RE: If Bitconnect is a Ponzi Scheme why isn't Bitcoin also?
The difference largely is that Bitcoin doesn't trick you. You know exactly what it is and it is traded on an open market. Sure you can lose everything, sure they can trick you, but both things are more fair. Markets are inherently risky and are gambling o some degree, but there is also fairness.
A ponzi is a scam. It lies to people to get them to invest, then it pays old investors with the money from new investors. It's that lying and tricking people that makes it so bad. If they were honest... well, a lot less people would invest in them, which would mean less money and make it much less of a good scam.
Ponzis s pay out and they pay out fantastically—until they don't. If you happen to have the bad luck in your timing to just be getting in when the owners are getting out, you lose all.
The moral issue here is that you are making money off of cheating people. Yes, in a market you are making money off people. You are making money off people who don't know what they are doing. Most day traders lose in the long run and the barons of the market just keep getting richer. But again, there is some fairness here. No one is tricking anyone about how to trade. In fact, most investors warn regular people not to trade but to go see an experienced investment banker to get help.
But with ponzis the money is directly from lying to people and cheating them. Now if you are ok with that from a moral perspective, then by all means get into a ponzi. But be careful or you may be the one losing.
Whether Bitconnect is a ponzi or not remains to be seen, but the reason people are doubtful is that they offer what appears to be a completely unsustainable interest rate, they have some strange paper trails that people have followed to deadends, and they send out confusing messages. For example, for the longest time they claimed they used a trading bot, but very recently a lot of the people promoting it have come out and said "there is no trading bot" and instead claimed the payments come from being linked to BTC. This lack of transparency is what is making people nervous. Also, they make it a priority to constantly have new people signing up. This is a red-flag. Normal investment programs don't constantly need fresh blood—but ponzis do. Again, it's not proof that BitConnect is a ponzi, but it does contribute to the level of unease people feel over the program.
The moral issue is, no one is losing money. Show me one person who lost their money to Bitconnect to make the moral argument otherwise you are arguing from a position of no evidence at all besides your emotions or fear of risk. You could argue the same about any crypto, any ICO, or any gambling or sports betting site, and a lot of people say these are immoral and should be shut down because people could lose.
But here you are on Steem where the value of Steem could drop and people who bought Steem could lose. So is it a Ponzi? I think people throw the word around without understanding how it is defined. The same with scam, a scam requires someone to have lose money and a Ponzi is just an unsustainable business model. All of crypto, and banks in general, could be described as Ponzis.
What does a bank do? They ask you to give or lend them your money just like with Bitconnect. They promise to give it back to you, sometimes with interest. Other times the bank even charges you a fee to store your money in a bank. You are okay with this, but you find crypto doing it and it's a clear Ponzi?
Simple solution, if it is about moral why not stay out of crypto, keep all your money in a bank where it is safe and the government can protect you? If not, then you're taking a risk being in Bitcoin, in Steem, in anything not fiat and backed by the government which you trust.
Yes i agree with you in all your points specially the fact that bitconnect has not scammed anyone. Actually i made the same argument here just 5 hours ago lol
https://steemit.com/bitconnect/@foodnature/i-quit-bitconnect#@ankarlie/re-foodnature-i-quit-bitconnect-20171119t014733777z
Anyway I am just a bit worried on those young teens like me who might be not think it through when investing on cryptocurrencies like bitconnect. But for me I only invest i am willing to lose and do it with due diligence.
I conclude people fear Bitconnect because it is not regulated by the banking industry. I don't think anyone cares if you and I make a profit. Where were these people before when ICOs popped up every day taking people's Bitcoin and offering nothing but a whitepaper? All ICOs carry the same risk as Bitconnect or greater because an ICO at best just is a whitepaper and some code with no data from which to determine the probability of a ROI.
With Bitconnect people are at least getting paid and as long as that continues we have more evidence that Bitconnect offers ROI than brand new potential scams like Saltlending which don't even have anything but an idea. Yet people who rant against Bitconnect are okay with others investing in an ICO.
It is all gambling. It is a low trust environment. People manipulate markets, and spread FUD, and the only thing which matters is are people making money and getting paid? If they are holding a token which isn't paying then they aren't getting their return on investment as quickly as Bitconnect lenders, so why listen to them?
Bitconnect may shut down, but the same can happen to a token which can be made obsolete overnight by another token, or copied, or dumped on by a whale.
Yes I totally agree with you.
well said sir.
Thanks
I have read on an article written by a fellow steemian that now bitconnect are targeting young people like me in their advertising campaign making it seem that is "cool" or "smart" thing to do in investing in bitconnect. The author was an investor in bitconnect also but he is worried that young impressionable people might get too excited get money from their parents or worse take out a loan from loan shark and invest without really understanding the risk involved.
Wow, really? That worries me. It's like when cigarettes target kids. I don't like smoking, but if an adult wants to smoke—more power to him or her. But a young person... they may not always understand the risks, esp if the company is lying to try to trick them. So too here. Whether BitConnect is a ponzi or not is unknown, but... that almost makes it more risky. If people want to invest in it anyway, well, that's their choice. But BitConnect shouldn't be targeting young people by trying to spice up their image.
If you open a bank account, what exactly is that? You lend them money, you get what in return? Your own money back? Sometimes they charge you banking fees for the privilege of you lending them money. Bitconnect gives you the money as interest but does the same thing banks do.
You can say it is risky, I accept this. But its your own choice where you put your money. As far as targeting children, what kind of child has Bitcoin or is playing with crypto? If they are then they knew the risk when they bought their first Bitcoin because no government authority claims Bitcoin is a safe investment.
I suggest the two of you continue trusting your government(s), and listen to their advice to avoid investing in ANY crypto at all. If you cannot earn crypto, do not buy it! It's all likely to crash at some point and you could lose all your money in a panic as many before you who react on fear have.
Final point, Bitconnect is not a company but is a blockchain. It has a corporate face and website but their website is no different from any other crypto website. Just like for example Augur, or the hundreds of other tokens out there, there is no guarantee by anyone in government or certified to give investment advice that these token will always gain value.
Will people lose money? You can. So don't invest what you cannot afford to lose, and if you fear it's a scam or too risky then don't touch.
The reason Satoshi Nakamoto had to keep his identity secret? People like these:
https://www.reddit.com/r/Bitconnect/comments/6wgkaj/reporting_bitconnect_to_the_fbi_tomorrow_tired_of/
https://steemit.com/bitcoin/@debugger/i-just-reported-bitconnect-to-the-uk-company-investigation-service-lets-se-what-happens
People are making money and other people who aren't willing to take the risks are afraid that other people willing to take the risk are making too much money from Bitconnect? Otherwise what is the agenda for reporting this? If you don't think it's worth the risk then you don't put your money into it but if the government seizes it then everyone loses.