This is a sad, sad tale, but one that’s all too real. Bitconnect – the lending platform that most called a Ponzi scheme – came crashing down yesterday.
This is nothing to celebrate. Nothing at all.
What Went Wrong?
Whether or not this was a Ponzi scheme is a question folks can debate: Ponzis rely on money from new investors to pay the old investors. Bitconnect certainly had elements of that. Ponzis also make it very tough for you to get out your original investments – and, since the “lending platform” locked down your funds for as many as 299 days, that’s also a pretty telling sign.
However, proponents of Bitconnect – and several remain – will tell you that the coin is in good shape (despite a perceived drop in value of upwards of 90 percent) and that the ICO for their new coin (which will do…what, exactly?) means that they’re poised for great things.
No “We Told You So”
On this site, we went through the “stages of grief” with Bitconnect – and you can visit our Passive Income page to see how that unfolded. First, we thought it was really really cool and continued our experiment. Then, we backed off a little, wondering if it was too good to be true. Finally, a few months back, we made it a point to get our money out (from “lending profits”) every chance we could.
Whether we did or didn’t get back everything we put into it is a question we’ll have to do the math in order to answer.
But, with all of these, we’ve done a “warts and all” experiment on passive income platforms such as these. Sadly, we’re now officially an “oh-fer,” 0-for-10?
Again, Those Caveats
We’re seeing awful stories on the darker corners of the internet: from folks who got in way over their heads, invested more than they could afford to lose, and are now left picking up the pieces.
The caveats in this space need to be repeated, in bold, which we’ll do now:
- Don’t invest more than you can afford to lose
- Don’t borrow to invest in cryptocurrency
- Do your own research
- Spread out your risk so that you’re not completely reliant on one investment
- Get legal, tax, and accounting advice from professionals
- You are responsible for your own success or failure.
Our Next Steps
On this site, we’ll update our own 2018 Crypto Investment Plan – we need to investigate more “Passive Income Programs,” but, to be honest, those will likely include only mining and staking opportunities; any “lending” or “high yield investment program” (HYIP) will likely be a scam and should be avoided.
We’ll also update the Passive Income page to reflect the fact that Bitconnect is a scam.
#DYOR is our favorite hashtag/acronym in crypto. Do Your Own Research. Don’t trust just one site for information about cryptocurrency, don’t rely on just one YouTuber or blogger, and investigate everything. If it looks fishy, it may well be fishy.
[…] farm on steroids. In the interest of public service — we should note that we’ve done a few experiments like this during our three years blogging here — we decided to gamble what amounted to a family fast […]