BitConnect describes itself as “the cryptocurrency revolution”.
Find out how BitConnect’s currency – BCC tokens – work today in our review.
What is BitConnect?
BitConnect promises to “empower people financially” using a digital currency built on blockchain technology. That cryptocurrency, called BCC, claims to offer enormous earnings opportunities. When you see promotional materials for BitConnect online, you’ll see information about how investing in the currency today will give you returns of “up to 480%+ in cash” every year. Some of the developer’s sources even claim to pay you a “guaranteed profit of up to 91.25%” per year.
BitConnect has all of the characteristics of a Ponzi scheme or investment scam: the company makes specific promises about its earnings opportunities, and it claims there’s no risk involved in the process. In fact, the only thing you need to do to get rich quick is to give the company a bunch of money.
The site is also riddled with grammatical problems and spelling errors, which tells us the owners care more about making a quick buck than they care about creating a professional business.
Is BitConnect really just another cryptocurrency scam or pyramid scheme? Or is it a legitimate investment opportunity? Let’s take a closer look at how it works.
How Does BitConnect Work?
Basically, BitConnect generates money through some type of lending scheme. You deposit your bitcoin into the platform in exchange for BitConnect coin. Once you’ve deposited money into the platform, you’ll have access to the BitConnect dashboard, which lets you lend BCC to other users.
Through this process, you’ll “earn daily profit”, according to the BitConnect website.
We’re not talking about a small amount of profit, either. The company claims to pay you enormous guaranteed profits from your lending activity. Here’s what the dashboard says you can earn:
- Lending Amount of $100 to $1,000: Up to 40% ROI per month, with capital back after 299 days
- Lending Amount of $1010 to $5,000: Up to 40% ROI per month plus 0.10% per day, with capital back after 239 days
- Lending Amount of $5010 to $10,000: Up to 40% ROI per month plus 0.20% per day, with capital back after 179 days
- Lending Amount of $10,010 to $100,000: Up to 40% ROI per month plus 0.25% per day, with capital back after 120 days
If someone claims to pay you 0.25% daily interest, guaranteed, that means you’re guaranteed to earn 91.25% guaranteed returns per year, which makes BitConnect a lucrative investment opportunity – not to mention the fact that the company also claims to pay you up to 480% more per year based on the “40% per month” figure.
On top of all of this money, BitConnect will pay you to refer other people to the platform. When you sign up for BitConnect, 7% of every investment or reinvestment you make will go towards the person who referred you to the platform. His or her referral gets 3%, and the person above that person gets 1%, and so on. This makes BitConnect a pyramid scheme or multilevel marketing scheme.
In fact, BitConnect’s referral system extends up 12 levels, adding up to 12% guaranteed profits throughout the entire pyramid.
The BitConnect Coin
The BitConnect ecosystem revolves around the BitConnect Coin, or BCC. There’s a maximum supply of 28 million BCC, with 7,790,319 BCC currently in circulation (as of September 2017). Today, each BCC token is priced at around $100 USD.
The value of the currency seems to come from new BitConnect signups. Every time you buy a membership with BitConnect, you receive tokens in exchange. The price of the tokens increases with every new member.
One of the unusual things about BitConnect Coin is that it’s listed on CoinMarketCap. We’ve seen plenty of other Ponzi schemes and digital token schemes on the internet in recent months, but most of them aren’t listed on CoinMarketCap.
CoinMarketCap’s data shows us the BCC token was priced at around $0.17 in January 2017. Aside from a couple big dips, it’s risen steadily throughout 2017, achieving an all-time high of $142 at the beginning of September.
Is BitConnect a Scam?
There are hundreds of scams in the bitcoin and cryptocurrency community today. BitConnect might be the most legitimate-looking investment scheme out there. The company has a large network of individuals located around the world. These individuals are eager to tell you about how much money they’ve made with BitConnect with no work, skills, risk, or experience required.
In reality, Ponzi schemes and pyramid schemes do genuinely work for some members. These investment schemes all work in a similar way: they continue until the scheme collapses, at which point all investors except for the top levels will lose their money. It seems like it’s only a matter of time until this happens to BitConnect.
One of the worrying things about BitConnect is that we don’t know much information about the original developers of the currency. The international BitConnect organizations – like BitConnect India – are more transparent about their memberships, but the main developers in charge of the currency and the technology are largely unknown.
Making things even more complicated for BitConnect is that the company has a lucrative referral program. That means any negative BitConnect article you see online is flooded with people telling you about how it’s not a scam, and how they legitimately made a lot of money through the company. Then, they spam their referral link.
Ultimately, BitConnect Coin appears to be a tempting investment opportunity – but based on everything we can find online, it’s a scam controlled by a few mysterious individuals who dominate the market and retain access to the majority of the supply of tokens.
BitConnect lures in users with promises of amazing returns. The company promises to pay you over 90% ROI per year guaranteed, with the opportunity to earn an additional 480% or more – and that’s not even counting referrals. When somebody promises to double your money, guaranteed, with no risk required, then it’s a surefire sign you’re being scammed. Investment opportunities like that just don’t exist.
Ultimately, based on all of the information we can find online from BitConnect’s official website, from BitConnect users, and from our own use of the system, BitConnect is a pyramid-based investment scheme that will eventually collapse, causing everyone except for the mysterious founding team and a few high-level individuals to lose their money.