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> Of course, this doesn't explain why they don't just use it themselves without needing other people's money. Not that it saves Bitconnect's case, but taking i

> Of course, this doesn't explain why they don't just use it themselves without needing other people's money. Not that it saves Bitconnect's case, but taking in money can be legitimate, can it not? That's what every money manager and every bank does. Even if you could just trade with your own money, you might benefit doing your thing with a larger sum of money (even if you get just a small piece of the profits). Edit: Hilarious, and uncomfortable, video, by the way.

flashdance 9y ago
That's correct, but this isn't the same! I've seen some folks on reddit mention you can get 7% of someone's deposited money as a bonus if you refer them. Only a ponzi scheme can sustain that sort of aggressive networking. This sort of referral system has been done before, for GAWminers, Pbmining, and Hashie--all ponzi schemes which later collapsed, of course!
- rothbardrand 9y ago
  I think the trick is that you "get" that %7 as an account credit, but since you're never going to be able to withdraw the money... these days all a ponzi needs to do is have enough shill accounts claiming that they were able to withdraw successfully, and drowning out those who complain.
wbl 9y ago
As the joke goes, Sharpe ratio is inversely related to size of marketing department.
- stefantheard 9y ago
  That's hilarious, and also has to be true. Most successful firms don't exist outside of some mild exposure and a basic splash/landing page to entice potential candidates for recruitment.
  - akgerber 9y ago
    A classic example: https://www.rentec.com/ https://www.rentec.com/
Tuna-Fish 9y ago
> Not that it saves Bitconnect's case, but taking in money can be legitimate, can it not? Only if the returns are low enough. If you had a way of making 1% a day returns, taking in large amounts of someone else's money would be really dumb.
- Bromskloss 9y ago
  Isn't the issue rather how your rate of return scale with the amount of funds under management?
  - notahacker 9y ago
    The issue is that anyone with an investment strategy capable of earning consistent returns of over 1% per day, will (i) have no difficulty raising capital by offering much lower payouts to their investors (ii) will maximise their personal profit far more easily by paying out only a small fraction of returns to investors, and retaining the rest to reinvest for themselves rather than offering 1% a day returns and stupidly generous referral schemes to try to attract more funds to "manage". Of course, the reality is that nobody earns rates of returns like this at any scale whatsoever except by robbing Peter's new funds under management to pay Paul

flashdance 9y ago

That's correct, but this isn't the same! I've seen some folks on reddit mention you can get 7% of someone's deposited money as a bonus if you refer them. Only a ponzi scheme can sustain that sort of aggressive networking. This sort of referral system has been done before, for GAWminers, Pbmining, and Hashie--all ponzi schemes which later collapsed, of course!

rothbardrand 9y ago
I think the trick is that you "get" that %7 as an account credit, but since you're never going to be able to withdraw the money... these days all a ponzi needs to do is have enough shill accounts claiming that they were able to withdraw successfully, and drowning out those who complain.

wbl 9y ago

As the joke goes, Sharpe ratio is inversely related to size of marketing department.

stefantheard 9y ago
That's hilarious, and also has to be true. Most successful firms don't exist outside of some mild exposure and a basic splash/landing page to entice potential candidates for recruitment.
- akgerber 9y ago
  A classic example: https://www.rentec.com/ https://www.rentec.com/

Tuna-Fish 9y ago

> Not that it saves Bitconnect's case, but taking in money can be legitimate, can it not? Only if the returns are low enough. If you had a way of making 1% a day returns, taking in large amounts of someone else's money would be really dumb.

Bromskloss 9y ago
Isn't the issue rather how your rate of return scale with the amount of funds under management?
- notahacker 9y ago
  The issue is that anyone with an investment strategy capable of earning consistent returns of over 1% per day, will (i) have no difficulty raising capital by offering much lower payouts to their investors (ii) will maximise their personal profit far more easily by paying out only a small fraction of returns to investors, and retaining the rest to reinvest for themselves rather than offering 1% a day returns and stupidly generous referral schemes to try to attract more funds to "manage". Of course, the reality is that nobody earns rates of returns like this at any scale whatsoever except by robbing Peter's new funds under management to pay Paul