Bitconnect is Not a Ponzi Scheme!

I was first introduced to Bitconnect (BCC) by @MericanHomestead. After watching his videos and reading his posts, I did my own due diligence. In the process, I came across a post by @thegrinder (and many others) denouncing the lending capability of BCC as a Ponzi scheme. This cause me to dive even deeper and form my own conclusions.

First, we have to look at BCC as a cryptocurrency. It has a blockchain that utilizes open-source code limiting its release and overall amount of distribution. As such, it is mine-able and can be traded just like any other cryptocurrency. Further it is currently number 12 on cointmarketcap in terms of size. It is indeed a legitimate cryptocurrency.

The crazy part comes into play when you look at the lending structure as laid out on the BCC site. You use their own internal exchange and give them Bitcoin (BTC) for which they give you BCC. At this point, you can exchange it back into BTC and leave or you have the choice of either staking/holding or investing/lending. The key behind this is the BCC host is getting BTC which is much more stable.

Staking and holding proof of stake (PoS) returns are linked to what month you purchased your BCC and how long you hold it. By holding BCC out of circulation, you lower the supply as demand goes up through exchange and lending activities, thereby making it more valuable. The BCC host is willing to pay you for your willingness to sit on the currency. This is very similar to any certificate of deposit.

Lending is another option with BCC and the BCC host. You may lend the US Dollar (USD) value of your BCC to a bot that makes trades according to the volatility of the BTC market. After a set period of time, your principle is returned. During this time, you are paid daily interest dividends. These dividends are not guaranteed and can vary widely, from 0% to near 2%. The only guaranteed returns are those for larger loan amounts – again, much like a certificate of deposit. Overall, this is simply a microloan program.

One last thing to address with BCC is the referral program. It really is the same thing as a Multi-Level-Marketing (MLM) structure. Much like Amway or Herbalife, the parent company (or in this case the BCC host) earns money when new people join and purchase BCC. It is definitely not my preferred business structure, but it is a viable one.

Just like with any currency trading (and especially with cryptocurrency), there is a lot of risk involved. At this point, due to the lack of feasible purchase points using BCC, the value is locked up in the speculation involved in lending. As with all high risk investments, you should NEVER USE MONEY THAT YOU CANNOT AFFORD TO LOSE.

In the end, I’ve decided to test the waters. If you like to join me, please use my BCC sponsor ID: ccfoshee

Be sure to leave a comment below on what you think!

No, I am not a financial advisor. Be sure to consult your own before making fiscal decisions.