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A rough crypto week

Author's note: This article is part of an ongoing blog about my adventures in the world of alternate currencies.

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 dusk 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.

Devtome Writers

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