The Definitive Bitconnect Scam Review
Bitconnect is one of the most talked-about cryptocurrencies in the world. With a $3 billion market cap, astronomical returns in 2017, and the promise of fast-compounding interest for investors/stakers/lenders, you’re right to be interested in BCC.
However…there has been a great deal of controversy surrounding Bitconnect. Even though the currency and platform have been stable and growing for months now, some analysts are calling it too good to be true. After all, Bitconnect promises 1% returns, every single day, for doing pretty much nothing. That’s 3.65X your initial deposit, every year, friends, with opportunities for ever more.
So, is Bitconnect a scam?
The short answer is: yeah, pretty much. More specifically, Bitconnect is a Scheme. A Ponzi Scheme, to be exact.
Ponzi schemes use marketing and big promises to bring tons of new money into a system, which benefits the people who got in early the most. When the hype dies down, the whole thing tumbles to the ground, but the early adopters have already gotten away safely with their profits. It’s the people late to the game who suffer.All of this is not to say that people aren’t making good money on Bitconnect. We’re just saying that BCC’s days are numbered, and people who stay in too long are going to get burned. We also don’t like schemes and scams because they hurt the entire crypto community. For this reason, we can’t recommend Bitconnect. Here are some more reasons why in this Bitconnect review for 2017.
Bitconnect Explained – What is Bitconnect?
Bitconnect is a peer-to-peer trading and lending platform, as well as a simple exchange. It is also a crypto trading bot, which ostensibly generates profits by trading Bitcoin against other coins on various popular exchanges. Constantly buying low and selling high, the bot is said to yield excellent profits which feed into the system and pay for the incredible interest gained by early adopters of Bitconnect.Bitconnect also features a referral and commission system that rewards heavy users of the Bitconnect protocol. When another user joins Bitconnect after following your referral link, you get a percentage cut of their initial deposit. For every user they refer you will receive another, smaller percentage cut. This goes on and on down the ladder.If this sounds familiar, it’s because this is how pyramid and ponzi schemes work. Bitconnect has created a cult of hype, and many of its users are as enthusiastic and committed as people can get. This is also typical of ponzi schemes. More on this later.
Bitconnect – How it Works
The Bitconnect bot is said to perform high frequency trades to yield fast profits which are then distributed throughout the Bitconnect user base. The thing is, if you try to find information about the Bitconnect robot, you’re really going to have to do your homework. It’s possible to extrapolate some conclusions drawing from their Bitcoin Volatility Software page (pictured below), but is this interest coming from trading, or is it really coming from thousands of new deposits?
A lot of BCC users don’t seem to care how Bitconnect works, but that it works. Early adopters are happy, and they’re making lots of BCC which can then be traded for BTC, which can then be cashed out into real dollars and cents (or whatever currency you use in your part of the world.) But the smart money is anticipating the day when it all comes crashing down, which is why BCC isn’t in this writer’s portfolio.
What is a Bitconnect Coin?
Bitconnect Coin (BCC) is simply a coin created for investing in the Bitconnect system. Bitconnect can be bought at a couple of outside exchanges, but is almost always purchased on the Bitconnect site itself. There will only ever be 28 million BCC in existence and the supply is increased through user mining and minting (the expenditure of computational power to break codes that lock up new coins, a la Bitcoin mining).
BCC is the only way to invest in Bitconnect. When coins are staked (held in cold storage, not actively traded), daily profits are generated. After an average of 120 or so, the user may have made back around 100% of their initial investment, paid in BCC. These BCC can then be moved to the general marketplace and exchanged for BTC, or simply reinvested into the Bitconnect system to get even greater returns.
How to Buy Bitconnect Coin
Bitconnect Coin is available through Livecoin and a few other exchanges, but the bulk (95%+) of trading volume happens on Bitconnect’s exchange. Most users buy Bitcoin through Coinbase or another exchange, deposit it to their Bitconnect wallet, then trade it directly for BCC, either from the site or from other users.
So why do you have to exchange Bitcoins for Bitconnect coins in order to invest within Bitconnect. Wouldn’t it be easier to just make it a Bitcoin market? The reason is, Bitcoin is still going to have value when Bitconnect crashes, so the people behind BCC (whoever they are) want as much Bitcoin in their orbit as possible so they can cash out whenever the cookie crumbles.
Bitconnect Coin Review
From an outside perspective, Bitconnect (BCC) seems to be able to do no wrong. I’d certainly not be complaining if I bought BCC back in March at $1.50. At the time of this writing, BCC is $350, or a 23300% return. I don’t care if you think Bitconnect is a scam, that’s beyond insane. Just nuts.
BCC’s main utility is for use within the Bitconnect protocol. It stores value according to simple principles of supply and demand, so if all goes well in the coming months, BCC could be a good buy-and-hold even if you don’t stake it and even if the parent company is super shady. However, to buy and hold BCC would just be dumb because 1% daily profits on a growth coin are a mindblowing combination.
Before you get too excited, however, you’ve got to question whether or not you think this level of growth is sustainable. Are you willing to run the risk of falling victim to a scam that is almost certainly going to collapse in the coming months?
Review of the Bitconnect Website
The Bitcoin Lending Scam Theory
OK, so let’s now talk about why people claim they see earmarks of a scam in the Bitconnect website, beyond the too-good-to-be-true compounding interest system. They are as follows, and we’ve got to admit, they look a little suspicious.
- Why all the spelling and grammatical errors? For real, you can’t get through a paragraph on the Bitconnect site without seeing grievous spelling errors (“Currecy”?!) that make it seem like the website copy was written by someone for whom English was not a primary language. Scams often don’t hire employees or invest in copyediting, because these services would put the knowledge of their nefarious plot into more hands.
- We don’t know who is in charge. One important aspect of investing in any crypto is understanding who the development team is. Certain personalities have emerged at Bitconnect conferences and events, but do we really know who the team is? Nope. This alone would keep smart investors from buying a coin.
- Where’s the bot? You’d think that a protocol that promises 100%+ returns in just months would be very anxious to show you exactly how those profits are generated. Not so with Bitconnect. The Bitconnect robot has a phantom presence on the site. It’s barely mentioned, even though Bitconnect goes into great detail about referral systems and commissions. There is reason to believe that a bot does exist, but why not make this incredible technology front and center? It makes it seem like profits are primarily generated through new user funds brought in by Bitconnect’s extensive marketing efforts. In general automatic trading bots aren’t that great anyway, so people are right to be highly skeptical that Bitconnect has found the magic formula that has evaded all other cryptocurrencies.
Bitconnect Tools Available to Users
Bitconnect users can mine coins, stake their coins, trade, and generate commissions through referrals. There are staking wallets and trading wallets for both Bitcoin (BTC) and Bitconnect (BCC). Bitconnect has an significant social media aspect, so you’ll be doing a lot of talking and strategizing with other Bitconnect users throughout the process.All in all, we find the Bitconnect tools to be pretty straightforward and easy to use. Anyone who has ever used cryptocurrencies and crypto wallets will be able to navigate the staking process. Anyone who has used centralized exchanges like Coinbase or Bittrex will be able to buy and sell coins with ease. If Bitconnect is a scam, its basic tool system and performance wouldn’t indicate it.
Is the Bitconnect FAQ Misleading?
Bitconnect’s FAQ isn’t misleading per se. It is, however, very incomplete. Again, we’d like to know more about the Bitconnect trading robots actual performance. How many users are added daily? What happens when and if Bitconnect’s new user supply starts to dry up and the system no longer has a constant influx of new money? Why the lack of transparency? Why the cheesy, sketchy Youtube ads? Why has the company never been audited?
The Bitconnect FAQ is thorough in the way it explains the Bitconnect daily user experience. If you believe in the BCC protocol and the stability of its currency, then you’ll find the FAQ to be more than satisfactory. If you want to understand “How the sausage is made”, so to speak, you’ll find that the FAQ comes up short.
How to Withdraw Bitconnect
Bitconnect Coin (BCC) only has utility within the Bitconnect universe. That’s why you have to bring Bitcoin (BTC) into the site in order to buy BCC, because Bitcoin has universal value. (Guess which coin we‘d rather have.) Once you’ve staked your BCC and generated your profits, let’s suppose you want to withdraw. Turns out, this is as easy as one would hope.All you have to do is trade your Bitconnect for Bitcoin on the Bitconnect trading forum, then send it to your Bitcoin hot wallet, then send it to a Bitcoin address outside of the system. It doesn’t take long and it works pretty much just like you’re used to in other protocols and exchanges.If you want to take your BCC off the site for whatever reasons, say, to trade them on Livecoin for other currencies, you have to follow the same process. Because Bitconnect only accepts two coins (BCC and BTC), you won’t get weighed down with a bunch of confusing possibilities, which is deceptively nice.
Bitconnect vs. Coinbase
Some people seem to think that Bitconnect and Coinbase are two different versions of the same thing, but they’re totally not. This is an important thing to realize for anyone who wants to decide whether or not they think Bitconnect might be a scam/ponzi/pyramid scheme.
Coinbase allows users to trade fiat currency (US Dollars) for Bitcoin, Litecoin, and Ethereum. There aren’t many places where you can do this, especially for American crpyto users. For this reason, Coinbase is central to almost everyone’s crypto trading experience, at some time or other.
Bitconnect doesn’t allow fiat trades. In fact, you can’t buy anything but Bitconnect’s own coin on their site. All you can do is bring BTC or BCC into the system, where it is then traded for BTC or BCC already in the system.
So, Coinbase is a true exchange; Bitconnect is a suspicious trading forum with only one coin to sell. It’s an important distinction. For this reason, Coinbase is highly regulated, because it is entrusted with users’ banking information, credit card numbers, personal ID, etc. Bitconnect doesn’t have any of that stuff. It’s an entity unto itself, one which has much less obligation for the security of its users’ assets.
The Bitconnect Investigation
There has been much discussion on the internet about an investigation into Bitconnect as a ponzi scheme. Ponzi schemes (schemes that generate a ton of money initially, benefitting users who get in and get out early, then collapse on the heads of people who come in too late and upon whom the earlier users made their profits) are illegal in the UK, where Bitconnect is based.It is unknown to what extent Bitconnect may be under formal investigation. The internet’s best crypto sleuths are on the case, however, and their belief in “the Bitconnect scam” seems to be more than validated. As Bitconnect becomes more popular (a process that’s essential if it is going to stay afloat), this conversation is only going to heat up. Pay attention to new revelations. We don’t think they’ll reflect well on Bitconnect.
Bitconnect has a whopping $3 billion market cap and has even been in the top 10 cryptos at various times. Current users are making incredible returns, sometimes even more than the advertised 1% per day, based on interest, referrals, and commissions. For early users of Bitconnect (it ICOed only a year ago), the system is absolutely killing it.
But experienced traders know that this kind of performance is unsustainable, and that fundamental questions about Bitconnect’s legitimacy are obscured and ignored by the company. How does the trading bot actually work? How much of BCC’s interest comes directly from user deposits? What happens if Bitcoin experiences a big correction, or BCC’s new user uptake starts to slow down?
People should avoid Bitconnect unless they want to get a piece of the action before ducking out with their profits before disaster strikes. If you invest in Bitconnect, do your own due diligence. Once you’ve bought your coins, pay careful attention to industry news, reports of Bitconnect scam investigations, and any general signs that it may be time to take your profits and get out.
Bitconnect may not crash tomorrow; it may not crash next year! But the history of ponzi schemes indicates that BCC is headed nowhere good. Invest at your own peril. You might enjoy big returns like early Bitconnect users have, or you might find that the scheme falls to pieces and your digital coins are now worthless.
Could Bitconnect turn this all around, become totally transparent, and prove all of our suspicions wrong. Maybe, but we very highly doubt. Watch out for your money, folks. Nobody’s gonna do it for you.