Since I've joined this site, I've seen multiple posts regarding people investing in or promoting BitConnect. I would like to show them how exactly BitConnect works and save them and other users some money, and to also point out how to generally detect a scam. For those of you that don't know, BitConnect is a cryptocurrency(BCC) and a site that promises its users a return of up to 480%+ in cash(not crypto) per year, and even a guaranteed profit of up to 91.25% a year, depending on how much you invest, with no risk of loss! They claim these money are made with a cryptocurrency trading bot that they created.

Let's take a look at their official guide on how to "invest" in their business. I have highlighted spelling errors with red(discussed at point 1) and suspicious, scam-like business practices with blue(discussed at point 3, which reveals the scam):

Let's evaluate a few things on this page:

1. Bad English and why it matters

First of all, there are many spelling and grammar errors, but I just underlined the most obvious ones that anyone can see. Most legit businesses have at least one employee to spell check everything before putting it on the website, if the developers are not native English speakers. However, it's very common for scam sites to have these kinds of mistakes, because they don't have any employees. Why? Because of two reasons:

The scammers don't want the employees to be able to identify them after they disappear with the money; They want to reduce the costs as much as possible until they shot down the site.

2. Too good to be true

Let's take a look at what they are promising you:

For 10,000$+, they claim that you get a guaranteed 0.25% daily interest, which means 91.25% guaranteed return per year. Not only that, but they claim that you get an extra up to 480% per year. Add to that the referral system, which pays your referral 7% of every investment or reinvestment you make, and his referral gets 3%, and his referral gets 1% and so on, until the 11th referral, adding up to more than 12%. So if you invest the same amount 3 times in a year, they would pay your referrals 36%+ of your initial investment.

This all adds up to a guaranteed 127.25%+ guaranteed, risk-free interest per year, not even counting reinvesting your interest. There is no legitimate business on Earth that will be able to pay this interest rate to its customers risk-free, plus another up to 480%. There is also no trading bot that can guarantee profits.

3. Suspicious business practices and how the scam works

To tie it all up, let's now take a look at how you are supposed to "invest" in their trading bot, and how they can(and will) profit from it:

You send Bitcoin to them. They don't ask for BCC, their own currency, they ask for Bitcoin! Why is that? Because their currency will become worthless as soon as they close down the site, but Bitcoin will still be valuable. You buy BitConnect with your Bitcoin, straight from the developers of BitConnect! Every time a user buys their currency, its price increases. You give them the currency you just bought in exchange for the promise of getting back its value in cash after 4 to 10 months, and some daily interest. The interest is paid in Bitcoin, but the amount is calculated in dollars. Now they have your Bitcoin and you also just gave them back their own currency and increased its price when you bought it. What do you have? A promise. They also offer a very generous referral program, so many people promote their site on YouTube, Facebook, forums etc. This helps to bring a ton of people to the site. It's a snowball effect: the more users they have, the more users they attract. The funds of new users are used to pay the old users. When not enough new investments come in to cover the costs of paying the old users and still make them a profit, they sell all of their ShitCoin BCC, which increased in price by 7000%+ since they released it because of their users buying it and giving it back to them, but almost never selling it. They also have a ton of Bitcoin to sell, but at this point it's worth a lot less than the total amount of BCC they have. They then disappear with all of the money.

To recap: They attract users by promising amazing returns on their investment. They artificially increase the price of their crypto by tricking users into buying it with Bitcoin and giving it back to them, along with the Bitcoin. They pay back the interest to their users from new investments. When their profit is maximized, they sell all of their artificially inflated currency(7000%+ since release) and Bitcoins and disappear.

I hope you found this article useful. Upvote it if you enjoyed it and follow me for more quality content.

If you are interested in legitimate investment opportunities, check out my previous article on the top 3 cryptocurrencies to invest in for the long run:

https://steemit.com/cryptocurrency/@thegrinder/best-3-cryptos-to-invest-in-for-the-long-run-as-bitcoin-replacements-5-years