Tuesday, January 16, 2018

Bitconnect is toast. Or at least the lending platform is.

If you're hearing the news, you're probably hearing "ponzi," mostly. Aside from the fact that there's no proof of that (trading robots do exist), here's the thing: you still own Bitconnect Coins.

The people behind the system immediately released all active loans in the form of BCC. They didn't have to do that, they could have just shut down the site and disappeared.

Instead, the BCC blockchain still exists, and (so far) the operators are promising to continue operating the site for its wallet functions.

That the value of BCC is cratering is not an indication that this whole thing was a scam. It's the market at work: BCC pretty much had just one use, as a lending token to generate income from the trading activity of the bot. Take away that activity, and the value proposition disappears. One's property in the form of the coin itself, however, does not disappear. Were this a scam, ALL of it would have disappeared.

Since this began a few hours ago, I have at times been able to access my account. All of my BCC is there, as promised.

There's been stress placed on the system lately in the form of regulatory activity from the U.S. states of Texas and North Carolina, lots of people constantly pounding the FUD drum, and in the past several days severe DDoS attacks directed against the service, which allegedly came with a promise that they would continue relentlessly. So, the Bitconnect crew decided to pull the plug. Put all of that together and maybe the value of the service would have dropped to nothing anyway as denial of access brought about by third parties would have contributed to the FUD, lowering expectations for the platform and thereby lowering the value of BCC anyhow.

So what's the likely outcome of all of this? That the BCC will become and remain virtually worthless, probably.

However, as long as it exists, there's a chance that a use will be created for it again. Things are such with the site right now that you pretty much can't withdraw the coins (it's under extreme load and constantly fails), and even if you could you nearly can't sell them anywhere at this point. I'd say "you might as well HODL," but you're kind of being forced to, now. So, you might as well HODL...

*(If it sounds like I'm being casual about this, I'll admit that I am, because I only had an amount in the system with a cost basis equivalent of what I make in about 1/4th of the time of my average day at work, doing what I do, so in the grand scheme of my total portfolio this isn't even a rounding error. Like I have and will frequently say, never put an amount of money into something that you can't afford to lose, no matter what it is -- no one knows the future.)

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