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RE: Are people fleeing BitConnect?
Even the amount of holdings is screwy. See if you invest $100 when BCC was at $10 you would have 10 coins and now BCC is at $200 your investment went to 0.5 BCC. They can "renew" your loan, and have to give 0.5BCC in your account. Where the other 9.5BCC went, well those are the questions that become complicated. BCC uses deflation to drive up the BCC token price. It is sort of like Venezuelan inflation in reverse. Suddenly, all these numbers are really meaningless.
"...when BCC was at $10 you would have 10 coins and now BCC is at $200 your investment went to 0.5 BCC. " The triangular nature of the price relationship between BTC, BCC, and USD makes it hard to follow, and in all probability deliberately so. You correctly point out that as long as the BCC price rises, fewer BCC tokens will be due to the "lender" upon maturity of the "investment".
"BCC uses deflation" Its very sustainability depends on it. Conversely, imagine that the BCC price fell from $200 to $100 . In that case Bitconnect would need to pay out twice as many tokens as it was lent @ $200 upon maturity. let alone if the price fell to $10 (20x the tokens to pay) , however i think our suspected perpetrators would be long gone by then.
The daily loan percentage payout would hypothetically be subject to similar deflationary effects, but daily rates are completely unverifiable and arbitrary. Bitconnect could simply set the payout percent to 0% and claim the "trade bot" activities became unprofitable. This slight of hand is not possible with the return of capital at maturity in which the full USD capital amount is to be repaid . If there is a BCC crash we might start to see those top two cohorts drain more quickly. However, the relative effect of this would depend on "loan" volume, which like almost everything else about BCC is undisclosed.
It reminds me a lot of Wizsec's investigative report on the Mt Gox theft. Stolen coins were initially mostly in one very large wallet, then distributed to many small wallets. Finally the coins were reconsolidated into a large wallet at a foreign exchange. The main difference is that BCC controls 95% of the market through its onsite exchange. I'm starting to think that a lot of the addresses in cohort 3 and 4 were fictitious as well , and that Bitconnect.co is using Gox like tactics to populate addresses for shill trading to manipulate the BCC price. It would be in Bitconnect's interest to legitimize exchange data with BCC blockchain transactions. Exchange trades should have a BTC counter part that could theoretically be vouched to, however this might be very difficult, like finding a needle in a haystack.
Also, I find it extremely suspicious how correlated BCC price and BTC price are. No other coin is so correlated to BTC. If anything I'd expect there to be a somewhat of an inverse correlation as BCC purports to be a vehicle to trade out of BTC in order to make fiat USD loans. We might expect a flight to a fiat based instrument during a BTC price crash for instance. The charts look nearly identical. It's almost as if someone is literally copying trades from a BTC exchange and pasting those exact trades into the BCC exchange: