For months now there has been a lot of talk about bitconnect, and there doesn't seem to be any middle ground with this coin, and its lending platform. You either hate this service and believe that it's a Ponzi scheme and a fraud, or you are one of the people that have made a great deal of money through their lending platform with their staggering average interest payments of 1% daily, and you love it.
I'll start by summarizing how the bitconnect lending platform works. To participate in their lending platform, you the customer, must exchange bitcoin for bitconnect coin. Then you lend them back the bitconnect coin for daily interest payments and the return of your capital after a certain predetermined period of time. There are 4 tiers of loans based on the amount you lend, simply put, the more you lend the shorter the loan term. They offer up to 0.25% bonus interest for loanas that excede $10,010 with a capital return after 120 days. You have the option to reinvest after each daily interest payment.
Bitconnect service is really careful to not make any guarantees on the amount that you should expect to receive in daily interest, but they make every effort for you to believe that the average daily interest that you should expect is approx. 1%. The key to what on paper makes this lending platform seem so attractive is what is called compound interest, and is tied to the ability to reinvest your daily interest payment when you receive it.
Some of you I'm sure are familiar with at least one YouTube or social media influencer who promotes this service and encourages their audiences to use this service and to use their promo code at the time of account creation. This referral program has been another topic of much debate. If 1% daily interest payments aren't astounding enough, they pay their promoters extremely generous referral reward payments as well. They have a three-tier pyramid format, meaning they receive 5% of every direct referral, and then 3% for every referral from each direct referral, and then lastly 2% for each of that person’s referrals. So, it's not hard to see why certain social media influencers in the crypto space have benefited greatly from this program and have led to a great deal of success and market visibility for bitconnect.
Now that you understand what bitconnect is, on to whether they are in the middle of orchestrating an exit scam. When bitconnect began their lending platform and started exchanging bitcoin for their bitconnect coin, bitcoin was valued around $1,000. So with the number of users and the success the platform has achieved, paired with the increase in bitcoin price to as much as $19,000 in recent weeks, it is hard to imagine exactly how much money the people in control of bitconnect have actually made. But it’s safe to assume that is a lot, most likely in the hundreds of millions, as there are numerous well known social media influencers that have made millions alone, with no known direct affiliation with the company.
So first there was the BitconnectX ICO, that by far had the least attractive terms of any ICO to date that I am familiar with, in short, $50 per token, a limited number could be purchased per day and United States residents could not participate. This ICO was viewed by many as a last stitch effort, or a money grab, to help sustain the Ponzi scheme during a down trending bitcoin. And then within the last week, two cease and desist notifications were to bitconnect and made public. First, from the state of Texas, and next most recently from the state of North Caroline. Soon after this second cease and desist letter, the bitconnect website went down for maintenance, this alone should not be a cause for concern, as this has happened numerous times in the approx. 12 months that their service has been running. But then, via Twitter, they announce that the site would be down for an additional approx 24 hours as they were under a massive d-dos attack, and they cautioned users from making large value transactions. Now most recently, today their Twitter reads that account access has been restored, but that withdrawals from wallets will be unavailable for at least the next 24 hours.
So now the waiting and speculation begin, I have to say in my opinion, a d-dos attack that they couldn't prepare for is completely unlikely, for no other reason except for how much contention has surrounded bitconnect for months, and how much hatred and vitriol has been spouted in their direction. Its hard to believe that this would be the first attempt of a d-dos attack, but again I am only speculating. Regarding the ICO, is this a last stitch effort and a money grab? In my opinion, it's possible but not likely. It seems with the wealth that they have generated from their bitcoin holdings alone since inception should sustain their platform for an extended period, even with a down trending bitcoin. Time will tell what is really going on, and I only hope that those who do have their hard earned crypto invested in this lending platform have an opportunity to recover their investment if the worst-case scenario for bitconnect supporters has arrived.
@OriginalWorks
