POWH3D

I've seen some discussion on this lately and thought I'd try to clear some things up. Powh3D is a contract on the eth network that is very popular right now with over 13000 eth and counting in the contract. What is Powh3D? Should you invest? I'll do my best to answer that.

Disclaimer: I am not a lawyer, financial advisor, or a resident of the US. You should not make financial decisions based on my advice.

Powh3d is a new contract based on the concept of the original contract, powh. Powh was first launched over a month ago and essentially sold "shares" in the contract for eth. For every buy and sell, 10% of the eth would be distributed amongst "shareholders" equally and the price of "shares" would increase on a buy and decrease on a sell. I personally invested a little into this scheme but unfortunately the contract was emptied due to an exploit in the contract.

Because of this hack, powh3d supposedly underwent vigorous testing to ensure that the contract was completely safe. Unless you are an expert in solidity or machine code (lol) you're gonna have to take them at their word. However, it is pretty easy to verify that the code does what they say it does (that is, distribute eth of buy and sell as dividends, price of share changes based on buy or sell).

Should you invest? Well, you have to realise, buying in costs you little less than 20% of your investment immediately (10% on buy-in, 10% on sell). So you have to depend on dividends and also the price of the shares increasing if you want to make a profit, which means you should probably think it through.

But there is also lot of misinformation about this contract. First, it is not ponzi, it is a pyramid scheme. In a ponzi, there is not enough to pay off all investors. In powh3d, there is always enough to pay off all investors assuming there is no vulnerability in the contract. There is no function to close the contract or siphon funds to the creators. It is a pyramid scheme because it depends on other people buying in to pay dividends to shareholders. I do notice some differences in the classification of pyramid schemes and the functioning of the contract. I cannot say if it's legal or not, but I think you could make the argument that Powh3D is a "skill based game" rather than a pyramid scheme.

So some of you might be thinking: Woo-hoo! I am guarantee to make money. This is not true. Please don't think this. You could just as easily lose money when you sell out. There is no guarantees, if the contract ever reaches 0 eth the amount of eth lost will be identical to the amount of eth gained. This is my metamask address if you want to see an example of what the contract does.