When I started this personal investigation into BitConnect I figured it was going to be an easy task. I ended up tumbling down a rabbit hole.
Instead of it being difficult I discovered that there was in fact a wealth of information out there on this orange hot topic - is BitConnect is a scam or not? This was not what I expected at all.
My first step was to hear what Crypto-YouTubers thought about the matter.
Being an artist I am a visual person so I decided to make a visual list of;
8 who were in favour of BitConnect.
8 who were either skeptical or out right saying it is a scam.
This list was compiled using two factors. The amount followers and if they made a valid point. Here is the list below.
I found one Crypto Youtube channel that actually changed their view from being
against BitConnect, to being in favour of it....Bitcoin Party.
See below:
I listened to all of these YouTubers several times and here I have tried to get their views down to main points/message.
One thing that has helped me through life determine whether or not a person is genuine or not is by using a quote by Henry Ford as a yard stick: "Money does not change people but reveals them"
I have worked with, and known, several millionaire business folk and art collectors in my lifetime and I have found this saying to be very true.
If a person is genuine then they will remain genuine if or when they become rich.
If a person is a pretending to be genuine, they tend to become narcissistic and elitest when they come into money.
Views of those in favour:
1: CRYPTO NICK: What is interesting with CryptoNick
In my opinion Crytpo Nick does not bring much to the table of proving or disproving whether or not BitConnect is legit or not. He is a and very capable young guy riding the wave.
2;TREVON JAMES: Trevon James has always stated that you should not invest what you can not afford to lose and that that platfom could indeed shut down at any time.
However, there is no question he believes that BitConnect is genuine. One of the things that seems to be under question is whether or not BitConnect actually has a trading bot. Trevon James
In my opinion Trevon James is in it for the money and as long as BitConnect works he will continue and perhaps he feels he could get out fast if it crashes. Therfore IMO he also does not bring much proof other than the fact that he is making a lot of money on the platform. However, one could argue that this is true for all trading. The whole crytpo space could also crash just like the stock markets do.
3; MICHAEL CRYPTO: This guy is 100% hooked into BitConnect and recently traveled to Thailand for the one year BitConnect Celebration. From watching footage on several of his videos there is no question there was indeed a party and it was indeed huge. At no time did I see him talk with anyone of the actual BitConnect team or leaders. However he does go on to tell that had a meeting with some BitConnect officials and they discussed with him how they made money. Michael Crypto totally believes that BitConnect uses a trading bot. He shows a sheet of paper that he believes shows how BitConnect "makes money".
In my opinion I can not take his word for meeting with BitConnect people as totally being true. Not that I am calling him a liar but I do not know the guy and I can only take his work for it. As for his calculations I will leave that for the math guys to agree with or tak apart.
4: CRAIG GRANT; From what I can understand, Craig Grant believes that the set up is so good that the owners of BitConnect would be foolish to close down and run away with the money. He suggests that perhaps BitConnect
In my opinion, Craig Grant makes an interesting point. It is possible that Bitconnect was a scam idea but then they changed their minds? It has become so big that they see no reason to stop it. As long as Bitcoin grows, so with they.
5.: JJETI KNIGHT: This guy probably has the loudest voice as well as the strongest argument in favour of it BitConnect being genuine. I would say, trying to be objective, that he does makes some valid points and he has managed to convince many others to agree with him. I think it Jeti Knight who convinced Trevon James that BitConnect was genuine - but I will have to double check on that.
To his credit it is clear he spent a long time looking into the whole BitConnect set-up and addresses many of the skeptics concerns. His conclusions are are actually well thought out.
Here are some of his answers to skeptics questions.
Question 1: Why are the owners of BitConnect anonymous?
Answer: Satoshi Nakamoto, who invented Bitcoin, has also decided to remain anonymous - In Dec 2015 Craig Wright (Australia) came out saying that "he" was Satoshi Nakamoto - the inventor of Bitcoin. Within hours his home was ransacked by Australian federal agents and confiscated all his computers. Remaining anonymous gives BitConnect protection against the Government
Question 2: Why did the people behind BitConnect not just go to the bank for a loan to raise the money for their concept of a trading bot and a loaning platform.
Answer: To get a loan from a bank one first has to have collateral (a house or property) especially if you are just starting out. Secondly you have to give all your private details to the bank and now they have you by the balls. Also, once you have told the bank of your "idea" what is to stop the bank just saying "no" and then seeing it was a great idea they go ahead and steal it for themselves.
BitConnect have stated from the very beginning that their intention is to "exist" only in the crypto space.
By creating their own coin (the BitConnect token) they raised the capital themselves to create the BitConnect platform without having to involve any fiat bank - of which they state they are against. This is in the spirit of Bitcoin itself - we all know the fiat banking system is corrupt, that is why we are all here in the cypto space.
Question 3: Why do the BitConnect owners/creators not tell how their Bot works and how they actually "make money" ?
Answer: To explain this he uses and an analogy: A person goes into a busy popular restaurant and asks the waiter if he can speak to the chef .The Chef comes out and he asks him; how does he make the food? The Chef tells him that he only uses the very best quality fresh ingredients. The customer says that the Chef has misunderstood him in that he wants to know how he makes the food. The Chef then turns to greet and welcome another customer and then turns to the skeptical customer and asks him to leave::: In other words BitConnect is so doing so well- is in so high demand, that it does not need to explain itself to anyone.
No 6; BRITVR: This guy is clearly passionate about BitConnect. He also recently went to the BitConnect one year party. He feels that there is a lot of hate and jealousy within the crypto-currency against BitConnect.
His basic points are: BitConnect had an ICO to create the BitConnect token; how is that different than any other ICO? He also points out that, for example the Qtum coin and OmiseGo coin do not actually have anything but promises and yet people gave them their money without any complaints or questions:
He says that; people would not buy a product if they did not desire the product in the first place. People would not keep on buying a MacDonalds burger if they did not think it was a great product. On the BitConnect platform you can buy, lend and stake BitConnect tokens against the rise and falling prices of Bitcoin itself using a trading bot and this is not different than what happens in the stock market.
One point he makes I feel is actually a very valid one: With regards to the BitCoin Cash fork.
BitConnect gave ALL its members the equivalent Bitcoin Cash tokens as the BitCoins that they held in their wallets. He states that Coinbase did not. Poloniex did not. Bitrex did not. JAXX wallet did not. Gemini did not.
He feels that these crypto exchanges/wallets essentially "stole" peoples money for themselves and yet no one complains about it. BitConnect DID give everyone their Bitcoin Cash tokens and yet people insist BitConnect is a scam. BritVTR feels that this is some moral evidence that the BitConnect platform is genuine.
His final point, and it is one that is used by other BitConnect believers, is that, if you look at the BitConnect ROAD MAP (you can find this on their website
No 7: LENKA CRYTPO GIRL: I do not need to go into much detail on this one as this lady basically joined BitConnect as a kind of experiment and uses her YouTube channel to record her journey in order for people to see exactly how it works and can decide for themselves if it is a scam. You can see her entire journey here: https://www.youtube.com/channel/UCpf0Osv44L53ujPDYZX-p7w
No 8: KISS DEANO: OK this guy got into Bitcoin early on but then cashed out early too and has regretted it ever since. Who wouldnt? I guess he feels that being part of BitConnect is his second chance. Still once bitten twice shy, right? Therefore he was incentivised to investigate BitConnect himself. Kiss Deano spent a lot of time and energy doing some math trying to figure out how BitConnect actually manage to pay out to their members. I am not going to bother writing all that out and I am an artist not a mathematician, so you can check out his breakdown yourself here ;..jump to 12.20..https://www.youtube.com/channel/UCpf0Osv44L53ujPDYZX-p7w
Views of those who are skeptical or totally against
No 1; DATA DASH: This young fellow has a back ground in the stock markets and as such understands markets and charts etc. He also loves and believes in the crypto space.
His view: Generally skeptical of BitConnect and believes it is a grey area in the crypto space.
Red flags for him: The website is not professional: The animation is bad. The english grammar is bad. The description of how the platform works is not clear. He feels that a Billion dollar crytpo currency should have a better website. (To be fair to this point; BitConnect was not a Billion dollar currency when it started and perhaps they feel that if it is working then why change it? Why fix something that is not broken) However, he does conseed that this alone is not enough to call BitConnect a scam.
Other points: He does not like the fact that you have to ave your capital locked away for a long period of time before you can get your money out.::::- I checked this and it is true. However it seems you can withdraw your money at any time but if you do you lose all your interest. As far as I know this is the same in the real world with assurance policies and other forms of investment. As far as I understand it, locking away capital is part of how you can increase the value of the asset. In the beginning, Steemit also had this idea of locking up capital, initially it was for 2 years I think it was
Back to BitConnect: The biggest red flag for DataDash is the BitConnect´s trading bot. From his background working in the stock markets he is used to such algorithm trading bots and he feels that it just too good to be true. He also does not like that he can not see the trading history of the bot history. He would like the see the trades that the bot is making using his Bitcoin stake. :::For me this is his most valid point. This would actually be a positive thing for BitConnect to show such data and go along way to prove they are genuine. They need not show their actual bot algorithm formula - it is understandable that they would want to keep that a secret - showing its trades would however show it was real. Just a thought thought that came to me as I wrote this: If BitConnect showed the trading data of this bot, could a clever mathematician work out the algorithm formula from that information and steal it that way? Also, could people just copy the bots trades making its exclusivity worthless?
I don´t know about such things but the questions just popped into my mind.
DataDash also mentions the addictive nature of the program encouraging you to keep reinvesting and reinvesting.:
Well I am not sure that is actually a negative thing, I would love it if some of the big account holders here on Steemit would do that instead of powering down. The more Steemit is locked up the more valuable the steem coin - Or am I wrong on that? I have not powered down once since I started on Steemit because I am in it for the long term.
I find the guy at DataDash very honorable and credible. He knows what he is talking about and he believes in crytpo space and I guess he does not wish for its reputation to be tarnished with scams. I think we can all agree ton that point. In my opinion DataDash makes some good points. However, as he himself says, they are not enough to call BitConnect a scam therefore he places himself in the "skeptical"
No 2; BOX MINING: OK, I have to try and be biased here because this is someone I place a high value on their opinion. I find his views and explanations very solid because he bases them on solid research. So I was very interested to hear his opinion on BitConnect
His view/points: He admits that he does not understand BitConnect´s business model, however he says that the set up reminds him of a scam where a person called "Pirate" who started Bitcoin Trust Savings where they guaranteed 7% a week. It lasted one year before it crashed and later was shown to be Pyramid Scheme. Michael at Box Mining apparently got burned himself in that case telling that he is somewhat of a gambler:
Interesting how people would still give their money to a guy who called himself "Pirate" lol
( I do not know of this case and an currently looking into it - but again a thought did pop into my head:: Did this "Pirate" guy have his own Crypto Coin?
His point is that one can never prove something is a pyramid scheme until it is crashes.::If that is really true then there is no hope for any of us because all you are saying is that your guess is as good as mine. It is a gamble.
However, he does say that the lack of transparency of BitConnect make this gamble a much higher risk than investing in a more transparent one, such as Steemit for example. This is a very good point:
This is actually one of the reasons why personally believe in the Steemit platform and steem blockchain. I like its transparency and that we all have a say in its future. To finish, Box Mining feels that investing in the Bit Connect platform is like going to Las Vegas.
Here he tells of his views on BitConnect
No 3; JSNIP4: I not wish to say much about this one. The video I initially got his point of view from has since been deleted. Therefore I cannot prove what I say of his views. I do know that he was a victim of the recent BitPetite scam so I guess he is somewhat pissed and understandably skeptical of platforms/schemes that appear to offer high interest rate rewards.
No4: DAVID HAY: This guy is so serious about finding out if BitConnect is genuine that he as offered a $1000 thousand dollar reward for anyone who can prove the BitConnect trading bot is real and if that happens then he will change his stance as an opponent of BitConnect into its biggest supporter.:::Again we are back to that point again about the bot. This is a catch 22 situation here. Why should BitConnect reveal this if it does not have too. Its alt coin is currently valued at $267 and as long as they keep paying out to its members no one can prove it is not real. I think perhaps a $1000 dollar bounty is too low- surely proof of such a thing is worth far higher than that.
He also mentions the point about why did not BitConnect not just go the the Banks, but we have already talked about that point. He feels that BitConnect is a Ponzi Scheme that reminds him of the Bernie Madoff scandal pointing out that even clever investors can be fooled.:: again we are back to Box Mining´s point that no one can know something is a Ponzi scheme until it fails.
David Hay places himself on the "Skepitcal" category until we is proven otherwise. Well we all want that dont we?
I am looking for solid arguments that disprove BitConnect ..so lets move on-
No5: CRYPTO LARK: OK this guy genuinely looked deep into the BitConnect platform. He starts by saying that it seems "too good to be true". He questions even the validity that there even is a BitConnect pre-mined coin. In other words that there is not even a blockchain.::: Well that is a very valid point in my opinion. Without a blockchain to back up the alt coin then in my opinion it is worthless. ::So I check this.
Well it turns out that BitConnect does indeed have a fully functioning blockchain..and you can see with your own eyes the transactions taking place just as you can on the Bitcoin blockchain
Here it is: https://chainz.cryptoid.info/bcc/
Crytpo Lark talked a lot about rumours of BitConnect being a money laundering scheme, however I am not interested in rumours. How often have we heard Bitcoin being accused of that? And what about the Bank of Scotland scandal? Money laundering is a fact of life, whatever currency is used this is going to happen.
He says that BitConnect relies upon new money coming in- as in a classic ponzi scheme. Again, we are back to the point that BitConnect has its own alt coin and this coin is rising fast. This in itself raises capital. He concedes that "even if no new money came in, their reserves (meaning their own Bitcoin and Bitconnect alt coin holdings) means they could keep on paying out for a long time"
One of his main concerns was that Bitconnect was not on any major crypto currency exchanges such as Poloniex, Bitfinex etc. This is a valid point in my opinon and this would certainly help the credibility of BitConnect if they were on some of these exchanges. However, they are on some of the smaller ones. But one could argue that BitConnect prefers to use its own internal exchange:- something he is very critical of.:::Just a thought as I wrote that: Does Steemit have its own internal exchange?
No6 SUNNY DECREE: From what I can see of this guy he went back and forth several times with his view on BitConnect. At first he believed in it, then had his doubts, then went back to believing in it and now finally he has come out and called BitConnect a Ponzi Scheme. Now you might think that this is nothing new here, however, in my opinion Sunny Decree approached the matter in a rather original way. Using visual graphics and basic math he revealed a rather interesting phenomenon or coincidence. He states: "The interest rates that BitConnect is paying us is exactøy the amount of money they make with the price gains of the BitConnect token".
No 7 YOUNG AND INVESTING: Ok this guy is 100% convinced that BitConnect is a scam.
His argument is based on the fact that suddenly BitConnect went down the list on Coinmarketcap.com over night.
Also its market cap went from $2 billion down to $600 million. Who can argue that this would be somewhat disconcerting to say the least. If I had seen that I would have got my money out in a flash.Well it turns out that this indeed cause a panic in the BitConnect Community and there was a sudden massive sell off.
What was confusing about that is because the price of the BitConnect token remained the same. It did not go down in price, so why did the market cap go down? Well I did some investigation into this:
Young and Investing also points out that now DASH has come right out and called BitConnect a ponzi scheme. This we have to take very seriously. DASH is a well respected alt coin and have earned their place in the CryptoCurrency community which is reflected in its N06 position on the Coinmarketcap.com listings. For DASH to come out with this puts their own reputation at risk if they are wrong and of all the evidence so far I take this as being the most serious. So far I have not heard of the reasons why DASH believe this and if they could do that it would go a long way in help out the crypto community out once and fall all.
Again a thought popped into my head as I wrote about DASH - regarding locking up alt coins in order to increase the value of the token: I am right in saying that DASH also does this when someone holds a node? You purchase a certain amount of DASH and then that amount is frozen and in return you run a node and get paid a certain amount of interest or rent for running that node? Correct me if I am wrong on this.
Here is the link to the views of young and investing ;
No8: KRYPTO GRAPHIC: Someone who feels strongly that BitConnect is an out and out scam.
In my opinion this guy is a good guy and basically just wants the truth and does a tremendous amount of research and digging when he suspects something is a scam, and this one needs to be given much respect for.
And as not to disappoint Kyptographic did some excellent digging on BitConnect find the actual company registration which reveals the name and address of the "owner" (Ken Fitzsimmons) and it being registered and located in London. This in itself is not suspicious however what is a very strong red flag for me was that BitConnect was required to deliver its turnover statement in July 2017 but they had not done that and it was now somewhat overdue. Of all the factors involved here this is probably the most concerning.
Further more, he discovered that there are also international versions of the BitConnect business which names Korean and Vietnamese individuals as being correspondence contacts. It is indeed all very suspicious and what I would say about that is that if they BitConnect have set this up to avoid paying tax in some way then they will soon find the British Inland Revenue on their tale. People whom I would not wish to have coming after me I can tell tou. My father was an chartered accountant and once told me; "Arthur, rob a bank, steal gold from Fort Knox, but dont ever try to swindle the Inland revenue because believe me they ill get you"
Kryptographic also revealed that one or two of these "contact" persons listed on the company documents were previously involved as promoters on the ONECOIN project. As we know ONCECOIN was proven to be a scam. To be fair this does not mean that the guy is a scam artist. He may well have just been hired as a promoter for ONECOIN and so he got known for this and BitConnect hired him to do theirs. From the footage of the ONCECOIN celebrations it is indeed very similar to those of the BitConnect
CONCLUSIONS:
First of all, all these YouTuber´s must be aware that their reputations are on the line.
Those who support and promote BitConnect have much to lose if it falls.
Everyone will laugh at them and their opinion will not be trusted ever again.
They will also get no sympathy if they lose all their money.
Those who were skeptical or call BitConnect scam will also lose face the longer BitConnect continues to grow. However, they have considerably less to lose.
Still, the stakes are high on both sides.
All views are now on the steem blockchain forever.
Whether or not BitConnect is good or bad, genuine or fake, appears to be undecided within the CryptoCurrency community, although at least DASH has come out and made their view public.
This whole exercise was in one way disappointing in that no one could give positive evidence or real proof of BitConnect being a scam. However I do not regret it because I learned a great deal from doing it and one I hope you will too by following my journey.
And what I learned was this: The fact that no one can prove or disprove that BitConnect is a scam points to it being something entirely new. Either a genuine new way of dealing with money or a genuine original scam that we have not seen before. And one that could turn out to be the biggest in history.
This of course is the very reason why the entire Crypto Community is so concerned. It is all to do with its gigantic rise in such a short time. From its initial start up value of about $0.15 to $270 in just one year is quite simply astounding. I mean dont we all here on Steemit wish for such a meteoric rise of the price of Steem?
What on earth is going on here?
Is it or is it not a ponzi Scheme, a bubble
If you want my opinion, my gut feeling is that it is a ponzi scheme or some kind of a bubble.
However, as we know the entire fiat money system is a bubble. People in the stock-market even talk in such terms "What is the next bubble" they say.
The "game" is be part of the bubble on the way up and get out before it bursts. And we keep n doing this over an over again. Each time the bubble bursts there are millions who lose everything and a few who win it all.
Each time it happens the transference of wealth gets bigger and bigger until only a few own everything.
This is the game and it is working. The top 1% own most of the world.
Some thoughts came to me, and I am merely speculating, so please do not shoot me down:
The dollar is designed to go down in value (as all fiat money is). It goes down because the banks keep printing more and more. Right?
Bitcoin, on the other hand, is designed to go up.
There will only ever be a certain amount of Bitcoin created and so its value has to go up because of its scarcity increases. Right? That is why Bitcoin is likened to gold.
OK, so for many decades now we have all become used to living in a world of fiat money of which always going down in value. The only way to keep the bubble increasing in the fiat world is to keep on printing more money in an ever increasing spiral of debt and inflation.
However, now "we" who are living in the crypto space are living in the very opposite world.
A world where we cannot just keep on printing more Bitcoin to add to a "supposed" bubble and so the value goes up. (I am excluding the hard forks at this point because in a sense we are printing more versions of Bitcoin)
Therefore perhaps we are experiencing money in a whole new way that we simply are not used to yet.
If Bitcoin is a bubble then BitConnect is certainly adding to this bubble because it is pegged to the Bitcoin price. People buy Bitcoin with fiat money (or with mined Bitcoin) and then buy the BitConnect alt coin because they are attracted to the high returns on their investment. If BitConnect is a ponzi scheme then it is the first of its kind that as been built in a financial space where the currency is programmed to increase in value rather than go down.
If that is true then as long as Bitcoin increases in value, then in theory, the BitConnect coin must also go up in value. Am I wrong here?
Now if this is true, then perhaps we are looking at a new way of banking. And if that is true, then we need to figure it all out. We should then copy it and rebuild it in such a way that is more transparent. Like the Steemit model for example. But with loans etc. Just like a Bank. As we have established, the fiat money system is a bubble.
So then is a bubble is the norm? Ask a banker and they have no choice but to answer yes, How can they not?
But this time the bubble has been created in a currency that goes up in value rather than down in value.
So what then? Is this a new scenario?
As I say, I am only thinking out loud here.
However, would I trust BitConnect with all my Bitcoin? No.
Do I trust legit Banks? No.
As we know the Crypto space is currently unregulated. It is the wild west all over again and in one way we are all of taking a risk by investing money into crypto-currencies.
As I stated in my first blog regarding this matter. The reason I was compelled to investigate BitConnect in the first place was because of these pop videos.
This really concerns me greatly as now BitConnect are actively making professional looking pop videos aimed at the youth giving them a message of financial freedom if they invest in BitConnect. This is seriously crossing the moral line if they are a scam and they know it. And if or when they fall they will not be forgiven and the government will surely intervene and it will not be good for the reputation of the entire crytpo-currency space.
The stakes are high for us all.
Iff you found this post of value please upvote and resteem and you will have my sincere thanks
