Understand Bitconnect : Is it legit?

Understand Bitconnect : Is it legit?
on June 2, 2018

While the official Bitconnect website still accepts registrations, the BCC Bitconnect cryptocurrency has collapsed to U$ 0,62 in 2018, down from an all time high of over U$ 550 in 2017. What’s behind this crypto and how did it end up where it is? Well, it’s a long story and to make it shorter we’ve created this post to give you an overview of what Bitconnect is.

BitConnect is an investing network where users were paid extremely attractive interest rates and were also given incentives to invite more investors to the system. It has several things in common with a cryptocurrency Ponzi scheme but at the time of this writing US authorities are still investigating this possibility based on lawsuits filed by former customers.

This investment network used its own cryptocurrency, which is called BitConnectCoin and has symbol BCC.

According to its GitHub source repository documentation, BCC paid up to 10% per month in interest rates convertible to Bitcoin or non-compunding interest rate of 120% per year (according to their documentation).

The BitConnect source code is simply a first generation cryptocurrency forked from Bitcoin, thus it’s written in the C++ language. All the Satoshi Nakamoto copyright notices remain on the source files as required per GPL terms. Despite the forked Bitcoin code being PoW-based (inherited from Bitcoin), the documentation claims to also employ a PoS system, a claim which can be verified on various files in the project (disclaimer: we did not investigate the correctness of this source code).

The following video from September 2017 made some very good points about the BitConnect business model. (Ed note: This post is being written in mid 2018.) A reminder that at the time this video was posted there was immense viral marketing of BitConnect going on, it was very popular and had some very cool and popular videos and social media material floating around, cryptocurrencies were on a major bull market and investors were euphoric with Bitcoin soaring several hundred percent points and this video author’s opinion was definitely contrarian to the market (and possibly very unpopular opinion at the time):

As we await for the courts’ decisions on BitConnect, we can definitely say that it’s a very controversial investment network and absolutely high risk. There are hundreds of other excellent cryptocurrency investment opportunities and we recommend you search for innovative and transparent investment opportunities instead of this particular crypto instrument.

While this may seem like obvious advice, many people were engaged in the original BitConnect while others were warning about it, and the same is true now.  Maybe you arrived at this post looking for the status of BCC in 2018 and here you have our opinion on it: no.

We hope this post has been helpful and that the facts presented here will help you make better investment decisions.

Update

As it turns out, Bitconnect was closed by authorities from Texas and North Carolina.

The company faces several lawsuits and is accused of having pulled one of history’s largest exit scams against thousands of investors.

Details about legal proceedings can be found on the Bitconnect Wikipedia page.