Hi,
I'm not any expert on any of this by any means but is it possible that they are not a Ponzi scheme? They used to be a peer to peer lending site, I think, as I pointed out with previous links. Remember that people who harbour negativity are usually doing so from a traumatised perspective and will need something to be against (it is like a delusion that prevents their anxiety, using scapegoating etc). A lot of people don't realise that it's very hard to change people's mind in this state once they decide it's true as it helps them psychologically to feel that way and they actually believe it strongly even when evidence is presented on the contrary. What I'm getting at is I'm not trying to change the mind of anyone who might think it's definitely a scam, just I'm not totally sure that it is. It is recruiting in lots of countries: https://www.youtube.com/watch?v=JUOUg52Zscc for lots of investment. People who have held the coin for nearly a year or so have made ridiculous gains (even ten times increase from a few months back when people on here were claiming it was a scam- can you imagine how much people in bitconnect are actually making who have been promoting it more than a couple of weeks and getting daily interest in huge numbers now), not to mention the coin itself has 8% monthly interest!
Ways they could make money on the platform are through their own exchange (after all most charge a commission at least of about 0.25% of all volume but not sure about the profits bitconnect take from its exchange), and also if they are sure the coin price is going to rise (through their marketing efforts) then when people 'lend' their coin, they are giving up all this growth (which bitconnect can calculate to decent degree based on their new registrations and payments coming in) and also the 8% a month growth in the coin algorithm. So this percentage return they are giving on the 'lending', could just be their calculation of the growth of the coin and that they expect that the cost to return the coin later will be zero (despite ostensibly giving ridiculous interest rates).
For some figures, say the coin stays the same value (which we know it does not as their platform causes it to gain in value) if people lend the coin and say get up to 140% the amount, we also have to add in the affiliate income which overall probably comes to about 10% on average over all the levels on all BCC deposits (7% on level one) but remember the 8% monthly coin interest actually negates this as this coin is still held by bitconnect when you lend it, just you give up on its natural growth in return for guaranteed USD growth. So say that in a month the people lending the coin have gained 50% over the coin (cos the coin didn't go up in value at all so would need to be paid 1.5X the BCC when exchanging back from USD) which would be an overestimate based on all this, then if you think this 50% extra isn't possible for them to earn on the exchange volume or other possible bot (from old or projected new customers that they can accurately calculate), then it's true it would be a Ponzi. That neglects the fact that they have been earning close to 10% monthly interest on all their premined coins and have millions of them so can probably afford to give 50% extra coins in return for a long time without others losing out. I am not sure exactly how it works but even if they got careless and let this 50% per month shortfall happen for a while, it would still be possible for them to pay the 50% extra BCC a month when users exchange the dollars back. Reealistically, they would normally make sure the lending interest rate was lower when they can't cover the costs without more members coming in than they predict (remember all these new members are using the exchange and giving them some percentage profit at least from that which they can calculate quite well). At the moment they must have lots of BCC reserves and have no problems, and they can probably calculate that their coin is going up and are not losing out.
In fact, at the moment they are making money when people lend the coin as they only need to give a fraction of the coin back later. For example if the coin doubles in a month (from their calculations) then, although the USD cost to them becomes 1.5x the original amount in a month (from my exaggerated calculations), this only equates to 0.75x the original lent BCC so they may actually be making a large profit on their current lending rates. Does anyone see what I'm trying to say? They are obviously not selling their coin into BTC yet as they know it is growing in value, and they might actually be making profits from the investment plan, despite it looking like they can't afford it.
I'm not any expert on any of this by any means but is it possible that they are not a Ponzi scheme? They used to be a peer to peer lending site, I think, as I pointed out with previous links. Remember that people who harbour negativity are usually doing so from a traumatised perspective and will need something to be against (it is like a delusion that prevents their anxiety, using scapegoating etc). A lot of people don't realise that it's very hard to change people's mind in this state once they decide it's true as it helps them psychologically to feel that way and they actually believe it strongly even when evidence is presented on the contrary. What I'm getting at is I'm not trying to change the mind of anyone who might think it's definitely a scam, just I'm not totally sure that it is. It is recruiting in lots of countries: https://www.youtube.com/watch?v=JUOUg52Zscc for lots of investment. People who have held the coin for nearly a year or so have made ridiculous gains (even ten times increase from a few months back when people on here were claiming it was a scam- can you imagine how much people in bitconnect are actually making who have been promoting it more than a couple of weeks and getting daily interest in huge numbers now), not to mention the coin itself has 8% monthly interest!
Ways they could make money on the platform are through their own exchange (after all most charge a commission at least of about 0.25% of all volume but not sure about the profits bitconnect take from its exchange), and also if they are sure the coin price is going to rise (through their marketing efforts) then when people 'lend' their coin, they are giving up all this growth (which bitconnect can calculate to decent degree based on their new registrations and payments coming in) and also the 8% a month growth in the coin algorithm. So this percentage return they are giving on the 'lending', could just be their calculation of the growth of the coin and that they expect that the cost to return the coin later will be zero (despite ostensibly giving ridiculous interest rates).
For some figures, say the coin stays the same value (which we know it does not as their platform causes it to gain in value) if people lend the coin and say get up to 140% the amount, we also have to add in the affiliate income which overall probably comes to about 10% on average over all the levels on all BCC deposits (7% on level one) but remember the 8% monthly coin interest actually negates this as this coin is still held by bitconnect when you lend it, just you give up on its natural growth in return for guaranteed USD growth. So say that in a month the people lending the coin have gained 50% over the coin (cos the coin didn't go up in value at all so would need to be paid 1.5X the BCC when exchanging back from USD) which would be an overestimate based on all this, then if you think this 50% extra isn't possible for them to earn on the exchange volume or other possible bot (from old or projected new customers that they can accurately calculate), then it's true it would be a Ponzi. That neglects the fact that they have been earning close to 10% monthly interest on all their premined coins and have millions of them so can probably afford to give 50% extra coins in return for a long time without others losing out. I am not sure exactly how it works but even if they got careless and let this 50% per month shortfall happen for a while, it would still be possible for them to pay the 50% extra BCC a month when users exchange the dollars back. Reealistically, they would normally make sure the lending interest rate was lower when they can't cover the costs without more members coming in than they predict (remember all these new members are using the exchange and giving them some percentage profit at least from that which they can calculate quite well). At the moment they must have lots of BCC reserves and have no problems, and they can probably calculate that their coin is going up and are not losing out.
In fact, at the moment they are making money when people lend the coin as they only need to give a fraction of the coin back later. For example if the coin doubles in a month (from their calculations) then, although the USD cost to them becomes 1.5x the original amount in a month (from my exaggerated calculations), this only equates to 0.75x the original lent BCC so they may actually be making a large profit on their current lending rates. Does anyone see what I'm trying to say? They are obviously not selling their coin into BTC yet as they know it is growing in value, and they might actually be making profits from the investment plan, despite it looking like they can't afford it.
Was checking the graph on coinmarketcap.com and the price spiked up at around 11:45pm UTC when I posted the above explaining how they were profiting from the lending and not necessarily a Ponzi etc. lol as they didn't need other investors as long as the coin demand was high, they could take profits from the lending rates (they were 'lending' USD at lower rates than the price was increasing basically). The drop came at 2am so still trying to figure out what happened.... the times on the graph are the same as on this board btw.
