Crypto scams are not new. There have been a lot of them in the past, and there will be many in the future if we are not careful.
Having said that, a significant number of people consider the entire cryptocurrency industry a scam.
But having spent almost two and a half years in this industry, I would beg to differ.
Yet, I would not refrain from agreeing with the fact that many projects in the cryptoshphere intend to scam the investors.
And to find out such scams, one should have an eagle’s eye to discern their reality.
But we understand having that mindset is not easy and that’s why we at CoinSutra do that part for you.
In line with that, our discussion point for this article is Bytecoin.
For those of you who don’t know what it is, here is a simple overview.
What Is Bytecoin?
Bytecoin (BCN) is an old generational cryptocurrency launched in 2012.
It is a privacy and anonymity-focused decentralized cryptocurrency implemented upon the CryptoNote protocol.
CryptoNote is an application layer open-source protocol that powers several decentralized, privacy-oriented digital currencies.
But, if you ask people about Bytecoin, they would probably say that it is a privacy-centric fork of Bitcoin based on the SHA-256 proof of work.
They couldn’t be more wrong. Both of them are fundamentally different.
Bytecoin is made up from scratch using CryptoNote. It was launched in July 2012 to fill in the gaps Bitcoin had.
Also, Bytecoin mining is quite easy, and they can be mined with GPUs. It doesn’t require ASICs miners like Bitcoin.
Bytecoin Minning Mess
Bytecoin specifications are drastically different from Bitcoin.
Bytecoin has a humongous supply of 184.47 billion BCN coins and a block time of 120 seconds in contrast to Bitcoin’s 10 minutes.
But unlike Bitcoin, Bytecoin has a very shady mining history.
It is alleged that Bytecoin had done 82% pre-mining of BCN coins before the public launch.
These stats come from Monero’s Lead developer, Riccardo Spagni, better known as FluffyPony:
Well, not much of a rumour – the reality is that 82% of the coins were already mined before its “public” release. Even if the premined coins weren’t done so maliciously, it still means 82% of the coins in the hands of persons unknown and invisible. It basically centralizes a decentralized currency.
And he further added:
Why listen to Spagni, you may argue.
Well, that’s another interesting story. Monero itself is a fork of Bytecoin!
The next question would be why trust a coin like Monero which is forked out of such a heavily pre-mined coin, i.e. Bytecoin.
Well, the reason is the same.
Monero (formerly known as Bitmonero, which forked out of BCN) wasn’t comfortable with this shady mining and that’s why Riccardo Spagni and other like-minded people drifted away to create Monero.
Monero is also an application of CryptoNote protocol and so far is the most innovative application of it. Here is a full Monero story: Monero Cryptocurrency: Everything You Need To Know.
I think these are enough reasons to have pragmatic eyes on Bytecoin.
However, there is more to it.
Recent Pump & Dump With Binance
Recently in May 2018, Binance tweeted:
Bytecoin (BCN) Deposit Issue
Due to Bytecoin (BCN) network issues, deposits and withdrawals are experiencing severe delays. The Bytecoin project team is working to resolve the issue. Please be cautious of high price volatility and trade with caution.https://t.co/ZaUk3p2Wln pic.twitter.com/dhbAfd8naA
— Binance (@binance) May 8, 2018
Upon further digging we found out that Bytecoin’s so-called team had also furnished this statement:
The network is experiencing an unusually high load. Transactions can be delayed, node synchronization can lag far behind.
The team is working hard to solve these issues.
It's strongly recommended to avoid any transferring of BCN until the situation is resolved.#BCN #Bytecoin
— Bytecoin BCN (@Bytecoin_BCN) May 8, 2018
And you would know from these tweets that something actually went wrong.
On 8th May 2018, Bytecoin was listed on world’s biggest crypto exchange, i.e. Binance, and in a matter of 24 hours, its price rocketed more than 30 times. The trading volume also reached its all-time high of 600 million dollars.
The spike resulted in suspended deposits and withdrawals on major exchanges such as Binance and Poloniex, leaving investors with bags of BCN which they couldn’t sell.
It was almost days before the prices returned back to normalcy but by then the investors who tried to catch the BCN train had been Rekt. And this is evident from these messages from BCN holders.
Planned manipulations of markets raised speculations against Bytecoin and Binance. Bytecoin’s development team then responded:
Dear Community. We'd like to clarify situation with the Binance/ #Bytecoin price. We don’t have any influence on one or the other’s price. We are responsible for only our software and all we are doing now is trying to fix everything ASAP, please excuse us for any inconvenience.
— Bytecoin BCN (@Bytecoin_BCN) May 9, 2018
Infinite Inflation Bug
Later on 18th May 2018, CryptoNote-based coins had a problem – “infinite inflation bug”. Infinite inflation bug is “a critical bug that affects all CryptoNote-based cryptocurrencies, and allows for the creation of an unlimited number of coins in a way that is undetectable to an observer unless they know about the fatal flaw and can search for it”.
Monero was the first CryptoNote coin to fix this issue. It also suggested that Bytecoin hadn’t fixed this issue after repeated reminders.
If you're trading Bytecoin you're about to get bitten, the infinite inflation bug still hasn't been patched by them.https://t.co/VtuRpEMclk
— Riccardo Spagni (@fluffypony) May 18, 2017
The next day of this heads-up gave birth to 1 million new BCNs with claims that the BCN devs themselves indulged in this activity instead of fixing it.
Within hours of privately disclosing to CryptoNote currencies, 693 billion BCN ($1 mil+) was artificially created. pic.twitter.com/O8MOTKGfxi
— Riccardo Spagni (@fluffypony) May 19, 2017
Bytecoin Team Scandal
Bytecoin team is alien.
Upon digging, I could find this bare page of the community which clearly shows they are not interested in revealing their identity.
Also, I highly doubt how many of these listed faces and names are true as I could not find details when I tried to find more information on Jayson (developer).
Plus, I found this on Cryptocompare.com:
The comments and findings are highly questionable.
Moreover, Bytecoin team’s responses have not been there at all when they have been alleged of such things and this kind of behavior validates their intentions.
That’s why I think Bytecois is both – a highly shady project and is run by a highly incompetent team of developers.
Lastly, when you have so many good projects in the cryptosphere to invest in, why waste your time in a coin you are not even sure of!
Now it’s time to hear from you: What do think about Bytecoin’s future? Are you a bagHODLer of Bytecoin or are you planning to be one? Do let me know your thoughts/comments in the comments section below.
And stay tuned to CoinSutra for more cryptocurrency discussions!
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An award-winning blogger with a track record of 10+ years. An international speaker and author who loves blockchain and crypto world.
After discovering about decentralized finance and with his background of Information technology, he made his mission to help others learn and get started with it via CoinSutra.
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