stolen money and request either a pay back from the HYIP owners account or ask for the HYIP owner’s personal contact information from their records to enforce legal proceedings.But both in vain,egold can’t help you in either of these matters.
If you had made a large investment say a few thousand dollars) then you would probably file a case in court against the HYIP owner.But from where do you find the scammer,because he might have provided with all false contact information!Next,you have to wait for a long period(over a year) to get verdict from court.And by that time the lawyer fees would have been mor than the amount for which you claimed for!
So it is always best said-
“Don’t invest what you can’t afford to lose”

Full Time Income

ts very possible to earn a full time income through HYIPs.But this is largely not recommended because-
HYIP returns are very unpredictable.If you lose all your money,you cannot get it back because it is difficult to trace the scammer.Even egold authorities cannot help you with that .If a case is filed in the court then legal proceedings usually take a long time for verdict & by that time your lawyer fees would have been more than the amount you claimed for!
Investing in HYIPs is like investing in gambling.You never know when you lose,thus there can never be peace of mind or job satisfaction.
And I think there is a little population who actually make full time earning through HYIPs(most of them are HYIP monitoring/HYIP related website owners and the rest few are those whom you see in forums as active senior posters)
Therefore I suggest that you keep HYIP investing as a part-time income source only

HYIP Articles

HYIP ARTICLES HOME

This section is dedicated to HYIP articles.These articles on HYIP are intended for those persons who already have a fair basic information on HYIPs.If you don't know much about HYIPs then we strongly recommend to first read our HYIP INFO GUIDE for complete HYIP information.
HYIP articles are little bits of information that fortify your knowledge base.You must develop a good habit of reading latest HYIP articles to have an updated info.Our advanced HYIP articles are mainly focussed on critical issues related to HYIP investment.Each article revolves around a specific topic giving you a detailed description.These extra HYIP information articles are written in easy language and none of our articles publish any hard-core technical/research papers(which usually confuse HYIP investors),
However we present important HYIP issues in a very easy to follow and quickly understandable format.These HYIP articles are for your use as information only.If you find these HYIP articles useful then just link to that article from your blog or website.But you are not allowed to put any of our content on other sites.So if you want your readers to read these HYIP articles then just link to that particular HYIP article!

Since this site is relatively quite new,we have few articles for you.Actually it really takes time to compose good articles.I dont want to compromise QUALITY for QUANTITY.So just expect some little but helpful HYIP articles here.New articles are added almost every week.Neverthless to mention,just check out every 7 days.Now get down to our article index below & enjoy reading...

HYIP ARTICLE INDEX

Understanding Virtual Currencies
Learning To Use Egold
Egold Security Measures
Concept of HYIP Test Spend
HYIP Forums-The Most Important Tool