On November 11, bitconnect was bombarded with thousands of inquiries about the news that the company was shutting down.
A particular Youtube Channel uploaded a video showing some documents from different sources, supposedly proving an imminent dissolution of the company.
Bitconnect Accounts & Directors responded by uploading a video.
It was explained that the link saying: "ALERT Bitconnect Default – Assets Now Belong to The Queen of England!!" was just a click bait. It was also noted that the name mentioned in the video, for bitconnect's CEO doesn't really exist. Another blatant lie was the caption underneath saying: "It's amazing how fast a Ponzi scheme can unravel when exposed to the light of day! Bitconnect has missed the UK filing deadlines and now belongs to the Queen of England!" As a result, it may have caused panic among investors.
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One of the truths exposed was: the company status has been 'Active' and it was re-registered on September 6, 2017.
Bitconnect Trading
The bitconnect system provides an investment option that can be used to earn on BitConnect Coin (BCC) price volatility. You can buy BitConnect coin at the lowest price possible and sell them at a higher price later.
People can also earn from dips in BitConnect coin price by selling them at a higher price and purchasing them again at a lower price. That way, one can immediately pocket the price difference after the transaction.
Why isn't it a Ponzi scheme?
A classic Ponzi scheme attracts investors with promises of great return, but there's no actual profit-making mechanism. New investors get ripped off because their money gets used to pay previous (waiting) investors. Eventually, the 'pyramid' collapses and those who get in last won't get their money back.
This is not the case with a solid coin like BCC.
My Opinion
BCC competitors/detractors may have just tried to insinuate Fear, Uncertainty and Doubt among investors. This is an unfair practice to malign any kind of coin. Of course, the real perpetrators will use fake identities and won't reveal their real faces. YouTube channels can be made exclusively for maligning people and companies.
Fortunately, the dip shown above was not caused by the smear campaign we're discussing. Even bitcoin and US dollar declined at the same time.
How to Prevent Panic
Seek official government and company websites. Never spread unverified information on any social media platform. Countless smear campaigns have been undertaken not only for BCC. You may also visit this article for more tips.
Summary:
Bitconnect is definitely not a Ponzi unless the government in itself was proven a Ponzi because all payouts are conducted using its own currency (which seems to have an infinite amount). Bitcoin is exclusively used to purchase BCC tokens for a loan. Bitcoin is never used to repay investors. The amount of BCC tokens used for this is determined by the coin's current value. The equivalent amount of coins in Bitconnect is more than enough to fund a capital release worth Billions of dollars. Among a few ways by which Bitconnect could fail are: Bitcoin ceases to exist or becomes non-volatile, and if the value of BCC drops to a low tipping point where all available tokens wouldn’t be enough to pay investors.
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