BitConnect is a coin that claims to be “by the people, for the people”; however, it has come under quite a bit of scrutiny as one of many crypto-based MLM (multi-level-marketing) or “pyramid” schemes.
The BitConnect platform has two parts. There is the BitConnect token (BCC) which can be purchased on the BitConnect native exchange and a few other obscure exchanges, and there is the BitConnect “Lending” program–this is where things start to get a little sketchy.
To participate in the “Lending” program, you must deposit your Bitcoins onto the BitConnect exchange and then trade them for BCC coins. You can then lend your BCC coins to the BitConnect platform in exchange for a profit. BitConnect claims that the profit is generated by “Volatility Software Interest”–in other words, trading bots that automatically buy when prices are low and sell when they are high.
Sounds good, right? Except when you realize that your money is locked into BitConnect’s ecosystem. This is very typical for MLM schemes. If you lend between US$100-$1000, you will not get any of your money back for 299 days. The more you lend, the sooner that you will supposedly have your funds (and the interest they accrued) returned to you.
Lending Program
BitConnect claims high profits from their “Lending Program”; up to 40% per month. That means up to 600% interest per year. However, there is no information anywhere on the BitConnect website about how these trading bots work.
BitConnect has no whitepaper, and no technical explanations to back up their claims. Even though there is lots of money to be made from investing in cryptocurrency, the old adage rings ever true: if something sounds too good to be true, it probably.
Of course, none of this is guaranteed, and theoretically, BitConnect could run away with your money with no legal recourse. After all, you willingly sent them your Bitcoins.
Once the money is locked inside the MLM’s ecosystem, the people at the top cash it all out and run, leaving the smaller investors feeding the bottom of the pyramid with nothing. This hasn’t happened yet, and there is no telling when it will happen–but in all likelihood, it will happen.
BitConnect Affiliate Program
BitConnect has an affiliate program, something else that is typical of crypto MLM schemes. For any MLM scheme to be successful, it needs a lot of people to buy in. That’s why other confirmed scam coins, like Swiscoin and Onecoin, have also had rather intense affiliate programs.
You can invest in and mine BitConnect coins without locking them into the BitConnect ecosystem, but since they are offered on so few exchanges, selling them may be slightly difficult. The problem is that when the rest of the system folds, the BCC token will fall with it.
BCC does seem to be a little more “on top of things” than most other crypto ponzi schemes; they do seem to be willing to pay out to affiliates, and some people have made some money. However, this is a risky business. Don’t think about getting involved until you have done the investigation required to make an informed decision about whether or not BitConnect is worth your time and money.
BitConnect History and Team
It may be better to call this section “The Lack of BitConnect’s History and Team”, because there is virtually no information about BitConnect’s history and team anywhere on its website or really anywhere else. We know that BitConnect was publicly launched on November 15, 2016, and that it’s supposedly based somewhere in Asia, and that’s about it.
There are individual BitConnect websites for Vietnam, South Korea, India, Indonesia, Japan, Thailand, Cambodia, and the Philippines.
There is no public information about any of the company’s employees, partners, developers, nothing. If nothing else about BitConnect has given you pause, this should raise some red flags.
BitConnect: Buying and Storing BitConnect
As is typical of coins that are associated with rather shady business practices, BitConnect is not listed on any of the large crypto exchanges. It is listed on a few more obscure ones–BCC Exchange (its own native platform), Livecoin, NovaExchange, CoinExchange, and TradeSatoshi.
90% of BCC tokens are traded on the BitConnect native exchange, making closed-market manipulation easy for Bitconnect. Between the native exchange and the lending program, the BitConnect company has managed to keep tight control over the supply of BCC tokens, which has artificially inflated their value.
BitConnect has its own native wallet that can be downloaded from the BitConnect website. It is actually a mineable currency, so if you would like to get involved in BitConnect in a risk-free way, you could consider becoming a BCC miner or forger–although there is no whitepaper, the BitConnect website claims that the coin uses both Proof-of-Work and Proof-of-Stake algorithms. After all, unlike its fellow ponzis Onecoin or Swiscoin, BitConnect actually does have a blockchain-based token.
