Bitcoin Forum

I never understood how a project like Bitconnect could reach such a high marketcap. I just read an article about the Bitconnect scam and I was severely shocked when I saw the date it was posted. 10 months ago!! When Bitconnect was like under 100 million marketcap (already high considering the project). Do you have any idea how people still could fall for this project even after people started writing articles and so on about Bitconnect being a scam?

The article:
https://steemit.com/scam/@thegrinder/the-bitconnect-scam-exposed (https://steemit.com/scam/@thegrinder/the-bitconnect-scam-exposed)

Two reasons;

(1) People trust, but don't verify, and
(2) People don't like to do math

BitConnect offered totally unrealistic returns on their accounts. People that opened an account just believed (blindly) that BitConnect's offer was real, sustainable. They didn't verify that the offer was realistic. To verify that the offer was realistic they'd have to do some math.

For example, BitConnect was offering something like 1% return per day for the length of the term of the contract (3 months, 6 months, whatever). For them to offer 1% return to the account holder means they'd have to make more than 1% return on the money the account holder gave them. There is no investment on this planet that can earn that kind of return reliably (with confidence that any real business would offer it to customers).

This equates to a 365% return per year! This kind of interest-based return is, literally, impossible given the current rate environment.

The totally unrealistic interest promised and the requirement to lock in the account for a set number of days are the two classic characteristics of a ponzi scheme. Once BitConnect thought they'd acquired enough funds or if early adopter customers got close to the end of their contract date they shut it down and took off with the money. Maybe they'll get caught, but the account holders will likely never get their money back.

The irony of the whole situation is that just owning Bitcoin would have given people a greater return than the interest rate. People are greedy, and as such they got burned. There are more realistic interest paying wallets available, like paying 10% per YEAR.

Simple. 99% or more of the 'trades' took place on an exchange controlled by them. That means they can feed the world whatever info they want to make themselves look good.

If I remember rightly the only real exchange was livecoin or something and that would do about 20,000 in volume a day versus several million on their own exchange.

Well I knowingly took a high risk on it (ended up breaking even) with a small amount that I mined in the first hour of mining Electroneum as its blockchain launched(free money as I see it). I checked it out myself before I put anything into it. It did raise some red flags for me, however I saw some legit income streams for them as well. The fact that they held so many BCC and were pumping their own coin meant they had the capital to pay. They could POS mine their own coin and get a ton of the block rewards and keep generating BCC. If they kept the dollar value of their coin up then that meant they could keep paying. If they needed more BCC they can just dump a ton to drop the price for a bit and buy up  more BCC on the cheap.

There was also the possibility of a trading bot actually existing (I never really thought there was one), but heck trading bots are widely used so if it actually existed that would be a bonus. Their exchange pulled a ton of volume for which they also raked in fees.  I forecasted that BCC will fail if they run out of coins, if I kept an eye on the big wallets in the explorer I could be ready for it. I didn't expect a fail before that stage.

As mentioned I did always feel iffy about it though, but heck it was fun to see how much % I get every day lol.

I think a lot of people reasoned like me, a lot of them however unfortunately didn't put in a small amount to see what happens for the lols. People got greedy. I myself experienced what greed is for the first time in my life with this scam. I was tempted to put in more a lot of times but luckily I kept it at my tiny $120 initial "investment". I do understand though how they could have gotten that big, a lot of people are struggling to feed their kids and just want a better life. A lot of people did BCC as their first crypto "investment"

My colleague wanted to put his life savings into it in December, he has just discovered bitcoin and heard I am into it as well. He thought bitconnect is "investing into bitcoin". Thank God I managed to stop him from doing that. However the lack of education in the cryptocurrency market is another thing to blame. A lot of newbies thought bitconnect = bitcoin.

I think people like my colleague made up a large part of the audience. To be honest I myself didn't see any good scam accusations and articles before I got into it, the ones I saw made their case very poorly. But like anything I researched it myself and got to the above conclusions and saw very high risk in it but was willing to try it out with my free mined money.

Kudos to you for saving your friend's ass! But yeah, it's easy to tell people they're stupid after the fact, but at some point, Bitconnect was very appealing (to some, at least), because it appealed to greed.

Ponzis and pyramids have existed since time immemorial for the same reason, and people just keep falling for them, despite the abundance of knowledge against scams, because they can't help but give in to the allure of quick riches. It doesn't help that some people (early entries, mostly) do actually make a lot of money from these scams; they give a taste of profit, then pull back once people start wanting more.

Yea but getting in early isn't a viable option anymore. Look at Davor, it lasted like a month. I think BCC failing after getting so big is a good thing in a way, it got the message across clearly. Lending platforms lost a lot of credibility and awareness against them have gone to an all time high. A lot of people learned their lessons. The wounds are fresh and I don't think anyone would have near bitconnects "success" again anytime soon. There are far fewer fish to take the bait now.

I still don't regret losing a bit of my free money though. It was a life education experience for me. I am happy that I managed to hold my own against the urge to chuck in more money.

The next lesson the community needs to learn is that you cant just throw money  at cryptocurrency, not know what a public key is and expect to drive your Lambo on the moon in a month. Things like BCC unfortunately result in loss for some, but in the grand scale it matures the community and we all learn our lessons the hard way to become wiser.

People never learn.. Even if someone loses money on something they get back to the same thing after a few years and blame everyone else for the "one time mistake" they made. This is psychology, we tend to believe things like free lunch.

Early is relative though. You never know when the parabola has reached its apex until it starts falling. Not saying Bitcoin is a scam, but some people still consider the market young, and that the most recent adopters are still early. People who do fall for scams likely see things the same way. But yeah, maybe it takes a high profile case like theirs to put people on their guard. Scams evolve, people adapt, and the cycle begins again lol.

unrealistic returns  of 1 %  (ROI)  without any business model , is is really possible .So this inability to meet the promised return and greed of investors ( investing more and more) bought the downfall of BIT Connect . They tried to bail them self out by bringing ICO but 50 USD for a coin was too much a ask . So that was final nail in coffin  .

Not to mention it has put serious doubt of all lending ICOs like Davor, Neoconnect  and Bit serial etc

Go on YouTube and watch some videos made from people that had invested in BitConnect and you'll get an idea of what their users were.

This is first and most important red flag that you always should notice anywhere in life.
You can't make fast huge profit without huge risk. If someone giving you safe huge profit, its always a scam.

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