Early Discussion of Bitconnect
It is now commonplace knowledge that some YouTube bloggers were shills for BitConnect. One such was CryptoGordo. His YT program appeared on my YT account ([email protected]), where in he gave a very favorable review of BitConnect and urged everyone to get in early where the best money-making potential existed. In his review he clearly noted the referral program as favoring the early birds.
I responded with the following comments:
"You describe a classic Ponzi scheme which will injure many downstream who will probably lose all their 'investment.' It's good for the early entrants who are used in these schemes as lures. This sort of thing gives governments a pretext to barge in to protect people from this sort of scam. That's unwanted, but helping such schemes along will give regulators the incentive." [8/7/2017, [email protected]]
To this CryptoGordo replied:
"That's all true but this isn't a scheme - unless Bitcoin itself is a ponzi scheme too. Believe me, I've been researching this for months and thought the same thing at first but I'm sold on it now, that's for sure. The people behind Bitconnect would be dumb to shut it down because it's more lucrative to keep it as an honest business model. Like I mention in the vid, it's like how BTC won't ever get a 51% network attack because it's too lucrative to just keep mining it instead."
I did not think CryptoGordo was on point in his reply. However, in his brief apologia he did use the word "lucrative" twice. I did not pursue the discussion further. Interestingly, a reply was made by Landlord Life which I thought I'd add to this exchange of views. It follows, thus:
"cryptogordo, they don't have to run off with your money for it to be a ponzi. Just think to yourself, where is the value coming from? It comes from people buying the token/loaning the money. Then because more people are using the service, the value goes up. Then more people buy the token, and then loan, so they can get a return. Since more people just joined in the value of the token goes up. So while the bitconnect coin itself may be a legitimate cryptocurrency...the lending part is what is ponzi. It is really interesting to me you don't see it as ponzi. If someone loans money to you, its usually for a purpose, whether it be an investment they will make a return on, or buying something. Then its repaid. But where is the money coming from to repay the loan on the bitconnect? Its purely coming from then banking on more people buying the coin and also loaning it. more people buy coins to loan, price goes up so they can give you the return you want and their return. Its the very definition of a ponzi. Why not just hold the coin? Its because the act of loaning it, and having to buy more coins in the future is what is driving the price up. (means its a ponzi) But its smart of you to not have much in. So you are not risking that much. You can make money off schemes like this, just seems to me your money would be better off in another coin. But to each his own. Just my 2 cents."
There was also the following reply from Feed, which seemed to be addressed to me (qatman2) in error:
"Equating Bitcoin with Bitconnect? Cmon man. We all know you're not dumb. Just be honest. Say it as it is. It's a pyramid scheme, it's risky and you sure will make a lot of money for months or more. But don't lie (to yourself and your viewers, who may be less knowledgeable)."
The Feed comment seemed to stir CryptoGordo to reply again, thusly:
"Look, I'm just sharing what I believe it to be. If it turns out to be a ponzi, I'll be on this channel admitting it the very next day. But I'm not investing my life savings into it either so if it turns into a ponzi tomorrow, I'll still sleep happily at night."
It goes without saying: A Ponzi scheme is identifiable by its structure. Hence, CryptoGordo is trying to have his cake and eat it too. He recognizes that Ponzi schemes are scams, but the "lucrative" returns seem to justify putting some money in it (though not his lifesavings), as most people look favorably on getting more money (my fair share - whatever that may be). However, if it does prove to be a Ponzi scheme, you bet! CryptoGordo will cut his profits (or unexpected losses) and bail out. He hopes this plan will be his "Get out of jail free" move. Could be.
