Bitconnect is a Scheme, not a scam.

Bitconnect may indeed be a brilliant scheme but it may not be a scam. I'm one of the data analysts that's been watching bitconnect very closely. I wrote a few months ago of how bitconnect could have been using something similar to Bitcoin Savings Accounts where they receive a low end interest rate to help earn the extra money. Today I watched this Sunny Decree video on YouTube when something Sunny said that made me realize exactly how bitconnect works in one of two possible ways.

Both ways are similar, so here's what's the same:

• If you had $100 USD in Satoshi 120 days ago the same amount would be worth much more today. Only about half of the same satoshi deposit would be needed to return that $100 USD value in Satoshi to the investor. This leaves plenty of room for the extra percentages to pay the referrals and still have a little for the business.

What's different:

• option 1) the company holds the deposited funds into a cold wallet then upon needing to pay out, the company sweeps the wallet to the appropriate people (since the company fronts the referral payments, the sweep is simple, x% to-> original investor && y% to-> company).

• option 2) All fiat deposits are placed into savings accounts for low end interest. All bitcoin deposits are placed into a type of interest building stake wallet or bitcoin savings account. Each altcoin is sold at any higher in BTC value of each altcoin or they use a trade api to instantly trade to BTC instead of actually receiving the altcoin. Now this sets up two main currencies at hand, cash and bitcoin. Both can be staked for low percentage interest rates, to earn slightly more.

Either way they actually end the investment (not in or in a stake account), just based off the fiat trade value rates for bitcoin Bitconnect can payout investors with their own money. This stops the "scam" label but only looks like a scam if the investors are not being informed they are in a "stake contract" (an agreement to hold funds with a company with understanding that they could lose the money).

Now, using an Altcoin instead of straight bitcoin means the company can actually pay you less money back!

If you spend $100 fiat or bitcoin to lend as an altcoin your return is in Altcoins. As long as their altcoin doesn't reach the same trade value as either of the two main currencies at hand (cash/bitcoin), they will automatically own a front end percentage of your deposits. This allows for them to give out referral percentages or pay employees.

Let's looks at this differently. I'll list in top/front end, core, bottom/rear/back end of a deposit (top to bottom order) below:

• front end %
• core %
• back end %

Now I'll explain:

• The front end is automatically absorbed at the projected-estimated trade value of the altcoin to the deposited currency by percentage. This is used to take care of fast needs like referral payments (at altcoin trade difference percentages), paying employees, paying bills or paying off starting investors (this puts a damper on the altcoin value but also mimics trading bots).

• The core amount is staked or placed into a warm/cold storage wallet. This is the ROI, probably with the considered interest based on projected estimations from the altcoin to deposited currency.

• The back end amount is considered in figuring the estimation of business return. This is used for long term payments like paying current investors and owners, paying bills, Expo bills, research and yes Development!

Do they have a bot? Doesn't matter, the system will mimic trading bots simply by the trade value. Building a mirror program to mirror the trade value but adjust to match your own percentages then a program will look like a real trading bot. A real trading bot can be built in a very light program using the basic combo of javascript, php, html, css so the company could have a third party bot program for investors that works and only helps build the altcoin trade value total. A real bot would only give bitconnect approx 1%-10% of extra trade value per $50,000 USD over 150-200 days. What I mean by extra trade value: the current bitconnect altcoin trade value is an exact to near-exact percentage difference of any two points of time when compared to the same two points in time of the bitcoin to USD trade value. Since the Bitconnect Expo or promoter get together the bitconnect trade value has been slowly heading towards that extra 1% trade value. Bitconnect also has a downloadable trading bot investors can download.

With a downloadable trading bot program, any number, figure, information and I mean anything on it can be faked, mimicking, even mirroring bitcoin average hash rates with alterations & all at real time speeds.

How does bitconnect have so much money?

This is simple now that you know what I know. Let me explain:

• when the bitconnect coin was worth less, the amount absorbed by the front end was higher.

• every $10,000 deposited within their first 60 days of bitconnect approx $7,500-$9,500 was front end and absorbed.

• now that the bitconnect coin has a much higher value and is starting to compete with the BTC trade value all bitconnect coins are with more this makes the core amount drop some.

• as the bitconnect coin trade value goes up the back end amount goes up (because core % needed drops).

Here's the most important part:

• If you lend an altcoin back to the altcoin company, the altcoin company can re-use the same coins but charge at the new trade value. They never explain if your bitconnect coins are old, used or new they could easily be used.

• the company could have 10,000 coins but would seem closer to 1 million coins.

• if the altcoin company holds the cash, bitcoins and bitconnect coins then they literally have all the money even if their website says you have it. So until you cash out, the company has all the money.

So the company gives you back your bitcoins (not someone else's), gets money up front and afterwards, may be earning interest on the funds, holds all the money, can mimic trading bots from the system so fake trading bots are just as or more possible then real light weight program bots.

This doesn't mean the system won't flop and I think the owners are hoping for it. If the system flops or dips to rock bottom, they could advertise just right and get the right promoters to relaunch the bitconnect coin and just earn more money, again. They could also flop than run but after the bitcoin conference I don't think the owners would leave the project unless someone paid them out or the company just stops gaining investments.

This is the scheme I believe Bitconnect is running with. This does prove it is not a scam but instead a scheme based on projected possibilities, previous statistics and mathematics.

 --Douglas "3D"