Report from the Mineshaft – Applecoin

In basements, garages, and spare rooms across North America and the world, legions of power-hungry GPU miners ply their hashcraft. Cooling fans whirring and power meters spinning, they await a day of record profits, the more dedicated among them actively seeking out the fringe altcoins that will make them a mint before the general public (and the buyers) know what hit them. Where do these altcoins come from; what drives these markets? Are people really funneling massive amounts of fungible and valuable BTC into these untamed and unproven scrypt coins? In this cryptofinancial wild-west the answer is decidedly yes.

Let's be glad we aren't these poor bastards from the old days.

A couple of fringe alts have graced my admittedly short-range radar as of late: the first being Applecoin (APC). This coin uses the scrypt-jane algorithm, which in a strict sense, makes it slightly incompatible with the regular host of other scrypt coins- that is, you can’t just add a new pool to an existing cgminer configuration. (The official GPU miner release for the coin is an offshoot of YBCminer, which itself appears to be a nearly direct lift from cgminer- the same display and hotkeys, albeit with a couple under-the-hood modfications.) APC also has a mechanism for actually squelching the effectiveness of GPU mining over time, thereby shifting power back to the CPU miners, which may be a first as far as I have been aware. Okay, so it has a feature, but is that really all that groundbreaking? Enough to set it apart from the crowd?

The price- what drives these prices? Early miners of APC enjoyed fairly ridiculous returns- 1,000 APC being worth $280 or so was one example I saw, and that may have actually been a late return, as the the extreme profit ratio is normally achieved earliest on by the first lowest-difficulty power miners. By the time my admittedly slower mining reflexes had become aware of the coin, it was still more profitable than any “regularly-listed” (ie, or scrypt coin by a moderate margin.

The China Factor

It would seem it’s the Chinese, those crazy Chinese. With the only early exchanges (beyond manual user-to-user forum trading) for APC being Chinese- BTC38, notably- it can be reasonably assumed that the demand was also mainly from Chinese investors and speculators. By the time I entered the market (thank Jeebus for Chrome’s on-the-fly translation engine) one APC was trading for about 1.4 CNY, which is about 23 cents in the USD, which was down about half from initial trading. As of this writing, the trade value is down to .9 CNY per APC.


Still, it remains confusing as to exactly why the Chinese have been so hot on this Applecoin. As with all the other short or long term explosions in altcoin price, I have taken a stance of “okay, I will let you give me your money”. Seriously, I have not exactly been able to locate rhyme or reason within these markets. Is it the name? Are golden apples a mysterious and little-known Chinese symbol of financial prosperity? Is it the logo? Did a trader accidentally fat-finger an extra digit on his buy price when trading began, and the market merely followed his lead? Is there something I’m missing and APC is really the next big thing, poised to take over and dominate BTC itself? Is there a god?

The overall proposition of determining value within the Altcoin markets is difficult at best, and Applecoin represents yet another mining-profit-price-explosion in a long string of what some would consider mere “pump and dumps”. Let’s name a few for reference: ChinaCoin (CNC), Feathercoin (FTC), Yacoin (YAK), the list goes on. If APC follows the usual trend, it will continue to drop in value until the market has reached whatever form of saturation it is willing to hold, while the miners and the mining difficulty will stick around only long enough to extract whatever profit they can from the coin before moving on to greener pastures.

I will say there is some delight in holding, even only transitionally, some amount of a currency that can only be used in any real way in mainland China- the Yuan (BTC38 trade pairs are all with the CNY). As an American, holding my bit of leftover CNY trade dust somehow tickles my fancy in the way that this has truly become a borderless global phenomenon, smashing through the usual barriers of trade and finance. At what other time in history could I have ended up with .003276 CNY? That's just cool.

Perhaps we will all be surprised – later, if not sooner. I know I certainly was when I saw that the all but dead and buried ChinaCoin was at least partially resurrected, appearing in the top 10 of mining profitability again recently, with a rising difficulty, price, and hashrate. If CNC can regain market cap after dying a slow and protracted death, then perhaps just about anything is possible. Just how many BTC flew into CNC during it's launch? The willingness of the Chinese (or anyone) to move money into these markets as a store of future value at all shows just how weak these fiat systems have become. Just about any cryptocurrency could be a better bet than any government-backed “money” in the long term. When even “Junkcoin” is gaining value, you know the old money system is breathing it’s last. Hell, even some ‘joke’ coins (BBQCoin, anyone?) have remained in the profitability top ten for days if not weeks at a time.

Altcoins to the moon- sure, why not? Conventional financial sense be damned, it’s a strange new world we live in. But good luck locating a video card!

Further reports from the Mineshaft

This is the first in a series of reports from the world of Cryptocurrency mining, including ASIC, GPU, FPGA, and Cloud mining. Any coin or development in this realm will be fair game, whether SHA256, Scrypt, Scrypt-Jane, or some algo I haven't even heard of yet. Stay tuned, it's an exciting time to be cracking blocks!

Second report: DOGEing Bullets (during a Chinese Fire Drill)

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