Quote from: YuTü.Co.in on February 11, 2018, 04:59:46 AM

Quote from: AGM76 on February 11, 2018, 04:48:28 AM

Quote from: dooglus on February 11, 2018, 04:09:58 AM

Quote from: AGM76 on February 08, 2018, 09:36:40 AM

The lending platforms should work properly if the people running them know what they are doing and I still think they are a good model as they generate profits for the company with the lending so are not real ponzis and they should be able to control the gain in the coin price (rising too fast is not good and that was what happened with Davor - although they did a lot of things that were scammy in the end).

That's where you're wrong, and what you should focus on. The model only works if their token keeps increasing in value faster than the interest payments accrue. When the token price stops rising fast enough the scammers have to decide whether to start taking a loss or doing an exit scam. Which of the two do you think they choose?

Actually, that's where you are wrong. All that happens is that they may have to pay more coins instead of less for the interest and capital release. They don't lose money as these coins are free to them and they have a large reserve (which they never even needed to use). The problem when the coin value doesn't rise enough (they can obviously adjust interest rates) is that it will cause inflation. In these situations they also can't take any profits without stealing from other investors by dumping more coins even though they would be stupid to do this as the coin would further lose value (Davor probably did this). Remember that the coin inflates organically with mining and staking at a predictable rate but the lending would normally be deflationary (they can then sell some of the extra coins at some point)

It's not a problem if at times it isn't deflationary as they don't actually lose any profits. Do you understand now why it's a good model as it prevents the company from dumping the coins as if they did that it means they have to pay more coins for the same amount of daily interest?

If such an excellent business model, then why did they close up shop with its promoters headin' for the hills?

Well bitconnect could have carried on for a while. DAV probably was stealing by creating fake DAV coins and selling them on the internal exchange. You still can't withdraw them to coinexchange which doesn't make sense if they are real lol. Also, even when their internal exchange was pumping, it was very hard to sell your tokens sometimes. They probably were just scamming people in the end.

It was probably the people complaining to the authorities (not the people actually in the program) that caused the problems. The lending platforms used to get lots of people lending but since bitconnect closed the lending, they are all struggling. What they probably need to do is allow capital release at any point with a fee depending on the amount of interest that was paid already.