As discussed earlier, the people behind the now failed Bitconnect scheme started an Initial Coin Offering (ICO) on Jan. 10 for BitconnectX (BCCX). I’ve already noted that the project has no whitepaper, no known development or operations team, and a rather generic mission already being fulfilled by dozens of existing projects. Despite all these red flags, people are still buying BCCX at $50 a pop — so far, 3,135,996 BCCX have been sold, worth almost $156.8 million!
There’s another problem with BitconnectX which I didn’t catch before. That pie chart up there. The percentages don’t add up, and the proportions are all wrong. Plus one of the data labels is wrong. [h/t to redditor IfaqYurmama for posting this, btw.]
Before we delve into the several errors in that chart, consider for a moment or two that a whole bunch of people have willingly sent $156.8 million to an unknown group of people (or perhaps just one person), who cannot even create an accurate pie chart for their ICO website!
I’m no spreadsheet whizkid, but I able to whip up a somewhat more accurate pie chart in about 10 minutes with LibreOffice Calc.
But what do these numbers represent? According to the BitconnectX website, the pie chart should represent the distribution of the unsold BCCX tokens during the crowdsale.
But it doesn’t.
Let me explain. According to the website, the maximum number of the BCCX tokens is 49 million. Of those, 14.7 million are already available (?). During the crowdsale, 11.76 million will be sold at a rate of 261,333 a day, and the remaining 2.94 million are set aside for a reserve fund “for marketing, development and administrative work.”
So far, the numbers add up: 49 million – 14.7 million = 34.3 million to be minted or mined. That last figure is on their pie chart.
Here’s where it gets flaky. The website states that any coins not sold during the crowdsale will be added to the reserve fund, and implies that there are also 11.7 million coins set aside somehow for “bonus distributions.” At least, that’s what I think they mean.
The total daily unsold coins will go to reserve funds for marketing, development and administrative work.
Round-1 (5% Bonus) January 10th to January 24th (3.9 Million)
Round-2 (2% Bonus) January 25th to February 8th (3.9 Million)
Round-3 (No bonus) February 9th to February 23rd (3.9 Million)
Within 5 days of a successful ICO, BitConnect will release the BitConnectX coins to the web wallet, and open the market for trading with other cryptocurrencies.
Any remaining coins after the ICO closes will be generated through stake holders until they reach the total supply of 49 million coins.
So far, the question of unsold coins is moot, because they have sold out each day within hours, but where are the 11.7 million bonus coins supposed to be coming from? They can’t come from the reserve fund. It’s too small. They can’t come from the crowdsale, because those have already been sold or will be sold by the end of the sale. So, are they coming from the 34.3 million yet to be created?
And why are these bonus-coins-from-nowhere and the reserve fund coins and the yet-to-be created coins all together in a pie chart full of mathematical errors entitled “ICO BONUS DISTRIBUTION”? It makes no sense.
Checking the math, I can see a possible explanation, and it still shows how shoddy BitconneectX’s work was. If we tally the reserve fund coins, the bonus coins, and the coins to be mined/minted, we get 48.9 million. That’s pretty close to the 49 million cap touted on the website. [What’s 100,000 coins/$5 million among friends, right?] So, my pie chart (not theirs) could represent the distribution of ALL the BCCX tokens. That’s the only way the numbers add up.
A legitimate project would have all these details clearly explained. Math errors would be corrected before launch, and certainly afterward. If I were going to drop $50 on each token, I’d also expect pie charts to be meaningful and look professional. But the BitconnectX team only registered their domain name 10 days before the launch, so maybe they were short on time.
Investors in BitconnectX are going to be disappointed. The heartbreak may happen next month, or some months later, but it’s going to happen. Mark my words.