Wednesday, December 11

Why HYIPs Collapse One Day

Hello everyone,

Industry is really quiet, every day starts tens of programs, but seems like they all are crap. While we are waiting for good programs to pop up we can talk about some other things, for example, some article from Chris a.k.a ex hyip-pulse would be right in time. This time - why programs close one day. It is clear for everyone that reason is not the same for every program, but there is many different reasons. If you want to find out why just keep reading.



It is clear that every HYIP will end at some point. Some of us expect it and try to be prepared by diversifying and analyzing HYIPs, some ignore this fact and others do not even know about it. The people who go for the first strategy are most likely the ones who make money on the investor side of HYIPs. The other side of HYIPs? The admins. But why are HYIPs so hard to predict and why do they collapse at such different points, sometimes even if they are very professional set up and very promising? In this article I want to show you several reasons for a collapse of HYIPs. Maybe this will help some of you to be prepared and to develop a profitable strategy.

Reason 1: The Greedy Admin
You still think HYIP admins are running their programs in order to bring people into profit? I can assure you that this is not a goal for most HYIP admins, and even if it is, it is not on the first place on their priority list. Primarily HYIP admins want to make good money for themselves. So what is the greedy admin? It is a admin which does not care about his investors – not even a bit. He has two goals: Suck enough money in to cover the expenses of the program and next suck more money in in order to scam and run away with a good amount of money that was worth the risk of running a HYIP. What programs do these admins operate? The programs which collapse before anyone was able to get some profit are mostly operated by them. The worst thing is that some of these crooks are able to set up high quality programs. So you will not always be able to avoid such quick scams. There were programs in the past who cost thousands of dollars, still they scammed down after just 20 days. Shocking, huh?

Reason 2: The Reached Goal
Every HYIP admin has set some goal he wants to reach with his program. Be it to earn enough money for buying something expensive or to reach some specific lifetime. After this goal was reached he will stop payments and (if he is a nice guy) close the program down, so newbies can not get into the trap and loose their money into a program which is not paying anymore. I think the goal thing is the main reason why this industry is so unpredictable. You never know what the goal is the admin has and you never know when it will be reached. It could be tomorrow or within the next months. No chance to know. Maybe he has not even a money goal but just want to reach a natural collapse?

Reason 3: The Natural Collapse
This leads us to the next type of admins. Some admins are not as criminal as others. They really want to get some people into profit and they also have set a goal: To cover their expenses, make a nice living from their programs and to let the program die a natural death after some time. Every program that depends on new deposits in order to pay the old ones will collapse at some point. At some timer there will be not enough new money coming in to pay the old deposits. This is called a natural collapse. Depending on the plans a HYIP is offering and his popularity and way of growth this can take between 14 to 1000 days. Remember on thing: If they program has grown rapidly (very fast) and reaches a Alexa Rank of 10,000 that means danger!

Reason 4: The Unexpected Stuff
Of course a lot of unexpected things can happen in this industry, both for admins and for investors. One thing for sure: In most cases such unexpected things are dangerous and mean a loss – sometimes even for both sides. The latest example was the long downtime of Libertyreserve. Admins still had to pay interest but now new deposits were coming in. I think we all know what this leads to for new programs and for programs with a bad financial situation. They will collapse because of that. We have seen a lot of programs going down recently because of that. I bet that some admins have not even reached their own goals due to that and maybe even made a loss. Well, maybe not even the worst thing as they also have to learn a lesson sometimes 10 Reasons Why HYIPs Collapse .

Reason 5: Blackmailers, Haters, Hackers And Competitors
The list continues. There are more dangerous things for every HYIP out there. Some people like to bring programs down by spreading wrong things about them. Sometimes they manage to get it viral and bring a program down. Why they are doing it? Nobody can answer that for sure. Maybe because they are ad because they lost in HYIPs? Maybe because it is fun to them? Maybe because they feel inferior and need to show their power? But that’s not all. There are also haters and competitors who try to get some money by threaten the administration of a program. Sometimes they even go that far and start to attack the website or even hacking the website. This can bring every program down very fast if the admin has not much experience on how to deal with such things properly.

Reason 6: Script Issues
Many scripts have back-doors encoded into them making it easy for script owners to get access to the API of the HYIP’s Payment Processors. So without the admin knowing, every penny can be withdrawn. Smart admins will either disable API or set limits daily so even if person accessing the back-door requests money, only a certain amount can be transferred. In other cases, many bugs in a script could make an admin frustrated and make him close his program as well. Usually these admins are unprepared or it’s their first HYIP.

Reason 7: Payment Processors
This can be a big factor on HYIP’s, especially short-terms. Payment Processors can go down a long time due to attacks and maintenance  and accounts can be frozen or hacked. This creates a shortage of funds which leads to forced closing of some programs. A perfect example would be Liberty Reserve. They were down for 4 days for maintenance which led to lot’s of HYIP’s closing. Of course it also makes for the perfect excuse for programs to close early.

Reason 8: Hosting Problems
This is normally not a problem for the big HYIP’s that use dedicated servers, but smaller ones that use shared servers will often run into a lot of trouble. One popular shared hosting service for HYIPs is Koddos. The problem with a shared server is that many websites are hosted on one server. So if one site gets ddosed, the rest also suffer. 100% of the time, it’s best to ignore such cheap scams.  Why do admins use shared hosting? It’s cheap and easier to set up opposed to a dedicated server which takes more time and money. You can check how many websites are on a server here.

Reason 9: Lack of Popularity
Many programs usually never get popular enough and just close in a few days or weeks. Lack of advertising, poor website design, and other features could scare away potential investors. Since most of what we invest in are HYIPs, if no more cash flow comes in, the program collapses. Usually the admin will realize that his/her program isn’t getting popular and he/she will just close it.

Reason 10: Piggy-Backing
Last but not least, piggy-backing. What is it? It essentially means that the program is investing investors money into other programs to generate some more cash flow. This tends to be a bad thing since the amount of money they invest can be very big amounts which never get returned. Take for example, Royalty7, now a scam. Before they stopped paying, many programs were investing money in them. Possibly, Prime Alliance, an early disappointment, was piggy-backing on Royalty7 and got hit hard when they scammed. As you can see, piggy-backing tends to kill a program off fairly quickly if the admin invests blindly.

As you can see, there are many factors that can affect an HYIP and make them collapse. I hope you can use this information to your advantage to make smart decisions and increase your cash flow.





In the end I want to say that this article is so detailed that I have nothing to add. All of those reasons are really true and this is why HYIP collapse. In conditions like now, I think main reason is 1st and 9th. First one because admin just want to collect money and ninth one because there is not that much investors and program just die naturally today faster then ever. 

*I'm not author of original article, original author for article is Chris from ex hyip-pulse.com, article is republished with his acceptance.


Thank you for reading,

David
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1 comment:

  1. Anonymous12/11/2013

    True, every HYIP will collapse one day. I think that many admins do not want to scam, but they have cash flow issues and they are forced to do that.

    ReplyDelete

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