Deer Steemit community,
At this current time, there is a privacy coin that has made some serious gains and I would like to save everyone some time by summarizing my findings for you here if you are new to Bytecoin.
The TLDR is to avoid BCN as a long term investment and sell at the current high if you own BCN.
Disclosure: I still own a small amount of BCN but sold most to diversify to other privacy coins. Other than owning a small amount of the top 10 privacy coins, I have no other ties to any of the coins and am not an active member of any privacy coin community.
In brief, BCN is one of the oldest privacy coins (since 2012) and the first fork of Cryptonote. Monero was a fork of Bytecoin. BCN has a functional (albeit not polished) wallet and mining system.
Bytecoin has been surrounded by controversy (see links and references at bottom of post) including premining and not disclosing the double spend bug. Much of the flame wars in the past were attributed to the battle for market prominence in the privacy coin world back when no one knew which coin the market would mass adopt. Many of the old threads appear to be from shills on one side of the debate-- specifically, Monero vs Bytecoin.
So a list of basic questions to ask yourself before investing in an altcoin*
How is the TECH/Whitepaper?
They don't have one despite being one of the earliest forked coins of cryptonote. They still link to the cryptonote paper. Also, there is some evidence they forged the time signature on their pdf (See references).How is the Dev Team?
Anonymous. All pseudonyms. This is not necessarily a bad thing given that privacy and anonymity was their founding principle. Their github is inactive.Do they have a funding scheme? What kind? (community donation, venture capital, institutional investment/buyouts, ICO etc.)
No.How are they organized?
Unknown. No governance system in place AFAIKHow is their track record?
Their first mover advantage has diminished. They have done decent PR to remove the smear campaign as a "scam" coin. A lot of angry internet threads appear to be from impatient individuals who did not have their wallets sync'd.Do they have any institutional or prolific backing?
No institutional backing.Does it solve a goddamn problem or alleviate friction anywhere?
A few years ago yes, but now there are many more privacy coins to choose from. There is no proprietary IP or tech for Bytecoin.Does it have competition and where does it stand within that?
They are losing the battle of market dominance in the privacy coin space (although they had a nice rally yesterday).How close to ready is it?
The wallets work, but are not ready for prime time. Transactions are fast at the moment, but it has never been stress tested as there are relatively few transactions.Any plans to create, stimulate, and maintain adoption?
Yes. But everyone has a "roadmap". I find these to be irrelevant.Does it have a Marketing and media presence? A good one?
Jenny. One person. Her name is Jenny. She is the figurative face of Bytecoin. People wish there were more transparency, and professionalism. A funny example is that she replies to the community using a gmail account.How is its Mainstream visibility?
None. But that is not a bad thing for a privacy coin.How about Accesibility and Liquidity?
Can be mined. Thin order books mainly on Poloniex and HitBTC.Growth potential based on current price and supply?
Not great. The supply for this coin is enormous. But then again, Verge coin has a bigger market cap.Can it survive or at least get around the regulatory hammer?!
Survive, yes. It has survived despite many people thinking this was a scam.
So why did BCN double in price yesterday? Especially given there was no recent news, announcement, or tech? Most the upwards activity was on Poloniex as HitBTC had some server issues yesterday. And the 2 "pennystocks" of the exchange, Dodge and BCN, had 4k and 3k BTC of volume in the last 24 hours, respectively. 3k of trading volume for BCN is pretty significant given how thin the order book typically is. For example, right now there are only 250 BTC worth of buy orders on Poloniex. It is fairly easy for a large investor to manipulate prices . Also, there is a lot of "dumb money" in the game right now and the market psychology of watching a pennystock 100x to 1$ is an irresistible temptation.
In summary, privacy coins have come along way and it is nice to see BCN get a run up. There are few reasons to hold BCN long term however and the market capitalization is overextended due to the publishing of >100 billion coins, many of which are in the hands of 'early adopters'. There are some smaller-cap promising privacy coins that are better picks to moon in my opinion. I don't know if the zk-snarks coins (eg. ZCash, ZClassic) will overtake the Cryptonote coins, but time will tell.
Links to do your own research:
https://bytecointalk.org/index.php
https://bitcointalk.org/index.php?topic=740112.0
https://monero.stackexchange.com/questions/2930/which-entities-are-related-to-bytecoin-and-minergate
a rare interview with Jenny? if this is really her...
*Special acknowledgements to the reddit thread that gave the list of 15 altcoin questions. I copied them to a text file but can no longer find the original attribution.