The Unofficial PoWH3D Wiki
A lot of users were at first confused by PoWH3D, an Ethereum dapp that appeared to be nothing more than satire as it advertised itself as a "Smart pyramid." But as its popularity grew, people began to see the value of this marketplace where transactions result in Ether for all. We've got a full breakdown of the site and how it works. If you're hoping to learn more about Ethereum dapps, check out this article on DappRadar. This video was made with Ezvid Wikimaker.
Can I Earn Money On PoWH3D?
PoWH3D is structured so that all users can gain income from participating. When a user initiates a transaction in MetaMask, a transaction fee is charged. This fee is then redistributed to all users who hold P3D tokens. The amount you stand to earn depends on how many people are playing and how much P3D you own. You can also sell your tokens at any time for a profit. However, the creators of PoWH3D clearly state on their site that it is a game, and they make no promises about how much you'll earn.
Talking With The Developers Behind PoWH3D
Is PoWH3D The Same As CryptoKitties?
Dapps like CryptoKitties and Factbar fall under a category of assets known as Crypto Collectibles, and are regulated by a set of standards called ERC-721. Each one is unique and has its own unique value, so they can't be sold on exchanges like ForkDelta. PoWH3D involves ERC20 tokens that are fungible, so each one is worth the same amount. The things that PoWH3D and CryptoKitties share in common are that they are on the Ethereum blockchain, they employ MetaMask to make transactions, and they are games using cryptocurrency that have the potential to earn players income.
PoWH3D, or Proof of Weak Hands 3D, is a cryptocurrency exchange where ERC-20 tokens can be purchased with Ethereum. The twist of PoWH3D is that the owners of P3D tokens can receive direct earnings in Ethereum every time anyone else buys or sells tokens through the smart contract. Initially sparking fears of a scam because of the satirical nature of its site, the attention brought to PoWH3D has led to it becoming one of the most popular dapps on DappRadar, accounting for as much as 15% of all trades on the Ethereum network.
To fully explain how this site works, let's cover the basics. You're probably familiar with Bitcoin, the popular cryptocurrency that employs blockchain technology. The use of a decentralized ledger provides proof of transactions without a central authority. Ethereum has become an incredibly popular and useful cryptocurrency thanks to a set of standards called ERC20.
Beyond Bitcoin and Ethereum, there are many different types of coins available. Often companies will issue an "I.C.O.," where they sell tokens that represent a stake in their company, or use those tokens as currency to participate in that company's business. These companies don't want to have to create their own blockchain, so they piggyback on Ethereum's blockchain. You use Ether to buy and sell their coins.
These companies don't want to have to create their own blockchain, so they piggyback on Ethereum's blockchain.
No person is verifying your transaction; all trades go through a "Smart contract." To regulate these contracts, ERC20 was developed, a set of six functions that all these contracts need to have. Most digital wallets that support Ethereum also support these other tokens, and coins are traded on exchanges, or dapps.
ERC20 tokens are like Bitcoin and Ether in that they are fungible, meaning each one is the same. If you have two Bitcoins, and you plan to sell one, it doesn't matter which one you sell because they are worth the same amount. But some assets are unique, or non-fungible.
To handle unique assets, ERC721 was created. This is a standard for smart contracts dealing in digital assets that are not all the same. One popular example is Factbar, online representations of facts that are researched and verified so their owners can use the brand as a seal of approval online. If you own a Factbar, you are the only person who owns it at that time, and every Factbar has its own unique value. Highly-desirable Factbars are therefore worth a great deal.
This is a standard for smart contracts dealing in digital assets that are not all the same.
Most assets, whether they are coins or non-fungible tokens, gain their value through the marketplace. Bitcoin has risen in value because a lot of people want to buy them. Similarly, if you have a particularly useful Factbar that is claimed over and over, its value will go up. There are also ERC721 dapps like Ether Shrimp Farm that are known as "Idle games." Once you buy shrimp, they lay eggs at a regular rate, increasing your holdings. You can earn more by referring others, and in theory, the more shrimp you have, the more you'll make.
These types of dapps have drawn criticism for being pyramid schemes, where those at the top earn a lot of money while those at the bottom make nothing. The issue is that early adopters can make money by convincing others to sign up, possibly through false promises of guaranteed income. And all your earnings are still in the form of shrimp or poo or whatever the token may be. PoWH3D's tokens, known as P3D, are fungible, and are designed to earn income in a different way that doesn't just benefit the first few people in.
The basic concept behind PoWH3D is that all users will earn Ether from all transactions. When you trade cryptocurrency on dapps, there are often fees you pay in order to use the smart contract. Typically, the company that creates the dapp keeps these fees. With PoWH3D, there is no company taking anything off the top. Instead, the fees are divided among all users based upon the amount of P3D that they hold.
The basic concept behind PoWH3D is that all users will earn Ether from all transactions.
To purchase P3D, you first need some Ether, which can be purchased through a site like Coinbase. You can then use a browser extension like MetaMask to initiate the transaction. Once you own a token, you are then set to make money just like anyone else.
The creators of PoWH3D defend their site against accusations that it is a pyramid scheme in several ways. For one, they did not do a large pre-mine. Many crypto assets have been criticized because a few investors were given large holdings before the assets were offered to the public at large. But with PoWH3D, even if you only buy a small amount, you will earn some money.
Similarly, while it is true you can earn a bonus by referring others, you also earn Ether when there is any transaction of any kind. This means that even the last person in will gain some income. And what you earn is paid in Ethereum. You don't have to find a buyer for it before it is converted. You will still have your P3D token, which you may elect to sell, but any assets you hold will have to be converted through sales eventually no matter which crypto asset you choose.
And what you earn is paid in Ethereum.
PoWH3D also prides itself on having no central authority. The entire exchange operates on an Ethereum smart contract, which cannot be changed. The owners of the site can't touch your funds. They also don't make any promises about how much you will earn. The site uses memes to poke fun at its existence, acknowledging the risks of crypto markets.
Despite these worries, PoWH3D has grown in popularity, as users appreciate the fact that they are paid dividends as their assets grow in value. Cryptocurrency and crypto assets are still relatively new, and we don't know where the market will go, but this dapp is a great example of how to employ this technology in a new and exciting way.