BitConnect now $1B market cap. Here is my summary

Hi Everyone,

For those of you who are not aware of what BitConnect is, it is an investment platform that offers on average a 1% daily interest rate by loaning out their tokens. They use the loan you provided to trade on the volatility of Bitcoin using so called 'bots'. You receive your 1% interest on a daily basis and after your loan terms end, you receive you capital back.
If you google BitConnect, the first thing you see is 'ponzi scheme' and there is no doubt that you need to research and look into the platform before putting any money into it. In this world it is important to be skeptical.
Below are reasons people think it is a ponzi scheme and then the reasons some people think it isn't, with some rebuttals.

Ponzi

1.The 'its too good to be true' comments are ripe in the BitConnect discussions. The crypto world is full of scams and it is only natural to be unsure when returns of 1% are offered on a daily basis. A 1% daily return is an incredible amount, which if you use the compounding interest by reinvesting your returns, the profits become really insane, really fast (look at the spreadsheet link below). Surely this isn't sustainable is the question posed, it must be a ponzi scheme is the natural reply to this.

_ The mystery surrounding the platform in terms of who created it and where the company is registered. The name of the creator is Ken Fitzsimmons but this is most likely a pseudonym, similar to Satoshi Nakamoto (bitcoin creator). The company is registered in the UK but those offices do not exist. This is sounding all too ponzi isn't it, or are there striking resemblances to Bitcoin?

_ The Referral Program, there is a referral programme which sounds very ponzi like and as such the naysayers believe this is without a doubt a scam.

_The bots, nobody has seen the bots work and thus they probably do not exist.

The BitConnect Community Response

_ The term 'its too good to be true' gets thrown around a lot with BitConnect. It is natural for humans to feel that way, we have never been offered returns like BitConnect is offering. We give our money to the bank and they make money with our money, only to return it with a small % but what if we allow our money to work for us? That is what BitConnect is doing. You lend the money to the platform and they make your money work for you. Anyway, 1% returns in the Crypto world is not unheard of, in fact that isn't a lot in this incredible world. Remember BitConnect trades on the volatility of Bitcoin and we see huge % swings in Bitcoin.
_ Additionally, the sustainability of the platform is questioned especially with the compounding interest because soon they will be paying customers a huge amount on a daily basis. Remember BitConnect is now a $1B platform, they have an exchange on their platform and they control 90% of the coins through this exchange.

Here is how they make money:

1.1 Firstly, they are making money via all the trades on their exchange ($12m alone in the last 24 hours, check this link https://coinmarketcap.com/currencies/bitconnect/#market).

1.2 Secondly, they are getting people to loan money to them in the form of BitConnect tokens thus, they are holding the coins which simple supply vs demand means the coins value goes up (see link https://coinmarketcap.com/currencies/bitconnect/#charts). They hold these tokens until your loan agreement comes to an end and then they pay you the USD amount of your loan (NOTE: Not the same amount of coins you loaned them).

For example, you could have started a $1010 loan and sent 7 BitConnect tokens to the platform but when your loan comes to an end in 299 days, they pay you 2 BitConnect Tokens because the value of the token has gone up and $1010 is now only 2 BitConnect tokens (its pretty genius). Therefore, they are holding the majority of the coins and the price has gone from $0.12c in January to $160 now, imagine the amount of money they have made just from holding.

1.3 This is now 11th on CoinMarketCap and has a marketcap of $1B - to put it in simple terms, they are massive now! They also have the potential to expand into many different areas and won't have to trade with just bitcoin, they could start using other Cryptos, they could start lending Bitcoin to exchanges to provide liquidity because of their huge inventory of Bitcoin and BitConnect.

See the following links from Jeti Knight:

The mystery around the platform is understandable, if you give your real name, you will have people in suits knocking on your door asking questions. Especially when a platform is offering returns such as this. It makes sense to keep the company relatively secret to avoid it being shut down. Although I do agree, this does add to the suspicion, we want to know everything before we put our money down but in this case it might not be possible. You just have to ask yourself if you would have put your name down if you created the platform?

Referral programmes are very common these days, Uber uses one, Coinbase uses one and there are many more examples. It is a great way of marketing the platform and its something used regularly in the business world of today.

Why would BitConnect show anyone the bots? That's their secret ingredient to make this whole platform come to life. If they show everyone it will be copied. Despite this, there are rumours that BitConnect will start to be more transparent with the community in the coming months, so for those wanting to wait, more information should become available soon.

Additionally, bots are not unheard of in the trading world, they are used in Forex and stockmarkets around the world.
But even if there are no bots because of the money they have been making through the trades on their exchange, their coin value going up and having a market cap of $1B you would think they can still sustain the platform.

See the following link:
https://www.youtube.com/watch?t=3s&v=RDYcpCa9FkE

Additional points:

• There are growing communities who support the platform, the biggest being YouTubers.

• There is a blockchain conference next month in north America and BitConnect is a gold sponsor with a guest speaker (see link https://blockchain-expo.com/northamerica/sponsors/)

• BitConnect had technical issues in August, the website was down for a few days. That was their chance to pack up and run, they didn't and they paid back the money.

• BitConnect is on a blockchain, unlike any other investment platform in this space.

• There are a number of BitConnect offices around the world

Here are some BitConnect YouTubers to follow:
https://www.youtube.com/channel/UCPWHmSfAsAiaKhMxNoIoByg
https://www.youtube.com/channel/UCWZbtMeOAb_qpEVUl551l7w
https://www.youtube.com/channel/UCNXsvi791-1eDTgX-WMN7Zg

Here is a free compounding spreadsheet:
https://goo.gl/yAi2CX

Remember, this is not financial advice, I am not your financial adviser. There are huge risks with investing in this platform despite everything I have mentioned, nobody knows for sure the answers yet. I have basically done the hard work for you, you just need to follow a couple links, watch some videos, read what I and others have written and make your own choices. In my opinion even if it is a ponzi the risk is worth it.

If you feel this has helped you and you want to join the platform, please sign up with my referral link:
https://bitconnect.co/?ref=cbvv1992

Would love to hear your comments.