One Enthusiast’s Two Satoshis

To start, I love crypto-currencies. Since the very first article I found that mentioned the word “bitcoin” I was intrigued yes, but the intrigue came over me like an insatiable thirst for information that I proudly still live with today. When I found out you could mine the stuff, well, puppy love slapped me in the face. What I really love though, the thing that makes Bitcoin, Devcoin, and all the other token systems out there so special for me is simply the community. I never would have dreamed that I would be introduced to so many brilliant, free thinking, and like-minded individuals because of some interesting pieces of computer code.

Yet, I can’t help but step back and ask a few questions. In light of some of the recent events that have been getting major attention in the Bitcoin space, I can’t seem to shake the feeling that the very thing keeping most of us around is the same thing that could prove to be it’s major downfall, the community. It’s astonishing that so many individually brilliant minds allow for tragedies to occur time and again, warning after warning.

Market Manipulation

To be honest, I genuinely can’t tell what the community (or at least the troll boxes in this case) think about the absurd amount of market manipulation occurring. I can only imagine the number of bit-per-click thirteen year olds that have been subject to losing the measly Bitcoin micro payments that took hours of clicking simply because they finally gave in to the seemingly helpful words of a “whale”.

I’d imagine many of us even heard the term “pump and dump” for the very first time through crypto-currencies as well, and this is exactly what I’m talking about. I like to imagine Bitcoin as a novel idea, inherently good in it’s characteristics, and with only the best intentions in mind. That being said, seeing good, yet unfortunately unlucky investors who lose remarkable amounts of money due to market manipulation is admittedly sad and in no way a generally good thing for the masses. If you’re turned off from this article now because of the spotlight don’t worry, I’m included in these unlucky (or just plain ignorant in my case) investors who have lost hard earned money.

Exchange “Hacks”

i.imgur.com_rojslm8.jpg In an effort not to lose the reader from mentioning this yet again, I’ll merely mention it: MtGox. This was genuinely catastrophic to Bitcoin and subsequently the rest of the alt-coins. Though, I don’t necessarily blame anyone for negligence here considering this was one of the more noteworthy first times. However since we have seen ridiculous mistakes leading to the loss of many more funds from the likes of Poloniex, Vircurex, and the most recent and heart wrenching for me personally, Coinex.

Why do we allow the same thing to happen over and over?

The general principles that many of the exchanges today function on do not mesh well with that of the principles governing Bitcoin and the Blockchain in my opinion. It seems that many investors and traders don’t necessarily see the risk in involving third parties in to hold and store assets.

Yet over time it’s clear to see there are far too many bad apples. Perhaps relative to the amount of exchanges that have popped up there haven’t been a significant number of “inside-job” looking thefts. However with Bitcoin, we are still in the infancy of digital currency, to allow anyone to get away with this kind of malicious activity after the Mt. Gox incident makes it seem like the Bitcoin community at large prefers to turn a blind eye.

One example that stands out is the incident were a significant amount of digital currency was not only being mined for the site, but at the time was still accepting deposits and claiming to be in a stage of development. Again hacking was blamed when went down for “maintenance mode” as stated on the Coinex twitter after the first alleged hack. However no word has come out as to what is going on with the funds and the Coinex site is still not allowing for any withdrawals or reflected deposits. Meanwhile many people continued to post on the Coinex forum saying they would gladly give up their coins in order to see Coinex back up and running.

Should we continue to let these types of activities go on, while not just assuming the worst at the first signs of malicious intent?

Mining Hardware Pre-Orders

Trouble with refunds, back orders, and many complaints for everything in between. The major players in the ASIC space are not only dominating the Digital Mining space, but now offer digital mining at a premium or partner with digital mining services to provide mining hardware at scale.

Why do we allow for monopolistic activity such as this to occur? The Bitcoin network is intriguing and secure because of it’s distributed nature. Looking at mining as a business however, the sooner one was to get in on the digital mining trend, the more they had to gain. Presumably as time has gone on those individuals could take the profits and run or reinvest to get the fastest pre-orders whereas other investors might have needed to raise capital to fund a mining operation.

Does this not create instability and centralization of the network? Not only are the mining hardware producers getting away with blatant lies on delivery dates, but they are doing it consistently while jeopardizing the very thing that sustains it, the Bitcoin network.

Though I don’t have very many opinions about how to fix this to draw from, I can see that this looks like a very clear problem that many of us as a whole in the Bitcoin community are ignoring.

Crap Coins

Creating a new digital currency is no easy feat. The developers behind Dogecoin who are very familiar with code and have created arguably one of the most popular digital currencies took a week to get what was meant to be a joke coin up and running.

However there are developers who have streamlined the process and made creating your own coin accessible for a small fee. In turn we see hundreds of alt-coins that will probably never see the light of day in mainstream media. Additionally these coins are going to make a bad name for the digital currency community as a whole. Imagine explaining to a financial services banker the power of Dogecoin, if you’re like me, you’d imagine it probably couldn’t be done without the banker provided a few giggles.

Now, I do like Dogecoin and I use it on a regular basis, however I don’t see how making a Kittehcoin, Catcoin, Globalcoin, and so on and so forth are helping Digital Currencies as a whole. Even some of the most promising digital currencies like NXT were abandoned by their developers, and in the case of NXT he comes right out to claim that NXT is not the next generation digital currency. Not a good sign for NXT investors indeed.

Final Thoughts

I understand this article is a lot of complaining and venting, though I think I have said a lot of things that need to be said more. Questions that need to be asked and ideas that need to be explored. I am passionate about Bitcoin, Devcoin and Digital Currencies in general because of their distributed nature and the ability to make peer to peer transactions over the internet possible without a middle man. That being said, I can imagine that many of the people using Bitcoin today are early adopters who think just like I do who might not have spoken up yet about the injustices they see happening.

I understand that we are a positive bunch, but when the bad apples make Bitcoin and Digital Currencies as a whole get a bad wrap, I can’t help but speak up.

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