BitConnect Ponzi Scheme Proves You Can’t Be Stupid in the Blockchain
It had to happen, and this week was as good as any. On January 16th, the cryptocurrency lending-exchange platform known as BitConnect shut down its lending program. Further service cuts, perhaps including the complete collapse of BitConnect, is likely. What once was viewed as a bold, new way of making money off of cryptocurrencies has been found to be nothing more than a ponzi scheme.
Of course it was! I marveled at the people who dove into this platform, thinking that this time, it's different! No. BitConnect had all the telltale signs of a classic ponzi scheme. Its lending exchange, which promised daily interest returns (!), featured a tier-level system (!). The more money you put in, the more daily reward payouts you receive (!).
As if that weren't enough to tip you off to the ponzi scheme, BitConnect forced you to have their money in what is essentially a lockbox (!). Those who put in less money had to wait a very long time before being able to cash out their capital (!), while those who put in more money had to wait less.
If you thought that was bad enough, BitConnect had an affiliate program (!). Sucker your friends and family into investing in BitConnect, and you'll receive even more rewards…of course you will!
With the recent severe correction in cryptocurrencies, people are finally returning to their senses. They're finding out that the blockchain markets are just like any other investment sector: you will have bull cycles as well as bearish ones. Cryptocurrencies aren't magic investments that rise in perpetuity.
In other words, you can't be stupid in the blockchain. Just because a ponzi scheme like BitConnect supposedly utilized the blockchain's revolutionary technology doesn't mean it's not a scam. We all know that gold bullion is the universally-accepted form of money. But if you came across a "GoldConnect" business offering daily payouts from gold investments, I'm sure you wouldn't take the bait.
This is the allure of the modern day ponzi scheme. The scam operators earn an audience's trust by invoking a truth, whether it be the blockchain, gold bullion, or some other reputable concept. From there, they associate the truth with a cleverly constructed lie. Add in the promises of riches, and you have the workings of a high-probability con.
The BitConnect ponzi scheme was particularly pernicious because, if you thought about it, it seemed like the daily payouts were possible. Cryptocurrencies have been soaring to the moon, and virtually everyone who invested in them were making money (prior to a few days ago). Daily payouts wouldn't be possible with investments tracking the Dow Jones, but they just might work in the blockchain.
Obviously, BitConnect failed. It doesn't matter how great a ponzi scheme appears. Investment markets, by their very nature, carry inherent risks. Nothing in the world can be based on investment markets to produce daily payouts. The business model is not sustainable, and never will be.
As we've been told all along, if it sounds too good to be true, it usually is.
Brief: Thanks to the collapse of the BitConnect ponzi shceme, investors realize that common sense trumps all, irrespective of the investment.
I was at some point doing a bit of technical research on the top five coins, at that time BitConnect was among those five coins. Looking at the github repo, it didn't take me long time to figure out "don't invest in BitConnect".
Of course, all the issues you're mentioning above are also big red warning signs.
BitConnect also managed to cheat and inflate the market cap somehow, so when CoinMarketCap figured out, BCC fell quite far down on the list.
is bitconnect scam?
Yes!
heehehey heheehey heheheey wasowasowasozuuuuup bitconnect!!
Cuando se trata de invertir en criptomonedas, debemos estudiar los pro y los contra, y ver las señales que nos puedan indicar que algo no esta bien, generalmente las inversiones en criptomonedas debemos verlas como una inversión a largo plaza.
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it was BitConnect scam???