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RE: Bitconnect: Scam or not to Scam
If Bitconnect is a scam it is a very lucrative one for the people putting it on. Why would they want to shut it down?
Further, the returns are not guaranteed for the majority of the loans. I imagine 90%+ of the loans made are $1000 or less. For those at $1010 and above, the interest structure is no different that a CD at a regular bank.
I predict the rate of return will diminish significantly until it is no longer attractive.
What types of banks make that high of yield? I have never seen a bank go over 3% APY in current market conditions.
I didn’t mean the yield was similar to an established bank - I just meant the structure of the product.
The interest structure of a CD is yearly not daily like bitconnect. Bitconnect's yearly interest rate compounded daily is astronomical. And the owners of Bitconnect will shut it down once they realize the game is up and people start pulling out instead of putting in. This game will naturally go to zero, or the owners could cash out early while still driving the coin to zero. Perhaps bitconnect the crypto isn't technically the scam, but bitconnect the lending program is. The owners will still have plenty of bitconnect tokens to sell in a flash thus making millions and driving the coin dramatically down. The first adopters will earn plenty of money, the owners will make plenty, and the ones holding the bitconnect token or still have cash in their lending wallet will lose their shirts. This is a zero sum game. The bitconnect crypto will simply transfer money from some people to give it to other people. The writing is on the wall. If people want to experiment, go right ahead, but be prepared to lose it all. This is nothing more than a grand poker game.