RE: Incentive trees and what we can learn from Bitconnect
You should not used premined token as a point here, if you been around here and in crypto for some time you would know why.....
I am not really gonna defend anyone or any crypto but the hypocrisy is on the roof, do folks even understand how the Steemit reward pool works and how the Steem Dollar works, if you did, then you probably ask a different question.....
Again the post deal with marketing and probably how that technique is being used by probably one of the most successful crypto of 2017....
I wish we can articulate concepts of how a lending platform used Proof of Stake and Proof of Work to leverage its token BCC against BTC while incorporating marketing at its finest....People argue about the returns, but we also have to remember that both BTC and BCC has seen year to date growth of over 900%, that's on the blockchain... that isn't made up numbers.... the asset class and mechanics is is truly amazing
Once again, not defending, I am more interested in concepts and application of them, I don't want to know to much about people personal lives or speculation
yes i have been around a long time and to use full premine is a good point because isnt a coin with economic fundamentals or the strength of security like bitcoin or others so to liken it to others isnt an argument for is trying to draw similarities between different things
saying bitconnect gained in price is irrelevant of course it would they take payments in bitcoin so can push the price for free
you say at the end you are not defending yet say how amazing it is and the gains its made, it is scam of course it pays a lot when they exit they will take a lot.
Once again, not defending anyone or any crypto, but lets evaluate the mechanics.....
The strength of any cryptocurrency is the blockchain and code powering it....In Steem we have Delegated Proof of Stake, it is our leverage relative to BTC or USD or any pair that the market providers give...In Steem we are leverage mainly against BTC and USD an thus we derive value, that value give power to the participant base on his Stake, what makes Steem blockchain unique, we participants mine the Steem and the overall value of Steem is base on the participant that choose to first buy the Steem on the exchange...one controversial aspect of the Steem ecosystem is the SBD, how does it obtain value, it can obtain value if its pegged to Steem or another asset that has value(in SBD case its the USD)...what one must understand here, something must offer a bridge to obtain value or a consensus must be reach where all participants agree that X is indeed worth that amount...If we should compare cryptocurrency to government back notes, the varying world currencies are backed by the respective governments making them legal tenders and thus giving them some market value....In cryptocurrency we are relying on the code and exchange, that says, given the demand and what available participants are agreeing that 1 BTC is worth this amount and from this other cryptocurrency/token obtain their value....There isn't any government backing so theoretically no one has any legal jurisdiction and no law is really broken...
With regard to bitconnect, the mechanics behind it are Proof of Stake and Proof of Work, two concepts you should be familiar with so I wont get into any detail..the max supply is 28 million and current supply is around 8million, now base on the supply and the demand BCC has seen its value risen from 3 dollars all the way to 280 where it is trading currently...impressive growth but we are missing the point of how it get there, it gave an incentive, an probably the incentive program fired up people who were energized to go out an recruit....what makes this unique, you can trace the transaction on the blockchain like we do with Steemd and the blockchain base on the market rate and supply give it a USD value of over 2 billion USD....there is much more to say especially with regard to Proof of Stake, an how the company has taken advantage of it to lock up tokens used in loans to further drive its price...so we have to zoom out now, we have three asset class BTC, BCC and USD, both BTC and BCC are appreciating relative to USD, the contract obligation of BCC is to pay the lender the equivalent of USD BCC value of their loan duration...at the beginning of January 2017 a 10K loan would have cost over 3000BCC tokens which has contract obligation of 120, if we did the calculation now a 10K only cost Bitconnect 49 tokens with an astounding USD return...if we look at the value left on the blockchain, Bitconnect made an absolute kill... now we haven't even mention the controversial bot but trading bots has been around with us since 2002, its primarily Bots moving in tune of over 4 trillion USD dollars for banks like Citigroup and look at the volatility in crypto, so we should really move from see this as far fetch and try to articulate weaknesses and strengths of the model
your making an example between different things yes bitconnect use pos also pow is much different than steem dpos
stating that they use POS is irrelevant to their legitimacy and isnt a innovation they created
also to say usd a a trading pair isnt correct majority of trades are done with btc on a platform they control only a small fraction not even 1% is traded in usd
artificial growth from a constant pump isnt a great achievement they accept btc in exchange for usd take fees from trading and in between etc is easily achieved
trading bots are in every market
humans cant make trades as fast as they happen 90% of trading is automated by bots
recently this year bitconnect relocated to Indonesia from the U.K leaving millions in unpaid taxes and within 60 days U.K will be seeking assets to claim this scam wont last much longer
You haven't read what I said, I never said POS was an innovation they created, I am saying they taken advantage of the concept to further their business model....
If you are referring to Bitconnect using BTC as payment then you lack the mechanics of how it works, it pays the USD BCC value, the only obligation of BTC in the contract is as an entry as with any cryptocurrency.....
There is nothing artificial about it, if Ethereum should incorporate Proof of Stake and lock up their coins in contract it would spark their price as well, if you aren't familiar this is basically the same concept behind Masternodes, its one of the features Dash has benefited from, in essence you can even think of Steem Power in the same light, the more power up the less Steem available and if the demand is great, Steem price would absolutely pump, so it isn't artificial... that how the market works, its the beauty of these varying cryptocurency project the code governing it and the economic model behind it....low supply coins are sensitive to price hikes providing that there is demand... Remember these concepts are ways of securing the blockchain...with regard to the article, the question we can ask, could Steem create an incentive, it used to be offering interest on SBD and the inflation that existed with Steem but participant had to deal with their Steem being lock up for over 2 years... its very lucrative to have a Dash masternodes but if the participant wish to sell then he/ she must forgo the agreement, remember the payment is in DASH at the market rate, so if Dash price continues to drive up, what matter place to be... what these coins are trying to do is give the coins more utility, for example Dash want to the crypto of commerce(used as payment option, that why getting merchants on board is important) when you do that you have another stream of income from transaction fees and the trading volume markets the crypto, so when Bitconnect makes moves to get debit card it shows that these people are making moves....I am trying to be objective as possible... I hope no one flags me but hopefully we better understand with regard to the 60 days we have to see how this plays out, quite frankly cryptocurrency does not really have any legal jurisdiction, what government can do is dictate what is a legal tender of commerce/ trade or not apart from that, there isn't much....base on the government classification whether they consider it currency or security, then we have to think of capital gains and the laws that exist with regard to taxation in that given country where the gains are realized apart from that, there isn't much written in law
Steemit used to have "vesting" which paid interest on Steem Power, Steem Dollars, etc, just for holding. I think of Steem Power as the "vesting wallet". I think of Bitconnect where they figured something out, like for Bitconnect loaning is the equivalent to mining conceptually. In Bitconnect there is the "lending wallet".
If you loan you might get rewarded some variable interest for the day. On Steemit you might get rewarded if you blog or hold Steem Power. On Bitcoin you might get rewarded if you buy an expensive mining rig and you mine.
All of these are the same at the core. Essentially in every case you mine with your dollars. You put money into some smart contract or equipment in the hope that you will take out more than you put in after some fixed period of time. In Steemit or DPOS they called this "vesting". In Bitcoin it's adjusted by the difficulty algorithm and it's Proof of Work.
So in theory I do think it is possible to achieve the goal of a sustainable affiliate marketing protocol on top of Steem SMTs, and I think it is well worth it to implement this after looking not just at the success of Bitconnect but the fact that some of the top bloggers on Steem who brought thousands of people to the site are now doing it for Bitconnect. To get people like that back on the side of Steem requires Steem actually do something to allow the marketers to actually be rewarded for promoting Steem at least at a level good enough to be seen as the safer alternative.
Imagine what good it could do for Steem if people were on Youtube telling people to buy Steem and power up, and if these people earned a commission it could still be worth it.
Excellent point, recently I wrote an article about how Steem and EOS could benefit from the continual mulit-sig Ethereum wallet problems....In it I wrote essentially about the SMT and how it can help push their agenda further....Thinking about it now, Steem itself can launch its own SMT for marketers, where marketers are rewarded base on the amount of volume that they bring in, What do you think....I also think moving forward, once Steem establishes itself and the price of Steem moves above 2.50, they can pegged it against Steem instead of USD as to help restrict the amount SBD in circulation as less would have to be produced because we all agree that crypto prices would continue to trend higher.... The challenges Steem faces is creating an incentive, everyone won't be bloggers, how now can we create an environment that encourages participants, one may say curation rewards but I believe that isn't enough as we can see happening....I am also very concern about the potential effects flagging could have on the SMT if participants for whatever reasons start flagging projects, so lets see how it plays out
These are only your personal opinions, but my post was not an opinion piece. I offered the facts based on academic literature which I cited. There are people who don't touch crypto by the same arguments you use about ponzi, and people who wont use Steem by the very same arguments. Steem has bots too, whales, and an internal exchange with a "Steem Dollar". Steemit+Steem is a legit innovation in the space and deserves to be discussed, but so is Bitconnect.
you keep referencing steem and other technology bitconnect doesn't use and are irrelevant
comparing two different things with little similarities is false logic and a week argument for
if you check this link you will see how bitconnect has committed criminal tax evasion from the U.K and will have a case put against after 60 days
So loaning is another form of mining? Plus they have an exchange. Their exchange takes 0.25% on every trade, which is the same 0.25% they give in interest max on loans. The interest or any other promises are regulated in the sense that they are variable rates and they can suspend accounts.
Also Bitconnect is not convicted of tax evasion, those are FUD rumors which have no documented evidence. The evidence does reveal a company with shareholders and you can find the names of the shareholders. Bitconnect based on all evidence is not going to shutdown in 60 days and even if somehow hackers shut the site down it is just like Steemit and can come up again in another jurisdiction because they have their own blockchain.
Anyway the post was not about whether you should invest in Bitconnect. We know you don't plan to invest in it and that is fine as no one asked you to.
References
loaning is not a form of mining
because a token uses a form of mining isn't what gives a crypto value, distribution economic principles network security and how changes are decided by consensus algorithms or otherwise
bitconnect has a centralized exchange take btc give usd is easy to manipulate price with such control and taking a well performing asset and giving less
yes it is proven that bitconnect has committed tax evasion relocated from the U.K in July one week before tax was due here is link to gov site with filing
https://beta.companieshouse.gov.uk/company/10278342
https://s3-eu-west-1.amazonaws.com/document-api-images-prod/docs/wYGmnuGVgp6obZ3htZsVMhGcK8aZXTSlG2QBe9SXMjQ/application-pdf?AWSAccessKeyId=ASIAJXTG26VRKMJNPRHA&Expires=1510914492&Signature=tk0EqUaEM37UwWEA19Y6oMLNp%2BE%3D&x-amz-security-token=FQoDYXdzEIj%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaDLWuB4VFLMTadd%2BbwSK3A0S08FhwAaczQdHv0sQInDHaf0BE0%2F5sanbkxNDOsxIjZSknTlSRZgaFa0o%2BQ7YMZ3ozGBiM%2BChvyWQgt7BCXwvZV7LFYVEiokkbXxZ1hj%2FG8JAltX%2BVROeGmtAGVc1%2B5apBZEMqhIWlKs357embXpx6Avvhgy7YI1R1LzPluftDqNdfGGdSihDHF8H0avmDSEWO%2BBm38KbK%2FtAMAIRYkdeJLlV9xvOkjDB9y6Qrh4xY%2FONujAzVqZ6Ihn2TQHYPbvXl0QhMQ5ts7FCkptgMMYpMn89fTppfi7Yp1nEIg4Bu4lREppaUGzY5rxU851ATASmFc7MyVgsyUb2Kj5PO8C7NpZma3ejrACX3%2FUCLYqWe3Ebr7WesNSbZ%2F9uIFkl%2Bx8FITzLLdIpqWInZ7yLstCc2xfCMJtsE4GpxrWy%2B1YWvHzs58LVpW4EyhIQq8o78VqTiGmhaUBj%2FnQg0qDI89L8I2c6Hyy%2FwtRAsno4x6hRZqtpNiTNvO7i2zDEaswoB3s6H8J0KBOah4eWWLyRVnyvEwJTCFIWfXvr21000SsIliJhBDjHel9gGwkkyzQSmJAjN1MWXpTMo1Im60AU%3D
loaning is not a form of mining
because a token uses a form of mining isn't what gives a crypto value, distribution economic principles network security and how changes are decided by consensus algorithms or otherwise
Take some time to read up Proof of Stake, read up on how asynchronous smart contract works, read up on how demand and supply works....You keep saying artificial but you fail to understand the more tokens that are lock up in loans, the less that are available for the given demand, so that price would definitely spike....Dash currently has over 4000 Masternodes holders, all of which must have at least 1000 Dash to get a masternodes, if they should forgo the agreement, so we see the price fall because the market would be flooded with Dash but that isn't the case as it is probably one of the most lucrative masternodes around, Dash currently trading over 400 USD dollars, remember the Dash Masternodes pays out the USD value base in Dash on the contract, Dash is their currency, what Dash is doing now is trying to lift their trading volume so they are getting more merchants on board.....
The link to the paper and the UK, seriously you took that seriously???? So you saying now that every crypto has to now file the quarterly or name their directors and be up to date with the Queen request, trust me the Queen of England probably be more concern about buying up the dips on Bitcoin....if its the US, the US would be concern about capitalizing on the capital gains of its US citizens through taxation...
every crypto doenst have to file but bitconnect had there exchange and comp[any registered there so they do
the link to U.K site is accurate bitconnect operated in the U.K since the beginning and owes taxes for trading there
I am very familar with how POS works examples you give are from legitimate cryptocurrency with vastly different workings than an ICO token
again you make illogical statements trying to say there are similarities between strong well based cryptos and bitconnect when there are none
now with regards to taxes stating government would be after citizens gains through taxes bitconnnect is a a company and was registered in the U.K to trade and give legitimacy to
Well seems like you are determined to call it a scam and yes the UK government would shut it down in 60 days....why you so negative why call it an ICO token???
Man you points are well noted, this is my final points though... cryptocurrencies are still in its embryonic stages and what is legal to illegal isn't clear cut, the concepts and codes governing the blockchain aren't well understood and clearly it can be seen from our discussion... How do we legitimize one project from the other, how do we reach consensus as a community....these are some of the challenges that are ahead, I see a lot of baseline accusation and character assassination, the ecosystem is a very toxic place filled with jealousy, if Steem were to regain momentum an enter into the TOP10 again we would see attacks calling it a scam circulating again, probably we can thank the Dollar Vilgilante for taking on some of its biggest critics.... let discussion how the concepts work and how we can use the blockchain and the code that governs it as our guide rather than trying to run with the saltiness of others
Something to consider about Bitconnect, they could also be using the loans to simply buy BCC tokens. This would reduce the supply of the BCC, pushing the price up for future loan givers (you cannot take out a loan without first buying the token). The thing is, no one really cares about the price of the BCC tokens except outside speculators, who again could push the token price higher doing margin like trading, so in other words as long as the price of the BCC token keeps rising I do not see how Bitconnect will run out of steam.
It's not some simple thing like most people seem to think it is and I'm not saying I trust what they are doing at all. If they offered proof that the tokens sent to their bot were being burned however, this would completely change my mind. The Proof of Burn model already is used for OpenLedger for instance. If they burned all tokens (or provably locked them up) or the supply were reducing then people could in theory track the reducing supply to be able to show the exchange is making some kind of measurable profit as it could be seen on the blockchain.
They do have a blockchain explorer: https://chainz.cryptoid.info/bcc/
So it can be analyzed to either prove or disprove my speculation.
The largest wallet has over a million tokens. I hope this is the Bitconnect team itself because if that is a whale that is a scary amount for anyone and probably enough to crash the whole thing. On the other hand if it is the Bitconnect team and the team by some miracle are ethical, then this could be the reserve fund to keep the network operational for years potentially, because as the price of the token goes up, the value of their reserve fund goes up, and as long as demand exists for the token and they have the ability to supply the token, they can fund themselves without the need to take much of the profit from the centralized exchange.
Transaction fees on their centralized exchange can generate profit, but I don't know if it is enough for the affiliates, perhaps for now? I also followed up on this post with an additional post in which I speculate on whether it is possible to create a mathematically sustainable affiliate program over Steem. So far I lean toward yes, based on the fact that we have similar concepts like Steem Dollars and stable tokens, there is no reason in mathematics why it is not possible and it's just a matter of managing black swan events, and limiting the risks to some acceptable range.
An algorithm can adjust commissions rate on a weekly or daily basis. As long as these rates are not fixed or guaranteed in code then the variable rate will allow it to remain sustainable because as long as it never goes beyond the budget constraint it is mathematically sustainable. So if set aside 5% or 10% in the budget, then whatever that represents in tokens is what affiliate marketers get paid.
I fine it weird that Steemit, a place where bloggers were getting paid $1000 per post a year ago, are now filled with people saying the math for affiliates to be making thousands per day is impossible? The only way it is impossible is if the price of the token doesn't support continuing to pay out at those rates, or if the growth of the program outgrows the ability to pay for it (a sybil attack of a sort). In that case just like with mining, you reduce the payouts across the board to adjust to market conditions which can make it sustainable.
References
We can explore the first possible application of SMT would be Steem, a token that rewards marketers of the Steem blockchain, we can probably take some points from Bitconnect an apply it here on Steem, that was the tokens would be a currency for marketers.... The difficult part would be getting the correct model as we want a token thats lucrative enough and not just a badge with no real value
bitconnect is a scam and has recently committed criminal tax evasion from the U.K will be cases against within two months
https://beta.companieshouse.gov.uk/company/10278342
Are you spreading fake news about Bitconnect on purpose? If you are trying to convince neutral people that it is a scam and you use out of date information then it makes you look like you have an agenda.
Here is the latest and correct information: https://beta.companieshouse.gov.uk/company/10948031
They started a new company and that explains why the old company is being allowed to expire. Also to qualify as a scam they have to stop paying people but since people are being paid you cannot call Bitconnect a scam. You can call it a pyramid or Ponzi scheme just like you can call any other crypto including the crypto we like to use but it doesn't mean the pyramid will collapse any time soon as they can adjust everything, from interest payments, to levels on their referral program, and have made changes.
The only neutral position I can take is to say it is inconclusive as to what Bitconnect is. It could be sustained or not depending on the motivates of the people operating the website which remains a central point of failure. Steem avoids this because Steem will exist without Steemit due to the design.
if you did your research properly and weren't trying to recruit people to your scam you would see that there are 3 listed with bitconnect in there name
bitconnect the cryptocurrency waas registered here by Ken FITZSIMMONS,
https://beta.companieshouse.gov.uk/company/10278342/officers
the one you listed has multiple people none being ken FITZSIMMONS
the exchange is the central point of failure which deals with over 90% of volume when case are put against will be seized and owners will be gone with what they can pull in an exit
it is conclusively proven to be a scam and you supporting are a scammer
get your facts straight before talking shit
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@isacoin
I'm not offering any referral link am I? So I'm neutral but you are clearly anti. What is in it for you to care so much about this? I don't know who made Bitcoin either and at any moment if I'm a holder the creator could dump a bunch of Bitcoins. I don't actually hold Bitcoin but I also don't go to around making it my mission to prove Bitcoin is a Ponzi scheme or call it a scam.
Here are some facts: Something cannot be defined as a scam as long as people are getting paid. In Bitcoin people get paid, in Steemit people get paid, and in Bitconnect people get paid. None of them are scams. This means according to the dictionary definition of scam, to be a scam requires fraud. Show fraud and you reveal the scam.
Are they Ponzi schemes? That is a different question but it doesn't matter to me as long as people are still getting paid. When people are not getting paid or when the thing stops working then it's a scam. This is from a very neutral point of view that I make these definitions. You also claimed "tax evasion" but provided no evidence of this.
Your point about "Ken FITZSIMMONS" really has nothing to do with anything. It was you who claimed Bitconnect was going to be shut down by the UK and I refuted that with the facts. It's not going to be shut down by the UK government. This is a separate question as to whether or not it is a Ponzi scheme which honestly I don't know or really care. As far as whether it is a scam, it does not meet the definition by any standard because people are getting their money back.
Scams do not give people their money back and scams don't actually make people profit. So if that is a scam I don't mind that kind of scam as long as it keeps paying out. When it stops paying out is when I join your side on that debate but not before.
References
who made bitcoin is irrelevant isn't a company and doesn't ask for money
bitcoin is in no way a ponzi scheme has much utility is not just a token like 100's of thousands of other crypto
not facts people can and do get paid by scams before they pull an exit
in bitcoin coins are created due to POW nobody is asking for money
Evidence for
https://beta.companieshouse.gov.uk/company/10278342
first tax filing was due in July 2017 and one week before bitconnect moved operation to Indonesia
bitconnect is a fraud due to fact that holding bitcoin would yield more and unless they hold reserves to match market cap wouldn't be able to pay if everybody wanted to withdraw
by the time it stops paying out will be too late will have exited
Yeah and Jamie Dimon says the same about Bitcoin. This is why I say:
All of it is gambling. You might prefer to gamble on Bitcoin as your own preference but lets not pretend like Bitcoin price cannot be manipulated, or like you know the motives for the creation of Bitcoin. Also POW does ask for money, how do you mine without paying money ? So you lock up your money in mining equipment which breaks after 6 months, and how do I know? I've got experience.
If the token goes to zero then all your equipment you are stuck with. Bag holder in equipment is no different than if you hold a useless mining contract, or anything else. It's not a scam, it's called you gambled and you didn't win. Profits are not guaranteed in Bitconnect, or Bitcoin, or any crypto, If you choose to mine no one is guaranteed to buy the token, and any little thing can go wrong to crash the price.
Jamie Dimons statements are not based on facts and bitconnect is nothing like bitcoin has no economic principles security or utility
POW isn't asking for money its economic cost to secure network rewarded by minting
any market can be manipulated bitconnect controls the exchange that handles 90% of volume takes payment in an asset more valuable than what it pays which makes it much easier and cheaper to manipulate
size of bitcoin network and growth shows no chance of going of going to zero bitcoin has economic principles and utility bitconnect does not
no little thing can "crash" price now examples being everything bitcoin has survived isnt going anywhere