This USI-Tech review comes at the request of one of our readers. The company offers automated trading systems for both foreign exchange, and Bitcoin. We will look at both but our main focus will be on the Bitcoin packages offered by USI-Tech.
USI-Tech promotes their system using multi-level marketing, where existing members can earn a commission from any investments made from people they refer to the system as well as people their referrals sign up (with a downline to 12 levels). Here at The Finance Guy, we believe you can't make money with MLM, but we are willing to be proven wrong!
What is USI-Tech
USI-Tech is a technology company, based in Dubai, which specializes in automated trading software. For 600 Euros, you can purchase lifetime access to their foreign exchange robot trader, which plugs into the popular MT4 trading platform. There are several brokers who use MT4, although many are now moving to MT5
In March 2017, USI-Tech released their bitcoin package, which enables clients to automate their mining and trading of Bitcoin. Each package costs the equivalent of 50 Euros (paid in Bitcoin). The goal of the Bicoin package is to make regular payments of approximately 1% per day for 140 trading days (5 days a week). These payments are a combination of any profits generated and your original capital.
At maturity, you will have received payments adding to a total of 140% of the original Bitcoin you invested. That's a return on your investment of 40% in around 6 months. These returns are after all fees charged. You'd struggle to find a better rate of return in the current investment market.
We watched a video about the USI bitcoin package, which explains how it works. Profits are made from mining alt coins and daily arbitrage trading of Bitcoin. Arbitrage trading involves trading Bitcoin on several exchanges and taking advantage of any differences in the price of Bitcoin between exchanges.
If you are new to cryptocurrencies, then this probably sounds like some sort of foreign language. Mining is the infrastructure of any cryptocurrency. Miners provide the computing power to maintain the integrity of the currency. Miners can confirm transactions and accept any changes made to the currency through a 'consensus' system.
As an investor, what you really want to know, is that mining cryptocurrencies can be profitable. Miners earn an allocation of cryptocurrency every time they are the first to successfully solve an equation for new coins. The supply of cryptocurrencies is increased at a controlled rate, and newly minted coins are distributed to miners.
USI-Tech have chosen to mine alt coins (crytocurrencies other than Bitcoin) because at this time, they feel that these are more profitable. We assume that they convert the alt coins to Bitcoin which is then paid out to investors who hold Bitcoin packages. The current target returns and entry price of the USI-Tech Bitcoin package are shown in the image below:
How Do You Make Money With USI-Tech
If the trading software performs as they claim it will, then you can theoretically let your fiat currency increase passively. However, the more attractive USI-Tech option seems to be their Bitcoin package, which grows at a rate of 40% every 6 months. If you reinvest your daily payouts in more Bitcoin packages, then you could potentially achieve an even higher rate of return
The other way to potentially earn income from USI-Tech, is from their MLM referral system. Unlike any MLM we have looked at before, you can earn Bitcoin with USI-Tech without spending any of your own money. This is because they allow you to join USI-Tech for free. You can earn referral commission on up to 2 levels without buying any products yourself.
We have tested this, and can confirm that they will credit you with 10% commission for first level referrals. We set up a Finance Guy USI-Tech membership. To unlock the full MLM incentive down to 12 levels, costs 600 Euro per year. You can choose to do this at any time if you believe your downline iw worth more than this.
USI-Tech works on what they call a 3X3 matrix. This means that you can only have 3 first level referrals and 9 second level referrals. If all 12 levels are filled, then you'll have a downline of 531,441. You have 3^12 spaces available. The commission payable at each level is shown below:
Can You Earn Bitcoin With USI-Tech
Based on our limited research so far, it is possible to earn Bitcoin with USI-Tech. We have seen 10% referral commissions credited to our account, and have seen daily payouts credited to our sponsor, shown below:
As we can see from the statement above, USI-Tech appears to be delivering on their promise to payout 1% per day per Bitcoin package. Having said that, these returns could be due to the fact that the price of Bitcoin has been on the rise over the past week. Bitcoin is extremely volatile. The price over the last month is shown below:
Bitcoin has risen by USD $551 (28%), over the past week, but has fallen USD $45 (1.6%) over the past month. These wild fluctuations show us that trading Bitcoin is very risky, but if done well, can be profitable.
The other way to earn Bitcoin from USI-Tech, is through their MLM referral system. We have opened a free USI-Tech membership, and thanks to a friend who bought one package, can confirm that a 10% commission was credited to this account. We can earn commission on 2 levels without paying for an agency license. With the 3X3 matrix used by USI-Tech, our free membership can earn 10% on up to 3 referrals then 3% on another 9 referrals. This is shown in the diagram below:
As you can see from the diagram above, we are eligible to earn 10% commission on 3 referrals (our 1st level), and 3% on 9 referrals (our 2nd level). The free account allows for a downline of 12 referrals. If we wanted to earn commission from all 531,441 referral spaces in the full 12 levels matrix, then we'd need to pay the 600 Euro annual license fee.
The USI-Tech matrix is similar to a binary mlm system, except is has 3 legs instead of 2. Another more important difference we found, is that USI-Tech pays commission on all referral activity from all downline legs. This means that your upline will never worry about 'balancing' so there will never be a benefit for favoring some legs while neglecting others.
USI-Tech has developed a downline system where there is a good possibility that you will get 'spillover' referrals. A spillover referral is someone who was recruited by someone in your upline, but is placed in your downline matrix. You will earn commission from these spillover referrals.
The USI-Tech Bitcoin package has several advantages over other MLMs we have looked at so far. First is the fact that it is possible to join for free. Then there's the relatively low risk. You can invest in the packages with as little as 50 Euro worth of Bitcoin, and there are no ongoing costs to remain in the system. This means you can not lose more than you are willing to invest.
What Are The Risks With USI-Tech
Any investment will have some financial risk. There is no such thing as a risk free returns, any system which claims to offer them, is misleading. When we looked over the USI-Tech Bitcoin package, we identified some to the risks we believe exist with this product we will go through them below.
As we saw from the table of Uni-Level payouts, USI-Tech pays upfront referral commissions on up to 12 levels. These commissions add up to a total of 35%! This means that when you buy a Bitcoin package from them, 35% of your bitcoin is paid as commission to your upline.
The company also charges a 3% fee on every contract, which is included in the price. This is included in their product description shown in the screen shot below:
USI-Tech has set a target return on their Bitcoin package of 140% in 140 market days. This means that they aim to return all of your initial Bitcoin plus an extra 40%. The payout required to generate this return is 1% per market day on your original investment. However after the 35% MLM commission and 3% entry fee, they are only investing 62% of your bitcoin in the package.
In order to achieve their goal of delivering a Bitcoin payout of 1% per day on the purchase price of your Bitcoin package, the Bitcoin invested needs to generate payouts of 1.61% per market day. We are not familiar enough with mining altcoins or arbitraging Bitcoin to say whether or not this is achievable on an ongoing basis.
The fact that USI-Tech quotes all target returns net of fees, makes the Bitcoin package easy to understand. The expectation is that you invest your Bitcoin for 140 market days, and you are paid approximately 1% of the amount you invested every day. Part of the
Returns include your Capital
As we saw from the product details, the package aims to pay you 1% per day on the amount you invested for 140 market days. This will result in a return on capital of 40%. This means that your original capital is paid back to you over the 140 days. You receive a total of 140%, with 100% being the amount you first invested, and 40% being gains made by the system.
While this may not seem like a big deal, we see it as an increased risk. The daily payouts from the USI-Tech Bitcoin package are made up of combination of investment earnings and your own funds. Every time they pay you back some of your own funds, you have less Bitcoin invested. This means that achieving the targeted daily payouts becomes increasingly difficult.
We would be more comfortable with a system which aimed for a lower daily payout but kept your capital invested for 140 days. A system which paid out 0.29% per day with no return of your capital for 140 market days, would achieve the same gain of 40%. The main difference would be that at the end of the term, you could either make a bulk withdrawal of your original Bitcoin, or automatically reinvest it.
Deposits and withdrawals to USI-Tech can be made using Bitcoin wallets. Your daily payout is automatically held with USI-Tech, and if you accumulate enough Bitcoin, you can buy additional packages. However if you want to take Bitcoin out of USI-Tech, there is a 2% fee, as shown in the screen shot below
It costs you nothing to keep your Bitcoin with USI-Tech, and all fees are included if you decide to buy more Bitcoin packages. If you decide to move some Bitcoin to an external wallet, then they charge a 2% fee. We think that this fee is designed to discourage you from taking Bitcoin out of the system. They want you to keep your Bitcoin with them and buy more packages.
We do not know enough about USI-Tech to comment on how they are running their fund, but to us it looks like the system could be at risk if too many people want to withdraw at the same time.
According to the Bitcoin package video we watched, part of how USI-Tech will earn you Bitcoin, is through arbitrage trading. Put simply, they find differences in the price of Bitcoin between multiple exchanges, and they trade on those differences.
We believe that arbitrage opportunities do exist between Bitcoin exchanges, however we question how much money can be made trading these differences. For example, using the internet, we found the arbitrage opportunity shown below
As we can see from the two market depths above, it's possible to simultaneously buy Bitcoin for US $2,657.77 from the exchange on the left, sell it for US $2,658.50 using the exchange on the right. That's an instant profit of US 73 cents per Bitcoin
The limitations to this strategy are in the volume. There is only US $176 worth of Bitcoin being bid at $2,658.50. That's 0.06 Bitcoin, so our potential for arbitrage profit is less than US 5 cents. To make thing worse the same exchange (on the right) already has offers at lower prices. This overlap in the market depth means that the sale price being shown is currently unobtainable.
Finding arbitrage opportunities is not easy, and when arbitrage opportunities do exist, they disappear quickly. USI-Tech has told us that they generate Bitcoin through Arbitrage, but so far we have been unable to find any proof that they are successfully doing so
Alt Coin Mining
USI-Tech is mining alt coins because they are 'more profitable'. Given that there are now more than 700 alt coins, it is very likely that some offer better mining profits than Bitcoin. However there are risks with this strategy.
The Bitcoin package aims to make daily payouts in Bitcoin. If they are mining alt coins, then they will need to convert whatever coins they mine into Bitcoin to make these payouts. Their strategy is exposed to the exchange rates between coins. If the value of a coin they mine drops relative to Bitcoin, then it's possible to lose Bitcoin even if the mining is successful.
The second risk with mining is in the difficulty. Bitcoin is designed to be released at a controlled rate. A predetermined amount of Bitcoin will be mined every day, regardless of how many miners are looking for it. More miners means less Bitcoin per miner. We assume that alt coins have similar risks of hyper-mining, but can not confirm the rules of all 700 coins.
Lack of Transparency
USI-Tech, has told us how they intend to earn Bitcoin for us, but they haven't shown us. We have not seen any evidence that they can do what they are promising to do. It is possible to make money from mining cryptocurrency and arbitrage trading Bitcoin. However we don't believe that these profits can be scaled or sustained.
Our concern is that even though profits can be achieved with a small amount of Bitcoin, the strategy will become less profitable as they invest more Bitcoin in it. We have not seen any proof that USI-Tech consistently generate these returns into the future.
Should You Join USI-Tech
Given that there is no cost to join USI-Tech, you could open a free account, like we did. If you are willing to risk 0.0229 Bitcoin, then you can buy one package and give USI-Tech a chance to earn you some Bitcoin.
We found that after all the incentives and fees, only 62% of your Bitcoin is invested, however this does not mean that USI-Tech can not deliver on their targeted returns. Our suggestion is that you only invest an amount you are willing to put at risk. If the system does what it promises, you can always buy more packages in the future.
The returns promised by USI-Tech are impressive, and from what we've seen from our short term exposure, investors in the Bitcoin package are seeing daily payouts. We can not say for sure how these returns are being generated. Given the risks we have identified, we would suggest that investors make an effort to withdraw their initial capital early and only reinvest with profits earned from the system.
Since writing this review, we have continued to research the USI-Tech Bitcoin package. We have purchased one package with Bitcoin, and have had a couple of friends also purchase packages. We can confirm that:
USI-Tech has paid commission - as promised we got 10% of the purchase price (in Bitcoin) when a direct referral purchases a package. We were pleased to find out that this seems to apply to all direct referrals, not just the first 3 in the matrix.
USI-Teck has been making daily Bitcoin distributions - Since investing in our first package we have been receiving regular payments of around 1% per day (5 days a week). We have had payments of close to 2% on some days, but never less than 0.8% so far. Remember that these payments are a combination of our original funds, and profits generated by USI-Tech. So far we are slightly ahead of schedule to make a gain of 40% in 140 market days
You can withdraw to an external Bitcoin Wallet - As our daily available balance from return of capital and commission has grown, we decided to test the withdrawal feature. We successfully transferred a small sum of Bitcoin from USI-Tech to an external wallet. One thing to take note of is that there is a 2% fee on withdrawals, which is not included in the 'available balance' displayed on the withdrawal screen. If you want to withdraw all your available Bitcoin, you need to request 98% of the balance shown.. otherwise it will not be accepted.
We'd love to hear what you think about USI-Tech. Feel free to share your thoughts in the comments section below, especially if you have any first hand experience with the company.
For more posts like this, look at our list of mlm reviews.