RE: BitConnect Ponzi Eats up 7% of Mined Bitcoin Daily! Part 7

You are viewing a single comment's thread from:

BitConnect Ponzi Eats up 7% of Mined Bitcoin Daily! Part 7

in bitcoin •  7 years ago 

Sorry for the delay. I haven't forgotten about your great investigative work, I've just been under the weather recently. The math appears reasonable. Even the use of ranges and estimation seems fine with me. It merely creates a probable range. It's the sources that are horribly unreliable, as I know you are all too aware. It's interesting that many believe you are underestimating total loan volume. If anything, I would think it might be overstated (That's just my hunch though).

In financial auditing there is the concept of directional testing, in which for a specific assertion of valuation we might ask would the party have an incentive to overstate or understate the item in question? I feel that it is pretty clear that the incentive for the sponsorship hustlers ( sadly the only available sources), is to overstate their loan volume to the public to make the public believe it's a great investment (this is similar to the directional incentive of publicly traded companies, I.E. Enron, Worldcom). In contrast, a small private business might have the incentive to understate revenues to reduce taxes owed ( less profit = less taxes due), since it is not trying to convince the public how great the company is to invest in(since it is privately owned/never publicly sold).

Of course, if Bitconnect.co was a legit actor with nothing to hide they themselves would publicly disclose and publish total loan volumes proudly. I won't be holding my breath for that day, as I'm sure neither will you.

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

Sorry you have been under the weather, thanks for your thoughts. Yeah, your points of BitConnect having an incentive to appear more successful are well reasoned. We are all guessing with hunches here. Interestingly, enough if you average a bunch of good guesses it is statistically becomes quite accurate. (I took a specialized cave search and rescue class once where a search commander needed to deploy people quickly with very limited information. They found the best way to make a decision was to brief about 4-6 people who knew the situation and have them independently guess the probabilities. Then take that result and average them. This was very accurate. The context of this would be we have someone lost in the cave the cave splits into three parts, which part do we search first, second and third. What is the likelihood they are lost in each part. While more people did improve the accuracy of the numbers, after you had about 4-6 people analyzing the situation each additional guess offered only a minor improvement. In a situation where timely action was important, this method offered a good concrete decision making framework. )