Is Steemit the new Devtome?

Devcoin and its accompanying wiki, the Devtome, were developed as a way to financially reward open source content. The vision was that if you were willing to develop stuff that others could use and build on, it would be nice to earn at least something for it.

People who wrote programs, developed open source software and other things involving code were usually rewarded through Devcoin bounties. Those who wrote prose, however, were handsomely rewarded based on word count. You could publish whatever you wanted to publish, then link to it on your invoice (profile) page, and an automatic script would run to tabulate the word count and populate the receiver files accordingly.

This made it a great deal for writers. You didn’t have to worry about how popular your content was or even if it was read. The payment came based on word count. Unfortunately, but predictably, this also attracted all number of plagiarists and spam content providers. This led to the creation of a number of Devtome admin positions involving checking submissions for plagiarism (and immediately banning the account of anyone caught), monitoring and rating content for quality, and other forms of curating content added to the Devtome. All those admin positions were compensated, and the system worked as long as the value of Devcoin was relatively high.

The problem with the system, though, was that it required tons and tons of human involvement. The payment for content part was automatic, but the monitoring of said content was not, and took many hours of human labor. When the price of Devcoin dropped to almost nothing, as all inflationary currencies are bound to do eventually, the humans found the effort wasn’t worth their time.

The low price of Devcoin has also been a deterrent to spammers and plagiarists, and I’m not sure if it’s even possible anymore to sign new writers up. The system still works for existing writers. I still occasionally post content there when I’m not too busy with other aspects of my life.

It’s more difficult to sell Devcoins, and you get very little for them. The only trading platform which still carries them is Bter. You can’t sell them directly for Bitcoin. You have to first buy either Chinese Yuan or Litecoin, and then those currencies can be sold for Bitcoin. I have to admit the sheer complication has seriously dampened my motivation to publish my own work on the Devtome.

However, for me the wonderful feature that is still there is that once I post my content, I know I will get paid for it. I do not have to worry about marketing my content, getting upvotes on it, or if the site is going to earn any ad revenue from my pages. I just have to write. The Devtome at one point had some admins who were responsible for marketing and they got compensated separately for their efforts. Most websites on the Internet are tough for writers, in that the writers also have to be the marketers for their own work. The Devtome is a huge exception to this, but being that exception comes with its challenges as already enumerated.

A couple weeks ago I discovered Steemit. Steemit is a bit of a cross between a forum and a social media site, though it’s still missing some important features of both. This site is housed on the Steem block chain so all your blog posts and comments are permanently etched on the block chain. However, there is a way to edit posts and comments such that the modifications are seen by the casual viewer. From the end user perspective it behaves just like a rather clunky social media site.

But this site also rewards you for your content. The rewards are based on who upvotes it and how much “influence” the upvoters have. Theoretically, a thousand people each with an upvote value of a hundredth of a penny would collectively value your post at a dime. That dime would then be divided up among you and the early upvoters (because there is a reward for being the first to “discover” content which later becomes popular). On the other hand, if your post landed an upvote by someone who has a lot of influence, then just that upvote could push your post’s value into the tens or hundreds of dollars.

Influence is based solely on the amount of Steem Power a user has. The more Steem Power he has, the more influence he has and the more valuable his upvote is. Steem Power is simply the Steem currency tied up for a minimum of two years. You essentially trade liquidity for influence. Anyone can go to an exchange such as Poloniex or BitTrex and buy Steem, send it to their account and power it up into Steem Power. You can even completely bypass the trading platforms and instead send Bitcoin to a specified address and the conversion to Steem Power will be made on your behalf. I have already connected that address to the Moon Bitcoin faucet so each week I can convert around 10,000 satoshis into free Steem Power. I would recommend anyone wanting to get involved in Steemit to do the same.

If you have a difficult time successfully marketing your content, whether it be writing or photography or anything else that can be shared in a blog post format, you will have the same issues with getting your work noticed and upvoted on Steemit. The Devtome is still the only place where an automatic payout just for posting is guaranteed (once you’ve been vetted as legit by admin).

However, there is a way around it, and that is to simply buy your influence and then upvote your own content–at least your blog posts. The post reward gets divided up among the author and the first few upvoters, so it’s easy to get a bigger chunk of that reward by making sure you are the first upvoter. If your upvote bumps the value of the post up, even if it’s just a few pennies, it might attract other influential upvotes, and that could result in a snowball effect. With no Steem Power (and therefore influence) of your own, you’re kind of stuck waiting and hoping for the big break. However, if you buy your influence, then you can improve the odds of that big break happening sooner. And even if the big break doesn’t happen, your own upvote will bring whatever it’s worth to each piece of your content.

So in this sense, Steemit is more of an investment than a workplace. You buy influence, and with Steem currently being worth between two and three dollars, that influence will cost you. But once you have it, you can use it to either bump up your own content or reward other people’s content you believe is valuable. In the mean time, your Steem Power does earn “interest” just for sitting there. I do not understand all that goes into the calculation but it has to do with the overall production of Steem. I read someplace on Steemit that the amount of Steem Power sitting in an account would double over the course of one year if nothing more was added to the account. What this means is that if you just keep adding some Steem Power to your account on a regular basis, you will gain in influence based on some form of compound interest.

With that said, keep in mind that just like Devcoin, Steem is an inflationary currency. This means that over time it will lose value. You also will not be able to just power it down and sell it all if you believe its heyday is over. You can request to power down your Steem Power, but then it will take two years of equal weekly payments for you to get it all converted to Steem, which can then be sold on the open market. If you just think of the Steem Power you’re buying now as influence that you are buying and consider any amount you’re able to sell the Steem for further down the road to be a bonus, you’ll probably do better psychologically with this one. Buy the influence, and then use it to lift your own content and other good quality content up. You can think of the income earned from the value of your own upvote whenever you upvote your own content as the residual income earned off the principal that is your Steem Power.

To get a sense of how much Steem Power you are going to need in order to add a certain desired value to a post you upvote, you can check out any Steemit user’s upvote value by visiting this site. Every Steemit user’s wallet (including how much Steem Power it holds) is public. Click on any user’s wallet, find out how much Steem Power he or she has, then run the user ID through the site. The value of that user’s upvote relative to how much Steem Power he or she owns will give you a good idea of how much Steem Power you need to acquire to reach your desired influence goal.

Another way to improve your odds of succeeding financially on Steemit is to think of it as a social media site, and as such one you would like to join with your friends. However you do it, try to either bring a community to Steemit, or join a community that is already forming there. People within communities tend to follow each other and upvote each other’s content. Some of the people with large amounts of Steem Power (known on Steemit as whales) believe strongly in rewarding others and actively seek out good content to post. A couple have even started communities where they encourage you to tag your content with their tag so that they will notice it and possibly upvote it.

You can also experiment with types of content. I personally have found that my tutorial posts do the best. I’ve also done OK with posting about any Aha! moments I’ve had concerning how Steemit works. My photography posts have not done so well. I’ve also posted questions I’ve had about the platform and those posts get zero, but helpful replies will get a couple bucks worth of upvote value. I’m told that if you post pictures of yourself and use your real name and verify that you are a real person, other people on Steemit will trust you more and then upvote your stuff more. I have not yet done that which may explain why so far my posts have yet to crack the $1.00 value mark. At this time of experimentation, though, I’m happy to pick up a quarter or two on my work and then convert it to more Steem Power.

Steemit takes the concept of the Devtome and develops it further. It certainly removes the need for so much intense human involvement to deal with spam and plagiarism. Unfortunately, I’ve heard that plagiarism has at times been greatly rewarded because the whales who upvoted it either didn’t know or didn’t care that the content was plagiarized. I’ve also heard that once a user becomes known as one who posts stolen content his reputation precedes him and the whales won’t upvote his posts. I can’t verify either one of those statements, but I will say that if you go the route of buying influence, do at least check for plagiarism before bestowing your high value upvote on someone else’s post.

One way that Steemit does not replace the Devtome (at least not for me) is that it does not pay any sort of base rate just for posting content. If Steemit would provide some sort of base reward just for posting content and then increase that reward based on upvotes, it would be much better, provided that there was also a way to cull out the spammers and plagiarists. Some of the users have developed some pretty clever bots which are programmed to look for plagiarized content and then post a comment about it. One such bot on Steemit is Cheetah. Cheetah runs a simple plagiarism check on content and when it finds that the content is published elsewhere it posts a comment with the source. The author can then explain why it’s OK for his or her Steemit post to use previously published content. Bots such as Cheetah could probably also be programmed to interrupt the normal base rewards process pending further human review.

I expect there will be more platforms like Steemit popping up now that we know a block chain can do that. They will vary in how they reward content creation and curation.

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Market manipulation fun

Cryptocoins tend to have small markets, making those markets much easier to manipulate than a medium sized country’s currency or a stock on the fiat stock market. Another advantage the cryptocoin market manipulators have is that at this point, government regulation prohibiting deliberate market manipulation does not yet apply to cryptocurrencies.

I remember a couple years ago (wow, it’s amazing that I am now counting my involvement in the cryptosphere in years rather than weeks or months!), back when there were far fewer Devcoins around, traders would occasionally pump the price way up. The most recent instance of this was done presumably by a guy on Twitter called Wolong, who bragged about how he could move markets. His tag line read: “Faith can move mountains and Wolong can move markets.” And he did. He pumped the price of Devcoin all the way up to 126 sat, and that’s the highest I’ve ever seen Devcoin since. I must admit to having some nostalgia about that day considering the going rate for Devcoins is now 3 sat each. No one seems interested in pumping the Devcoin price anymore because the sheer number of coins out there means that it would take tremendous resources for a trader to do so.

However, market manipulation is alive and well when it comes to many of the newer cryptocoins, particularly ones which do not trade at a huge volume.

Enter Diamond (DMD), the coin which has been promoted as the best cryptocoin to hold for store of value, the one with one of the most stable prices, the one which currently mints at a rate of twenty-five percent annually. It also happens to have a fairly small market, with only 4.38 million coins to ever exist, and just a little over 1.6 million currently in circulation and a trading volume on BitTrex of under a quarter of a Bitcoin’s worth.

Apparently it has all the right features to attract the market manipulators. According to the Diamond thread on the Bitcoin Forum, there are three different trading bots running on the Diamond market on BitTrex most, if not all, of the time. Earlier this week I observed one of those bots in action.

I hadn’t been planning to buy Diamonds that day, but I have this neat app on my tablet which tracks the real time market price of cryptocoins I select from most of the exchanges. I happened to notice the price of Diamonds was at an all time low of just over 53,000 satoshis. Normally the price of Diamond hangs out around 70,000 satoshis but I have seen it as high as 100,000 satoshis on more than one occasion. When I saw it at 53,000 sat I had to learn more.

I logged onto BitTrex, one of two exchanges I know of which trades in Diamond, and was delighted to see that not only was the ask price really as low as 53,000 sat, there were actually a few hundred DMD for sale at that price. This means phenomenal buying opportunity, so I started sending my Bitcoin over. While waiting for my Bitcoin deposits to clear I watched the market, and that’s when I discovered something rather peculiar. The ask price kept decreasing every ten to thirty seconds by one satoshi. I also noticed a distinct pattern with the amount of DMD being offered at the top five ask prices. Each time the ask price decreased, the amount of DMD would be the exact same amount that it had been at a higher ask price just a few minutes ago. I also noticed that every so often, exactly 0.05 DMD would be purchased, each time at a price lower than the previous time. This made it look like the price was in free fall. My app only tells me the last price of a coin, but it doesn’t tell me how much of the coin was purchased or if it was a buy or a sell. This lack of complete information can make it look like the price is just falling like a rock, when in reality, only miniscule amounts of coin are actually moving. This is why I always log into the actual exchange site when I spot something interesting via the smartphone app.

I watched the ask price gradually decreasing (incrementally by one satoshi) for nearly an hour. It didn’t take me long to figure out that this was not the work of an actual human being (or group of human beings) placing sell orders, then cancelling them and placing them even lower. It was the work of a preprogrammed trading robot, or bot. I was also reading the DMD thread on the Bitcoin Forum, and at that same time there was some kind of troll bragging about how he was going to gradually bring the price down to 10,000 satoshis. When I saw the bot in action I wondered if the troll owned the bot. That was hard to tell, because there were a few other posters on the forum who were kind of joking about it as well. Regardless, the actual buying and selling that day was pretty slow so the bot had managed to drive the price down quite substantially. Not only that, there were plenty of cheap diamonds for sale.

After watching the bot for around fifteen minutes I started making small purchases every ten satoshis, to see if my interference would affect the bot’s behavior. It didn’t seem to, so I started making larger purchases. Then I asked myself what would happen if I just bought all the DMD which were included in the bot’s incremental lowering of the ask price. Would more DMD be added, or would that cheap supply dry up? After watching the bot for another fifteen minutes or so, I bought up its entire supply. Then I started to buy some of the other cheap diamonds which weren’t obviously included in the bot program.

To my disappointment the bot didn’t refill its supply of diamonds and the gradual price dropping stopped.  At that point the desire to share my discovery on the Diamond thread got stronger than my desire to quietly pick up even more cheap coins. I posted my discovery on the forum, and that resulted in one or more large Diamond buys which very quickly brought the price back up to its current level of around 70,000 satoshis. I ended up paying more for the remaining coins I wanted to buy as a result. But it was fun to see a couple of DMD community members post something about defeating that price depressing bot and then see those large buys quickly drive the price back up to its normal value.

The really amazing part was that it only took a few hundred DMD offered at incrementally lower prices to drive the price way down, but that this only worked until someone like me came along and bought those cheap coins. The whole point of pushing the price down as this bot was doing is to incite other Diaimond holders to panic sell, in which case the price decrease becomes real. I did notice some large sells so clearly the bot’s strategy was working to some extent. But I’m sure if those panic sellers had taken the time to just watch the market for a while they would have seen what I saw and realized the price drop was completely artificial. If a trader can sell off a few hundred coins at an artificially low price but then buy a few thousand at an even lower price, then all that bot work will have paid off.

A few minutes of watching the BitTrex Diamond order book tells me that this bot is still active. It’s working from a price of over 70,000 satoshis, but it keeps trying to incrementally lower it. The one difference is that there are fewer diamonds up for grabs. It seems to me that the amount of DMD for sale drops to near zero once the price resets or the supply is depleted, but then gradually increases over time. If no one buys the bot’s coins for several days, perhaps the price will drop all the way to 53,000 satoshis with a few hundred for sale ready to reward a patient buyer.

I think now that the community knows about this particular bot, that scenario is much more unlikely. There are probably several DMD accumulators with plenty of Bitcoin to spend who continue to watch the market, ready to pounce on the first opportunity to pick up some more Diamond at a discount. There are others who are happy to place low buy orders and hope to take advantage of the next panic sell that drops the price way down, even for just a few minutes. More importantly, people in the Diamond community want to keep the price stable and see it gradually increase. They seek to accomplish this not by the use of trading bots or market manipulation, but by buying coins on a regular basis and holding onto them. The truth is most of the time, there are only a few Diamonds for sale at any given price. To buy a large number of them (and by large, I mean more than fifty), you either have to place a buy order at your chosen price and then wait patiently for it to fill, or you run up the order book (and the price) until you have purchased the desired amount.

For the record I don’t believe the use of trading bots in and of itself is unethical. Many people use trading bots as a way to regularly buy or sell coin at what they consider to be optimal prices without having to watch the market all the time. I actually would like to learn how to program and use one… when I have some spare time. Market manipulation, on the other hand, including  using bots to accomplish it, is anothe ball of wax. Is it unethical? I think that if all traders, including the occasional buyer or seller of a given coin, approach the market with open eyes, understanding that there are games afoot, and that the price they see may be either inflated or deflated, then deliberate market manipulation may not be so bad. The problem is that many people, when they see the price of a coin they are holding drop precipitously, they really do get scared and they may sell holdings they wouldn’t otherwise sell given a natural price. One could argue that inciting someone else to sell at a loss under false pretenses is a form of theft. The other issue is that suppose someone wanted to sell off an asset because he or she felt it was a good time. But then he goes to do so and finds the price to be much lower than what he was hoping to get. In that case he can either sell at the lower price, or wait until the price goes back up. In that scenario, what is stolen from the investor is liquidity, the ability to buy or sell at a consistent price. Finally, market manipulators often have much more resources than those investors who just buy and sell honestly. It can be tough to counteract the manipulation, in which case the ordinary investors lose on either price or liquidity.

In general I would prefer it if people bought and sold cryptocoins based on the coin’s fundamentals, and the price fluctuations would be the result of each investor having a different opinion about how those fundamentals ought to translate into price. Speculation on coins and deliberate market manipulation annoy me. in part because it makes it hard to discern what a coin’s actual value is. I also don’t like people getting hurt by panic selling or its opposite, panic buying at an inflated price. But I have no problem taking advantage of the situation when someone else is trying to manipulate the market, especially when that involves putting up several hundred underpriced Diamonds for sale.

People trading in the cryptosphere need to be aware that market manipulation does happen, and because the markets are often small, it’s not difficult to trade in a way that greatly affects the price. I’ve run coin prices up or down at times just by doing my own shopping. The best way to ensure you won’t be negatively affected by market manipulation is to know your coin and know your market. If you plan to buy or sell a lot on a given market, it helps to just study that market, mainly take the time to observe what happens over a period of time. Also know your coin and know its community. If the coin’s fundamentals are good, do understand that they didn’t suddenly go bad just because the price dropped. Buy, rather than sell, on those price dips. Don’t make buying and selling decisions solely on what the market is doing on a given day. The main thing is to be patient. Place limit buy or sell orders based on the price you want to buy or sell at, rather than buying or selling at the going rate, especially if the going rate is not what you believe it should be. This means be willing to wait a few hours or days for your order to fill.

Market manipulation mostly hurts what people call weak hands. Weak hands are those traders who cannot handle holding onto an investment while its price is dropping. They often panic sell at the bottom of a dip. But I think the expression can also include investors who buy and sell randomly with no particular plan in mind. Having a good investment plan and sticking with it is the best recipe for having strong hands. Not having a plan makes you more vulnerable to the power of suggestion, and market movements, natural or manipulated, are ripe with all kinds of suggestion. Finally, if you know about the bots and the pump and dump schemes which affect your coin’s market, you can use those things to your advantage, and it always feels good to score by buying more coins at a discount or selling coins at an inflated price.

It’s the possibility of having some fun taking advantage of other people’s market manipulation schemes that makes me believe that while I would never encourage anyone to engage in deliberate market manipulation, nor would I do it myself, I don’t necessarily want it to be outlawed in the cryptospace. It’s just all that much more important to know what you’re dealing with. Cryptocoins should not be traded blindly. Buyers and sellers need to be informed and educated about their coins and their markets.

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A rough crypto week

This has kind of been a bad week for cryptos–at least in my corner.

A few days ago I got an email that Paycoin was basically over. The site where I’d been staking my coins abruptly released the coins and announced a closure next month. The replacement coin is supposed to be amazing (if you can believe the hype), but the old coin is officially abandoned. I dumped at a loss immediately, and the price has predictably dropped even more since then. At least I seem to be finally getting over my habit of holding onto coins long beyond the chance of reasonable hope, cutting my losses somewhat.

In the grand scheme of things, losing Paycoin isn’t a huge deal. I was only hanging onto it because it was minting at a decent rate and I figured I could sell off the minting proceeds. Still, at the price, the trickle I was getting was hardly worth it. I ended up using the proceeds to buy some cheap Neucoins.

I’d finally found a place to mint my Neucoins–a minting pool set up by CoinWallet. I tested it with a small amount of NEU, found it worked wonderfully well, so decided to buy a few thousand more. I placed a low ball buy order and waited for four days for it to finally fill. Then I sent the chunk off to CoinWallet. Before the coins had a chance to mature (NEU only takes 1.6 days to mature and start minting), I tried to log in and saw the announcement that they are closing.

That is a huge bummer because CoinWallet was really the only place I could mint my Neucoin. The other option is to sock them into a “growth account” at the Newcoin wallet website. However, the growth accounts recently cut the rates in half so I felt like a minting pool would be a more profitable option. I’d barely discovered one, and then it closed. Not only that, I was also happily staking my Piggycoins there. It was so nice to know my coins would be minting 24/7 without me having to keep my QT wallet constantly running. I was also staking dust amounts of many other POS coins I’d been collecting from faucets.

I spent quite a bit of time this afternoon withdrawing my large balances from CoinWallet. Sadly, the newly acquired Neucoins had to get put into a growth account as there aren’t any other minting options at this time. My Piggycoins got sent back to their QT wallet, which fortunately is working OK since I redownloaded the block chain. The other coins got sent to various nonminting wallets on PayServices and exchanges as I do not wish to download and run another ten desktop wallets to attempt to mint dust amounts. Unfortunately I won’t be able to withdraw some of the coins as my balances fail to meet CoinWallet’s minimum withdraw requirements. I have requested that they lift those minimum requirements since they are closing. Hopefully I get a positive answer. If I don’t, it is just dust, but still, it’s my dust. I do have to say that I am happy CoinWallet is at least giving people three weeks to withdraw their coins.

Vircurex, my preferred exchange for selling my Devcoins since Cryptsy had its own security breach issues, was not nearly as courteous. They announced a few days ago that due to low network hash rate, they would be delisting Devcoin “with immediate effect.” Deposits are now no longer possible. I’d deposited nearly 200,000 DVC before even knowing about the announcement. I also believe I made that deposit two days before the announcement was even posted. Fortunately, 200,000 DVC at today’s prices is really not much, so it is not a huge loss. But it’s annoying to have it simply vanish into thin air. There is no good reason the site couldn’t have given its customers at least a week’s lead time to take in the announcement, stop making new deposits and either sell off or withdraw their funds. Meanwhile the DVC/BTC market remains open until early May. I contacted Vircurex support and through the Bitcoin Forum to request that my coins be sent back, but I have not received an answer, nor do I expect one. Poor customer service is a sad reality in the cryptosphere.

I do have an alternative exchange for trading Devcoins, but at this point the market is so slow there that I have to settle for lower prices. Because my itch to purchase other more promising altcoins is high, I’m not willing to wait for weeks and weeks for a buy order to fill, especially when the buy wall for the next lower price continues to erode. Sometimes it’s better to just settle for what you can get for certain. Not to mention, I’m rather impatient when it comes to buying my coins. It was quite a challenge for me to leave my Neucoin buy order unchanged for four entire days. I’ve now got a buy order for Diamond set up that is not filling immediately, and I truly hope it doesn’t take four days. There are some decent sell orders up which aren’t too pricey, so I may instead take advantage of those. The Diamond market is more of a tricky one in my opinion. It certainly does not move very quickly.

A quick perusal of CoinDesk shows that there’s more bad news in the Cryptosphere with services I don’t happen to be involved in. Shapeshifter got hacked so they’re offline. Bitcoin/Fiat exchange itBit is halting services in Texas, I’m guessing due to burdensome regulation. The Cryptsy website is offline, claiming maintenance, but I suspect for good. I read somewhere that the company is folding, unable to recover from its own security breach.

I write all this not so much to complain and rant (though I do love a good rant!), but to drive home yet again just how unstable the whole Cryptosphere really is. Even after seven years it’s still very much the Wild West and fraught with all kinds of risks. You still can lose everything so it’s important to tread carefully. I have not suffered any major losses from this last round of bad news beyond withdrawal fees (CoinWallet does have higher withdraw fees than most sites), potential loss of dust amounts, and reduced DVC prices on other exchanges compared to Vircurex as well as having been compelled to dump all my Paycoins at a substantial loss before the price really plummeted in response to the news of the coin’s abandonment. I’m not about to stop investing in the Cryptosphere, and I will say I’m doing a whole lot better in the space than I was doing this time last year. But it’s important to keep the instability in mind at all times.

The instability can be an advantage for those who understand it as well as for those developing something within the Cryptosphere. Earlier today I was doing some edits on the DNotes story, a part of DNotes founder Alan Yong’s new book. Reading the story, which I’ve in a small way been a part of, reinforced for me just how much of a benefit it has been not just to me and all DNotes stakeholders, but I think the Cryptosphere in general, the unwavering resolution on the part of the DNotes leadership to actually build something solid both with and around the coin. The DNotes coin is long lasting. Sure, it has had its share of unwanted market volatility making it a bit harder to consider a true store of value at this point in time (right now the clear winner on store of value is Diamond–get some while the prices are still low, but not so quickly that you run up the order book). But everything about DNotes from the coin itself to its surrounding infrastructure is built to last. I can confidently buy DNotes today and know that they will still be around next year. Every few months or so, a new bit of infrastructure is built around the coin, with the specific purpose of giving the coin value, and creating an ecosystem to nurture the coin and the people invested in it. I remember discovering the CryptoMoms forum. Since then DCEBrief, a news source for all things Crypto, has been launched. Also the DNotes vault, with its various savings and investment vehicles. Alan Yong is about to release his new book, and there is also a for-profit company in the process of being incorporated. This coin has some serious value and planning and leadership behind it. Set against the backdrop of a world where promising companies providing valuable services are here one day and gone the next, and where coin developers and company owners make sudden decisions that jerk their customers’ and stakeholders’ chains on a regular basis, a solid venture such as the entire DNotes ecosystem will not take long to truly stand out as an attractive way for the more risk averse to get into the cryptogame and truly benefit from their involvement.

If you have a great idea for a service you would like to provide in the Cryptospace, my advice to you would be to do whatever it takes to make it solid. Figure out what it is that makes so many entities so unstable and vow to mitigate these issues. I think one of the main problems is security. There are tons of hackers who would prefer to steal other people’s hard earned coins than go about acquiring their cryptowealth honestly and steadily. Whatever you have to offer in the cryptoworld, you’d better be prepared to defend it from such thieves. Good IT security is expensive, but at this time it’s an investment that must be made. Other issues have to do with human nature, particularly the undisciplined kind. People in charge of coins and other projects will make sudden and directional changing decisions because they think their project will be more profitable that way, but unfortunately all they manage to do is create unnecessary instability and drama in their project, turning off their stakeholders or worse, leaving them in the lurch holding onto something that now has no value. There are other issues to be sure. Know what they are; deal with them; make it your primary goal to provide a lasting and stable product, and your star is bound to rise in the Cryptosphere. DNotes’ day is coming and so is the day of any entity which can remain reliable and stable in the shifting quicksand of the Cryptosphere as we know it today.

On the bright side… I just became the proud owner of a few more Diamonds. You want a good store of wealth now, Diamonds are your ticket. They still mint at 25 percent annually too, so not a bad vehicle for growth either.

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Can money ever be fully trustless?

Bitcoin was founded on the idea that we should be able to have and hold money, as well as make transactions with it without having to rely on a centralize infrastructure such as the banking system. With fiat money, unless you are dealing in cash, you cannot make a payment to another person without at least one bank, usually two, getting involved in that transaction. For example, I write a twenty-five Dollar check to my babysitter. She takes the check and deposits it into her bank account. Then the check amount is debited from my bank account. If she never took the check to her bank, it would be as if I never paid her.

For the most part, this system works fine. However, it is based on the fact that both I and my babysitter trust that our banks are going to make good on the transaction and continue to exist. We also assume that the banks are handling their assets responsibly and are not in imminent danger of failing. If a bank should fail, then we also trust that the government FDIC system will reimburse all its account holders as promised. In other words, having, holding, and dealing with fiat currency involves trusting in a lot of people and institutions along the way.

People in the US learned during the Great Depression and more recently, in 2008, that the trust we place in those institutions isn’t always well founded. I’m sure it’s no coincidence that Bitcoin was launched in 2009, just one year later. With Bitcoin you don’t need any kind of centralized institution. I have a wallet; you have a wallet. As long as I know your address I can send you funds directly from my wallet to yours and no one else needs to be involved. That is actually technically not true, as it does take the miners running the network to actually confirm the transaction; however, the network is not centralized and it’s going to be a random miner whose machine deals with that transaction. It’s done automatically, with no need for a human to actually know what’s going on. The only human beings who will have any interest in my payment to my babysitter will be me and the babysitter. It’s just numbers for everyone else.

The essence of trustless money is that there is no need to trust any intermediaries to do the right thing in order for your money to be safe and make it to its destination. The network itself is decentralized such that one individual cannot significantly impact it in a detrimental way. There are amazing technical ways to make this possible and the technology has truly come a long way since Bitcoin was launched. In fact, Bitcoin is already starting to look like a dinosaur in comparison to the new developments.

Trustless money is definitely possible from a technical standpoint. My question, though, is given that human beings are the end users, is trustless money really possible, or practical?

The first thing everyone needs to know about trustless money is that it is completely up to you to keep your money safe. There are two main ways that you can lose all the money in your wallet. The first way is if you lock your QT wallet with a password and lose it, and you also did not record (or you lost) the private key for each address in that wallet. If I lose my password to my online fiat banking account, there is a way to reset the password through the website and no other human being sees either my old or new passwords; in other words, the data is fairly secure, but if I lose my own keys, I can easily get new ones which will also work.

But if I lose my wallet password and the private keys to my wallet addresses, then I have lost my money. It’s the same thing as losing a physical wallet loaded with cash in a bad neighborhood. It’s gone, the only difference being that at least the bad guys can’t access the funds either.

It’s not particularly complicated to keep a record of things like wallet passwords and address private keys. One could store that information on a flash drive kept in a special place. One could keep an updated hard copy of the information in a special place. One could also use a service such as Last Pass to store all that information. Naturally, one would want to keep such important information in more than one location, in case one location burns to the ground. For example, I keep a copy of this information both at home and at work. The important thing is you don’t want to lose the information ever. You also want to be able to access it relatively easily. You need that wallet password every time you want to send money out of your wallet.

The other way you can lose all your wallet funds is if some malicious person somehow gains access to your wallet password or your address private keys. If they know your wallet password and have access to your computer, they can empty it out directly. If they know your private keys, they can import your addresses to their own wallets and then empty them out. Either way you lose.

The more convenient it is for you to access your own wallet, the easier it is for someone else to steal the information. For example, let’s say you keep a file on the same computer that has the wallet password. This makes it very easy for you to input the password as needed. But it also would make it easy for someone else to do the same if they gained access to your computer. If you store the information on a third party password service, and someone gains access to your account, they could steal the information that way. The less convenient you make accessing your password (such as you have to dig up the hard copy and then type in each character), the safer it will be but also the more of a pain it will be for you to just use your wallet. Good security is always going to be a trade-off between end user convenience and restricting ease of hacking and other types of thieving.

Each end user is going to come up with a different happy medium between their own convenience and making theft difficult for someone else. The main point here is that it is up to each end user to take full responsibility for protecting their own funds. In the fiat world, that is taken care of for you if you have a bank account. The bank assumes responsibility for keeping cash and physical assets safe (bullet proof glass, heavy duty safes, etc.), as well as for keeping its website secure for the customers. Most people do not use their own computers in a way that places security front and center. The keeping and protecting of wallet passwords and address private keys are only the most basic precautions. There is also the matter of secure Internet channels, antivirus software, firewalls, and all kinds of things most people don’t even know about. Taken together, those things are not cheap.

I remember a recent time when someone’s Diamond wallet got hacked and emptied. Since the breach was not the result of utter stupidity on the wallet owner’s part, the Diamond community came together and helped the guy mitigate his losses. I sent a small contribution to that end and am glad to know that the community would do the same for me. After that incident, people started recommending that you only run one wallet on each computer. The reality is that some cryptowallets do contain malware which can harvest sensitive information such as passwords and private keys from other wallets. The recommendation makes sense, but if I’m going to run five wallets, then that means I need to own five different computers. Some wallets can be run off Raspberry Pi computers, which are much cheaper than laptops, but there is a learning curve in learning how to use them. They do not run Windows! But even if you do know how to program a Raspberry Pi, that is an outlay of $50 to $75 for each wallet. That introduces a new element of risk into your cryptocoin wallet. You would need to have the confidence that you will at least make that cost back.

Besides security, to be your own banker, you also have to assume all responsibility for maintenance of your wallet. That means you have to keep up with the latest wallet upgrades and if your copy of the block chain gets corrupted in some way, then you have to take the time to download the entire block chain all over again. That can be an extremely time consuming process, and you are not able to make transactions through your wallet until the process is complete. The older the coin is, the longer it takes to download its block chain.

Fortunately, the wallets themselves are designed by the coin’s development team, so at least you start off with a working product (most of the time). But it is up to you to keep that wallet updated, to know about forks and how to deal with them, and other bits of technical knowledge for running your wallet. A good coin will only have occasional forks and mandatory wallet upgrades. However there are some coins which have nearly constant upgrades and forks. Sometimes there are very good reasons for this; other times it simply means the development team is not very good at building good wallets. If the reason for all the wallet drama is the latter, then you need to seriously consider dumping the coin.

This brings up a very important point, which is that a coin is only as good as its development team. If a coin loses its development team, it is going downhill fast and you’d better dump it. If the development team is not as technically competent with the coding as needed, you will be running a buggy wallet that will probably need to be upgraded often and the coin itself may fork often. Other issues that can happen with the development team are all the human ones. Perhaps they begin to fight among themselves; perhaps they can’t agree on the next step in the coin’s development. Sometimes these issues can be resolved in a professional manner; other times they can’t and the coin suffers.

The need for a development team is probably the biggest reason that truly trustless money isn’t actually possible. No matter how decentralized your wallet and transactions are, ultimately the coin you choose to use is at the mercy of its development team. A development team can be as small as one or two people, and some coins have been one man shows. You’re actually placing a huge amount of trust in a very small group of human beings under these circumstances. Even the trust we place in the fiat world is spread out over a much larger pool of human resources.

While many of the early adopters of Bitcoin and other altcoins are quite computer savvy and have no problems with handling wallet security and maintenance or in downloading large block chains, most currency end users, even if they do know how to do all those things, would rather not. For this reason, no matter what the coin is, if it looks like it might succeed, it does not take long for people to develop online services to take that burden off of people. For example, I personally consider the Bitcoin block chain to be way too big for me to want to download and store on my computer, so I have not used a desktop Bitcoin wallet in over a year, probably closer to two years. Instead I use online services such as Coinbase and CoinWallet to store my Bitcoins. If a particular coin does not yet have an online wallet, often a good exchange site will serve that purpose temporarily.

The online services are great. If they are reputable, they assume the responsibility of security and maintenance for all their users. This is great for the users, but… it is no longer trustless. When you use an online site to store your coins, you are placing your trust in the people who run that service to keep your coins safe and not steal them, just like you currently trust the people who run your fiat bank.

Besides people choosing to use online services instead of trying to take care of all the details of being their own bankers themselves, there actually are coins designed with centralization of that sort in mind from the beginning. When Josh Garza first came out with his cloud mining site, and later Paycoin, he recognized something important about human nature. People will not adopt a new coin or even a new payment system unless it is convenient for them. The vast majority of end users are not going to want to deal with the hassle of desktop wallets. For this reason, Garza kept Paycoin minting centralized. Yes, the QT wallets could mint, just not at the stellar rates which could be obtained through Zen Cloud. Later one, when the Microprimes stopped working, rather than taking the time to repair them, the new Paycoin team instead told everyone to mint their coins on a different centralized website. I sure found it easier to use than the Microprimes while it lasted.

Neucoin was also designed with centralization in mind. Anyone who wanted to participate in the initial games or Jango tipping that Neucoin provided need to have a verified wallet. Since the Neucoin team supposedly manually verified my wallet but never flipped the switch from “unverified” to “verified” on my account, I cannot participate in any of the games and other ways to earn coins that rely on a verified account. Furthermore, the minting algorithm for Neucoin ensures that minting can only happen reliably for very large balances. The only way for small balances to mint is for people to pool them or just use the Neucoin centralized platform and set aside coins to earn a guaranteed rate of return after a set period of time. Minting pools such as CoinWallet are another option, but again, you’re getting away from trustless.

When it comes to my own funds, I use a combination of my own desktop wallets which I take full responsibility for and online wallet services. The main wallet I run on my computer is my Diamond wallet, because it is so well designed that I can open it, unlock it for minting, and basically forget about it. It mints like clockwork and I can easily send funds out of it should I so desire. I used to also run my Paycoin wallet until the Microprime quit working. Then my coins went to xpy.io to mint until xpy.io announced its closure and released my coins. At that point I sold them and I no longer own any Paycoin. I also used to run a QT wallet for my Piggycoins. Then I had to repair the wallet by downloading the entire block chain which took two days. At that time I discovered CoinWallet and have been happily minting my PIGGY there ever since. I also mint a small amount of Neucoin there. The really great thing about it is that I don’t even have to log in and the coins mint. The downside is that CoinWallet could go under or steal all my coins one day. As far as I can tell, though, they are an honest service.

In conclusion, although it is certainly technically possible to have trustless money, because of the way human nature works, we are a long ways away from it being used across the board. Cryptocurrency provides some very innovative specific applications where the need for trust can be removed from certain aspects of financial transactions or even contracts. Overall, however, most people are going to prefer to deal with more centralized entities which they believe can be trusted, because using those services is ultimately more convenient and less expensive for the end user.

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The end of Paycoin… for me… for now

Paycoin has had an interesting history. It began as a scam coin to cover up a mining hardware scam. When both of these scams were revealed, there still were plenty of people who believed in the coin. They closed down the original hashlet/hash staker “mining” site and replaced it with a special higher rate minting address that could be run from a QT wallet. In this way the original promise of lifetime hash stakers was still good. These special addresses were called Microprimes.

That lasted for about six weeks. One day the Microprimes broke and quit minting new coins. When I asked about why my wallet wasn’t minting any new coins, the developers told me the Microprimes were broken and there were no immediate plans to repair them. I was advised to load my coins on a staker on xpy.io, so that’s what I did. xpy.io was a Bitcoin and Paycoin wallet, and they were also starting up some kind of shareholder system. There was also a way by which you could load your coins onto a staker for a period of ninety days. I parked my coins on a staker on xpy.io and the small payments began to accumulate daily in my wallet.

I found it a bit ironic that after finally having closed down Zen Cloud, the centralized site where hash stakers staked coins for everyone, the only place to successfully stake Paycoin was on a different centralized site. The people running that site were more honest, though, and I never had any issues with getting my payments or otherwise using the site.

Then a couple days ago I received an email announcing the imminent closure of xpy.io. All the stakers would release their coins on April 3rd, yesterday, and all assets would need to be withdrawn by May 15. More information could be found by logging into one’s account.

I logged in and learned the reason. According to the pop up explanation, Paycoin’s reputation had suffered too much damage. I guess the development team felt they couldn’t overcome all the negatives from the way the coin started. So they are closing xpy.io and probably other sites related to Paycoin and launching something new.

The something new is a coin called ION, which will be part of the “Ionomy.” A quick perusal of the website identifies ION as a gaming rewards coin, and there’s also something called the “Electron” that is supposed to in some way add value to the coin or the platform or something. ION is currently conducting its ICO, and valuing each coin at 20 cents. There’s a fixed rate at which Paycoins can be exchanged for IONs. Other assets sold on xpy.io also have their fixed exchange rate with ION.

Another new coin to figure out.

I am not at a place in my life where I have time to research and make a good decision about investing in a new coin. I also have developed a policy to never buy a coin during its ICO because the price always drops substantially once the coin begins trading on the open market. The exception to that was XEM, where the initial investment got you 2.25 million coins and no matter how low the price of the coin dropped, an investor selling off all their XEM would have come out ahead. But any kind of ICO based on a fixed price of an individual coin is usually not going to be a good buy. I believe the people who buy into the ICO do so because they want to support the new coin. I wait until the coin goes on the market and then I watch the price fall before I buy in. Or, if I believe in the coin, I’ll start buying high and keep buying all the way down, and then try to pick up more during subsequent dips.

This means if I decide eventually to invest in ION, I’m going to have to wait awhile. In the mean time, Paycoin will continue to exist as a coin. However, with no more support or development its days are numbered. I decided to just sell off all my Paycoin at a loss (again!) and use the proceeds to pick up some cheap Neucoin. I have a substantial order for lower than market rate which I hope will fill over the next few days. I am now officially out of Paycoin, and expect I won’t get back in it unless someone revives it in a convincing way.

Since I haven’t kept up with the Paycoin forum or the slack chat, I can only speculate as to why after their valiant attempts to reposition Paycoin as a respectable coin, the development team chose to give up on it now, basically scrap the whole thing, and start all over with a brand new coin.

I am not sure that was such a great idea. In my opinion the biggest problem that plagued GAW Miners was that it was constantly changing. One day it was a mining hardware retailer, then it was a cloud mining platform, then it was a fake cloud mining platform, and finally it was a brand new staking coin. Then the entire leadership changed and the staking coin could no longer be staked on its original website, but in the QT wallet or on an altogether different website. Then the wallet staking broke. Then the second staking website closed down. That is way too much change for comfortable investing. In the early days I felt like if I didn’t spend a lot of time keeping up with the forums I might miss some important news which could cause the value of the coin to plummet within minutes.  This improved somewhat once the new leadership took over, but never truly disappeared. There was also a time when the coin forked and updating the wallet involved downloading the entire block chain all over again. For some people, it took more than one entire block chain download before the wallet worked properly again.

Part of the reason I do not see myself a likely investor in ION is that it seems to me to be more of the same chaotic change in direction which has characterized GAW Miners and Paycoin from the get go. I could totally understand perhaps changing the name of the coin. Perhaps the name “Paycoin” has come to be too closely associated with the GAW Miners scam. I can understand that. But why not just change the name of the coin to ION and then announce a new road map for the coin–a road map to be implemented in gradual stages. Such a road map could even include changing the coin’s protocol as long as it was done at a decent pace. Even the steady DNotes team is at least considering the possibility of fundamentally changing the underlying coding for the coin at some point down the road. If Paycoin had not been basically abandoned, but only given a name change, I most likely would have hung on to my coins for the time being. But I think it’s a better investment to sell them off and put the proceeds into a coin I already believe will perform well, and which has already suffered its post ICO drop in value.

This makes me think of another issue, and that is the increasingly crowded graveyard of altcoins which didn’t make it. And yet those coins still exist. The code is still there, and wallets are still out there. What would happen if instead of inventing a totally new altcoin from scratch, a development team with a vision instead decided to pick up an old abandoned coin and revive it? The coin would not need to be revived in its current form, and everything about it could be changed. But suppose all the people who found themselves still stuck with the coin suddenly got word that their coins were good again and were now off in a new direction?

I think about the SeedCoin lurking somewhere on my hard drive. I would love it if someone decided to revive it. I’d probably first notice when the coin’s Bitcoin Talk thread got updated, since I have my forum settings set to notify me of new posts. The fact that my dead coins might now have some value would excite me. I’d probably hang onto them while eagerly keeping up with new developments. If I didn’t like the new direction and the coin got relisted on an exchange then I’d probably sell and be done with it, but at least I’d get something out of it. More likely, though, I’d keep the coins and see what happened.

I personally don’t have the technical know how to take something like this on. Nor do I have the motivation or resources to promote a coin (old or new). But it just seems like it would avoid some waste if those new coin developers who do have all that would first take a look at the graveyard of altcoins whose first life is over. Perhaps there is one in there whose code would only require slight tweaking to fit the new vision. And voila! A recycled coin.

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Coin minting: great concept; high technical entry barrier

First there was mining. Then there were ASICS. And then, someone came up with this brilliant new way for people to “mine” new coins with far less computing power. This method became known as proof of stake (POS). The concept is simple. Your wallet will mint new coins at a set rate according to the number of coins it contains. For example, let’s say you hold 100,000 of a coin that mints at 10% annually. Assuming things are all working well, at the end of one year your wallet will contain approximately 110,000 coins. If your wallet only holds 1000 coins, then you’ll end up with 1100 coins at the end of the year. This is not taking into account compound interest, where the newly minted coins themselves also mint at the same rate, but you get the idea.

If you are a small investor, the truly attractive thing about POS coins is that you do not have to invest in specialized computing equipment and even a small balance will grow over time. So what’s not to love, right?

I personally love Proof of Stake as a concept. I love the idea of my coins earning interest for me just because I’m running my wallet. There are no strings attached to that interest either. Once the new coins are minted and confirmed I am free to save or spend them as I see fit. I love the fact that I don’t have to deposit my coins with some third party in order to earn that interest, which is what I would have to do with fiat money, and even some cryptocoins. You want to be your own bank? Get some minting coins and run the wallets all day.

That’s the ideal of proof of stake coins. The reality, however, can vary widely, depending on a lot of things. Here are a few of the minting pitfalls to watch out for before buying a ton of the latest greatest proof of stake coin.

The coin could die This isn’t directly related to whether or not it’s a proof of work or proof of stake coin, but it is an important consideration. I am still the proud owner of Seedcoin, a powerful staking coin that for one week actually minted at 269% per minting instance, and then settled down to a solid 16% annual minting rate. Other than some coding related drama during that 269% week, the wallet worked very well, minting new coins like clockwork. I could unlock my wallet about once a week and get all my coins minting in less than two hours. It was fabulous…

…until one day I opened my wallet and it could not connect to any nodes. Why? Because no one was running nodes anymore. The network was gone. The coin was dead. I should have seen the signs and dumped when BitTrex, the one remaining exchange carrying SEED announced it would be deslisting it. But back then I was naive and hopeful. They have a word for that in the cryptosphere: bagholder. Yes, I still own SEED, but unless someone resurrects it, it’s literally nothing more than a few data points on my hard drive. Its current value: zero.

I will say that I do not consider my experiment with Seedcoin to have been a total loss. It was with this coin that I learned a lot about how minting works. Regardless of the way it died in the end, I got to experience first hand what it’s like for a minting coin to mint as advertised and where everything worked well from the technical perspective. But if you’re invested in a coin because you hope it will make you money (as opposed to because it will be a fabulous learning experience), then it won’t matter how well the coin mints from a technical perspective if it dies in the end before you have a chance to sell it off. So before you invest in a coin because it has good minting specs, do research the coin’s fundamentals to make sure it has a good chance of being viable long term.

The minting formula matters There are a number of factors that go into the actual script behind the minting–the math, as it were. It’s not necessary to understand all aspects of the equation, but it is helpful to know what the variables are and how they relate to each other. These variables include coin balance, minting rate, wallet weight, network weight, minimum coin age, maximum coin age, and number and size of inputs.

Coin balance: Coin balance is quite simply the total balance of the wallet. If you own 10,000 coins, your coin balance is 10,000. Assuming everything is working well, you can get a rough calculation of how many coins you’ll have in one year by multiplying your coin balance by the coin’s minting rate. You can get a more accurate calculation by taking into account the compounding that takes place when the newly minted coins themselves mint.

Minting rate: This is usually expressed as the annual percent yield of the coin. It can range from a low one percent to a high 25, 40, or even 100 percent. This rate can be the same throughout the life of the coin, but in most cases it incrementally decreases.

Wallet weight: This is the weight your wallet has relative to the network, and is usually expressed as a number (with the network rate also listed). The higher your wallet weight relative to the network rate, the more likely your chances of minting. The wallet weight is the combined weights of each input. If I have made five deposits to my wallet, I will have five inputs, each with its own individual weight. The coin weight also impacts the amount of coins that are minted in the minting instance. For example, an input of 100 coins that would mint one coin if it minted immediately upon maturity might instead mint 5 coins if it had to wait several days or weeks after that. This allows for all wallets, large or small, to mint at very close to the minting rate at all times.

Network weight: This is the combined weight of all wallets currently minting in the network.

Minimum coin age: This is the minimum amount of time that must elapse from the time a deposit was made before those coins are eligible for minting. Minimum coin ages can be as low as a couple hours and as high as thirty or more days. This is determined by the coin’s development team and worked into the coin’s code. For example, PIGGY coin has a minimum coin age of eight hours. This means that if I make the first deposit to my PIGGY wallet at 9:00 am, the earliest the wallet will mint is 5:00 pm. The actual time of the first minting is usually going to be a bit later, though, and will depend on other factors, especially the amount of coin in that deposit, the weight of those coins (which will be the same as wallet weight for only one deposit), and network weight.

Maximum coin age: This is the maximum amount of time that a set of coins sitting in the wallet will increase in weight prior to minting. For example, Diamond coin has a maximum coin age of thirty days. This means that an input of coins which has not minted will reach its maximum possible weight at the end of thirty days. It will not increase in weight past that time. This feature makes it advantageous to have your coins grouped in a few large inputs rather than many tiny inputs. For example, in a Diamond wallet containing 1,000 coins, it is best if it’s a single input of 1,000 coins or even ten inputs of 100 coins each. However, 1,000 inputs of one coin each will have a difficult time accumulating enough weight to mint in a timely fashion.

Number and size of inputs: The most basic meaning of number of inputs is the number of deposits made to the wallet and the size of each deposit. A wallet balance of 1,000 coins can be divided up any number of ways, such as two deposits (inputs) of 500 coins each, or two thousand inputs of a half coin each. Although the wallet’s overall chances of minting are based on the total wallet weight, each input mints separately. This means that larger inputs will mint more readily than smaller inputs. If the individual small inputs reach maximum coin weight and still aren’t minting, it is possible that their weight is too small to effectively mint, and should be combined by gathering all the small inputs and sending them as a deposit to a wallet address to create a single larger input. This new deposit will reset the coin weight and age to zero. The Diamond wallet has a feature which automatically combines inputs which have reached maximum coin age and not minted as part of the minting operation, but not all minting wallets do this. If the wallet doesn’t automatically gather small or “dust” inputs, then you will need to manually gather them to improve their chances of minting.

If you regularly send the coins to other addresses, then you can create “change” inputs from withdrawals. For example, let’s say you send 15 coins to your favorite trading platform, but it comes from an input containing 20 coins. The 15 coins will go out to the trading platform, but the remaining 5 coins will be put in a new input, often under a completely different address. You can monitor and even control this by activating the “coin control” feature in most QT minting wallets. With coin control, you can choose which input your withdrawal will use. You can select the most recently minted coins which will have the lowest coin age and weight while holding back the coins that are more mature and very close to minting.

Another part of the minting formula to consider is how the wallet handles minted inputs. In my own experience, when the coins in an input mint, the wallet adds the minted amount to the input and also divides that new total into two approximately equal smaller inputs. For example, an input of 100 coins which mints two coins will then be divided up into two new inputs of 51 coins each. This results in the input size decreasing with each minting instance. However, as the input size gets decreased to a certain point, the wallet will then tend to gather up smaller inputs into larger ones for minting. There are other ways for a wallet to handle a minting input. For example, when the Paycoin Microprime addresses were actually minting (they are currently broken), the minted coins got sequestered to an address you set called a scrape address, and the Microprime input remained the same, usually 1,000 coins. The Neucoin wallet does not split up inputs, but simply adds the minted amount to the original input, creating a new, larger input. It helps to know how the wallet will handle inputs, as that will impact the results.

Finally, it is important to note that not all minting coins take into account all the variables just listed. NeuCoin is a notorious example which makes it a poor choice for a small stakeholder to attempt to mint with his own wallet. Neucoin has a rapidly decreasing minting rate (It began at 100 percent and is gradually decreasing to six percent over a period of ten years). The chances of a particular wallet minting are based strictly on input size. Coin age and weight are not taken into account. A small input of coins does not grow in weight, so there is no increased probability of it minting for each day that it doesn’t mint. This makes minting Neucoins essentially a lottery with every block. Just like your chances of winning the lottery are slim to none if you only buy one ticket (no matter how many times you play that one ticket), a tiny Neucoin input’s chances of winning the minting lottery at any given time are slim to none. The Neucoin minting formula definitely favors very large inputs in the same way that a lottery player who bought several thousand tickets would be more likely to win the jackpot than one who only bought a single ticket. This is the sort of revelation that is no fun to learn after having bought a stash of coins to mint.

Technical aspects of running a minting wallet Once you know and understand a given coin’s minting algorithm, you then need to set up and run the wallet itself. For the most part this is a simple process. You download the latest version of the wallet from the coin’s website, unpack it, install it, and then run it. You then add coins to it by sending coins to the wallet’s address.

Next, you have to wait out the coin maturing period. The coin’s specs will usually give you a time in days, but the actual number that is used in the calculation is number of blocks or confirmations. Your coins will not be able to mint until they mature, or reach the required number of confirmations.

During the maturing period, you should encrypt your wallet. Before you do that, you want to record the private key for the wallet’s address–all addresses you intend to send coins to. You go to the console (through the “help” menu item) and type “dumpprivkey” followed by the address. When the console reveals the private key, copy it and store it in several secret places. This will allow you to recover the wallet’s address in the event that you lose the wallet’s encryption key. You can also backup the entire wallet, an activity that should be done regularly.

Encrypting the wallet is a matter of choosing and confirming a password for the wallet. Keep the password safe and don’t lose it. (But if you do lose it, you can import the private key into a brand new unencrypted wallet). Once the wallet is encrypted you can always open it and look at the balance, but in order to send coins anywhere you need to enter the wallet password.

Minting wallets have a menu item that allows you to open the wallet for minting only by entering the password. Do this and once the coin maturing period finishes, your wallet will begin to mint. Various wallets have indicators of what’s happening, usually giving information about your wallet’s weight, the network weight, and an approximate amount of time it will take for your wallet to mint.

Those are the basics, but there are interesting complications, the most common one being that not all wallets are created equal. Some wallets work extremely well and will mint coins day in and day out without a hitch. Other wallets are buggy. For example, the Paycoin wallet recently had its Microprime addresses quit minting altogether. When I inquired about it I was told the Microprimes were broken and there was no ETA on when they would be repaired. It can be a frustrating situation when you bought a stash of coins in order to mint them and the wallet won’t mint them. Other times the wallet may mint, but requires constant monitoring and updating in order to work with the network. As I mentioned before, the Seedcoin wallet required at least four updates during the single week that it was minting at 269 percent. Updating a wallet is generally a fairly simple process. You download a zip folder with the wallet installer, unpack the folder, run the installer, and then open up the wallet. However, it can be time consuming to do this four times in one week!

Another common issue is that the block chain can get corrupted or it can fork. I recently had the PIGGY block chain on my computer get corrupted. A common cause of this is a hard shutdown of the computer. The corruption was such that I couldn’t open my wallet. Fortunately the coin developer was available to help. The solution ended up being deleting the block chain and downloading it all over again. Downloading the block chain is not a big deal if the coin is only a few months old. But when the coin is over a year old, the download process takes hours, sometimes even days, to complete. During that time you cannot send funds out of your wallet and the wallet will not mint. For a coin that mints every eight hours, that was a lot of lost minting time. Fortunately, the increased coin weight did result in more minted coins. However, it is a big deal to not have access to one’s wallet for days at a time while the block chain is downloading.

Even more insidious than the block chain getting corrupted to the point of the wallet not working until a new block chain is downloaded is when the block chain forks and your wallet ends up on the wrong chain. Unlike an outright corruption which can become obvious when you try (and fail) to open your wallet, a fork does not give any indication of anything being amiss until you attempt to send your coins out and they get lost. Or you find that all the time spent minting since you got on the fork was to no avail. Truly, the only way to know if the block chain forked is to stay in touch with the coin’s community and watch for any announcements. Forks can be intentional (such as when a new feature is added to the coin) in which case everyone in the network has to update to the new wallet by a certain date, or forks can happen randomly, in which case it’s usually the developers who will tell you the fork happened and which is the correct chain that you can check your wallet against. If your wallet got on a fork, the solution is the same as for a corruption: you need to delete the block chain from your computer and download it all over again, sometimes multiple times.

There are probably several more wallet issues which can be corrected by downloading the block chain again. Regardless of the reason, having to download the block chain all over again is an annoying and time consuming process. In my opinion it is one of the biggest reasons for people choosing to use online wallets rather than desktop wallets for everyday use. Up until recently, though, you would lose the option to mint your balance if you opted for an online wallet instead of the desktop client.

Security matters The other issue that is paramount if you are going to conduct your own minting (be your own bank) is wallet security. The most likely and egregious wallet hack is when someone gets access to your wallet, dumps all the private keys, then imports them into his own wallet and sends the coins to an address you can’t access. This is unfortunately all too common. These hacks can happen through a number of back doors to your system including but not limited to vulnerabilities in the operating system, another wallet that you’ve downloaded containing malware, malware such as keyloggers being inadvertently downloaded and installed from having visited compromised websites, certain kinds of social engineering, and more. Most computer users do not in practice consider security to be a high priority. There are many common computer usage behaviors that are actually anathema to maintaining good security. For the most part, users do not suffer from these behaviors and most users probably do not have anything on their hard drives that would be of interest to hackers. However, those practices can put the cryptocoins on your computer at risk. Ideally, you would not be running more than one wallet on your system, but instead run each one on a different computer or Raspberry Pi. Ideally, the wallet would be heavily encrypted and you’d change the password regularly. Ideally, you would be running a good antimalware protection program which will still allow your wallets to run. Ideally, the place where you store all your wallet passwords and private keys would be very secure as well, but not so much that you yourself are locked out!

With security, the more of it you have, the less convenient it is for you to work. For a while I kept my wallet passwords on a separate encrypted flash drive. But then I found the process of decrypting the flash drive, then accessing the file with the passwords to be overly cumbersome, so I came up with a more convenient system which is most likely less secure. Each person has to come up with what they consider to be an appropriate balance of security and convenience. Being your own bank in this case can turn into a heavy and expensive burden, which is why most people are happy to let the banks be the banks.

Alternatives to desktop minting clients Fortunately, if you’d like to take advantage of minting, but are not prepared to run your own desktop minting client, there are some interesting online alternatives opening up, mainly shared minting wallets and POS (proof of stake) pools. For a while, Next and Fimk, which mint on a completely different type of platform, both spawned minting pools where people could send their balances to a website and they would then receive their share of the minting proceeds. This allowed people to take advantage of the economy of scale (a larger total minting pool, which was very important for those two coins), and also have all the security handled separately. Of course, the disadvantage was that if the pool operators turned out to be scammers you lost your balance. Fimk had an ingenious setup where you could lease your balance to a pool while still retaining control of your balance, a much better option for the original owners. In that case, if the pool operators turned out to be scammers all they could take was the minted coins, and you could cancel the lease at any point to minimize even that loss. I am not aware of any other coin which has that feature.

Coin Wallet is an online wallet service which is also a minting pool. Each user is given a subwallet for each coin the site supports, and individual addresses can be generated for each coin. The user can then send the coins to the appropriate addresses and withdraw them at will. Most of the coins Coin Wallet supports are minting coins, and to participate in the minting (or staking) pool, you just have to deposit some coin to your Coin Wallet account. Once the maturity period expires your coins will start earning a piece of the overall minting proceeds. A portion of the minting proceeds will go back to Coin Wallet as a pool fee, similar to how mining pools work, but account holders have access to the rest of the minting rewards as soon as they mature. I have tried Coin Wallet with a number of my staking coins, both the ones I have large holdings in and some that I only have dust amounts (faucet earnings). Either way, the coins are minting and accruing rewards just for sitting there. I am liking the service, but still hesitate to recommend it completely because I am not sure how well the site is protected from hackers, nor how honest the operators are. The site is continually adding new coins and appears to be growing, and users do retain control over their coins once deposited. The best part about it is that even microearnings from faucets will mint and get credited to individual accounts. Coin Wallet allows one to own many different minting coins in any amount and not have to bother with running the individual clients. If you want to try out Coin Wallet, start with faucet earnings to see how it works, and then gradually add coins you buy, but only invest what you can afford to lose.

Another interesting online minting option is StakeMiners. StakeMiners works a lot more like cloud mining, in that you make your deposit in Bitcoin, and the service then buys altcoins to mint. Once a week the minting rewards are divided up and paid to users in Bitcoin. This is a good route for those who want to take advantage of minting coins, but don’t actually want to deal with the coins themselves. StakeMiners only uses a few of the many minting coins available. They choose coins to mint based on their own criteria of what makes a profitable minting coin.

I expect more minting options will open up as time goes on. Minting is too fabulous an opportunity to not take advantage of, and hopefully as more reliable online minting wallets and pools open up, the entry barrier for nontechnical users will be considerably reduced.

 

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Not in the US

About a month ago I wrote about how Bitcoin websites such as BTC Jam provide a unique opportunity for me as a small and poor investor to be able to increase my funds and better my financial picture by allowing me to access on a much smaller scale the same types of financial tools currently only available to the rich–that is, those with significant disposable income to invest.

But this morning when I logged into my BTC Jam account and attempted to sell off a note to a loan I believe will default, I was informed that the site management had made the difficult decision to no longer accept investments from people in the Unites States. I currently have an autoinvest program set up which reinvests funds I get from current loans by putting them into new loans. According to BTC Jam, I will be able to continue to stay in the loans I’m in, but will be unable to invest in any new loans.

Needless to say, that was a huge disappointment. I just lost access to an amazing financial opportunity just because of where I live. In order to continue taking advantage of this opportunity I would need to create myself a whole new BTC Jam identity from an IP address coming from a country the site still allows. I am not interested in going through all that trouble. Quite frankly, I shouldn’t have to hide who I am or where I live in order to be able to invest my own funds.

Unfortunately, that is not how the US Government and financial regulatory agencies see it. I honestly do not know too much about how the financial industry is regulated in the US. I do know that at least according to public explanations, the regulation is meant to protect people like me from losing everything in financial scams. I am certainly all for the government monitoring and prosecuting people or entities who deliberately scam people. I also believe intentional scamming would fall under the general category of theft. The more the deliberate scammers can be removed from the financial ecosystem the more likely it is that investors will put their funds into worthy vehicles, benefiting everyone involved. The part of regulation that I take issue with is when the intention to protect me goes too far, when it crosses the line from protecting me from intentional scammers into limiting my viable financial options.

Yes, the government has a role to play in removing criminals from the playing field. But to what extent is it responsible for protecting me from my own bad choices? I will be the first to say that when I initially got into Bitcoin I made quite a few bad choices. In fact, at one time I lost everything I’d amassed up to that point, and it was a painful loss. And yes, I lost it to an intentional scammer, one who probably got away with it. That was when I discovered the Bitcoin Forum and learned I was not alone. Lots of people had lost considerable amounts of Bitcoin to various scam websites and endured being called idiots by the people who had enough experience to know which types of sites to avoid. We idiots who got scammed either learned quickly and picked ourselves back up and made smarter choices about where to deposit our Bitcoin next time, or we left the cryptosphere in disillusionment. I am happy to say I survived the experience and went on to both gain and lose plenty more Bitcoins in the process of navigating through the new world of tremendous financial opportunity and peril.

The fact that most Bitcoin entities at that time ran below the regulatory radar in the US meant that I was not limited in the opportunities I wished to pursue in my endeavors to grow my stash of Bitcoins. Today, some of the very good entities have pursued compliance with US regulation at great cost, and I generally consider the pursuit of compliance to be a good sign. However, because of the great cost, some like BTC Jam have made the decision to simply not do business in the US. Others, like Poloniex, have decided to not do business in the states with especially high regulatory burdens such as New York.

This is unfortunate. It goes beyond protecting American consumers from financial theft and in effect steals from them by shutting them out of financial opportunities. Let’s suppose that my rate of return on BTC Jam is fifteen percent annually. I currently have about one Bitcoin invested in it. At today’s price one Bitcoin is worth a bit over $400. We’ll use $400 as the Bitcoin price to keep the math easy. This means that this time next year I will have my $400 Bitcoin plus $60 in my rate of return. But once the loans I am in mature I will not be able to reinvest the funds. Assuming all the loans mature in one year and I reinvest everything, then the amount I could have earned the following year had I been able to reinvest would be $96. That $96 I now cannot earn is not just a lost opportunity; it can also be viewed as an effective theft against me due to the heavy burden of regulation. Next year, the US government will effectively steal $96 from me in lost ability to invest my own money.

Ninety-six dollars is a small amount, but for me it’s significant. It represents groceries for a week, my phone bill for a month, a new winter coat, or even better, some money I could put towards paying off some debt I owe in the fiat world. Add to that the interest I will continue to owe on the debt from not being able to pay that $96 as an extra payment on the principal and that amount grows bigger each year. Or, if I’d decided to stash that $96 into a fiat retirement account, how much will I lose in interest there? Or how much will I lose from a second year of not being able to reinvest it in BTC Jam loans?

The BTC Jam 15% rate of return is not an unreasonable projection. One reason for converting some of one’s fiat funds into Bitcoin is that the rates of return on legitimate investments tend to be better overall than fiat rates of return. There are of course increased risks from the volatility of the market price of Bitcoin itself, but the actual Bitcoin investment rates of return are better. Where in the fiat world am I going to find a place to stash a mere $96 to earn a 15% rate of return? Traditional savings accounts have a 1-2% rate of return (being generous here), and that rate of return may increase to 3-4% once my balance reaches $15,000 or something ridiculous like that, and even that doesn’t come close to the 15% rate of return I had just until a few days ago. I know there are some investment vehicles in the fiat world that pay higher rates of return, but… you guessed it, you need an initial investment in the thousands of Dollars. I am priced out of all those opportunities.

My purpose in writing all this is not to knock legitimate governmental regulation. I am by no means an anarchist. I do not believe just anyone with an Internet connection should be able to set up a website which makes false claims, collect gullible people’s funds, and then run off with no trace. I am very glad that we have laws against that sort of thing and that at least some of those perpetrators are hunted down, prosecuted, convicted, and punished. It’s not a perfect process but it does have significant deterrent qualities, resulting in me having fewer scam opportunities to sift through.

However, I do believe that honest regulators need to take a close look at the regulations they pass and ask themselves this question: Does this rule actually prevent financial crime, or does it result in effectively robbing the poor of legitimate financial opportunities? The laws which truly prevent crime should remain and be improved, and plenty of resources should be dedicated to enforcing them. The rules which rob the poor need to all be repealed. The ones which do both need to be suspended until they can be rewritten to only prevent crime.

Legitimate companies such as BTC Jam should have no problem operating in the US and I as a US resident should have no problem using their services in a legitimate way to improve my financial  situation. Intended or not, to prevent me from doing so is a form of theft. Ironically, because I am not rich, I can not afford to be the victim of that theft. Who’s being protected here? Not me.

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On not self-destructing

DNotes founder Alan Yong was recently interviewed by The CoinTelegraph about the history, purpose and direction of DNotes. In this interview he made a profound statement about a pervasive culture that has taken root within the fledgling cryptocurrency industry. I quote:

In addition to business, I also have a background in behavioral science and it did not take me long to conclude that the industry has already developed a culture of its own. It is a culture of self-destruction, high stress, and blatant disrespect for other’s properties and human emotion. I had never seen any business that had a chance of survival in that kind of hostile environment. No wonder the male population has dominated it by a ratio of 95 to 5, male to female.

While I’m not entirely certain why this “culture of self-destruction, high stress, and blatant disrespect for other’s properties and human emotion” would be a direct cause of a disproportionate male to female ratio–I don’t know any men who enjoy that kind of work environment any more than women do–I can tell you that I have observed and experienced what Yong is talking about over the course of my nearly three years’ journey within the cryptosphere. This “culture” is unfortunate and has already played no small role in the death of many otherwise promising altcoins even before they got off the ground.

This article is my open letter to anyone in the cryptosphere who is about to make his or her great idea a reality–either in the form of a new cryptocoin, or an innovative business venture within the industry. It is my guide, garnered from many months of experience in this industry, on how to not self-destruct, or how to not doom your project before it even gets off the ground.

1. Lose the pinups On more than one occasion I’ve read through threads on Bitcoin Talk about an altcoin in which I was already invested or was seriously considering it and suddenly was assaulted with some picture of an inappropriately dressed woman in a revealing pose. What does a picture of a sexualized woman have to do with an alt coin? I’ve even been personally sent such pictures, like I’m supposed to take that as a compliment? Because my forum handle “wiser” is gender neutral, and 95 percent of the people involved in the cryptosphere are men, it is certainly logical to assume that I’m male. I don’t have a problem with that, per se, nor do I feel any need to correct that assumption in most cases, but since when have all men been into porn?

Nothing screams unprofessional louder than pornography, even so called “soft porn.” Nothing shouts “I have nothing interesting or beneficial to offer” than a website decorated with such pictures. Nothing screams “Get outa here and never come back!” more effectively than a barrage of chick pics. That effect is only magnified if the person on the receiving end of such a barrage happens to be a homeschooling mom or dad with innocent children who might accidentally see something they should have never seen. Is that the message you want to put on your project’s bill board?

I am not here to delve into the moral aspects of pornography–that’s for a different article. But I will say that it should have no place in any kind of professional business environment. Think about your altcoin losing ten percent of its market cap with each soft porn image on its forum thread and then go ahead and post that chick pic along with a suicide note for your project.

2. Answer questions So you’re updating your thread about all the wonderful exciting things in store for your hot new altcoin, and some newbie asks a dumb question like “What’s a block chain anyway?” You have better things to do than hold newbies’ hands so you let loose with some kind of condescending lecture about how they should do their homework before posting such infantile questions. Or maybe someone joined your thread somewhere between page 86 and 87 and asked a question about your project that got thoroughly answered on page 45 and they get a similar lecture about how they really should read through the thread so as to not ask questions that have already been answered.

Do you have that project suicide note ready? Not only did you just alienate the person asking the question, who could be anyone from a down and outer with a computer all the way up to a potential large investor in your project. You also alienated many other people who happened to be reading your thread at the time and who now know better than to ask a question of their own.

Skip the lecture and the mocking or condescending tone and just answer the question, no matter how dumb it may seem to you and no matter how many times it’s been answered before. This doesn’t mean you have to write out an original answer each time it comes up though that certainly does add a personal touch. You can post a link to the message where you did cover it along with a gracious invitation to read it. Even better, every time you are asked a question, copy your answer to an FAQ page you create. Throw in a few basic Q and A’s about cryptocoins in general and then post the page often, and refer inquirers to the appropriate section.

Even if the questioner is not a newbie, even if the question is coming from someone you believe should know better, just answer the question. Keep in mind that people reading the interaction are not going to be aware of all the history between you and that person. All they are going to see is that you just made a snarky reply to what seemed like a reasonable question.

3. Avoid drama No one likes to be jerked around. No one likes to have been away from your updates for a few days and come back to learn that something happened which completely and suddenly changed the direction or even viability of your project. There are several kinds of drama that affect altcoins, all of which should be avoided.

  • Sudden shifts in direction Think your project through from beginning to at least several years down the road before you launch it. Make sure you have enough resources to do what you have planned to do. Be sure you know what it takes to get from point A to point B every step of the way. This isn’t to say that you can totally avoid the unexpected, but even then, plan for how you will deal with the unexpected. At the very least, have your vision and direction mapped out so that you can keep it consistent. If what you are launching is a hosted mining operation, then stick to that. Don’t start off as a hosted mining operation and then scrap that and launch a hastily put together altcoin instead.
  • Bad coding resulting in numerous urgent mandatory wallet updates Give yourself plenty of time to do a good job with the technical aspects of your project. Thoroughly test your wallet before releasing it so as to minimize the number of mandatory updates. Nobody likes to have their wallet quit working on them or find themselves mining on a fork. Some of this is going to happen anyway, but it is up to you to do all you can to minimize this by writing good code and then getting other competent people to proofread and test it.
  • Scandal This boils down to being an ethical person. Say what you mean; mean what you say. Don’t take what isn’t yours and don’t cheat. Keep your personal life clean as well. Don’t cheat on your spouse or be the town drunk in real life. Treat the people in your life with respect and don’t neglect your real life obligations. Basically, don’t give anyone a reason to speak ill of you. If you have personal problems (and we all do) don’t air them on your project’s online public correspondence and never ever use them as an excuse for not delivering on your promises or in any other way lacking in professionalism. This doesn’t mean your life has to be perfect. Pretty much all of us have done things at one time or another that we regret. It does mean dealing with our mistakes and regrets honestly and always striving to improve ourselves so that we’re not mired in bad habits or vices which lead to scandal.
  • Trolls in your thread This is one aspect of drama that we can’t fully control. However, there are ways to mitigate the damage it can cause. For starters, make sure you can control the content of your project’s thread. On Bitcoin Talk that means you start a self moderated thread. This allows you to delete truly unwanted and unnecessary posts. When you’ve identified a poster as a troll (and not someone who has legitimate concerns) minimize your engagement; do not get into endless arguments and never make personal attacks or give any credence to personal attacks directed against you. Do all you can to move the topic back to your project. Ban that person from posting further in your thread if you have already taken reasonable measures to address their concerns, and don’t let it get under your skin. Successful people know how to deal with that kind of adversity. Learn how they do it and emulate them. Don’t get sucked in to pointless and damaging toxic exchanges.
  • Suffering material damage from malicious attackers Again, not something that can be fully controlled. However, there are reasonable precautions which can be taken to minimize the chances of this happening. For starters be sure that all your online assets are thoroughly secured, especially if they are sites on which people have accounts or keep funds. Do not cut corners in this regard. Website hacks leading to thefts happen all the time in the cryptosphere and many of them could have been prevented. Another kind of attack can be to your reputation. Again, take reasonable precautions, especially avoiding scandal and being professional at all times. If someone does say something that can injure your reputation, take reasonable measures to address the issue and restore your good name but don’t let that take you away from your focus or get you mired in an ugly verbal confrontation. Always be professional, gracious and polite no matter how unprofessional or vicious your adversary may be. Let your good character speak for itself. And it goes without saying that you must have good character to begin with.

4. Do not name bad guys Be open to working with everyone who shows interest in your project until they have proven themselves unworthy. Do not assume someone is your enemy based on their race, personality or even industry background. One common tendency in the cryptosphere is to lump all fiat financial institutions and their workers as being evil. Another tendency is to call anyone who dumped a large amount of your coin bad names. Resist that urge. Even if we concede that the banking industry has some severe ethical problems which have hurt others that does not translate into bank CEOs or tellers themselves being evil people. We also can never know the true circumstances behind some trader’s decision to sell a large number of coins. Both people and industries can evolve and grow; give them that chance. With that said, there may be certain niche industries you do not wish to work with. That’s fine. Treat any refusals to collaborate as a matter of such collaboration not being conducive to the direction you have for your project (you do have a plan and direction for your project, right?), not as a good vs. evil or us vs. them thing. In other words, don’t burn bridges. In all dealings with people try to find common ground, and if you don’t find it beneficial to continue the relationship, then at least part on good terms.

5. Do not publicly rebuke anyone Perhaps as your project has progressed people who promised to help you out in certain ways let you down. Perhaps you need to fire someone from your team. That sort of thing happens. Keep it private. All the public ever needs to know is that so and so is no longer a part of this project. If someone needs to be corrected concerning their actions (not just about something they said which wasn’t accurate), take it up with them privately. Definitely do not rebuke anyone on a public forum, no matter how much they might deserve it. Most readers will not know the backstory and all they’ll see is that you humiliated someone publicly and they’ll worry that they might be next.

6. Graciously welcome everyone Express genuine joy and excitement that they have stopped by and expressed interest in your project. Welcome them, welcome their questions, even welcome their concerns and challenges. Did they just repeat the same worn out objections that you tackled last month for the umpteenth time? Thank them for their insight and graciously address their concerns and challenges, even if briefly, and it’s OK to direct them to an FAQ page or the message where you thoroughly addressed those issues in the past.

7. Respect people’s humanity However technical your innovative project may be it’s never just about code and programming. You embarked on your project because you believed it would solve a human problem or improve human life. Know that every one on the other end of an online interaction concerning your project is a human being with human dreams, vulnerabilities and emotions and proceed accordingly. If you have something a bit difficult to say, before you hit send, visualize yourself speaking it out loud to the recipient in person. No matter what you say, always treat the other with respect and treat their human feelings with consideration. Even more so when the conversation is public. Never intentionally insult or poke fun at anyone (apologize promptly if you did so unintentionally), never use sarcasm, give straight answers and use good manners. Each and every person you interact with, no matter how annoying they may come across, is a unique and infinitely valuable human soul. Treat them with the utmost consideration and respect. Among other things it’s the essence of professionalism.

If you follow these basic principles of professionalism, I can bet that even if your idea and execution stink, your project will rise above the other better designed ones whose teams lack basic professionalism. Of course, you can improve your odds substantially by having a sound project. Just don’t ever assume your amazing idea will stand on its own without professionalism behind it. Professionalism matters. A great deal. Be professional… or begin composing your project’s suicide note.

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I can do it better with Bitcoin… or at least smaller

Despite the fact that I really don’t have any fiat disposable income to invest, I have managed to get myself added to numerous fiat investment themed email lists. I occasionally read the emails they send.

Yesterday morning, my email alerted me to a little known opportunity to very lucratively invest a mere twenty-five dollars. Of course I was interested. I’m not so hard up that I can’t spare $25 on a good opportunity. The first link I clicked on led me to a page with much hype and little actual information. I skimmed the hype page to figure out which key words to use to search for some real information. The real information I found came in the form of this also lengthy, but actually informative, article.

The opportunity is a legitimate one. The consequences for people who get caught promoting scams in the fiat world at this point are far worse than for those who scam in the cryptosphere. The little known website mentioned in the hype piece is Lending Club, a website for peer to peer lending. Another similar website is Prosper. Borrowers, many of whom might not be able to access conventional bank loans, can apply for loans and investors can lend funds to their loans at any amount they wish beginning with $25 per loan.

So let’s say I have only $25 to invest. I can carefully choose a loan to fund and hope that the borrower actually pays me back at the agreed upon rate. If I’ve chosen a good loan, then I will recover my $25 plus some interest, and I can then place it into another loan to earn more interest. The problem, of course, with this scenario, is that no matter how small my capital (in this case, $25), it is always a bad idea to invest it all in once place. The best way to spread out my risk is to invest in more than one loan. How many loans are enough diversification? Lending Club recommends investing in at least 100 loans. The site even has a program to automate the investing based on parameters you set. With a minimum investment of $25 per loan, that means that to be properly diversified, you must invest at least $2,500. This way, if one or two loans default, you will still recover most of your principal and enough interest to make up for them. Diversification is a wise strategy.

The catch is that this lucrative $25 opportunity has now turned into a $2,500 opportunity. For many investors that is no big deal, but as I mentioned, I am hard up in the fiat world, and no, I do not have $2,500 to play with. If such a sum were to randomly show up in my mailbox it would go towards paying bills, not investing. It’s way more than I can afford to lose, so not going to happen. Once again, despite the marketing claims, investing in Lending Club or its equivalent is not appropriate for small investors. This has been my experience with checking out investment opportunities in the fiat world. Whether it’s minimum one time or minimum monthly amounts, flat trade fees (the cheapest I’ve seen is $6.95, which doesn’t work for a $100 trade), or even a minimum net worth just to participate, it’s been the same story over and over for me and others in my income bracket: I’m priced out of the ability to invest my meager fiat holdings in order to better my life.

Fortunately, Bitcoin has changed all that. Bitcoin has gotten a lot of negative press attention lately as being broken or inadequate in various ways. It’s too volatile. It’s too technically difficult. It’s too risky. It’s too slow. There is certainly truth to all those claims and many others the media is wont to make. However, there is one amazing and positive thing about Bitcoin (or more specifically, Bitcoin’s infrastructure) that has been consistently overlooked. To illustrate, I want to revisit one of my Bitcoin investment opportunities that I recently wrote about.

I love the idea of lending out funds to borrowers, especially if it’s not up to me to fund their entire loan. But $25 is still too much for me to risk on a single loan. What I need is a way to diversify my $25 stash, and I can do that with Bitcoin, thanks to BTC Jam. With BTC Jam, I can invest literally any amount I want. I just put in 0.0001 BTC into a random loan to test this. At today’s Bitcoin price, that amounts to the fiat equivalent of 3.7 cents. It may be possible to put in even less, but even for a dirt poor investor, 3.7 cents is probably low enough. At 3.7 cents per loan, I can diversify quite a bit with $25. In fact, I can spread my $25 capital outlay over 675 loans! That’s even better than what Lending Club recommends.

Realistically, though, it’s going to take me a very long time to manually invest 3.7 cents in 675 different loans. I would want to let BTC Jam do the work by creating an autoinvest plan. The autoinvest plans do come with some limits. The least you can invest into one loan using an autoinvest plan is 0.0067 BTC, which amounts to $2.47. So, with $25 to spend, you’ll only be able to spread your risk out over ten loans–not the best, but you’re still diversified. I would recommend choosing a conservative autoinvest program to reduce the chances of losing principle from loan defaults.

The other limitation is that the minimal amount you can use to create an autoinvest plan with is one Bitcoin. That amounts to $367.64 at this writing. But no need to get alarmed. Once you create the plan, you do not have to deposit the entire Bitcoin all at once to get started. Start by depositing what you have, and add to it later. Perhaps you could swing $25 or even just $10 a month until your plan is fully funded. Even if you did put in the entire Bitcoin all at once, you have still invested far less than Lending Club’s recommended minimum of $2,500. And you would have that single Bitcoin divided into 150 different loans–half again as much diversification as Lending Club recommends.

BTC Jam is just one solid site where a small investor can begin to grow his or her funds. For investors that have more time to manage their investments, another solid opportunity is lending to margin traders on Poloniex. The catch in both cases, of course, is that the investor has to first convert fiat money to Bitcoin (or acquire the Bitcoin some other way). Yes, there are certainly risks to that, the biggest one being that you could pay over $300 for one Bitcoin and then watch it drop to $200 while you have it tied up. The Bitcoin price has gone up and down many times and probably will do so many times more during a normal loan term, so I personally do not worry too much about that, instead consider growing my Bitcoin stash to be a long term project. However, the recommendation to only invest what you can afford to lose is even more important for the small and poor investor than it is for the large and wealthy one. This means that funds you put into any kind of investment should be funds that if lost would not devastate you financially. They could represent money saved from giving up a cup of coffee or a pack of cigarettes or some other luxury that you allow yourself. Even poor people have those, especially in developed countries. They could also represent money that you budget for that purpose as well. Either way, it’s important to not put pressure on yourself for the funds to grow at a certain rate, or even at all, as that will cloud your thinking.

It is, of course, the advice to only invest what you can afford to lose coupled with the high entry barriers in the fiat investing world which shuts poor people out of the opportunity to use investment as a way to gradually climb out of poverty. While the advice still stands, Bitcoin has lowered the entry barrier by orders of magnitude, making it possible for small investors to get involved. Of all the amazing and disruptive ways that Bitcoin has changed the way finances work forever, in my opinion this is one of the best, and strangely, least talked about.

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The altcoins and other “investments” I like, Part II

In Part I, I wrote about a few interesting Bitcoin growth opportunities. This article will be all about altcoins that I believe to be promising investments as well as a few that are worth at least considering.

Before getting into specific altcoins I like and am currently accumulating, I need to first state my disclaimer and second, share some general principles which guide my altcoin investment choices.

First, the disclaimer: I am not a financial adviser, so nothing I write here should be taken as financial advice. It is your responsibility to do your own due diligence and only invest what you can afford to lose. This is, after all, crypto. It carries extraordinarily high risk, and no one really knows what the long term rewards will be. Treat this as information; now you know about some interesting altcoins that you might not have heard of before, then go read up on them yourselves, come to your own conclusions, and make your own decisions.

Second, the basic principles. 2013 and 2014 saw a massive amount of altcoins launched, most of which have failed. I personally have had two of my altcoin investments blow up on me when people stopped mining the coin and when I’d try to run the wallet, it could not connect to any nodes, making it impossible to either send or receive transactions. Although I may technically still have the coins inside, I can’t do one thing with them, and even if someone were willing to buy them, I’d have no way to send them. That is ultimately the risk you take when investing in altcoins. However, I believe the altcoins which follow these three principles are more likely to succeed over the long haul.

Principle 1: The coin must come with solid infrastructure. At this point, it doesn’t have to be a huge amount of infrastructure, but there does have to be something beyond the coin itself. Otherwise, the coin’s value is tied to mere speculation and subject to the whims of the pumpers and dumpers. By infrastructure, I mean both value added products and entities designed to increase the coin’s adoption. One of the very first altcoins to have added infrastructure was Devcoin, the infrastructure being the Devtome, a wiki that users could contribute content to in return for a share of the following month’s mining rewards, which generated some ad revenue. Another early coin with infrastructure was Namecoin, with its associated website domain name service. The very first cryptocoin, Bitcoin, now has infrastructure such as trade exchanges and online wallets and payment gateways, but that infrastructure has been added by third party entities, not by the Bitcoin development team itself. Altcoins need to have their infrastructure provided by their development teams until third parties are willing to step in.

Principle 2: The coin must come with incentive for buyers to hold onto it, keeping it off the market for months or years at a time. Due to the way cryptocurrencies are mined into existence, the vast majority of the time, the coin’s supply increases more quickly than the value-added infrastructure can be built. This tends to lead to a noticeable price decrease, making the coin less attractive to speculators and other investors. To counter that a coin needs to have a built-in incentive for holders to keep it off the market, making the available supply substantially less than the total supply. The most obvious way is for the coin to earn interest while it is being held. This can be built right into the coin’s code, as it is with proof of stake coins whose wallets “mint” or generate new coins based on the balance. Some examples of minting coins are Diamond, Neucoin, and Piggycoin. The ability for a coin to earn interest can also be built into the coin’s supporting infrastructure, though not part of the coin’s code itself. One example of this is the DNotes vault retirement accounts, which provides users with a monthly return on coins of 0.7% to 1.0% depending on how long the user is willing to tie up their coins. Either way, the coins that are held in a wallet to mint or in an online interest bearing account such as the DNotes vault are coins that are not being dumped on the market.

Principle 3: The coin must be systematically and consistently bought on the open market. In addition to an incentive for coin holders to hold onto their coins, there must be a consistent and systematic removal of coins from the market through buying them. At the beginning, this can be done by the development team, but a third party can also do it, as long as it is being done. If coin holders know that the price of the coin is being supported, this helps them feel better about owning and holding the coin, especially during periods when the price is low. Since coin developers rarely have super deep pockets, it’s more than just a matter of them buying their own coins every day. There needs to be some sustainable reason to buy the coins. One way to do this is to provide the opportunity for users to buy shares in a profitable company and have the dividends be paid in the coin. In the early days of Devcoin, you could purchase fractions of pass through shares of ASIC Miner in Devcoins. As the actual share paid weekly dividends, the pass through dividends were also paid weekly, but in Devcoins. This meant that every week the administrators of this asset had to buy the Devcoins in order to pay the dividends. For a while, there was a share on the Next asset exchange that was a pass through share for LTCGear mining shares. Its weekly dividends were paid out in Next, meaning the asset issuer had to each week convert his dividend payouts from Bitcoin to Next, supporting the Next price in the process. Unfortunately, both the Devcoin and Next pass through shares are no longer valid (and illustrate that these pass through shares are only as good as the people issuing them), but they still make for good examples. Creating a pass through share of an existing asset is probably the simplest way to do this, but it’s also possible to create an entirely original asset, particularly if the coin has also developed some truly profitable infrastructure.

It is not always necessary for a coin to follow all three of these principles at all times, but it is important to the potential investor to know which ones are being followed and which ones are not.

An overarching principle that makes an altcoin a good investment is that it needs to have a solid core development team which provides clear vision and leadership for the direction of the coin. Without such clear leadership, it will be all but impossible to implement the other three principles. Although not enough by itself, a good initial indicator of a coin’s strength is a frequently updated Bitcoin Talk thread where the leadership is active and communicative. I would consider a thin and infrequently updated thread to be a red flag.

With the principles for a solid and long lasting altcoin established, I will now share my personal favorites.

Altcoins to buy

DNotes (NOTE) DNotes launched in February of 2014 and was partially a response to Founder Alan Yong’s observations of the dysfunctionality inherent in the cryptocommunity largely run by geeks and computer nerds with poor social skills. Yong realized that even with Bitcoin’s tremendous first mover advantage, it could be surpassed by another cryptocurrency if that coin had a solid business model with good executive leadership and professional communication. He also recognized that a coin couldn’t stand alone, but needed to have value added to it through surrounding infrastructure.

DNotes probably has some of the most advanced value added infrastructure of any altcoin and continues to add more. The CryptoMoms forum was launched shortly after or perhaps at the same time as the coin itself. The purpose of CryptoMoms is to engage women in the cryptospace with top notch information and a pleasant and professional online community. DNotes also owns the DNotes vault, a full service online wallet with some additional features including a whole line of retirement accounts which earn interest, providing that necessary incentive for DNotes holders to keep their DNotes off the market. DNotes recently launched DCEBrief, a news and information service on developments in the cryptospace. The founder is currently writing a book to assist small business owners, and there are plans to launch a for profit company sometime in 2016. Not only that, an emerging third party company, PayServices, designed to be among other things an efficient payment gateway that uses as many cryptocoins as possible, already supports DNotes, giving it a bit of third party infrastructure. DNotes has plenty of infrastructure to go with it.

The only principle that DNotes does not follow at the moment is a systematic way to consistently remove DNotes from the market. This has no doubt contributed to DNotes’ recent price decline. The DNotes team believed that the value added infrastructure would be sufficient to keep the price steadily increasing, and that should normally be the case, but the cryptoworld is filled with fickle speculators so in the short term all the infrastructure is still not quite enough to fully support the price. However, it appears the DNotes team is taking steps to rectify this. One of the core developers is working on an automated trading bot that DNotes investors can use to both support the price of DNotes and acquire them at a predetermined daily amount.

DNotes is currently way undervalued, making this a good time to buy it, and then grow it by opening up a retirement account in the DNotes vault.

Diamond (DMD) Diamond has been around for a couple years and got off to a rough start with an apparently not entirely ethical development team. However, the coin was forked and taken over by the current development team, which is committed to this coin for the long haul. Diamond is a rare coin. The most there will ever be is 4.38 million. The coin is set up as a dual POW/POS coin. This means that new coins are put into the supply both by mining (Groestl algorithm) and minting. This hybrid system is credited with keeping the network secure and free of technical problems which often plague coins relying on POS only. The development team is very active on the DMD forum thread and works hard to continue to develop and move the coin forward.

Diamond’s infrastructure is simple, but effective. The development team offers a cloudmining service where investors can contribute Bitcoin to buy shares and in return receive regular dividend payments in Diamond delivered directly to their QT wallets. Dividends are not guaranteed to pay out at a particular interval and can sometimes go as long as a week between payments. However they typically pay out once a day or five times a week. All proceeds from cloudmining which are to be paid out in dividends are first converted to Diamond, meaning there is consistent DMD buy pressure on the market, keeping the price stable. Diamond is also wrapping up an auction for ten special addresses which will mint at twice the current rate as well as record the owners’ names in the block chain (for posterity). These special addresses are named after real life valuable diamonds. The auction has already raised considerable funds for the development team to continue working on developing and promoting Diamond.

Stakeholders who acquire Diamond either through direct purchase or through cloudmining dividends have a strong incentive to hold onto them. The extremely stable QT wallet mints new coins at an annual rate of 25% of the balance. Coins have to be a minimum of nine days old in order to mint, and the wallet handles everything associated with minting. Coins that are older than thirty days are automatically gathered into larger piles and minted. All that the wallet owner needs to do is leave the wallet running and unlocked for minting. Minting proceeds can either be sold for a bit of income or saved for additional minting.

The DMD price has been quite stable over the past few months, ranging from twenty-five cents to nearly thirty cents a coin. The recent Cryptsy theft resulted in a large number of Diamonds getting dumped on the market, but with that dump over, it is likely the price will begin to climb in the next few weeks. Diamond has been promoted as a good store of value, and for a cryptocoin, I would agree that it does a good job of it.

NeuCoin (NEU) Neucoin formally launched this past October with big names, big plans and big investors. Neucoin’s goal is nothing less than to be the cryptocoin that mainstream (and generally ignorant of cryptocoins) people adopt in large numbers. To that end, Neucoin has established a partnership with Internet music site Jango where Jango users are given some Neucoins to tip emerging new artists. In return, the users are given some Neucoin of their own and encouraged to open up an online wallet to receive them. They are also resupplied with Neucoins for tipping. Neucoin has also set up a Facebook based game that people can play to earn Neucoins. The Neucoin team now claims to be supporting 50,000 new accounts. More games and partnerships are in the works.

Initial investors in Neucoin were given large amounts of coin in exchange for their contributions. However, those coins were to be tied up, only releasing a few each month for a period of several years. This was to both prevent investors from immediately dumping their stake as well as motivate them to participate in the Neucoin community and work to benefit the coin so that when their entire stake did become available to them it would have even more value. For this reason, out of a total current coin supply of nearly four billion coins, only 180 million of them are available.

Neucoin has an additional incentive for regular stakeholders to tie up their coins. On the same site where users can set up an online wallet, they can also transfer their coins to three different growth accounts. A five year growth account will earn an unbelievable 1600 percent interest rate while a three month growth account will grow by 20 percent. Coins can be withdrawn at any time from these accounts, but the penalty is that all interest is forfeited.

The ability for Neucoin to provide such amazing interest rates on the growth accounts comes from the fact that it mints at a near 100% annual rate. This rate gradually decreases over time, and the return rate of the growth accounts will eventually also decrease. Although one could theoretically earn more from minting coins in a QT wallet, the minting algorithm is set up such that minting is really only feasible for those wallets which contain at least 100,000 NEU. If you have any less than that, you are better off just using the growth accounts.

I am not aware of any provision that the Neucoin development team has for deliberately removing coins from the open market, and that may explain the current low price of 650 satoshis apiece down from over 2000. It could also be that the close to 100 percent minting rate is simply adding coins to the supply too quickly. I do believe that the coin is currently undervalued, though, especially considering the rate at which Neucoin is gaining new users among people who aren’t already involved in the cryptospace. As long as it keeps growing its user base and continues to create new ways for mainstream people to acquire Neucoins, I believe it’s only a matter of time before the coin’s value begins to trend upwards. I am currently taking advantage of the low price to acquire as many as I can and then I’m socking them away in various growth accounts.

One important thing to know about the Neucoin online wallet is that in order to access any of the Neucoins earned or won from Neucoin sponsored games and activities, you will need to verify your account. Part of that verification process involves registering your cell phone number, then typing in a code that is sent to your phone by text message. Unfortunately, their system does not accept all cell phone numbers. If your phone number is not accepted, you will not be able to access coins from playing the Neucoin games. Support, no doubt overwhelmed by 50,000 new accounts, is also quite unresponsive lately. Any investor of Neucoin needs to know this, as often what makes or breaks a business is good customer support and a completely working product. This glitch with the wallet verification does not affect coins that you buy yourself and send to your wallet. You will have complete access to all those coins and can send them to growth accounts or elsewhere at will. You are even supplied with your wallet address’s private key. I am assuming that the phone verification issue is only affecting a small percentage of account holders; for this reason it is not a deal breaker in my decision to invest in Neucoin, despite the fact that it affects my own account.

Altcoins to watch

New Economy Movement (XEM) I want to mention this one briefly as it holds a lot of promise. However I am not sure if it’s a good buy right now. The New Economy Movement is an entire platform on which once completed many different types of assets and coins can be supported. XEM is the specific currency that automatically comes with it. It began as a clone of Next and then the development team decided to build it from the ground up. New Economy Movement is essentially its own block chain technology and it does require far less power (by orders of magnitude!) than the Bitcoin network and its underlying block chain technology. The block chain technology itself (under the name Mijin) is currently being adopted by a number of Japanese banks, and this news has resulted in the recent tripling in market price. Further major announcements are expected this year.

I was an early investor, back when they were selling stakes for 0.03 BTC. I bought one stake and have held onto it except that I sold some of it to take profits in the recent price hike. I was hoping to buy back in when the price dropped but that hasn’t yet happened. It’s a bit tough to tell at this point if the current price is the new level for XEM or if it will eventually drop back down, making for a better buying opportunity down the road. This is a determination each investor has to make for himself.

Minting (knows as “harvesting” in the XEM ecosystem) is currently not very rewarding. This type of 2nd generation cryptocoin requires that the entire supply is minted in the genesis block, so the only rewards left to harvest are transaction fees. Since there aren’t many transactions, most of the blocks are empty. This will change once people get to the point of using XEM to buy and sell but as with all cryptocoins (except Bitcoin) we’re probably several years from that. For the technically oriented, there is a node rewards program for those who set up and maintain a node. Since you need three million XEM to run your node, that is an incentive for keeping large amounts of XEM off the market. In addition I personally am hoping that XEM will be opened up for margin trading on Poloniex so that I can grow my stash by lending it out. If XEM does become available that way, then that will act as another incentive for people to keep their coins off the market.

There is no system I’m aware of for taking XEM off the market. The price is supported entirely by XEM’s infrastructure and the value speculators place on the coin. Right now that value is trending upwards, but we all know how prone they are to changing their minds at a moment’s notice. The entire supply of XEM, since it was released from the beginning, has already been priced into the market, so an increasing supply is not an issue as it is for many other coins.

My take on XEM is that it definitely was a good buy for early stakeholders. I am not sure if it is a good buy now. I do believe it is worth watching and learning about, and making one’s own informed decision about. Considering the potential XEM and its backbone has to be adopted and useful for many different types of entities, it is probably grossly undervalued at this point, but there are also a lot of unknowns, for example, if the open source technology is copied and improved by a team of people who turn out to be better marketers. It’s definitely a coin to watch.

Paycoin (XPY) This is also another coin to watch. It is not one I am trying to accumulate. I hold a stake in it because I was one of the Zen Cloud customers who was compensated with a MicroPrime address. The MicroPrime churns out a few Paycoins every so often. There are also two generous faucets, FreeXPY and XPYBits, so accumulating Paycoin isn’t difficult. I find it interesting largely because of its controversial beginnings and subsequent recovery. Paycoin started off as a scam coin to cover up a mining hardware scam known as GAW Miners/Zen Cloud. The current Paycoin development team essentially took over the coin from its founder Josh Garza, and once Garza was out of the picture the new team set out to clean up the mess and make right with the Zen Cloud customers as much as possible. Although it’s always great to compensate customers when something goes wrong no one expects to be compensated in the cryptosphere when the “something goes wrong” happens to be a fraud to begin with. You expect to eat your losses and move on. So it was clearly going above and beyond the call of duty for the current Paycoin developers to award each former Zen Cloud customer with a MicroPrime address which would mint coins at a comparable rate to what the Hash Stakers were touted to produce. Paycoin has since enjoyed a nice price recovery as well.

Paycoin has some infrastructure, mostly through the website xpy.io, which potential investors can check out. It is also supported on Payservices, lending it some third party support. MicroPrime owners have an incentive to at least keep their MicroPrime addresses stocked. The wallet itself also mints at a lower rate than the MicroPrime addresses, creating an incentive for people to hold onto Paycoins in their QT wallets. I am not currently aware of anything systematic to provide Paycoin buy support, but I believe there may be some kind of dividend paying assets starting off on xpy.io, which would fulfill that requirement. It is another altcoin to watch and learn more about.

Butterfly Bits (BFB) Butterfly Bits is the coin associated with the extensive PayServices platform. PayServices seeks to enable users to bring together all different kinds of currencies, including cryptos, in one place and then be able to spend those currencies anywhere you can spend a credit or debit card. PayServices even issues a debit card called the Butterfly card. Those who buy Butterfly cards will get some Butterfly Bits added to their account as a reward.

Butterfly Bits currently has a supply of 100 million coins, with 1440 per day being added by scrypt mining. PayServices believes the value of one BFB to be one Dollar and awards them accordingly. This value is based on an earlier estimate of the total company valuation of one hundred million Dollars. Butterfly Bits has not been listed on any open markets yet, so we won’t know the market rate until that happens. Many times a coin’s value will drop for a while once it gets listed before going back up to something closer to its true value, so some possibly amazing buying opportunities may lie ahead. This is a coin I am planning to watch closely with the intent to buy in when the time seems right.

This list of altcoins I think are worth at least taking a look at represents my favorites at this time. It is by no means a complete list of all the good altcoins out there, just the ones I know about. If you believe I have missed any, please let me know by leaving a comment.

 

 

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