50BTC Mining Pool Exit Scam

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50BTC

50 BTC was a large mining pool. Near the end of their existence, there was a reported event where balances were switched around, and many users reported that they were unable to withdraw their stored funds. It's unclear how much was lost. There is no record of any recovery. The site eventually went offline.

The country for this case study is not yet known.

About 50BTC

"We’ve created the 50BTC.com pool first because of increasing difficulty of generating new blocks and second because we want to reward your investment in hardware. We don’t like the situation when the most powerful graphic card, presented on the market, can’t give you 50 BTC. Periodic payments from pool allow participants to earn bitcoins and reduce risks of investment;"

"Every time 50 BTC are earned, these bitcoins are distributed between participants according to their contribution. Let’s describe the process of earning bitcoins."

"The server sends to the participant the “block” — it is a cryptographic task which has to be solved by participant’s CPU and graphics card. Every time some solution for this task is generated (no matter if it is correct or not — it just should “look" like solution), it is sent to the server and the server counts how many possible solutions ("shares") you’ve sent. Occasionally, the solution will match hard requirements of the Bitcoin algorithms and this case will be granted with 50 BTC."

"So, when some user of the pool sends “good” solution for the block, the pool will start sending bitcoins to participants. Specifically, it will divide earned 50 BTC between all users of the pool who sent some possible solutions for that block according to the number of shares. The more time your computer was mining, the more bitcoins you will get."

"If someone has the time, do you think you could start a new thread that just quotes all the new 50BTC.com miners asking "Where the hell's my money?". You could also use that as the name of the thread."

"The pool operator has been given plenty of opportunity to respond on this thread after he private messaged me. I'm going to assume he has forsaken all his users and close this thread. I suggest users open their own thread if they wish to discuss 50BTC's unresponsiveness further. The same goes for the opening poster/pool operator."

The country for this case study is not yet known.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

Known history of when and how the service was started.
What problems does the company or service claim to solve?
What marketing materials were used by the firm or business?
Audits performed, and excerpts that may have been included.
Business registration documents shown (fake or legitimate).
How were people recruited to participate?
Public warnings and announcements prior to the event.

Don't Include:

Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

When the service was actually started (if different than the "official story").
Who actually ran a service and their own personal history.
How the service was structured behind the scenes. (For example, there was no "trading bot".)
Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - 50BTC Mining Pool Exit Scam
Date	Event	Description
June 17th, 2014 1:02:19 AM	First Event	This is an expanded description of what happened and the impact. If multiple lines are necessary, add them here.

Total Amount Lost

The total amount lost is unknown.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?