Is BitConnect a Ponzi Scheme? Post#1steemCreated with Sketch.

in #fraud7 years ago (edited)


If Bitconnect is not a scam, Why doesn’t Bitconnect keep profits for themselves? Bitconnect claims to pay investors 1 to 2% a day. Others say it is a legitimate investment and these returns are legitimate.

Whenever you look at a business it is import to consider, if it’s claim are logical and legitimate. Some allege that Bitconnect is a Ponzi scheme. Bitconnect claims to pay from 0 to 3% percent returns DAILY as a result of its trading activity. If it can get these returns, why does it need your money?

Anyone who has dealt with people and customers know they can be a pain. It requires hiring staff, answering emails, managing websites and more. If you can make the money without customers, it can greatly simplify a business plan. If you can prove an easy way to make money, it can be easy to attract investors. One concern that we should consider, is that if Bitconnect returns are legitimate, why does it want your money? It could just make money and then reinvest the returns.

To begin with let’s just assume a 2% daily return. Now for comparison, the stock market returns about 10% a year. We all know that there are 365 days in a year. Simple math (365x2) would indicate these returns are really fantastic before considering compounding effects. A spreadsheet and a little basic math will show how crazy this is. If you take $10,000 and make 2% a day, the returns grow very quickly. Here is a table.


Looking at the numbers in yellow, if you grow 2% a day at the end of day 1 your $10,000 grows to $10,200. This is easy to do on a calculator. At the end of week one this 2% of day has grown to $11,487. Now hold you horses, before you get excited. This too is easy to prove with a simple calculator, -you probably have one on your cell phone. It just takes 7 steps. You multiple 10,000 times 1.02 seven times. You can prove all these numbers for yourself, very easily with a spreadsheet, or calculator. Looking down the chart, the numbers get real big. At 2% a day 10,000 can grow into a million in less than a year. At the end of 2 years, it is worth 18 billion. At the end of four years it is worth 35 quadrillion! I think that is enough to pay off the national debts of every country in the world, and still have money left over to buy everybody person on the planet an ice cream cone, a mansion and a boat. (Yes, I actually shrank the font size on line four.) This is the power of compounding interest. Everyone agrees it works this way. It is not a secret.

The problem is that no one is able to do it, -or we would all be rich.

People want to believe they can get rich quick. It is not that easy. One needs to ask hard questions.

So if Bitconnect is able to give these returns, why aren’t they rich already. It takes money to start a business. That money could be invested and grown daily. In two years they would be billionaires. In four years every person in the world would have a new Yacht!

Simple put ....this does not work!

You only need to understand this once in your life and then apply in every situation someone is offering high yield investments. It makes it very easy to spot a scam a mile away! If it sounds too good to be true, it probable is.

Bitconnect does not guarantee 2% a day. The rate changes every day. I think the variable rate is done as a marketing ploy to keep you interested and engaged. I think it is mostly random, like the roll of dice, or the spinning wheels of a slot machine. I think it is also engineered to keep you interested, focused on something that doesn’t matter and make the scam more exciting. Humans like variable reward, this is what makes slot machines exciting. You never know what is going to happen next. That said, come the end of the month Bitconnect has been paying out daily rewards that average to about 40% a month. This is not realistic, meaning that Bitconnect is a likely scam.

Now in the above table I included several other interest rates. You can pick whichever one you want. All these daily interest rates are ridiculous.

Bitconnect is full of red flags. There is some interesting and excited posts instore that show how this scam works. Stay tuned. There are lots of other factors we can look at with Bitconnect.

Logically, Bitconnect is most likely a scam. If it could make the returns it says it could make, it would make more sense to keep that money for itself. The people behind Bitconnect are not dumb, they are banking on customers who are greedy. Bitconnect cannot logically make the returns it says it can. No one has been able to this is the past. This should give everyone pause. Some will still invest in Bitconnect. Those people are likely to learn an expense lesson.

I am not saying we need to kill all the stupid people,
but let’s just take the warning labels off everything and see what happens.

–Quote from Facebook feed.

Stay tuned. I have some interesting and exciting Bitconnect posts planned!

Edited: Post 2
Inside theBitConnect Trading Bot

Guess when it will collapse Post 3

How Many People Are Involved? Post 4

Inside the Facebook Profile of a Scammer Post 5


I would like to add to your comment about variable daily returns. I like your post that people like it because it's similar to slot machines. I thing there is something more sinister than that. Bitconnect does not have same influx of money every day. If they have low investments they most probably give 0% rate. So almost nobody can withdraw. Next day if they give something, mos people feel like they were missing on investment and are more likely to invest that withdraw. Anyways that is genius, I have seen many ponzi scams, but Bitconnect is one of the best well though I have ever seen.

I actually read a whole book about variable returns. Hooked. It goes into all the design that made Farmville and Facebook so addictive. It really is a well thought out plan! The variable lock up periods based on investment amount... this mean if you invest a lot you get out first leaving the small guy holding the bag. I think these guys are smart enough to have enough invested that they can weather a few bumps.

From Psychology 101 back in college, I recall that the "random reward scheme" is the one most likely to train an animal (which includes people). Your analysis of the variable daily returns sounds very similar; thanks!

I wrote something up a few months ago which to me showed that BitConnect is a scam and I'll be lucky to get my investment back out. I chose the top tier, so I'll be out in a month and a half or so, if it's still around.

Since my investment came from BTC, I likely won't get the full investment back. Had I started in dollars it might be more attractive. I'm glad this is my only exposure, and to Craig Grant, karma works, just sometimes very slowly.

Thanks for your account. I learned a thing or two. Yeah. This double coin with accounting in dollars makes it really complicated. I have been trying to figure it out. Definitely, get out! I was trying to figure out if they held funds in BTC or USD. I am sort of trying to figure out if I can predict when it might blow up... based on funds. Any ideas on that? Is there a way to trace the Bitcoin you send in and see if it was held, or sent out right away.

That's a great idea, hadn't thought of that! :) I think that the fall from 5k to 3k might have triggered their exit, but it seems they survived that. Perhaps they're gaining more accounts currently, than they're losing from the price dipping?

I know that the lack of transparency regarding the bot and the principals should have turned me away at the beginning. Duh. Oh well, it was only a test with a minor amount...

And, thinking further on the transaction tracking -- I sent BTC in, then immediately traded it for BCC, so yeah I think it'll be difficult to follow the blockchains for both...

It is relatively easy to find your bitconnect block chain info with your address. I would think you could use a timestamp of one transaction to find the transaction in the other block chain. I was following a few transactions I saw on youtube; but I did not get that far. I wasn't really sure what I was looking at...

Thank you guys for valuable comments. I have no doubt they keep all the funds in Bitcoin (real funds). They pay back in dollars. One of the reason why they could stay afloat for longer time is because bitcoin price went up. Let's do math.
Bitconnect started around march, 1 bitcoin was around 1000 dollars, now around 4,000 dollars. Let's say I invested 1 bitcoin=1000 dollars. Which is very unlikely, most people started investing in august. But for example sake, lets say I was early investor.
From March till now I should be up around 200%. So my total investment plus profit in dollars is around $3,000. We can add another 500 dollars in compounding. So even even though I made profits in USD, Bitcoin went up at the same time. Bitconnect did not pay real profits to me.

you mean as long as bitcoin goes up in value.. bitconnect will still be around?? As of now.. bitcoin value is $8200.. and still going up.. if the bitcoin still go up in value by 2019.. you mean bitconnect will still probably be around??

Great post, it's just a matter of time before Bitconnecters start calling you a hater :)

You are right! 10 points to you... yeah. I know. You can call me a hater. I did my research. There is more to come!

BitConnect is a scam and pyramid scheme for sure!

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