Update 22nd January 2018 – Bitconnect has now been shut down.
There is no doubt about it Bitconnect is a ponzi scheme made to look like a cryptocurrency. It is designed to lure in newbies who don’t know better by baffling them with jargon from the crypto space. At first glance it might seem like a brilliant investment, but beware that claims of making 1% per day profits are going to be unsustainable at best, and a down right scam at worst.
Think about it. If you could make 1% daily, a $1000 investment would grow to $50 million in just three years, yet no matter how ridiculous that sounds people will still sign up to sites such as Bitconnect and sign up their friends – even when they know that they are part of a ponzi scheme.
A ponzi scheme like Bitconnect works by paying members who actively refer others using money received from the newer members, but they can’t sustain paying everyone – so only the people who get in first ever make money, at the expense of people who joined later who are fobbed off with excuses about why they can’t access their money.
Coincodex have recently removed Bitconnect from their site, and said:
“After taking the time to further analyse the Bitconnect project it is still unclear who is behind the project, exactly how it works, or if BCC has any actual use. Bitconnect also employs a number of dubious methods in order to operate and promote its business. The business model outlined by the company is economically unsustainable with the current level of returns unable to be validated by any legally known investment system.
The Bitconnect project also generates a large amount of negative feedback from within the cryptocurrency community with accusations that the project is actually a “scam” or “Ponzi scheme” being actively discussed. As a result, we have taken the decision to distance ourselves from this project, remove it from the top 100 by market cap list and place a warning on Bitconnect page.”
If you are looking at Bitconnect and other HYIPs (so-called “high yield investment programs”) as a game, please think again. If you make money from Bitconnect then you can be sure other people down the line are being screwed. You would in effect be stealing hard earned money from them, and they could well be people who can not afford to lose their money.
You are either part of the problem or part of the solution, so instead of being part of a scam, there are plenty of legitimate ways to make money using bitcoin, like the ones I highlighted in my recent blog post that can truly help to financially empower people.
Hopefully you haven’t got involved with Bitconnect yet, and you got this information in time. Remember, it always pays to do your due-diligence!
My advice is to buy bitcoin instead. It is the largest and most successful cyptocurrency by far, with the biggest market cap, and a proven track record of growth, yet it is volatile enough to make it interesting to trade by buying when it is low, and selling when it is high. Over time though, just like gold you can be sure that bitcoin value will increase as demand increases and supply becomes more limited.
Let me know what you think in the reply section below.