In the altcoin world, there are more scams than there are real projects. While these scams typically fail on their own, there are a few that seem to stick around. The worst part is these scam coins that stick around tend to fall harder and faster when they do eventually fall.
If you are new to the cryptocurrency world, you are much more likely to encounter a scam as you aren’t sure what to shop for when looking at cryptocurrencies. Hex is one project that may seem like a good deal on the outside, but in reality, is one giant Ponzi scheme.
Keep reading to learn more about the Hex cryptocurrency, the scam the owner of the coin is running, and how you, as an investor can avoid these scams.
What is Hex?
Hex advertises itself as an alternative to banking. In the DEFI world, it claims to do everything a bank does, just with no oversight/completely decentralized.
It functions in a way that users send Ethereum to an address, and through a proof of stake process, they receive a cryptocurrency known as HEX in return. Then if they leave this HEX on the blockchain, using it to stake future HEX transactions, they will receive up to 40% returns according to advertisements.
Users can then use the Hex blockchain to ask for loans, lend cryptocurrency to other users, as well as a variety of other bank-driven processes. All without having to go through the process of opening a bank account. Hex was invented and launched in 2019 and reached its current high price to date in 2021. It has since been on a downturn.
Is Hex a Scam?
Here at MintDice, we are 99% certain Hex is a scam. First of all, the man behind the protocol is Richard Heart, a man who has been scamming people for decades.
Beginning in the year 2000, Richard Heart became known as the spam king as he would use various extortion methods to get money from websites. He would often do this through extortion, blackmail, or theft. While he was sued for violating anti-spam laws in 2002, that has done little to stop the criminal who repeatedly creates new Ponzi schemes to steal money. Hex is his latest Ponzi scheme.
Beyond just being run by a known criminal, it is easy to see that Hex is a scam as there is no verified way of making money through it. While users can lend out money to others through the protocol, this alone will not make enough to pay the 40% returns boasted in the advertisements.
Not to mention that this entire thing spells Ponzi scheme. In what world do you just send money to people in order to make money? A dream world, that’s what. It is almost certain that any money Hex stakers receive is money sent to the protocol by new investors and redistributed by Heart himself. Plus, since sending Ethereum to the protocol creates Hex, this provides Heart with a way to launder money and inflate his own currency by claiming tons of people are buying in when it’s really just himself laundering his own money.
When interviewed about Hex, Richard Heart refused to state who owned the Ethereum master wallet for the project. That alone should be a red flag that this project isn’t what it says it is. The second red flag is the 40% returns. No cryptocurrency project offers this. Remember, if it sounds too good to be true, it probably is.
Should You Invest in Hex?
Of course, there is no way to know with 100% certainty that Hex is a scam. After all, there is no way to read the mind of Richard Heart. Therefore, if you wish to purchase Hex, you may. Just know that purchasing Hex is a huge gamble, and you are probably going to lose everything when this comes crashing down.
Many others in the cryptocurrency world, namely Eric Wall, have already surmised that Hex is a scam and have been betting against the coin by shorting it. Wall also placed an outright bet, that Hex will never recover from its current downturn and will in fact go defunct.
As of the writing of this article, he seems to be on the right track, as after the Terra Luna disaster the value of one Hex coin fell below $0.04. But even in its heyday, this coin has never passed $1 in value. Either way, it will likely continue to fall until this coin is officially defunct. Or until the SEC catches up with Heart.
What Cryptocurrency Should You Invest In?
When you are new to the cryptocurrency world, it can be disheartening to look at the price of Bitcoin or Ethereum and know you can only afford a fraction of one. This is for a reason. Bitcoin and Ethereum cost so much because they are proven products and not scams.
As tempting as it will be to be drawn to other, cheaper products in the cryptocurrency world, don’t do it, as most of them are scams. Others, which may have the best intentions, are often promoting products that are similar to Bitcoin and Ethereum which already exist and in the end, they will not gain traction. Thus you should just stick with an investment in Ethereum or Bitcoin.
Don’t get too excited though, as investing in Bitcoin and Ethereum is still risky. You still could lose everything. This is why it is best to only invest money you are prepared to lose.
Final Thoughts on Hex
Overall, Hex is likely a scam altcoin and you shouldn’t invest. Besides just the obvious red flags, the entire system is run by a criminal, and that is enough to turn us away from this project. Instead, stick to Bitcoin or Ethereum—as there are very few projects in the cryptocurrency world that are not scams and these are two of the only ones that should be trusted. Regardless, investing in cryptocurrency always carries risk, so keep this in mind as you invest.