BitConnect: Token Scheme Changed

Published on 06 November 2017 by Cryptovest Staff

BitConnect suddenly dropped from position 8 on CoinMarketCap to position 15, due to a technical recalculation of tokens in circulation. Because BCC is a coin used in a lending scheme, the tokens currently on loan are not considered a part of the market value calculation.

But the price of BitConnect has been rising, toward $280. Yet it is important to note that this is not organic growth- it is a price set for participating in the lending and interest service. To participate, users buy BitConnect with Bitcoins, and then lend the BitConnect coins and collect an interest rate.

The demand for BitConnect is also not organic. The BitConnect blog has a series of stories on the rise of the price of BitConnect, and sometimes, the company is much too confident that BitConnect would grow.

"Exactly! Bitcoin rose 6% today, I'll get no more than 25% of that increase back tomorrow from Bitconnect. How is that unsustainable? Lol" — Kyle Palmer (@kylepalmer64) November 5, 2017

The reason for this is that the price of BitConnect directly reflects the growth of the user base in a progressive fashion. This growth is caused by a months-long campaign and referral program that constantly supplies newcomers to BitConnect. The growth has all the signs of a Ponzi scheme, where newcomers pay the higher BitConnect price in Bitcoin.

Currently, BitConnect is extremely lucky in that the Bitcoin price has taken off, and whatever BitConnect were sold in the past have turned into a reasonable reserve. So despite the pyramid scheme of referrals, BitConnect may have enough to cover the payouts, for now.

The reason for this is that BitConnect only pays out the dollar value of the earnings, not the actual BitConnect coins earned.

"I saw this comment on Reddit about bitconnect and I couldn't have said it any better👏pic.twitter.com/XGGwDMxSXQ" — Ponzi crypto coins (@bccponzi) November 5, 2017

The Reddit community has made calls to banish BitConnect from CoinMarketCap and other sites for cryptocurrency ratings. Users have also reported BitConnect to local authorities in the UK.