We’ve been trying an experiment here at Metacoin HQ: can we use a small amount of capital on the Bitconnect platform and see the kind of results that make it a worthwhile investment? This post will contain our BITCONNECT REFERRAL LINK quite a few times – so you can read on and decide for yourself if you think it’s legit. We’re not here to sell you on the platform – you can make that decision on your own; if you do decide to join, use the link above and warm our hearts appropriately.

To that end, here’s a disclaimer before we dig in: Do your own research. With anything in this rapidly changing and evolving crypto space, past performance may not be indicative of future results. Your experience may vary. Also, be sure to talk to your own legal advisors and accountants and tax people. We’re not responsible for any successes or failures of yours: your investments are entirely your own responsibility.

OKAY, y’all…let’s find out what’s really going on with Bitconnect.

First up, the difference…

…Between the Bitconnect coin and the Bitconnect “Volatility Software.” We think it’s really important to understand where one stops and the other begins. (BTW, what follows is a banner ad that we found; it works like an affiliate link.)

The Bitconnect Coin is ranked 15th by market cap, according to Coinmarketcap.com. Here’s a screenshot of some of the statistics:

Upshot for those who don’t want to study the details – in case you don’t want to, say, examine the blockchain behind it – is that it’s sizable enough to not go anywhere. Legitimacy is key, because you’re buying the coin first – that’s a must – in order to have access to the volatility software. Were this a coin with a low market cap, you might ask a few hundred more questions.

The flipside here, though, is the  “Mt. Gox” element of ANYTHING IN THIS SPACE. There could be a hack, or an inside job of some sort could cause large chunks of the coin to disappear; the Bitconnect coin could plummet in value, leading to a “run on the bank.” Or the founders and large “whales” with lots of BCC could dump the coin, which could have the same effect.

So that’s the risk with any of these coins – the risk, in our view, may well be exacerbated by the fact that there’s that volatility software element. It’s the man behind the curtain: we don’t know how he (or she) operates, and his run of magic may come to an end.

Now, Let’s Invest – or Lend – or…

When we first “went there” a few weeks ago, we said the same thing we’re saying now: it’s an experiment.

It’s a simple process: take your Bitcoin – you of course need to get some first, which you can do with Coinbase by using that affiliate link over there- and convert it to Bitconnect. Using their platform is the easiest way (though you could use one of the exchanges on which BCC trades, too) to convert the coins.

Once you have the coins in hand, you need to “lend” them. And, our best guess here is that you ARE technically lending your coins – but you’re lending them to the Bitconnect folks, who then take their volatility software and work their magic.

For us, this process was a little bit of a pain. We decided to bite the bullet and actually get into the mix on a day when prices were plummeting on all of the exchanges. And we moved coins back and forth and money around just enough to get $110 – $10 more than the minimum – into the system.

Our journey was now underway.

How it Works, Part 1

Once you have invested in the platform, you will need to keep a couple things in mind. One is that you are now saying goodbye to your money for as long as 299 days. See this chart:

That’s right: my first investment was on July 10, 2017. I will not see my capital return until May 5, 2018. If you remember those “substantial penalty for early withdrawal” notices you used to hear about bank CDs, well, this takes it to a new level. Your funds are locked up and you will not see them.

However, you will see the interest, and that interest is something you can withdraw at any time.

The Interest

Here’s what that interest has looked like for the past five days.

Interest is tabulated daily, but it is tacked onto the original investment amount only.

The beauty of compound interest has been talked about over and over, so we won’t give you all the Einstein platitudes about it. We will tell you that you will have to do the actual compounding. That’s right, playas, you need to reinvest on your own in order to compound.

This is a rather important fact – and one that we actually missed for a few days while we were focused on other things. Yes, we’ll be more diligent next time.

The Actual Results So Far

Some notes about the above:

1. Though the minimum buy-in is $100, the minimum amount to reinvest is only $10.
2. This reinvestment must be done in multiples of $10 – so we could technically have reinvested after eight days.
3. They take what’s left over and call it “leftover” and put it back into your account.
4. When you reinvest any amount, it is locked up for 299 days (unless you are reinvesting an amount that’s greater than $1010, which cuts your “lockup” time by 60 days).

The Referral Program

This is where it gets…well, interesting. There’s an element of this that is old school affiliate marketing – “hey, here’s our Referral Link” is something you’ll see all over the place, and it’s why this is the third time we’re mentioning our own link in this blog post.

But where it’s even more intriguing is that there’s also an element that is similar to multi-level marketing. That’s right, by nature of my signing up, I’m now in someone’s downline. He gets commission when I invest or re-invest, and I get commission when someone I refer invests or re-invests.

This all has me wondering whether or not this is a sustainable business model: at some point, we’ll all run out of people to invite to this system, and the value of Bitcoin might drop, or the entire crypto universe could render itself obsolete.

Another Note of Caution

Sustainability is a really big buzzword: more than just “is this environmentally sound?,” sustainability can and should include questions such as “will this business be able to continue?” More endemic to this discussion – is Bitconnect here to stay?

I don’t honestly know. That’s why I gave you several up front caveats.

Now, in theory, with a total number of coins in circulation that’s right around 1/4 of the total coins to be created, Bitconnect may very well have the inflation thing down. And, since they advise you to “pay no attention to the man behind the curtain,” what we don’t know about the system may be an okay thing. High-frequency trading can certainly throw off percentage gains here and there that eventually add up, and perhaps this system does that in such a way that it can be sustained as long as Bitcoin remains somewhat volatile.

But it could also come crashing down. My 299 days could balloon to infinity if the money all of a sudden isn’t there.

These are risks throughout cryptocurrency, and this is why you are advised anywhere and everywhere in this space to only invest that which you can afford to lose.

Projections Are Also Dangerous…

I mean, really…do we think that 30% returns are sustainable on an annual basis? 30% a month is…well…nuts.

My math tells me that the original principal of $110 would, if it continues and I continue to compound, turn into $2500 in one year.

Once you see a projection like that, you start to think: “well, what if I invested $1100? OR $11,000!!!”

Here’s what I’m going to commit to doing: I will keep an eye on this coin, this project, and this system, and I’ll keep you up to date on what I learn. Warts and all.

Color me still intrigued, a little skeptical, but willing to ride this out and see what happens.

And here’s that link again, in case you want to join us.