The mysterious team behind the crypto-lending platform, Bitconnect, today launched a new product, called BitconnectX, with an initial coin offering (ICO). The new token, with the ticker symbol BCCX, purports to enable “instant payments to anyone worldwide with lightning fast confirmation times.”
In other words, it’s nothing really new or revolutionary, as several other cryptocurrencies, such as NEM or even Litecoin, already offer similar services. But Bitconnect has so many rabid fans, the ICO’s first day quota of tokens was sold out in short order.
The developers of BitconnectX kept much of the project under wraps until just before the ICO launch. Even Bitconnect’s top promoters were in the dark. Some thought it would be a new exchange, or Bitconnect Coin (BCC) 2.0. [Spoiler alert: it’s both.] While there was a website with all the appropriate tags for “FAQ,” “Roadmap,” etc., none of them were working until today.
And right out of the box, there was already confusion. The FAQs originally said the tokens would be sold for US$5 each. Then, the FAQ changed the sale price to $50 a token. Maybe it was a glitch or a typo, but a professional launch would have had someone proofread all those important details before it went live. Just sayin’.
[UPDATE: Judging from comments in the Reddit Bitconnect channel, the first day’s sale was sold out within a few hours. Redditor mbrown913 posted this:]
Unbelievable, even with the price increase, this is madness!!!!
Daily ICO Sell limit: 261,333 Coins for 24 hours. The sell limit will reset at 12 AM (UTC).
Total sold today : 146,052.74434842 Total available for sell : 115,280.25565158
That means BitconnectX took in more than $7.3 million in the first hour!
Let’s go over the other pertinent details. According to the BitconnectX website,
- the new token will use both proof of stake (POS) and proof of work (POW) algorithms, much as Bitconnect Coin does;
- the estimated maximum transaction time on the BCCX blockchain will be 2 minutes;
- the maximum coin supply will be 49 million BCCX (for comparison, Bitcoin has a 21 million cap);
- 14.7 million BCCX will be the available (circulating) supply (representing $735 million at $50 per token); the rest will held in reserve (explained below);
- 11.76 million BCCX will be sold during the ICO (representing $588 million); and
- 2.94 million ($147 million) will be held in reserve.
- the ICO ends Feb 23, or until the tokens run out, one presumes
Interestingly, there is a cap on the ICO sales of 261,333 tokens every 24 hours, about 1.78% of the planned circulating supply. Any unsold coins in each 24 hour period will “go to reserve funds for marketing, development and administrative work,” according to the website. It’s not clear to me if those unsold coins will increase the reserve fund above the advertised 2.94 million tokens, or if they will be counted as part of the reserves.
By the way, “reserve funds” is a fancy way of saying “money we will keep for ourselves.” Unlike other ICOs, the BitconnectX team does offer any specifics on how the reserves will be spent, such as the percentages set aside for marketing, development and administration.
For that matter, the website also offers no details about the members of the team (developers, administrators, and so on). There is no whitepaper describing the specifics of the blockchain
or the PoS and PoW algorithms being used [CORRECTION: I missed it on the website. BCCX will use the Scrypt algorithm], only a somewhat ambitious roadmap for 2018.
As people suspected, there will be a cryptocurrency exchange. The roadmap says the exchange will be tested in March and launched in April, presumably to trade BCCX against other cryptocurrencies. Other tokens will be added to the exchange at a later date.
Reviewing all this, I have some big questions about this project, which make me doubt its success. Maybe you readers have answers or comments on them.
- Does the world need yet another cryptocurrency promising quick transaction times?
- What advantages does BCCX offer over the other blockchains already in use?
- In other words, isn’t the market for “quick transaction time” crytocurrencies already pretty saturated?
- How will the BCCX blockchain achieve these quick transaction times?
- Has it been tested yet?
- Does the world need yet another (presumably centralized) cryptocurrency exchange?
- How will the BitconnectX exchange be any different from ones already in operation?
- What assurances do we have that BitconnectX’s mysterious operators won’t just disappear with all this ICO money?
- Who are these people?
- Will the funds generated from the BCCX ICO be used in the Bitconnect Coin platform, i.e., to pay lenders their daily takes?
By way of disclosure, I did put $120 into the Bitconnect lending program last May, and as of today, my total returns have been around $395, with no referral bonuses. I will not be participating in the BCCX ICO because (1) US residents are barred from participating in it and (2) I don’t trust it anyway.
If you want to drop some hard-earned money (the ICO accepts BCC, BTC and LTC — no fiat) to join this ICO, then you are free to do so. Just don’t invest more than you can afford to lose. I have some serious misgivings about this ICO and the overall project, so I suggest you proceed with caution. Or walk away, and see what happens after the ICO ends.