I think the one part about bitconnect that should have been explained better it what algorithm they used to trade bitcoin vs bitconnect coin to make their profits.
I think the one part about bitconnect that should have been explained better it what algorithm they used to trade bitcoin vs bitconnect coin to make their profits.
Algorithm? You folks are kidding, right? Everyone is searching for the mystery algorithm. There was none! You pay them in bitcoin a particular dollar value, i.e. $100, $1010, $10010. Then they tell you they will TRY to pay you around 1% daily. (They never guaranteed any specific minimum return, they only showed you the typical return. I do believe banks could easily make you 1% a day return on your money as well just by sharing their profits from the market trades of their HFT bots, but that's another subject...kinda) When your loan term is over you have approximately 1% daily return on the initial cash value investment you made. Meanwhile the increase in bitcoin valoue is theirs. It was more than plenty for them to make huge profits and pay everyone their expected returns. At the same time they used their own coin and manipulated supply to keep it's value high so they made tons of money there as well. It was brilliant because unlike most "ponzi" schemes (which this wasn't) they could have gone on forever (or at least as long as BTC will be increasing in value, i.e. to the year 2140) and everyone would get paid. This drop in the market wasn't their undoing. You can blame it on the US government. My speculation is when their lawyers met with the Texas AG a guy in a black suit sat at the head of the table and said "I'm from the US government and there is no way we will allow you to survive inside our shores." So Bitconnect did the smart thing and cut their losses while they were still gains. Stop blaming Bitconnect for being smarter than the rest of us.