For the last few weeks, the internet has been buzzing about a new website called BitConnect. Some have been declaring it the next best investment platform, but a far larger and ever-growing majority seems convinced that it is a scam of the Ponzi scheme or HYIP variety. I decided that the only way I could discover the truth was to do some digging on my own. This is what I found.
Also read: Know Your Crypto: What Is Bitcoin Gold?
Getting to the Bitconnect Home Page
My first stop was the official website for BitConnect. I was surprised that when I did a Google search for BitConnect, more than a few phishing sites appeared at the top of the results. This is not uncommon in Bitcoin, but amusing in this case.
Upon opening the site, I was met with what has to be the strangest, fever-dream like explainer video that I have ever seen.
It begins with a very long-winded, buzz word-laden animation. It uses made-up phrases like “social network capital”, and keeps repeating things like “financial independence” and “financial freedom” — without really explaining how the platform is supposed to work.
After almost five minutes of jargon, jangly guitars and whistling, the explainer animation outlines its four-tier investment system.
How It (Supposedly) Works
The scheme works like this: You deposit money into one of BitConnect’s tiered accounts — more on this shortly. From there your money is locked for between 299 and 120 days depending on tier.
You will be paid interest per day and receive all of your initial deposit back after your lock down period is finished, plus a huge profit in the form of interest. Though not mentioned in the video directly, the site is essentially promising a guaranteed return of at least 91.25 percent and up to 480 percent per year.
If your mental HYIP scam detector isn’t going off yet, it certainly should be.
Once this section is over, the animation ends and it cuts to a very bizarre montage of people who appear to be in Vietnam, standing next to mid-range luxury sedans and coupes, and then driving them around to a pulsing techno-pop beat. All the while, a text box on the bottom right reminds you to “make your dream come true” by investing ten thousand or more dollars.
After several minutes of driving around, the subjects of the video stand in front of a panel that reads “BCC Vietnam”. The video ends with a banquet and dance party, all with the text box in the corner continuously urging you to invest.
If the video consisted of only the bizarre animation, it would have been strange enough. The sudden cut to the cars driving around and then the subsequent banquet and party just make it even stranger.
BitConnect Coin (BCC)
At this point, all I had seen was a lot of weirdness. Weirdness, however, was not enough to declare this a scam. I needed to dig further. The next point I needed to research was the native currency of the platform, the BitConnect Coin or BCC*. This is how BCC is supposed to be used:
First, you deposit bitcoin into a specific address that BitConnect provides. From there, you “buy” BCC from their own exchange.
Next, you lend your BCC to borrowers and earn a subsequent daily profit. This is where the tier system comes in. The total amount that you lend out determines your tier, and your payout and capital lock down period. Obviously, more money in equals more money out, and faster.
*Note the “BCC” label is also used to refer to Bitcoin Cash. Many prefer to use “BCH” in part to avoid confusion.
In my opinion, BitConnect is a classic HYIP scam. Here is why:
- It promises massive, impossibly large, guaranteed returns
- The site makes use of affiliate links to spread quickly with potential false testimonials and reviews
- It uses colorful, exaggerated language like “financial independence” and “financial freedom”
- The program is designed to encourage you to continuously reinvest and not withdraw your money
- The site hasn’t been up for very long, and it will likely disappear sooner rather than later.
While the claims being made by BitConnect are in some ways less egregious than the likes of bitpetite.com or laser.online (both sites promising to double your money in less than a month, every month), they are most certainly unsustainable and unrealistic.
To avoid getting caught by one of these schemes, always remember to keep your expectations grounded in reality. No investment platform, company, or website could ever possibly afford to give out a near 500 percent return per year just for lending out Bitcoin or other forms of money.
My advice: Always remember to do your own research beforehand, and if something seems too good to be true, it probably is.
What do you think of this and other crypto investment schemes? Let’s hear your thoughts.
Images via BitConnect, Pixabay