Quote from: AGM76 on February 21, 2018, 07:40:57 PM

Quote from: suchmoon on February 21, 2018, 07:30:46 PM

Quote from: AGM76 on February 21, 2018, 07:12:13 PM

It's very simple. The whole time bitconnect ran, the BCC price went up a lot faster than the interest they were paying. Including the capital releases, the lending was profitable for bitconnect as they were accumulating more and more BCC coins and paying out less BCC than the amount loaned to them. Assuming they had zero BCC reserves (although they actually had millions) they wouldn't need to use BCC from new investors to pay the interest so it wasn't a ponzi! The lending was like the reverse of staking coins in that people got back less BCC and not more for lending (including capital release) just because of the coin price growth. If they ever needed to use their reserves, it would mean that they'd be adding coins to the market and reducing the real value of BCC but this never happened! This proves all the coins they sold were legitimate profits from the lending system which they could use to market the coin (NO DUMPING OR STEALING FROM INVESTORS). The lenders didn't mind paying this as they still made good interest on the investment. How anyone understanding this can think this was a Ponzi is beyond me. For example, if they had web staking (which they were going to have and not just in the desktop wallet), that would pay extra BCC coins and cause inflation... the lending didn't even get to that point and was the reverse of staking so was nowhere near a ponzi!

The whole lending scheme was a sham designed to create artificial demand for their useless token. That was the reason BCC went up. Until it didn't and collapsed just like all ponzis do. It's an unsustainable and illegal scheme.

Yeah it generated demand because bitconnect had profits from it and could market the coin. If they didn't make any profits from it and just stole it from investors, then it would have been a Ponzi. It would only collapse if people didn't want to pay X amount for the BCC coin but there would be no reason for them not to. Lenders didn't mind what price the coin was. Only when people started getting nervous about lending, for example if they started going into reserves without reducing the interest rates, could it collapse. They could have easily found other ways to keep demand for the coin while they reduced the interest rates because most of the coins would be locked in lending and couldn't be sold.

To be fair, I forgot all about that part where Investards lent their BCC to BitConnect knowing full well that it would be utterly impossible for BitConnect to liquidate Investards' BCC in BitConnect's complete control because, perhaps, of some code thingy written in the blockchain like ...

Code:

if lent != no touch {
log.Fatal(err if moved)
}