Bit Connect - Fraud or Legit - Reality Check!
Hi everybody! MS aka cryptogem here. Today, I want to talk about Bit Connect. This is a lending service for cryptocurrencies such as Bitcoin. Here, specifically you can lend your Bitcoins and then receive massive returns every year This is extremely among some youtubers or even Steemit. People seem to be posting these ‘unheard of’ daily returns and getting these massive rewards. Now, before I begin I want to start off with saying that anything I post on cryptocurrencies is thoroughly researched and verified before being put out her. I am passionate about this asset class and it tends to show in my work. I conduct thorough research and not just your normal amount of research, that will satisfy a novice, but I tend to stretch my limits for research.
Bitconnect is one of the things, that I really don't understand. And after reading and comprehending about them, there are not many things, I don’t understand, . I am a Data Scientist, working on massive amounts of datasets to improve the efficiency of business processes. In short, I have a pretty good head on my shoulders. However, BitConnect seems to test my patience to the hilt. I fail to understand their business model. They guarantee extremely high returns on your lent money, returns that are absolutely unheard of and only wreak of disgusting Ponzi Schemes. You take from one investor and give to another. This can work extremely well in Bull markets….psst.. the one we are seeing in Bitcoin recently. And what a Bull market it is. Madoff ran a Ponzi scheme for more than 20 years. Only when there was the 2008 Financial crisis and all hell broke loose in Financial Markets, did his fraud come to light.
If Bitcoin suffers a correction, which ought to be sometime in the future, because no asset can indefinitely have an upward trajectory, not even Bitcoin. Having said that, any dip in Bitcoin will be temporary and a buying opportunity. I am extremely positive about the long term prospects of Bitcoin as a ‘store of value’, something which gold has been for a long time. However, this is the digital age and Bitcoin is ‘Digital Gold’. Gold has a market cap (if I can call it that) of 13 trillion dollars. Why can’t it compete with gold. At a market cap of 13 trillion, we are talking about Bitcoin at a eye popping 500,000 dollars!
Anyways, back to the topic of this huge Ponzi scheme called ‘BitConnect’. I am skeptical as to where the invested money is going and who's borrowing that money. There is no evidence of any so called ‘Trading Bots’, which they claim to employ. Even if they do, are these some magic bots, which create money out of thin air? They don't show any evidence of it and there's very little talk about where that money goes. You lend your precious Bitcoin and once you lend it out, you have to lock it up for a long time as well and all this starts to sound a little bit suspicious. The disturbing part for poor investors is that you can't prove something as being a pyramid scheme until it falls apart or until it disappears.
You are therefore putting yourself to a lot of unknown risk. From what I've seen and read, I don't see enough to justify that as a running business – as something that can continuously grow over time. There's a huge amount of risk in locking up your Bitcoins and getting Bitconnect for a long period of time. That's extremely risky and in my opinion, plain stupid. Why get greedy for more returns, when you have Bitcoin, which is the single best performing asset on the planet ever since its inception in 2008-09. It has given median returns of approx. 20% every month.. Yes every month! That is absolutely insane!
Maybe, if you're invested early in Bit Connect, you do make money but there's a risk when you know the last one standing is going to pay a heavy price. So, unfortunately, there is no conclusive way to prove that this is a pyramid scheme, but as they say, if it looks and smells like it, it probably is! I don't understand it enough to invest into myself. I've been investing into cryptocurrencies for some time now. I always look for long term investments that are relatively safer. Safe is a word that is seldom used with cryptocurrencies, but some cryptocurrencies are tested and proven legit.
Those are my humble two cents on BitConnect. One advice that is like gold to current Bit Connect investors reading this: Please make sure that you exit before Bitcoin takes a massive dip. It can happen now, it can happen in some time. But when it happens, you will see the unraveling of one of the largest Ponzi Schemes in cryptocurrency history! A 600 Million Dollars Ponzi scheme, nonetheless.
so ponzi's are not economically viable for fiat economy but for new block chain technology eh... lol
Ponzi scheme and pyramid scheme are two different things.
You mix them up in your summary.
The return from Bitconnect is actually stated on their website as being variable. And it approximates what you would get from just holding BTC. So you don't know for sure it is a Ponzi based just on rate of return.
There are some classic signs it could be a Ponzi:
I agree with your conclusion that it makes sense to stay away from Bitconnect. Not because i am CERTAIN it is a Ponzi scheme.
But because many of the behaviors and attributes look a lot like a Ponzi scheme, so why take the risk?
Hi davebrewer,
Thank you for your reply. Appreciate your constructive comments.
Thank you for your frank post. I believe anyone who is investing in Bitconnect or any other lending services should be withdrawing their profit immediately. In case it fails, at least they get their money out. Its all about taking risk.
Hi eadiatu, you are right. This is a bibble waiting to burst and whenever theres a rapid drop in bitcoin, we will see the ripple effects
Everyone there know, that this is piramid
It's a fucking scam/fraud/ponzi what ever.
At least it's a bit better made than the rest like OneCon, Tether, etc.
They surfed on people ignorance and miseducation (or rather lack of education + Greed + Stupidity).
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You have to be technically analytic before you can speak for, defend or against bitconnect platform, the geniuses behind bitconnect are betting on the rise of Bitcoin and they are holding two strong assets (BTC & BCC) which they are exchanging on their platform and pay you back the fallen dollars, turn the chart of bitcoin and bitconnect upside down against your precious dollars. The truth is that many people are not used to winning big and Bitconnect will survive a long time as long as Bitcoin keeps rising.
If it smells like a hamburger, and feels like a hamburger, it probably is a hamburger. Bitconnect cannot be proven to be a ponzi scheme but it smells and feels like one when you look at it. One of the core features of a ponzi scheme is it being unsustainable. On bitconnects site, it says that you get 1% interest. Per day. Ok, lets calculate the compounded interest for 30 days, 90 days and 365 days. That would be 34% in one month, 244% in 90 days and 3778% per year. Something, someone or some entity has to pay for this. This cannot come from thin air. Compare that to the bank giving you like 2% per YEAR for the money you deposited with them. Again, if it smells like ponzi and feels like ponzi, it probably is ponzy coming your way. Get your money out faster than fast and stop fooling newcomers into crypto with bitconnect-propaganda-nonsense!
Nothing is guarantee in crypto world my friend, only opportunities and stop beating yourself up over someone's pain. It's not your pain!
Hi cryptoproff,
We haven't seen a sustainable correction in Bitcoin yet and when that happens, I want to really how they are going to pay investors those promised insane returns.. I hope for those poor investors that this doesn't happen soon
Hope is life!
I'm interested in knowing some of these long term investments you define as relatively "safe". 🙏🏾
I have to say, I put some in one of those lending wallets just to try..and this is already making me itchy.
300 days before your original input is 'free' again. Until now, they are still paying and I am withdrawing those pays asap to get my original input back. Curious what is going to happen.
Dude, look at it this way: you put your hard-earn money in the bank and you are charged some amount based on what you put there. Bank executives and staffs get paid a huge amount of money every month. As a data scientist where do you think all that money come from? Banks build branches everywhere, where do you think the money come from? From thin air?. Of course, it is other peoples money (OPM) put into a profitable investment. Instead of paying some executives and staffs huge amount of money, platforms like bitconnect is paying the money back to people who put it there. They might take some percentages which is none of my business after all banks are doing worse in the name of protecting our asset. Blockchain technogy already offers some level of security even though it is not yet perfect. And do you really understand the core meaning of the word 'decentralised'? Money that is supposed to go to bank executives and staffs are now evenly distributed (decentralized) based to the investor or (lenders incase of bitconnect). I totally disagree with you. Bitconnect and other lending platforms are here to stay as long as their founders don't mess up the system by being too greedy. And if bitoin take some deep as you indicated, it will bounce back. So we can wait.
No it doesnt webyclass, youre using flawed logics. Bitconnect promises to give you 1% interest on your deposited money PER DAY. I calculated the compounded interest for you 3 replies above. Its simply not sustainable and per definition a ponzi scheme. Get your money out faster than fast. Best of luck.
@drdmd, I constructively question your claim that the platform "promises to give you 1% interest" daily. That's completely false. I won't say more as a neutral party, but you should reconfirm your understanding since you're giving others advice on the subject that should be more accurate.
Hi mate! I beg to differ. Do the math. Here is some for you: "Since May 26th, 2017, a person who deposited a loan of $1,140 would have received $871.81 in earnings up through August 3, 2017. This is 69 days, with an average percentage paid of 1.1% a day. This is data, pulled from the system, without using reinvesting or referrals."
Google "bitconnect 1% daily interest" and youll come across many articles discussing this. Here is a good one which i pulled the above quote from: https://steemit.com/bitconnect/@crypto-investor/the-bitconnect-whitepaper-maths-of-a-ponzi
Do your research and you will see the unsustainability of bitconnect.
Best regards
Hi - I'm not supporting the site, but people who promote it incorrectly by saying 1% daily guaranteed, or "promised" like you did, are technically wrong.
"Doing the math" on anything is biased because you can pick any numbers you want to support your claim. Payments are based on whatever interest the site gives for the day, which has ranged anywhere from 0 many times to about 1.9%.
Just because YouTube videos of promoters or the top level Google search results (I guess this is research) show promoters' incorrect claims of 1% promised per day, it does not even remotely equal the platform promising 1% a day as you QUOTED. This is why I'm correcting you. You replied back proving my point exactly.
Again, I'm neutral on the platform, but know that the most common misconception and assumption is that 1% per day is promised and guaranteed, because people who haven't used the platform don't see the mechanics of it.
Statistically, over a period of 30 or 60 days, etc, at times the daily interest over that time frame can AVERAGE around 1%. That means that it can be much lower as I've seen, and much higher as I've seen.
Please do accurate research before you present incorrect info as factual information, which is what my first reply and this now are about.
Best regards.
Were discussing severe level of depth on technicalities. But hats off. I stand corrected! Its completely false what i said that bitconnect promises 1% daily interest. Bitconnect claims to give you an average of 1% interest rate daily is what i should have said.
Best regards
It doesn't claim that either. That's what marketers with affiliate links all across the web say to try to hook people. If you look at the marketing materials on the site, it says "up to 40% per month". "Up to" is a disclaimer and it's up to people to understand that's a range. I don't see anything else regarding claims of an average of or promise like that, nor have I ever since June. The only thing they guarantee is a bonus 0.10-0.25% daily for loans ranging from $1,010 in value upward on a scale. Of course, it's semantics, but that was the extent of my first reply before the conversation was redirected.
I don't like the site if it's a scam as anyone wouldn't, and am not arguing, but just hope people generally spread the right info after proper due dilligence.
Congratulations @cryptogem!
Your post was mentioned in the hit parade in the following category:
I've invested $100 into bitconnect fully aware that I could lose it all. After the first 3 days I've made back roughly 2% of my original investment which isn't too bad given I haven't recruited anyone. If anyone is interested in hearing how that goes feel free to give me a follow. I'm planning on doing fairly frequent updates.
Phinn, please, no more free advertisement for bitconnect please, its a ponzi scheme and its a question of time of when the pyramid falls. We dont need newcomers to crypto falling victim to one of the biggest schemes the cryptoworld has ever seen.
Smart business to post on this sensitive topic, although fairly redundant and in line with tons of other Steemit posts, because whales hate it and will upvote highly.
Kudos for seeing and seizing the layup opportunity.
Hi Steemmatt,
Thanks for your constructive comment. However , I also dont fail to see the hidden sarcasm behind your remark.
Its just a topic that was closer to my heart and I want to vent my anger and frustration at this Ponzi scheme, which is so readily apparent but growing larger by the minute Some of my close friends are enticed by the returns and want to invest in that. I don't want them to suffer when this all goes down the drainhole!
There was zero sarcasm meant for you. I was commending you. I understand that you have good intentions.