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Drama and long term investments in Cryptoland

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

The cryptoworld is never short of ups and downs and drama, and my little corner is no exception. Here are just a few highlights from the past week, and mostly today.

CryptoStocks issues

I am just about fed up with CryptoStocks. The operators seem honest enough and have generally been helpful when I've needed support. However I have found out the hard way that many of the projects listed on the site more often than not go nowhere, taking with them all the Bitcoins which were invested. Some of the projects turn out to be outright scams. I happened to catch a snippet on the Bitcoin Forum about one of CryptoStock's projects in which one user was saying that the project website went down for lack of payment which most likely meant the project was not going to pay a dividend anytime soon.

I'm pretty sure a scrypt mining project I invested some spare change in went that way. Its website is down and it hasn't paid a dividend since May 20. Something tells me it never will. CryptoStocks has such a high Bitcoin withdrawal fee that it's easier to spend small amounts of Bitcoin sitting in the account on some cheap stock. That's what I did with CryptoPower Mining. The shares were selling at the lowest possible price so I managed to buy a lot of them. They paid out good dividends for a while and I kept reinvesting the dividends. Now it's bye bye spare change. I'd also added a couple hundredth Bitcoins for good measure. Bye bye to those as well.

I had another asset on CryptoStocks which for a while paid out really nice dividends, but that stock quit paying dividends a long time ago and the value has dropped to near zero. I should have sold out much sooner but I was holding out hope for at least breaking even.

I'm basically done with Bitcoin stocks on CryptoStocks. I haven't lost a ton of money there as I never had very much to spend in the first place. But I've lost enough to be very, very annoyed.

The one reason I keep using CryptoStocks is because it is the only platform which allows for projects to be listed in Devcoins. I haven't had too much luck with Devcoin denominated stocks yet, but I'm optimistic about VirtualMining, which is basically the only extant DVC-denominated project besides the Devcoin Bounty stock. The other DVC securities are still listed but they both encountered various problems and do not pay dividends any longer. Their value has also plummeted. Fortunately Devcoins are easy to come by because I don't think I'll see the ones I invested in the defunct projects again. But VirtualMining is hanging in there so far, though I'd like to see its value increase.

Sometime yesterday I sent over 400,000 DVC to my CryptoStocks address and nearly twenty-four hours later I have yet to see it even show up. I was hoping to pick up a bunch more cheap VirtualMining shares before the scheduled June 5 dividend payment. Now the funds are in limbo.

I have had delayed DVC transactions before, where I'd send some DVC to an address and it would take hours, sometimes days, for the transaction to finally confirm and the funds to become available. It seems occasionally the transaction gets hung up and the DVC block explorer indicates it as a not yet redeemed transaction which for whatever reason needs extra verification. In my particular case it seems a duplicate hash is causing the hangup.

This coincides with some chatter about a CryptoStock wallet issue, which I assumed applied to Bitcoin. A couple of the projects which had scheduled dividend payments have posted announcements that they are postponing paying them until CryptoStocks fixes its wallet. Some have even gone so far as to say they are unable to access their own funds because of this issue. So even though I have not seen anything indicating that Devcoin wallets are also affected, it's simply not too reassuring to have over 400,000 DVC in limbo on my CryptoStocks site. I'm starting to think this may be the last time I send DVC over there. I intend to hang onto my VirtualMining shares and other than reinvesting dividends it might be unwise to buy any more shares. I don't suspect VirtualMining of having problems, but I'm growing less confident in CryptoStocks, where it is listed.

If it's merely some hangup with the Devcoin network, that has happened before and I have always gotten my funds… eventually.

Scrypt mining power is a depreciating asset

Fortunately the scam project on CryptoStocks is not my only investment in Scrypt mining. I also have an account on Scrypt.cc and have been slowly accumulating KHs, which is the primary unit of hashing power for Scrypt mining. One thing I am doing differently than what I did with my CEX account is I'm only investing a few hundredth BTC at a time, a little bit each week, so that I can buy KHs at different prices. Just like with Bitcoin mining, Scrypt hashing power is turning out to be a rapidly depreciating asset. You buy the hashing power and the price drops further within hours. I bought my first KHs at around 90,000 sat and it's now selling for less than 40,000 sat. It also appears that the mining difficulty is increasing and I'm getting less out of those KHs than I did when I first bought them. The estimated break even date is still less than 200 days. At this point I'm reinvesting all the rewards into more power, but at some point I hope to accumulate enough to produce some significant rewards. Time will tell whether or not this is going to happen. Since I am not selling any DVC at this time I am using proceeds from my CEX mining account to buy my Scrypt mining power. And just to make it extra fun for me this time around, my small weekly BTC deposit took forever to show up, which gave me some anxiety in light of my missing Devcoins on CryptoStocks.

Devcoins are still a great buy

I'm actually still buying DVC as well as hanging on to the DVC I've been earning from the Devtome. Today I bought some (using a combination of CEX mining rewards and proceeds from my last two BTCJam payments) for just 13 sat apiece. I didn't think the price of DVC could drop any lower when I bought some at 17 sat. Devcoin may have just hit a new low, and people are selling at 12 sat. I will make out quite well if the price of Devcoin recovers. I do believe it will as I've seen that happen before. It feels weird buying them now, though, when the market seems to indicate that everyone else has given up on them. This is the time to buy, despite what the market seems to indicate. If I wait until the recovery starts I could get caught up buying on the upside (or downside) of a pump. This price bottom and currently boring market provide the best buying opportunity.

Investing Bitcoin in real estate

I also put some more Bitcoin into RENT, the real estate security listed on Havelock Investments. The price of the shares dropped so I decided to buy ten more. I'm thinking more and more about just putting a few hundredths of a Bitcoin into RENT either weekly or monthly. Of all the securities I've owned, RENT has by far had the most communicative owners. They clearly love real estate and are excited about their investments. Could RENT actually hold up enough to be a Bitcoin-denominated nest egg? If so, then I would love to own enough to turn the monthly dividends into significant earnings. And one of these days I'd really like to buy back the ASIC MINER shares that I sold. It's on my list of things to do once I can sell my Devcoins again.

DGEX

Although I'm not too happy with the current share price (it's dropped substantially since I bought), I am loving the weekly dividends from the DGEX shares I hold. I get paid in both BTC and NXT. The price of NXT appears to be rallying as well. I still don't have a working wallet, so some of my NXT are inaccessible to me at the moment. I'm starting to use my Cryptsy NXT address more because that one doesn't have the same issues–or at least it's someone else's problem. I'm also having an issue with withdrawing BTC from my DGEX site, so unfortunately the only thing I can do with my BTC dividends is buy NXT. The price is rather high at the moment so that's not such a good idea. I'm waiting for some technical support on that one. Other than being annoyed at not being able to spend those earnings, I'm not too worried about it.

Despite current wallet drama, D-Notes is looking good as a long term investment

The D-notes faucet I'd recently discovered has been dry more often than not. Today when I checked it after a rather long hiatus, I was delighted to find it flowing again. I happily hit it up enough to get my 50 NOTE payout, only to find that my AllCoin NOTE wallet is currently frozen for maintenance. So at this point I'm not sure if I will see those funds once the wallet maintenance is complete, or if I just filled out a bunch of Captchas for nothing. Assuming I do get the funds, I'm also trying to decide if I should do a bit of day trading with them or if I should just hold onto them.

I had put a bit more than one hundredth of a Bitcoin into buying D-Notes. Then I started to notice a pattern in the price, so I sold my NOTE at a higher price than I paid for them, and waited for the price to drop back down so I could buy some more. The price drop never happened and instead the price soared to way higher than my highest sell price. Meanwhile the price of Devcoin kept getting cheaper and cheaper, until I finally just used the proceeds from selling D-Notes to buy more Devcoins. I remember thinking: “This is what I get for trying to be a day trader!” Perhaps holding onto my D-Notes is a wiser strategy.

But D-Notes strike me as an alt-coin worth investing in. According to this press release, Alan Yong, the founder of D-Notes has been a highly successful entrepreneur before and understands what it takes to make a venture successful. He views getting into the cryptocoin business as a similar opportunity to getting into the PC manufacturing business in the late 80s. Lots of people get into the business but in the end there will be just a few still standing. He intends to have D-Notes among them. His team has a vision and a plan which includes launching interesting projects such as the CryptoMoms forum.

I've hung out some on the CryptoMoms forum and one of the users made the recommendation that people give up one of their specialty coffee drinks every week and use that money to buy D-Notes instead. My original intention with spending around 0.01 BTC on D-Notes last month was to essentially do the same (except since I don't drink specialty coffees I'd have to come up with the equivalent amount some other way–mining). But then I got sidetracked with my attempts to accumulate D-Notes not by buying more but by day trading the ones I had. This time I think I will just buy and hold, and supplement that by occasionally hitting up the faucet. At least I'll get going once my D-Note wallet gets unfrozen.

It's tough, but...

Right now it's tough for me to be involved in Cryptocurrencies because of the incredibly low price of Devcoin. I'm not able to take any profits. I mean, I could take profits, but I'd barely scrape together one Bitcoin at this point. The Bitcoin price isn't so bad right now, so that scraped together Bitcoin would yield me over six hundred dollars–enough to pay for my soon due auto insurance policy. But once I scraped together that Bitcoin, I'd be completely out of Devcoins. I think I can do better by waiting, and instead, using my Bitcoins to buy more Devcoins. Waiting is tough. Not taking profits when there are bills to pay is tough.

However, the great news is that I think I am starting to discover some serious possibilities for long term investments with Bitcoins–investments which I believe will still be around next year. So far, I've come up with four areas where I want to regularly invest a small amount of Bitcoin each week. They are Devcoins (buy as many Devcoins as I can while the price is this low), RENT, Scrypt mining, and D-notes. Scrypt mining is probably my least favorite option because I'm pretty sure it will go the way of Bitcoin mining and I may not make back my initial investment. Still, most of the Bitcoin to fund these options is coming from my position on CEX. That small amount of mining reward my account kicks off each week (despite the fact that it is noticeably decreasing) has actually provided a lot of opportunities for me to try different things with small amounts of Bitcoin. I'm hoping to build up my Scrypt mining account to be able to do the same as I think it will last longer as a small stream of income.

The cryptoworld definitely has its ups and downs, but after writing this out I am more convinced than when I started that things are going in a good direction for me.

Devtome Writers


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