The Incognito Node, which begins shipping next month, is a plug and play device that resembles a triangulated Alexa and claims to passively earn multiple cryptocurrencies.
Grandmas and cats will love it, Incognito’s marketing bumph says triumphantly.
But crypto forums aren’t so sure and pundits are asking: If it worked as well as Incognito claims, why would they even sell it?
Under-the-radar Incognito boasts offices in Vietnam, the U.S. and Malta, and claims the device will earn users an average of $30 a month.
It’s a “little helpful gadget that earns Bitcoin, Ethereum, Binance and more for processing crypto transactions confidentially,” says the website.
Except the slick-as-a-caramel-gelato marketing doesn’t explain that, as Bitcoin and Ethereum are proof-of-work coins, it’s technically impossible for a device like this to earn them in a traditional way, through mining; the computing power required would turn it to slush.
Instead, the Q&A section of the site explains that “Node” is designed to power the Incognito privacy blockchain and primarily earns Incognito’s privacy token—which has an undetermined value, since it’s not listed on any exchange.
The website states that it relies on only the latest proof-of-stake blockchains. The reward, then, is not BTC or ETH per se. Instead, it's earned from "transaction fees," according to an Incognito spokesperson.
Most importantly though, the crypto forum pundits believe that’s unlikely to add up to much.
"The technical claims about proof-of-stake are gibberish,” commented arch crypto-skeptic David Gerard, who outed the device on the Reddit Buttcoin forum.
“The economics are ridiculous - two hundred dollars to make a few cents a day, and they sell it on ‘number go up.’ The whole thing smells of a straight-up scam. [They’re] talking nonsense to suck in the naive,” he said.
Incognito’s site features an unboxing video, in which “Chris from Incognito” sets it all up in less than the time it takes to boil a kettle.
He also demonstrates the Incognito Node’s app, which prominently displays a balance of 0.1 BTC and 0.2 ETH, implying that the device generated around $1,000 in a matter of weeks.
“You could use those profits to buy 5 more, then rinse and repeat. Pretty soon you'll be a millionaire,” quipped one Redditor.
But it’s not the first time crypto gadgets have been marketed at novices. Adoption, after all, is the primary goal.
Back in 2015, a company called 21 Inc (renamed in 2017 as earn.com) raised $116 million in venture capital with the aim of bringing crypto mining to the masses. It was the largest raise by a startup in the cryptocurrency industry at the time, and their star product was the 21.co.
Marketed as a Raspberry Pi “bitcoin computer,” the gadget became a bestseller on Amazon but was outed by none other than Ethereum cofounder Vitalik Buterin, who calculated that profits would be in the region of $0.105 per day.
But there have been successes. Electroneum, for instance, has marketed its crypto phone and app on their ability to “mine” its token, ETC. But the startup is upfront about the fact that no mining actually takes place and tokens are assigned as rewards for participation.
And, while Electroneum’s credentials are prominently displayed on their site, the same can’t be said for Incognito.
Despite their boasts to be “geeks who shipped $100M+ of connected hardware worldwide,” background information on Incognito is lacking.
Decrypt reached out to them for comment, and will update. Unless, that is, they themselves have gone incognito.
This article has been updated, after Incognito replied to point out that interest on coins is not earned from staking, as we previously said.