Ana Sullivan

82% of Bytecoin Premined!

by Ana Sullivan February 2, 2018

Bytecoin (BCN) is another privacy-oriented cryptocurrency which, aside from privacy, focuses also on untraceable payments. Even though their names are similar, Bytecoin is not to be confused with Bitcoin. It is a completely independent currency, developed separately from Bitcoin and its forks. In fact, Bytecoin is based on the CryptoNote technology and it uses its ring signatures to provide anonymous transactions. Yet, the two currencies share some of the same use-cases, but, unsurprisingly, Bytecoin aims to do better where Bitcoins fall short.

Created in July 2012, Bytecoin is one of the earliest created cryptocurrencies. It is the first one to be based on CryptoNote. The idea of the project, as we said, is presented as protection of privacy, allowing investment growth, minimizing the risk for business, and anonymity in transactions. The current price of 1 BTC is $0.005375 USD, according to coinmarketcap.com. Out of 184,470,000,000 BCN, 183,700,025,334 BCN are currently in circulation which gives Bytecoin a market cap of almost $1 billion USD ($987,295,786 USD to be exact).

Even though Bytecoin is the first and the original anonymous cryptocurrency, when compared to Monero, a fork of Bytecoin, it is relatively unknown. Before Moreno was created, Bytecoin tool a lot of criticism due to its premine scheme and that`s why the Monero development team did not collaborate with the Bytecoin team. Monero`s lead developer Riccardo Spagni even stated:

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.

82% is a huge number of coins to be premined and gives the developers and stakeholders the opportunity to influence the price of BTC solely with their holdings. What is more, this opens the possibility of a “pump and dump”, meaning that the premined Bytecoins can be dumped on the market which, in turn, would cause the price to drop significantly.

Even if you take the fact that Monero is clearly leading the innovation race, I would think it dangerous to touch a coin where 82% of it is held by unknown actors who were not publicly observed during the period where they supposedly mined the coin. Having a shady history does not set a good precedent.”  –Spagni also says.

Another concerning fact about Bytecoin is that is has been on the market for so long and yet, very little is known about its developers. Even in the official website of the currency, you can only find pictures and first names with no detailed information . Also, when you enter one of the names in a search engine, nothing significant appears. All over the forums discussing Bytecoin, this is described as incredibly “shady” and “untrustworthy”. A project which has been out for almost 6 years now does not show its own team. How are people supposed to have trust in Bytecoin when nobody knows who the people working on it are and are they credible? That’s why Bytecoin doesn’t strike most users like legit. There are too many unanswered questions and the premining allegations are just the cherry on the top.

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