IWSF – Ch 260

Multi-Level Marketing (MLM)

Also known as Network Marketing or Pyramid Selling.

In typical marketing, sellers and consumers are clearly distinguished. However, MLM is structured in a chain where sellers become consumers, and consumers soon become sellers.

MLM itself isn’t illegal, but it usually conjures up a negative image. This is because in Korea, large-scale MLM scams erupt every now and then, just when you think they’ve been forgotten.

The most famous case is the Jo Hee-pal scandal, dubbed the biggest fraud since the founding of Korea. The damages at the time amounted to over 4 trillion won.

How many publicly listed companies achieve an annual net profit exceeding 4 trillion won? Yet, a mere individual accomplished this incredible feat!

In return, tens of thousands lost their fortunes, and hundreds of families were torn apart.

Of course, that was illegal MLM, but even legal MLM isn’t without its problems. While those at the top of the pyramid might make a lot of money, the reality is that the majority of members earn less than minimum wage.

No, far from earning profits, there are countless people who have accumulated debt by spending their own money on sales activities. How many young people have wasted their time and money after going to meet a long-lost classmate or army senior, only to be dragged into this?

Taek-gyu carefully looked around the company interior. He noticed the words ‘JG Blockchain’ attached to the wall.

The internet is overflowing with stories from people who were lured into MLM and escaped, or those who belatedly came to their senses. Because of this, he was somewhat familiar with the nature of MLM.

“Please, have a seat.”

Taek-gyu sat down opposite Min Ha-young.

‘What on earth is this place, and how did she end up doing something like this?’

As he was thinking this, a young man approached.

“Hello. I’m Hong Chang-soo, Deputy Manager, Min Ha-young’s mentor.”

“Yes, hello.”

“Did Min Ha-young tell you about our company?”

“No.”

He naturally sat down next to Taek-gyu and said, “Our company is JG Blockchain, and we develop cryptocurrencies.”

“Cryptocurrencies?”

“Yes. You know Bant Coin or Ethereum, right? As you know, cryptocurrency is the future currency that will replace the dollar and gold. Our company has developed a new cryptocurrency that surpasses existing coins and is about to be listed on exchanges soon.”

“What coin is it?”

“It’s called Jeil Gold Coin. You can call it JG Coin or JGC. We are currently in the pre-sale phase for the coin…”

He rambled on and on, but the conclusion was to buy coins.

Currently, the price of one coin sold to the general public, 1 JGC, is 120 won. However, if you sign up for membership, you can purchase it for half price, 60 won.

“Membership?”

“Yes. If you purchase 2.5 million won worth of coins, you will be immediately registered as a member.”

As you increase your purchase volume and raise your membership level, the coin discount rate gradually decreases to 30 won.

The interesting part starts from here. After becoming a member, if you bring in new members and they purchase coins, the person who introduced them receives 10% of the coin price they purchased in cash or coins. And even if the members below them purchase coins, you get rewarded, and even if the members below them purchase coins, you get rewarded.

This is, in a word…

‘Cryptocurrency MLM!’

Blockchain is a new technology of the 4th Industrial Revolution, and cryptocurrency is its embodiment.

But this has crossed over to Korea, combined with MLM, and evolved into Cryptocurrency MLM!

Taek-gyu clicked his tongue.

‘Damn clever.’

Usually, MLM sells health supplements or cosmetics. But who would have thought they’d do MLM with cryptocurrency?

Even if you attach all sorts of benefits and take excessive profits, health supplements and cosmetics have manufacturing costs. As products being sold, they also need to be certified by related authorities.

But coin issuance doesn’t really cost money. You just have to increase the numbers and send them to electronic wallets.

It’s literally creating something from nothing.

Isn’t this truly the creative economy, or Korean-style 4th Industrial Revolution?

Of course, creating a proper cryptocurrency requires considerable expense to write source code and program it. (That’s why they sometimes disclose part of the source code in the development stage and raise funds.)

Deputy Manager Hong Chang-soo continued to speak.

“The price of JG Coin is continuously rising. It has already increased more than 10 times compared to last year. Even in just a month or two, you won’t be able to buy it at this price again.”

“Hmm, is that so?”

Saying that a product is quickly selling out or that the price will rise soon, telling you to buy quickly, is a common tactic used by scammers.

At this point, he began to wonder about the true nature of this coin.

As Taek-gyu seemed to show interest, Min Ha-young quickly said, “There’s a seminar for new members being held in the seminar room upstairs, would you like to go?”

“Shall we?”

He should listen once, if only to satisfy his curiosity.

The seminar room was one floor up.

Dozens of people were already seated in a small space. There were young people in their 20s and 30s, middle-aged women who looked like housewives, and even elderly grandmothers and grandfathers with white hair.

Min Ha-young sat right next to Taek-gyu, as if she was monitoring him.

After a while, a man in his 40s with glasses came in and stood on the podium. He wore a neat suit, luxury cufflinks, and a Rolex watch on his wrist. Outwardly, he looked like a successful young businessman.

He introduced himself as Team Leader Seong Han-soo and said, “Before starting the seminar, would you first like to take a look at the car in the parking lot?”

In the parking lot in front of the building, a white, gleaming Bentley that hadn’t been there before was parked. People exclaimed in admiration at the car.

“Wow! A Bentley.”

“That car must cost around 200-300 million won.”

“When will I ever drive a car like that?”

Team Leader Seong Han-soo said with a confident smile, “I was born with nothing, a ‘dirt spoon’ (came from a poor background), and didn’t graduate from a good university. But I had a dream. A dream to become rich. So even when I was wearing worn-out clothes and eating convenience store lunch boxes because I had no money, I always pictured myself wearing nice clothes, driving a nice car, and living in a nice house. Others ridiculed me, saying that dream was unattainable, impossible. But I only thought about how to make that dream a reality. And I achieved my dream in just one year. Because I became a member of JG Blockchain. The moment I first saw Jeil Gold Coin, I realized it was the world’s best cryptocurrency that would surpass Bant Coin. So I sold all my assets and bought Jeil Gold Coin, and last year alone, I made a profit of 3 billion won. As you can see, I am now driving a foreign car and living in an apartment with a view of the Han River. You too can make your dreams a reality as easily as I did with just one year of investment.”

People’s eyes lit up at his words. At that moment, Taek-gyu opened his mouth.

“Isn’t that car not very expensive?”

Then Team Leader Seong Han-soo laughed out loud.

“Haha! You don’t seem to know much about Bentleys. Bentley is a prestigious British car brand, a world-class luxury car like Rolls-Royce.”

OTK Company’s main investment is in car companies. He knows at least as much as the average person.

Taek-gyu shook his head. “Things have gotten better since being acquired by the Volkswagen Group, but Bentley is no match for Rolls-Royce. More than that, looking at the headlights and wheels, it looks like a 2006 Continental Flying Spur, and the used price for that is less than 60 million won now, isn’t it? In that case, it’s cheaper than an Eunsung Motors large sedan Cavalus or a Mercedes-Benz E-Class, and leasing it would cost less than 2 million won a month. Even average office workers can afford to drive something like that. For someone who made 3 billion won last year, you’re driving something too cheap, aren’t you?”

At those words, Team Leader Seong Han-soo’s expression slightly hardened.

“Oh, um, I like classic cars. So I tend to enjoy driving older cars.”

Min Ha-young, sitting next to him, pulled his arm as if telling him to stop, but Taek-gyu continued to speak.

“Hey, that’s not a classic car, it’s just a used car. But the exterior is clean. Anyone who sees it would think it’s a new car, not a used one.”

Team Leader Seong Han-soo’s face gradually turned red at the continuous barrage of facts. However, getting angry here would make him look ridiculous.

He smiled and displayed a PPT on the screen.

“I will now explain about Jeil Gold Coin, which you are all curious about. JGC, created with the latest blockchain technology, has improved all the weaknesses of existing cryptocurrencies, and I can confidently say it is the most perfect cryptocurrency. Above all, it boasts the fastest processing speed among existing cryptocurrencies…”

A long explanation that was difficult to understand continued.

Cryptocurrencies have different uses depending on their purpose, but the core is distributed computing technology connected P2P.

But according to the current explanation, this is more like…

‘Isn’t it just game money?’

If the issuer can issue it at will and register it only on limited sites for trading, it’s no different from game money.

He would need to see the exact source code to know for sure, but it seems far from distributed computing.

Can such a coin really be listed on exchanges?

“Are there any questions?”

Then Taek-gyu raised his hand high and asked, “Has the coin whitepaper been published?”

“Whitepaper?”

“Yes. Shouldn’t there be a whitepaper detailing how blockchain technology is implemented and specific details related to rewards? I need to know what’s different from existing cryptocurrency source code to invest.”

Team Leader Seong Han-soo was briefly flustered.

“Y-yes, right. Whitepaper. Of course, there is. We plan to release it on the homepage soon.”

“I’m curious about how the coins additionally issued on the distributed network are distributed. Is the algorithm for proving transaction details POW or POF?”

“Um, ah, POW? ”

“Proof of Work, isn’t it?”

“That’s…”

“Or, POI? Proof of Importance?”

His expression was smiling, but cold sweat was dripping from his forehead. Team Leader Seong Han-soo said as nonchalantly as possible, “As I said, Jeil Gold Coin was created with the latest blockchain technology, so you can see that we programmed a source code that encompasses all those algorithms.”

“What nonsense is that…”

Team Leader Seong Han-soo clapped his hands and quickly changed the subject.

“Okay! Let’s stop taking questions here. I think what you are most curious about is the rate of return. Currently, we are in the pre-sale, that is, the coin pre-sale, ahead of listing, and only members who have joined our JG Blockchain can purchase at a discounted price. The price at which I purchased Jeil Gold Coin at the beginning of last year was only 3 or 4 won. But as you know, it has now soared to 120 won. Perhaps even this price will soon be hard to see. We are expecting to be listed at the end of this year, and the expected listing price is 10,000 won.”

At those words, people couldn’t hide their astonishment. If it gets listed, they can immediately earn 100 times their investment.

This isn’t unrealistic talk. In fact, there were numerous coins that rose more than 100 times through ICO (Initial Coin Offering). Come to think of it, Bant Coin and Ethereum were also only a few cents in the past.

But that’s all old news.

With numerous altcoins already listed and the coin market in a slump, such jackpots have now disappeared.

Moreover, there are hundreds of coins worldwide waiting in line to be listed, and among them are scam coins that are no different from fraud.

Taek-gyu thought with his arms crossed.

‘This looks like a scam no matter how you look at it.’

In Korea, the definition of cryptocurrency is still unclear, so even if you commit fraud, there’s no proper way to punish it.

Is that why they’re doing this?

A young man cautiously raised his hand.

“Is the listing at the end of this year real? What happens if it doesn’t get listed?”

“It’s unlikely, but if it doesn’t get listed, we will refund the full amount of the coins.”

A middle-aged woman also raised her hand and said, “I heard that sometimes they get briefly listed on a small exchange with not much trading volume and then delisted.”

“You are right. There are many scammers and fake coins in the world. But you don’t have to worry about Jeil Gold Coin. Coincidentally, our CEO is visiting our branch today, and if you see him and hear what he has to say, you will gain confidence. I will briefly invite him to this stage. Please welcome him with applause.”

Clap clap clap!

As people clapped in unison, the door opened and a man walked in.

Taek-gyu was startled to see the face of the man standing on the podium. He was in his early 30s. Tall and thin, with a pale and slick face.

It was a face he had seen before in front of Jin-hoo’s house. He was the one who was shouting and being dragged out by bodyguards back then.

‘Why is this guy here?’

He stood on the podium and greeted, “Nice to meet you all, everyone. I am Choi Nam-woo, CEO of JG Blockchain.”