PRODUCT DEVELOPMENT
Problem
BitConnect aimed to capitalize on the burgeoning interest in cryptocurrencies by offering a platform where users could lend their Bitcoin in return for BitConnect coins (BCC) and earn extremely high returns. The fundamental issue was the lack of a clear, sustainable business model behind the high returns, leading to accusations of operating a Ponzi scheme.
Solution
The BitConnect platform included a lending program where users could lend Bitcoin in exchange for BCC. The company claimed to use a trading bot that took advantage of Bitcoin’s volatility to generate profits, which were then shared with lenders as daily interest payments. Additionally, it offered a multi-level referral program that rewarded users for recruiting new participants.
Value Proposition
BitConnect’s value proposition was the promise of high returns on cryptocurrency investments, with the added potential for earnings through its referral program. This was highly attractive in the speculative atmosphere of the 2017 cryptocurrency boom.
Development Process
Details about BitConnect's development process were scarce, contributing to its lack of transparency. The company claimed to have a proprietary trading bot but never provided evidence to support its effectiveness or existence.
Scalability
The scalability of BitConnect’s model was intrinsically linked to its ability to attract new investors to support returns promised to existing ones. This unsustainable model ultimately led to its collapse when it could no longer meet its promised payouts.