The ponzi scheme was invented almost one and a half centuries ago in the 1880s. Since then, with the advent of the internet, the trading of securities has accelerated from multi-day transactions to nearly instant trades.So too has the "Oldest trick in the book" been re-envisioned to fool new investors.

Almost exactly one year ago, the iconic image of Carlos Matos (hey hey hey!) spread like wildfire across the internet. His exuberant, roaring optimism at the first (and last)
Bitconnect Annual Ceremony (I highly recommend watching this) starkly contrasted with professional analyst opinions, all of whom unanimously opined that it was a total scam. But I'm getting ahead of myself. First of all, what the heck is Bitconnect?
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BCC PRICE CHART |
Bitconnect, shortened BCC, is a cryptocurrency. Built from the same
technology as Bitcoin, BCC is theoretically the perfect currency: Easy to exchange, a good storage unit of value (well, once more people start using it), and implausible to steal. So far, nothing fishy.
Launched in February of 2016, the creators of Bitconnect had more in mind for their coin than just as currency. They created a complementary investing program: Lend your bitcoin to us (which was sold and converted to BCC, this becomes important later), and you will receive 1% interest
per day, also paid out in BCC
.
People flocked from all over to Bitconnect, after all, just a $1000 investment, left to collect interest for 1 year, would transform into $38,000, a 38-fold annual return. With endorsements from celebrities like Mike Tyson and Ashton Kutcher, it's no wonder the price of BCC exploded from a few dollars to a peak price of $400 in the span of a year.
However, the incredibly successful launch story of BCC was about to take a darker turn. Authorities had gotten wind of the outrageous 1% per day interest and served them Cease and Desist letters in Texas and North Carolina. The letters primarily asserted their failure to register and obtain the proper licenses to sell securities in their respective states, but also pointed out a lack of transparency on their business model, including assets, liabilities, and risks. In all but name, they were accused of fraud.
Just a few days later, on January 16th, the Bitconnect investing platform closed down. Even as investors frantically withdrew and sold their BCC balances, the price plummeted from $400 to $200, to $100, to $30, to $16, and finally leveled out at ~$0.05. Many investors ended up with far less than their initial investments, and the organizers vanished into thin air
On Reddit, posts about the news read like horror stories:
Soon after, the subreddit went private, hiding the last of the posts from the world.
Today, BCC has been scheduled (Sept 10, 2018) to be delisted from the final exchange still trading it: TradeSatoshi . Without the interest generated by the scam, it's trading volume has shrunk to just $10,000 daily. After all, it is little more than new name on bitcoin software. After the delisting, trading BCC will become nearly impossible, and the saga of Bitconnect will finally be over.
Here's some questions for you:
What do you recommend to prevent this from happening again?
What do you invest in/what is your general strategy? hopefully not bitconnect