The cryptocurrency Bitconnect (BCC) has rallied from less than $1 in Jan to reach an all-prison term high of over 286 us dollar in early November 2017. However, Bitconnect’s impressive year-to-engagement acclivity in value did not occur without controversy. The cryptocurrency “investment” platform has increasingly come under fire for allegedly being a Ponzi dodge .
This criticism of the Bitconnect program had made a resurgence in the yesteryear week when Ethereum founder Vitalik Buterin tweeted that Bitconnect is a Ponzi strategy if it promises a daily one percent regaining on investiture
What is BitConnect?
According to its website, Bitconnect “is an out-of-doors source all in one bitcoin and crypto community weapons platform designed to provide multiple investiture chance with cryptocurrency Education where it is entirely possible to find the independence we all desire , in a community of like-minded, freedom-loving individuals who, like you, are seeking the possibility of income stability in a very unstable world.”
The primary soma of income for Bitconnect “investors” is the platform’s supposed lending activities. To partake, a user has to invest bitcoin to receive Bitconnect coin that he or she can then invest for a profit that is earned daily. This involves profiting from a trading bot and the volatility software (the platforms lending mathematical process ), according to Bitconnect. User can also earn new coins through staking their existing property using the functionary BCC wallet as Bitconnect uses a combination of Test copy of Work (POW ) and Proof of Stake (Petty officer ), according to the company.
Bitconnect was launched in late 2016 through an ICO and quickly rose to become one of the largest cryptocurrencies in the mart . Its founders and hustler are largely unknown quantity , which is nothing new in the cryptocurrency distance but does not bestow a lot of confidence in what is supposed to be an investing platform.
Why Are Critics Calling BitConnect a Scam?
Vitalik Buterin was not the first person in the bitcoin community to call out BitConnect as a Ponzi scheme. According to its long list of critics, BitConnect is a Ponzi scheme that leverage the popularity of bitcoin and cryptocurrencies to promise impossibly high and fixture reappearance .
By promising up to 40 percent return on investment each month but requiring its “investor ” to lock up their upper-case letter for a prolonged stop of time on the Bitconnect platform, it is not surprising that the wider bitcoin biotic community is more than skeptical about this cryptocurrency labor ..
Like all MLM-powered cryptocurrency chopine , its member are enthusiastically sharing their positive experience with BitConnect on platforms such as YouTube, Facebook, and Twitter in the promise to onboard new investors for which they then receive a referral fee.
This is a very common feature among Ponzi schemes, and since BitConnect put a lot of focus on encouraging its exploiter to refer new investor , it does brand it seem like BitConnect may be using funds of Paul to pay St. Peter the Apostle , instead of actually generating high take through cryptocurrency loaning .
Bitcoin community watchdog Scambitcoin.com said “Bitconnect may indeed be a Ponzi and if it is that, it is certainly one of the most successful and lasting such system in history. It is the case of frame-up the more one read into, the more he/she becomes convinced that it is indeed a Ponzi,” and its verdict after a thorough analytic thinking of the program was that Bitconnect is a cozenage
Popular cryptocurrency fancier and YouTuber Michael from BoxMining.com agrees with this depth psychology . He said: “From what I have seen and read about Bitconnect I do not see enough there to justify it as a running business […]” in a video posted in August 2017, while some Reddit substance abuser are calling for Bitconnect to be dropped from CoinMarketCap and be reported to Military action Dupery in the UK.