If you've not been too distracted by the insane amount of red in your portfolios, you may have noticed today's news the bitconnect has lost over 87% of its value.
The difficult thing about cryptocurrency is the returns have been so good for many legitimate projects that it can be difficult to sniff out those that are pure cash grabs that don't offer anything meaningful and may even run directly afoul of securities law.
This is why using the term "scam" is dangerous. Too many people on reddit, twitter, and even steemit throw around the S word carelessly, as if it doesn't have meaning.
We should rightly call scams by their proper name, but that word should not be used just because you dislike a project.
There are thousands of new people entering crypto every day. They're looking to those of us who have some idea of what is going on for guidance...if you use "scam" for every coin project you dislike, the word will lose all meaning and you'll have no punch left when you really mean it. Let's face it: you may dislike a project. You may dislike many projects. That doesn't make them scams.
A handy guide: if a project needs to fill a stadium of people and pump them up like a Tony Robbins event to sell their token, it's probably a scam. Quiet companies like Digix and Maker are the ones that are adding real value to the blockchain...not bitconnect.
In the case of bitconnect, odds are pretty overwhelming they are a scam. I was happy to see Texas serving them a cease and desist letter, and look forward to projects like them being quickly pruned from this otherwise outstanding ecosystem. And while I have bought and sold some tokens that are on an upward trajectory, but likely overvalued and being "pumped", I will never buy or sell a token that has no purpose but to take money from the gullible to enrich the serpent.
Here's a snapshot of their reddit front page:
Suicide hotline twice on main page. If you lost money in bitconnect and are thinking dark thoughts, please reach out for help.
We'll see scams disintegrate a lot faster if we hold our tongues and our emotions and save them for the most egregious offenders, rather than for projects we hate.
-Jeff