BitConnect Closes Exchange as States Warn of Unregulated Sales

For those unaware, Bitconnect was a Bitcoin-based ponzi-scheme that had operated 'successfully' for quite some time. I don't say 'ponzi' as an insult in the way some do for cryptocurrencies, it was quite literally just a bare-bones ponzi scheme, where you deposit your money (Bitcoin) on their website, buy their token, 'lock' your funds for some amount of time, and you are promised very high interest rates while encouraged to re-invest your returns.

What has happened today is Bitconnect has closed the exchange on their website, and so users flocked to some of the only other exchanges (of dubious reputation, since no reputable exchange wanted to list the BitConnect coin) in order to sell their now-worthless tokens, resulting in losses of around 90% today: https://coinmarketcap.com/currencies/bitconnect/

Many famous Youtubers and other individuals with influence convinced hundreds of people to put their money into BitConnect in order to profit off of referrals, leading to a lot of unfortunate losses and a lot of delusion and misinformation among devoted investors. The general sentiment towards those that lost money due to BitConnect has been a mocking attitude in the cryptocurrency investment communities, as BitConnect has been referred to by many as a blatant ponzi scheme for months.

I noticed this other apparent BitConnect-like Ponzi scheme here: https://polynetwork.org

Funny thing, I noticed because it is using an old version of our 3D player on their home page (the 3D robot), and they are getting an incredible amount of traffic.

It's almost shocking how transparently dishonest they are. And yet people put real money (well, I suppose real bitcoins) into a black hole like this...

Most investors knew Madoff was cheating some how, they just all assumed they would get out in time.

Was bitconnect cheating though? I totally thought it was possible that they were a ponzi scheme until I ran my own bitcoin trading bot.

But, don't take my word for... if you look at bitcoin trading bots that you can run yourself (many example on youtube of people running their own), bitconnect's return rate was significantly lower than typical bitcoin trading bots.

So, if bitconnect was getting typical returns (and it's safe to say they should be getting at least 2%, which only puts them in the top ~60% of bitcoin bot operators), they could have been taking more than 1% for themselves and still returning their "high" level of returns -- without running any sort of ponzi scheme!

Seeing my own bitcoin trading bot in action led me down the path of investigating stock trading bots and high speed trading within banks. The more I learned, the more I realized the real ponzi schemes are the national banks. That sounds crazy until you realize that with fractional reserve banking, they can take (for example) $1000 that you deposit and lend out 90% of it -- they only have to keep 10% of deposits deposits in reserve! Yet, most of them pay you less than 1%/year in interest. If I can make 4%/day on $1000 in my basement, how much do you think giant banks can make with your $1000?

I would highly recommend running your own bitcoin trading bot if you've got $1000 to spare. I'll refrain from recommending a specific one for fear of sounding biased, but it will completely change your outlook on what bitconnect could be. More importantly, it'll probably make you a decent chunk of change that you can cash in at anytime (unlike bitconnect's CD model).

This is new to me. What does a Bitcoin trading bot do exactly? Do they trade alt-coins through exchanges?