January 2015 Review: What's Bad, Worse, and What Didn't Completely Suck - www.dinbits.com

Welcome to The Monthly Article

Each month we'll be covering the wins, the losses, the good, and the bad, of the Blockchain, Bitcoin, and Cryptocurrency world.

With every small step forward, there's a line of critics, corporations, politicians, governments, financial institutions, and just good old fashion haters, ready, willing, and able, to do anything possible to push it two steps back. True of many new things, especially things that could change the world as we know it, the fear of the unknown, misinterpretation, misunderstanding, and just plain ignorance, often tends to persuade certain individuals in a negative direction while formulating an opinion. Mistruths are misconceived as fact and facts are shrugged off as fallacies, fueled, in part, by the very initiative itself, in the way of overexposure, exaggerations of accomplishment, and illusions of greater stability, than actually exists.

I presume it’s always been that way with everything. Some people, still, do not even know how to turn on a computer, never carry a cellphone, and have no idea what the internet is. For these folks, landlines, snail mail, and the yellow pages, will continue to serve them, until the day they are no longer able to continue to do so, and have transformed their services into new offerings with different technology, or closed their doors outright.

What's Bad, and What's Worse

We have to remember, that even the good is bad when it comes to technology, even good technology. Remember the first cellular telephone? Even the first iPhone looks clunky these days. Recall the internet in its infancy of animated gifs, and flickering eyesores? How about dial up? Enough said.
New stuff always sucks, it just seems cool because it’s new, but what’s cool today, will suck tomorrow. This is especially true with new technology, and let’s face it, the Blockchain, and Bitcoin, are still in its infancy. So there’s allot of bad to come yet, what’s worse, are the folks who take the bad, and make it worse. The haters, the supporting companies who make poor business decisions, and the criminals who use every angle to perpetrate scams.

What Doesn't Completely Suck

What doesn’t completely suck, are the microscopic strides forward making concrete progression towards a stronger foundation, which in turn, promotes better processes, adoption, products, services, education, and unity.

No matter how you slice the pie, Bitcoin, and its Blockchain technology, have become a multi-billion dollar economy and industry, so like it or not, it’s here with no signs of going anywhere, anytime soon. On that note…

1. Bitstamp 5 Million Dollar Hack

     Bad - This is the one time Bitstamp did something “not as big” as Mt Gox, and it worked out in their favor. Losing only 5 million bucks, compared to the 460 Million dollar implosion, of the now bankrupt, Mt Gox.

     Worse – With the hack making front page news, BitPay, Quoine, and other opportunistic BitCo’s exploited the tragedy, by taking advantage of the press time to put their name in the news. They all sounded about the same “The Bitstamp situation really sucks, but here at [Exploitation, Co.], this would never happen, because we are so perfect, this is why we are so great. Let us count the 92 ways…” Obviously sympathy and ethical marketing, isn’t one of them. 

     What Didn’t Completely Suck – No user funds were lost, and the company was able to, thus far, absorb the entire 5 Million. In addition to this, put in measures to further secure its platform and re-opened in a week, and then shot a tip to Jimmy Fallon.

2. EgoPay 1.1 Million Dollar Hack

     Bad – EgoPay got hacked to the tune of 1.1 Million USD, launching an array of finger pointing, accusations, and internal turmoil.

     Worse – This happened back in December. EgoPay was fully aware of it, yet did nothing but ignore customers, accuse other companies of wrong doing, and completely shutdown all of its services, website, and fired a bunch of employees, including the CEO, who they now claim had something to do with it, while it picked up the puzzle pieces and started trying to figure out what happened.
     What Didn’t Completely Suck – Not much of anything, this sucked all around.

3. Coinbase Exchange Grand Opening

     Bad – In a blatant attempt to win the title of the “first fully regulated US Bitcoin Exchange” over Winklevoss Twins, who less than a week prior, had made an announcement of intent to do the exact same thing, Coinbase rushed it’s exchange platform to the masses, complete with a sexy interface, epic introduction, and 75 Million USD in backing by big hitters such as NYSE and BBVA.

     Worse – As it turns out, less than half the country could even use it. About 58% of the country is blocked from the platform, and California, who can access the platform, is doing so completely unregulated, unlicensed, and quite possibly, illegally. What’s even more perplexing, is that some states, such as Texas, where Coinbase has a green light for the exchange platform, can’t access it. It all adds even more merit to the above hasty decision to “open just to say you opened first”. Which would have been fine, had they not touted it as “fully regulated”, which it is not, and certainly not available for even half of the country.

     What Didn’t Completely Suck – The Coinbase Exchange opened its doors. Although open for a dismal portion of the country, and not regulated, at all, in three of the States in which it is available, it is in fact, open. That is a step forward, and they join just a handful of exchanges, such as Cryptsy, in the United States, who’s exchange offerings for cryptocurrency are nearly non-existent.

4. LocalBitcoins Hacks
     Bad – In an effort to blackmail, extort, defame, and scam various traders on the popular platform, and epidemic of feedback abuse is still ongoing. False feedback, impersonating feedback, extortion, blackmail, and other scams are running rampant throughout the platform, while the Finland based crew scurries to try and get a grasp on the situation. This is another black eye for the troubled platform, as many traders have been forced to slow trading, or stop trading completely while the fire continues to blaze. 
     Worse – To circumvent the issue, and help cut-down on the scam attempts, LBC implemented a new instant chat service, which then itself was hacked by compromising its own staff member accounts. 
     What Didn’t Completely Suck – Several Pro-Traders stepped up to the plate, providing information, and even luring the scammers into traps, thus gaining evidence, and in some cases, legal grounds for SAR filings, to assist in stopping the outbreak. LBC has managed to clean up some of the mess, but the aftermath still has several Pro-Trader accounts damaged, and many wondering if LBC is a safe, viable option for trading at this point.

5. Cointerra Crash and Burn

     Bad – The once promising company out of Austin, TX, ceased it’s cloud mining operations after millions of past due debt reared its ugly head in the form of its Data Center vendor. 

     Worse – The same once promising company, filed Chapter 7 bankruptcy, to liquidate the company’s assets, which about equal its debts, to satisfy debtors.  

     What Didn’t Completely Suck – Nothing, this went from bad to worse, and it’s going to stay there. The company is no more, and that is not going to change.

6. The Winklevoss Twins Announce Gemini

     Bad – It was just an announcement of intention, with little else backing it up, other than a website. Not to say this is really bad, but a release date, or some sort of timeline would have been more appealing. 

     Worse – Just days later, Coinbase did the exact same thing, but opened three days later.

     What Didn’t Completely Suck – Gemini may be doing this the right way, they are waiting to get a full understanding from the State of New York in regards to its Bitlicense before unveiling its platform. After the news of Coinbase’s Exchange opening, Gemini has done little else, but continue to move forward, and this shows some self-confidence and stability. 

7. GAW Miners - PayCoin

     Bad - Gaw Miners released PayCoin, the complicated black-box that was to be the be-all of end-all of the Cryptocurrency planet that was as confusing as blue cheese topped spaghetti and green jello.  The coin that you were going to be able to purchase with a credit card, but couldn't purchase with a credit card, and somehow was to get discounts at Walmart and other marketplaces. 

HashStaker - Gawminers.com

     Worse - Gaw Miners released PayCoin. 

     What Didn't Completely Suck - If you managed to chew through this glass sandwich and get a couple paycoin, GAW released a further confusing blog statement of which stated they would honor $20/coin. Considering the coin is thus far a complete flop, we can only suppose this is a good thing. Two staff members at the dinbits.com staff mananged to acquire some PayCoin, we're not sure what to do with it, but we assume it's a good thing.

8. We'll also mention TNABC 

    The national Bitcoin conference about as useful as a wooden frying pan, took place in Miami, and that didn't completely suck. It's always nice to gather around and talk shop while people try to sell you anything and everything.

There is more than enough room in the United States for several Exchange platforms, as we mentioned in a previous article, Coinbase was far from the first, and not what should be considered as the first “fully regulated” exchange either. They (Coinbase) is only operational less than half of the country, and are operating in three states unregulated.

Montana, and South Carolina, are the two States that have no regulation regarding this type of business. Texas, allows this without a Money Transmitters License. New York is proposing a lesser license specifically for BitCo's.

Two of those require no regulation, however California does, and have come out specifically stating that the Coinbase Exchange is operating unregulated in its State. The Gemini project and the Winklevoss Twins, have a more than possible chance of claiming the actual title of “first fully regulated exchange”.

Americans certainly need avenues beyond shipping currency to overseas exchanges, or dealing with local scams on a foreign website.

What we really need, is for the BitCo’s to start doing things right from the beginning, no matter where they may be based. Making poor business decisions, failing to keep an eye on internal operations, and borrowing more and more money to keep afloat, is going to continue to burst bubbles and give more ammunition to those waiting to point it at this industry. 

There’s a method to growth for longevity, it’s called slow and steady. Everyone wants to be the next Google or Microsoft, but those companies did not happen overnight. Any Bitcoin related business, is a business, like any other, and a business needs to be run as such, regardless of what they are selling, be it potato chips, or chips of the ASIC flavor.

Once things truly get to that point, we’re going to see some amazing things, but unfortunately, it might get worse, before it gets better, after all, they are called growing “pains”. 

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