Cryptocurrency & Blockchain Business

Beware of the NEOConnect Pyramid Scheme

We have seen a fair few new currencies and tokens launch throughout 2017. Not all of these ventures are worth investing in or even legitimate to begin with. A few companies have cloned the BitConnect scheme, by the look of things. After ETHConnect, we now have NEOConnect as well. This situation is slowly getting out of hand, as many people will eventually lose a lot of money. Always do your own research when it comes to new projects like these.

SHOULD WE TRUST NEOCONNECT?

The most obvious answer would be “no, absolutely not”, even though that is a biased response. A lot of people claim BitConnect and ETHConnect are Ponzi schemes as well, yet others continue to make money with them. OneCoin is also known to be a major pyramid scheme, yet there are people out there who make their living off it. Whether or not NEOConnect falls into this category remains to be seen, even though it is highly likely that is the case.

When something comes along that sounds too good to be true, it often is. In the case of NEOConnect, everything screams this is a pyramid scheme waiting to collapse. Its team claims to have created a lending platform connected with the NEO ecosystem. If that were the case, they could have just used the existing NEO currency rather than create another token to mimic the real thing. Then again, without a native token, the creators of NEOConnect would be unable to earn a lot of money in the process.

Surprisingly, the creators of this project have stated that holders of their token will not earn a lot of money quickly. Instead, investors will earn money over the long run. It may even be an honest pyramid scheme, as the early investors will certainly benefit from more people falling victim to this scheme over time. Those who buy in later on – knowing all too well they really shouldn’t – will be the ones failing to earn much in the way of money. So far, it appears it would be best to avoid this scheme altogether, yet everyone will have to make up their own mind in this regard.

The NEOConnect website itself doesn’t instil a lot of confidence either. It looks as if a thirteen-year-old put together this website and typed out a few sentences in broken English. Any program that claims one can earn substantial interest on one’s investment should be scrutinized first and foremost. No one will give out money for free, yet that seems to be exactly what is going on with NEOConnect right now. It’s a very worrisome business model, as a lot of people will be lured in by these empty promises.

Similar to BitConnect and ETHConnect, NEOConnect will serve as a proof of stake token which cannot be mined by anyone. All users need to do is store NEC in their wallets to earn interest after eight days. There is also a brief roadmap on the website, indicating that a security audit will not occur until next February. That is the same point by which the tokens will supposedly be tradeable on a lot of smaller exchanges. The team also hopes to partner with Visa or MasterCard, which will never happen.

It is abundantly clear that currencies such as NEOConnect need to be avoided at all costs. There is nothing legitimate about this token or its promise that investors will make money. There is no real business model other than the lending aspect, yet there are established methods of lending cryptocurrency which don’t require a new token to be created out of thin air. It will be interesting to see how long it takes for NEOConnect to blow up.

Source: themerkle

Leave a Reply

News by Month

 

Scroll to top