RE: Incentive trees and what we can learn from Bitconnect
I looked deeper into it and I think they can afford to pay out 1% a daily easily for at least a while. Have a look:
Bitconnect is a gamble, but it's at least paying people which is more than I can say for the majority of ICOs. People are being paid and they have the money to pay people according to my own estimate and the estimate in the video. They could always get greedy but they would make a lot less money.
Bitcoin went up how much % this year? People from the stock world are looking at Bitcoin saying no company could ever go up so much in a year. My estimate is based on the fact that Bitcoin and BCC both went up a lot this year but the payouts are in USD value, so think about this.
In any case, in my post I suggest that an algorithm be used to simply adjust the payouts in commissions, either raising it or reducing it, to make it adapt to the market conditions. On Steemit you could at one point make $20,000 for a post, I've seen it, so to say Bitconnect cannot afford to pay out millions when they have billions, is kind of weird. The key is to know how much you have, and adjust your percentages to your budget, which Bitconnect actually is doing.
For example they used to have infinite levels on their reward tree. They reduced it to 7, then 3. This means the referral bonus program is not guaranteed to stay and if they cannot afford it there is evidence they will just remove it.
will watch the video but as I told; as soon as the influx of new money, new people stops, they are doomed. and yes it's a complete gamble as you said.
If people stop buying Bitcoin or Steem what happens to the price? And what happens to the miners or stakers? So I see your point but I think all crypto could be seen as people describe Bitconnect because crypto in general doesn't follow traditional script.
It could all collapse, all of the ICOs, all of the coins, including Bitcoin, but for now people are making money. Here is something amusing, true believer in Bitconnect @craig-grant said in his latest video that when he gets his payouts in the future he intends to buy 1 million Steem.
If doubters are wrong then expect to see Craig Grant as a Mega Whale.
I get what you are saying but btc or steem don't promise you 1% daily roi on a shady bussines model that depends on new investors.
As long as Bitconnect continues to meet it's promises it's not a scam and no one has lost anything. It's paying interest but remember if we look at the history of Steem we were also receiving interest on Steem Dollars before they changed that.
Most people are not aware that Steem also had similar "impossible" daily ROI when it launched in 2016 so they see something like Bitconnect and have no reference. I have reference because I remember Bitshares and Steem which had interest, so I know it is theoretically possible to achieve.
1% daily is possible under the right market conditions and right now in a bull market yes I do tend to believe they can afford it. As far as "shady business model" what is the business model for most crypto?
There is usually a token, the founders often have most of them, then they have to convince a new group of people to buy and hold the token, and then the new group holds until they can convince another group to pay more for the privilege of holding, and so on and so forth.
So if we are going by business model can you show me a business model in crypto space which couldn't be accused of the exact same thing or which hasn't been called a Ponzi? None of these gambles in crypto space are safe, it is all gambling but we are here because we are risk takers.
Yes but 1% daily, almost everyday is unrealistic imho. We still recive "interest" on holding SP 2% yearly.
I wouldn't invest a cent in a system with no proven bussines model or disclosure on how they manage investments.
Just because they pay out now isn't proving that it's not a scam.
The beauty of a ponzi scheme is that you cant know 100% it's a scam unless it all comes crashing down and everyones money dissapears.
Investigate Bernie Madof and what he did and the people he scammed.
He was paying 10% yearly to all investors for 50 years and people were crying and begging to get in his fund.
Also the type of people he scammed were much smarter than the type of people bitconnect is scamming now and because of that the system will be sustainable for much longer. I can see bitconnect staying for another couople of years for sure. Because if everyone just reinvests their earnings and bring more people, they have $$ to pay the old investors and as long as everyone doesn't want their money in the same time or the influx of new cash doesn't decrease. It will work. But for how long?
No one can say for sure.