To Ponzi or Not To Ponzi ===>> A Look Into Bitconnect & the BCC coin
A Look Into Bitconnect & the BCC coin
To Good To Be True
The crypto-currency landscape is changing at light speed. Everyday, it seems, a new ICO is being proposed or some new business is delving into Blockchain technology. Having seen many Bitcoin lost or scammed from their owners, I tend to be very cautious and/or pessimistic when it comes to investing Bitcoin in "the next best thing." I tend to stick to the proverbial "if it sounds to good to be true then it probably is to good to be true" frame of thinking, and it has served me well in the cryptocurrency world.
So of course upon hearing about Bitconnect, I too dismissed it as another scheme to have me part with my Bitcoin, only to never see it return again. I dismissed it without much thought, only to hear of it again, and again. Several months passed and I happened to watch one of @craig-grant 's videos where he discusses his Bitconnect endeavors. I was blown away at some of the numbers he was talking about. I started to pay attention and read many of the comments that followed his videos. There were many detractors, and Craig doesn't usually engage them. His responses usually make more sense to him than to those its answering, cranking up the naysayers' frustrations regarding what Bitconnect is or isn't. With many calling it a pyramid or ponzi scheme, and some actually responding with posts and videos of their own calling Bitconnect a scam and/or a ponzi scheme.
Bitcoin is often called a Ponzi scheme
One side, usually Craig Grant, sagaciously responding with one or two intriguing words while the accusing side against Bitconnect rants and raves in posts and videos about Bitconnect and its faults and perils. Neither side really providing much concrete evidence as to what Bitconnect is or isn't. Craig will usually post a video showing his account on Bitconnect, which shows that the site is working for him at least, while the other side complains that Bitconnect is a scam without providing irrefutable proof other than supposition. I have decided to look into Bitconnect with the intent of finding concrete evidence and presenting here to the Steemit community.
Bitconnect Ltd.
The Bitconnect.co website was created last year, on Tue Feb 09 07:08:17 GMT 2016 according to a Godaddy.com Whois query. Some see this as an immediate red flag indicating that Bitconnect is a Ponzi scheme or scam. All this points to is that Bitconnect.co is a new website, and possibly a new company. As a side note, Steemit.com was actually created on Creation Date: 2016-02-21T22:44:33Z, making it just as new of a website as Bitconnect.
Unfortunately, the Bitconnect Domain name was registered using a third party company that essentially keeps the true ownership of the domain name, Bitconnect.co, hidden. Unlike Bitconnect, Steemit.com did not go the same route. Steemit actually names its CEO, Ned Scott @ned , and lists a company address.
I was able to find a press release from March 21, 2016, announcing Bitconnect's new lending platform for the Bitcoin community. In that release, it appears that the premise was simply building a peer-to-peer lending community built around Bitcoin. It does have an email contact for a 'Vindee" listed as the CFO with an email address of [email protected], phone number +12015881679 and an address of Balboa, San francisco, 94118, but no unit number. A few other press releases list the company address in Ashford, England but no phone number or address.
I tried calling the phone numbers that I did find for Bitconnect, but none seem to work. I have emailed [email protected], but have not received a reply yet. I also was able to locate a Mr. Ken Fitzsimmons as being the lone share holder of Bitconnect LTD, a recently incorporated British company. The address that is provided in England is a virtual office address. Several internet searches for Ken Fitzsimmons did not turn up any information other than he is a British citizen. So just like Bitcoin, it is anybody's guess as to who actually owns and/or operates Bitconnect.
satoshi vs satao??
One thing I did learn is that just like Bitcoin has Satoshi Nakamoto as its supposed architect, Bitconnect, oddly enough, has Satao Nakamoto as its Head of Development. Doing a search for the real Satoshi Nakamoto is about the same as doing a search as to who actually is Satao Nakamoto. Not knowing who either person is doesn't make either one a scam, but I know it doesn't add confidence to the average investor. The biggest problem is that you can't complain to Satoshi or have any recourse should the Bitcoin software fail and your investment is lost, and the same goes for Bitconnect. I have created a support request ticket within Bitconnect in regards to a referral. I have not received a reply yet.
How does it work?
According to early 2016 press releases from Bitconnect, they originally started as a peer-to-peer Bitcoin lending site. Then in November of 2016, Bitconnect announced that they would be offering an ICO for their Bitconnect Coin. Now you would be able download a wallet, mine for the Bitconnect Coin as well as trade it on exchanges like Bittrex. Strangely, in this press release, Vindee is listed as a Marketing Manager and not the CFO as in an earlier release. There is a Github link where you can download the code for the Bitconnectcoin.
Bitconnect is actually one of the early ICO's before this recent boom with ICO's garnering millions and millions of investment money within a matter of hours. Bitconnect appears to have been early with its ICO, but maybe that is why it is ahead of the curve when it comes to its recent pricing. The price early this year was under 0.25 US Dollars and then around April of this year it climbed over $10 Dollars, trading within this range until recently. In early June 2017, the price of the BitconnectCoin jumped to $55 per coin, and has been trading within the $50 range for the past month, trending with the crypto-market for the most part.
The BitconnectCoin is similar to Bitcoin in that there will be a finite amount of BitconnectCoin produced or "mined." According to Bitconnect, there will only ever be 28 Million BitconnectCoins in existence. I believe there are some 6 Million+ coins left to mine. Initially, around 10 million coin were sold to early investor before going live on their own BitconnectCoin Exchange as well as Bittrex. I don't believe they trade on Bittrex anymore if they ever did. Coinmarketcap currently lists BitconnectCoin at around $52 US Dollars per coin with a market cap of around $355 Million US Dollars. According to Coinmarketcap, the BitconnectCoin trades on 4 exchanges, with over 80% of the action taking place directly on the BitconnectCoin exchange. Some will argue that this is a sign of a ponzi scheme, or at the least a self-perpetuating scam that will eventually run out of new "suckers" to keep the scheme going. It does not bode well to have 80%+ of the trading taking place on 1 exchange, but then again, there are no fees for trading within the Bitconnect exchange, and also it is less than a year old which could explain low trading volume elsewhere. So they don't have fees for trading, so how do "They" make money and How can they pay such a high return rate?
Stay Tuned for Part II of A Look Into Bitconnect
Please note: This is not an endorsement of Bitconnect, nor is it financial advise. Also, I am a recent investor/lendor in Bitconnect, Bitconnect Coin and other crypto.
Full Steem Ahead!
07/03/2017
@streetstyle
So You Want To Mine Bitcoin?
Code rT5ix8 =3% off + Bonus in STEEM!
I provide the bonus STEEM
sources:
http://www.newsbtc.com/2016/11/17/bitcoins-fastest-growing-community-issues-innovative-bitconnect-coin-ico/
http://govdatauk.com/company.php?id=10278342
http://www.newsbtc.com/2017/05/22/bitconnect-coin-sees-massive-growth-amid-surge-adoption/
https://chainz.cryptoid.info/bcc/
Hi! @streetstyle
It was hard for Japan in the typhoon yesterday.
And, the humidity is high yesterday, the temperature is high today.
Mining at home is already the limit.
And today, just before, I bought a hash rate using your Genesis ming code.
I bought 0.102 BTC minutes so you will be notified of the reward for you soon.
Wow, thanks @asim I really truly appreciate that. I will look for the rewards and then do so with a reward of steem for you ok. Thanks again!!
full steem ahead!
You’r welcome :D
Because I could not use my own discount code, I used to remember @ streetstyle so I used it.
@asim , I do see the the reward I received from Genesis Mining. I will send you some steem very soon ok. Thank you so much.
I confirmed the deposit. Thank you.
It was a good day with win-win relationship with each other.
Yes that is right @asim
Not sure if you read my recent post on Bitconnect
I think this might be better than the mining but with more risk. Let me know if you have any questions on this.
Regarding Bitconnect, in Japan, there are so many tweets that are fitted to HYPE, and it is hardly talked about.
I do not see it in Slack or tweets that I trust, and I myself am not considering investing in Bitconnect for now.
@asim I fear it could be and I fear that it isn't.
Awesome post! This is the most honest, unbiased, but still skeptic post ive seen on bitconnect! Cant wait for the next one! check out my bitconnect epiphany vid lol https://steemit.com/investments/@nesstopher/bitconnect-epiphany
Thanks @nesstopher I have done the homework need to pen it now, well type it but stuck on some other project that is kicking my butt!!! ahgggh
There is a few strange things about Bitconnect for me... First one is that NOONE can ever guarantee results of trading, and they guarantee to pay certain percentages, and second is that it just looks like a normal HYIP. There is thousands of this things online, this one is just more successful, why should they stop then if they are making tons of money? :)
They only guarantee the bonus payouts which require bigger investments to get. On average they are not sitting much higher than Hash Flare or Genesis especially as Bitcoin price increases. They are at .88% average right now. That's not like the 2,3,5% daily that we've seen with some true blatant HYIP scams that are up and gone in 40 days or so. Many people by now are already way in the money with Bitconnect which is unusual for a scam/scheme. That being said I consider it a risk and advise caution. However, how many other things in life have you wasted $100 on without thinking twice? That's all it takes to get started.
exactly, it seems very scammy to me but, coincidentally, just this morning I decided to throw $120 at it and see what happens.
I agree that there are some interesting if not strange "co-inky-dinks." @dejavu
Great post. Followed, resteemed, upvoted. I'll be anticipating part 2.
Thanks for that @jetiknight
Here is part II, let me know what you think.
Thanks for sharing
Good post, I "invested" a small amount into Bitconnect to see how it worked and even though I see it working as advertised there is one really important question that sticks out as a red flag and that is the issue you already mentioned with the owner structure being a secret.
That said, there are some things that I have yet to see any review take into consideration. The first is the biggest detail that seems to be ignored and that is the volatility software does not trade BCC. It trades based on the volatility of BTC & dollar. That's a huge difference. If it were trading BCC, I could see this system as being a ponzi or at least broken but by trading on volatility, it gives the system stability. In theory. To understand, let's compare Bitconnect to the Federal Reserve that is printing BCC out of thin air and selling it for BTC. Immediately Bitconnect is making a 100% profit. However as soon as someone lends their BCC, they are gaining twice the value for the term of the loan. This gives Bitconnect leverage to increase the volume the volatility software can trade. The practice is not uncommon in trading but by loaning back to Bitconnect, gives them much needed leverage to buy and sell. This is similar to how traditional banks use money you deposit.
Screenshot form my loan acct:
Here is where it discusses it more: https://bitconnect.co/learning-center/bitconnect-bitcoin-price-volatility-software/
Another detail I see being missed is that although they say " The interest rate that we can guarantee on your investment while using our investment platform is calculated by our BitConnect Price Volatility Software " the truth is there is no actually guarantee of daily interest. I think this statement is worded poorly because it is referring to the interest that have already been calculated in real time for that trading period. Also people are misinterpreting their chart to be the guarantee when it clearly states "up to 40% per month" As you can see from the screenshot I provided of my account, there are days where there is no interest. And unless someone who can prove otherwise, even if you lend $1010 or more, 0% + .1% is still zero. It just so happens that BTC is pretty stable which makes loan investments relatively risk free while their software for tracking volatility has a proven track record. Surely if the company were to tank overnight, just as any company, investors would likely lose their money. So despite it smelling fishy with the "guaranteed interest" that really isn't saying that and the lack of transparency which is a major red flag, there is no actual evidence that they are scamming anyone. To the contrary nobody has said they have lost money. Yet. But then if it were a real ponzi, we wouldn't know about it until people lose their money right? So what are you going to do? Play into your fears until more information comes out? That's for everyone to decide for themselves but people really shouldn't be calling something illegal when there's only indicators not evidence of being a scam.
Research volatility trading for a better understanding.
https://tradingsim.com/blog/how-to-trade-volatility/
https://www.elitetrader.com/et/threads/how-does-volatility-surface-work-in-market-practice.282853/
https://volatilitytradingstrategies.com
https://www.math.nyu.edu/faculty/avellane/harcourt.pdf
With investments, there is always the possibility of losing everything. Especially with investments that are dependent on the fiat system. Educate yourself but don't be paralyzed by fear. Avoid giving into excitement and make investments your comfortable with and can afford to lose.
If you're ready to try Bitconnect for yourself click here. https://bitconnect.co/?ref=Creadis
I have been thinking of investing into bitconnect! Thanks for this.
@becerra18 If you do decide, use my referral, and I will give you a small Steem Bonus based on the amount invested. Let me know, here is my referral link.
https://bitconnect.co/?ref=gmoneybtc
I used your referral link.
Hello and thanks @becerra18 What service did you sign up for? I so far don't see anything in my referrals. Keep me posted, thanks.
Bitconnect.
@becerra18 Unfortunately I do not see you on my referrals tree.... my friend signed up too and he removed me (gmoneybtc) from the sponsor box before signing up. He didn't realize that is my sponsor code. He then had to create a support ticket asking to have me placed as his sponsor. Let me know if you have any questions. Thanks again though.
I probably did it wrong. I'll double check.
yeah let me know @becerra18 if you have any questions. If need be, the support at Bitconnect can fix it. Thanks and let me know if you open a ticket and I will be on look out for your sign up. Thanks again.
full steem ahead!
Cool, will do.
@streetstyle great article. Looking forward to read the next part soon.
Also, note that there is new crypto scam (Ponzi scheme) on the internet. It is promoted on coinmarketcap.com and other sites. Take a look @izbing @deadspace @shirish:
https://steemit.com/scam/@cryptogirl1/warning-scam-cryptoclone-people-lost-their-money
Thanks for that @cryptogirl1 It can be hard to distinguish the good actors from the bad ones sometimes, but sometimes, they just stand out really bad like these guys.
Absolutely agree. I found more (pretty obvious) scams on cryptocurrency market and will write about them soon. I am really sorry to hear that many people have lost their money in those schemes. I can't pay back to them, but I can inform.
Right now I am writing an article how to recognize pump-and-dumps. You are writing second part of bitconnect. This community works!
Now I am following you and will read your posts on a daily basis.
Thanks @cryptogirl1
full steem ahead!
Please @streetstyle consider reading and resteeming this post. This is important!
https://steemit.com/steemit/@cryptogirl1/alert-the-billion-coin-scam-is-promoted-on-steemit-resteem
I can tell you that I was the victim of a couple of ponzi-scams and the feeling is horrible. One of them is offline right now but I think the other one may still be accepting new suckers. Not sure if it's good form to name them on here. If you're interested in the details let me know. Thanks
Thanks for sharing, I personally have a few loans out on bittconnect, it seemed like a nice little investment, and it helped me save my crypto. BBC has been steadily going up so that's going to be nice as well. I don't try and refer people or anything, just though it was a good investment.
@blackamine , how long have you had your Bitconnect loans for If I may ask?? And also, have you re-couped your seed money?? Thanks.
3 months now and yeah I earn everyday but I usually don't take it out until the end of the week.
So you are taking out your interest payments, that's pretty good @blackamine In about 6 1/2 months you will be able to pull out your initial investment.
I've seen videos on youtube of investors showing their capital being released. I'm still taking a gamble in my eyes, same with genesis mining but so far so good though. I think what makes it look scamy is that people try hard to refer people...which I don't bother to do at all. But its always good to be cautious, if I lost money on BCC I wouldn't cry about it so I'm willing to take the risk. Good luck.
@blackamine When people ask me "how much should I invest," I always reply, "how much can you afford to lose and not cry about it." That always gets'em. But yes, I have seen others that have taken out there initial investments from Bitconnect, something you never get with Genesis-mining.
Yes I feel bitconnect has the advantage over genesis mining
When I get back from a 4 day Beach vacay, I will do a comparison @robbierush
but I suspect you are right!!
Hey, there is a good chance this is a scam, but what convinced me personally to invest a tiny little bit is that I played with automatic trading systems with forex trading in the past. It is possible for a good auto trading software to get good returns like this on a very volatile currency that Bitcoin certainly is. Some days auto trading systems will fail, and I think what they are doing looking at the days there is almost no interest paid, is they just autokill the software to stop trading on the days the formula don't work. Ironically the zero paydays convinced me more than the paydays :) I'm taking my seed money out asap and hope for the best with the rest and manage risk.
Thanks for the input @melowilo It is very much appreciated.
full steem ahead!