Is Bytecoin (BCN) A Scam?
Well, being a privacy coin with a largely anonymous development team, Bytecoin is shrouded in secrecy, and because of the nature of cryptocurrencies (and the many controversies the leaders in the space have always been involved with), it can be difficult to (get clarity on allegations) decipher fact from fiction and justified concern from the jealous fear of a combative dev team. But fear not! That’s why Seth and I have composed this impartial list to get you started on your way to DYOR & decide for yourself.
Up front though, we definitely want you to know that PoW communities emphasis the importance of fair launches. Bytecoin was a premine, with 82% (nearly $33.6m) belongs to the unknown founders. That 82% premine is considered excessive since 4-10% premine is considered acceptable, 11-15% is generous, and anything over 20% is absurd
1. Do they make bombastic claims?
Perusing Bytecoin’s website, I see no claims promising high returns for investors or even discussing the potential for returns at all, but bombastic claims don’t end with the promise of returning capital. BCN also claims to be the first truly private and untraceable cryptocurrency. While this might be true, it’s important to note the recent findings from Chainalysis, which conclude that 99.9% of Zcash (ZEC) transactions and 30% of Monero (XMR) transaction are traceable. Although there is no mention of Bytecoin in the report, for those who might be looking to BCN for privacy, it might be worthwhile to find out if there is similar data on this more controversial project. I reached out to Michael Kapilkov – the writer behind the CoinTelegraph article about Chainalysis – and he said “I doubt anyone wastes their time researching smaller coins”
Still no mention of returns on their website doesn’t mean that Bytecoin leadership doesn’t make bombastic claims. Some may say that the community manager – Jenny Goldberg’s January 2018 statement that Bytecoin “is gearing up for what could be a major resurgence in the near future” hints toward bombastic
2. Is there a tiered-referral system?
3. Where can it be traded?
BCN was in the top 50 coins only a couple of months ago, but as recent doubt has been cast on the project, it is now in 249th place (according to CoinMarketCap on 6/18/20 at 7:56 am PST), which is a fall from the same time yesterday when the coin was at 116th place. It’s important to note that Monero (today’s leading privacy coin) has also fallen recently after several exchanges recently delisted XMR, fearing government strangulation. Additionally, purchasing coins after they’ve suffered a hit is one of the most common strategies for profiting from them. To give just one example, this reporter bought BSV just after Binance and several other exchanges delisted the coin and I made a massive profit
- A. BCN is traded on multiple exchanges
- i. Poloniex
- ii. CoinEx
- iii. HitBTC
- iv. CoinDCX
- v. STEX
- vi. Gate.io
- vii. TradeOgre
- viii. Crex24
- ix. BitexBook
- x. Coindeal
- B. BCN is also used for privacy transactions among peers and several online merchants accept BCN as payment, but because of the allegations that Bytecoin founders and developers lied about many aspects of the coin including where it was used, I decided to check a few of the merchants listed on Bytecoin’s website myself
- i. LeBytecoin.fr – site down
- ii. Payza – site down
- iii. HearFirst – site works, cannot find info about payments though
- iv. CCX News – site works, they do accept BCN & offer 15% discount for those who pay with it
- v. Domaine de Cromey – site works, but
- 1. You have to enter your name, email, & address to complete transaction
- 2. There is no option to pay with BCN (or any cryptocurrency)
- vi. MantaMedya – site down
- vii. Coinstop – site works, redirects to CoinPayments.Net & they do accept BCN
- viii. Sheldon Store – site down
- ix. Dukley Hotel & resort – site works, no option to pay in BCN or any crypto
- x. MonoVM – site works, they do not accept payment in BCN (tho they accept BTC)
- xi. Cryptoblocktimes – site works, they accept BCN & offer 15% discount for anyone who pays with it
- xii. Emaildatabasepro – site down
- xiii. Gemma LED – site works, they accept BCN
- xiv. Cryptwerk – site works, they accept BCN
- xv. Star Brite Car Wash – site works, does not accept BCN or any crypto
- xvi. CoinPayments – site works, they accept BCN
- xvii. LiteArt Gallery – site down
- xviii. Trust.Zone – site works, does not accept BCN; does accept BTC & 3 alts
- xix. RPM Accessories – site down
- xx. 1Gbits – site works, they accept BCN
4. Is it legal in the US & other regulated countries? Why or why not?
Like all cryptocurrencies, BCN’s legal status is questionable. Governments around the world have expressed concern over anonymous digital currencies. Japan has banned all privacy coins, France has followed suit, and the US will also likely continue to strict-en laws about owning privacy coins like BCN (see info about the EARN IT Act & US effort to ban cryptography). Although many argue that a potential ban of privacy coins makes owning them all the more important, those who are in it for short-term financial gain might be less apt to hold a coin that their governments are likely outlaw
5. Do actual experts promote it?
This is particularly difficult to decipher because privacy coin developers are notoriously private and often operate anonymously or pseudonymously. Follow some of the conversation within the community at this Twitter link. Bytecoin’s website does have a page with some Doxxed BCN community members. None of them are names or faces I recognize, but that’s not really saying much
It is notable that Richard Spagni (aka fluffypony) is vocally opposed to Bytecoin, but given Spagni’s affiliation with Monero, that may not be saying much, as the coins are competitors. Here is some research on the limitations of Monero
6. Who are they marketing to? Noobs or savvy buyers?
Given the limited number of exchanges the coin is listed on and that none of them support Fiat to BCN exchange, I would initially say the coin is not marketed to noobs, but a highly critical 2018 article suggests that the founders of Bytecoin funded popular crypto news website CoinTelegraph, which could be viewed as marketing to noobs – who consider reading media articles “Doing Their Own Research”
Former CT writer Ian DeMartino further emphasized the link between the BCN and the media outlet, saying: “I have no doubt that CoinTelegraph was funded by Bytecoin from at least when I started and continues to get funding from the stable of CryptoNote coins, among other clients.” Though DeMartino admits, and my own former co-worker and friend P.H. Madore counters, it’s possible that CT is funded by MinerGate who has connections to BCN. When I asked current CT reporter Michael Kapilkov if he was aware of a potential connection between CT and BCN, he said “Honestly, I have no idea about any connection between BCN & CT”
Regardless of the connection, it’s not a secret that news outlets are often funded by those with motivations for manipulating the masses, but as some have pointed out, manipulation isn’t always a bad thing. From what I can tell on this particular issue, it seems the biggest problem some people have is that Bytecoin and CT are both anonymously owned, which seems a bit hypocritical to me, particularly given that we’re talking about privacy-oriented people and cryptocurrencies that claim to enable anonymous transactions
7. Who is on the team? Are they real, pseudonymous, or fake?
As stated in section 5, Bytecoin’s website does have a page with some Doxxed BCN community members; however, none of the people ID’d on the page appear to be executive members of the Bytecoin team, and I don’t recognize them. Again though, none of this is uncommon in the privacy community
8. Have the founders made claims that have since been proven false?
That’s unclear. BTC Manager reporter Jamie Holmes certainly seems to think so. Holmes says that BCN lied about their narrative, falsely claiming that the coin started in April 2012 when it actually launched in 2014. Further, Holmes & bitcointalk forum regular “rethink-your-strategy” note that Bytecoin falsely claimed that people had been transcatin in BCN on the dark web for years when “not a single vendor, user, miner, drug addict, drug seller, porn broker, fake ID card manufacturer, student who bought a fake ID card to get into bars, libertarian, libertard, cryptographer, Tor developer, Freenet developer, i2P developer, pedophile, or anyone else that is a known person – even just known on the Internet – had ever encountered ‘Bytecoin’ on Tor. Ever. Nobody.” But I’m unclear, and I think it’s fair to note that Holmes could be biased against Bytecoin for a number of reasons, among them are his stated affinities towards Bitcoin, Ethereum, and Monero
9. Do they have a functioning blockchain or token?
Yes, though I’ve never transacted in BCN, it is traded on multiple exchanges and I’ve confirmed that some merchants do accept the coin. As for how well it functions as a privacy coin, I’m unsure, but Seth is certain to have some thoughts on the topic
Seth here: I have transacted in Bytecoin, using FreeWallet on Android, and found it to be a very performant currency! Beyond that, there are many premium cryptonote forks that have chosen to base their code on Bytecoin instead of Monero- though that trend has since reversed, with most coins favoring the intensely researched and well-executed work of Monero.
10. Check github repository for relevant activity – it exists!
11. Look up the smart contract – not applicable.
12. Listen to your gut/instinct
Regardless of the evidence in front of you, there is always more information laying below the surface. So what does your gut tell you about Bytecoin? Is it a scam or a legitimate project?
IDK, DYOR: In the end, the only person who can prevent you from being scammed, is you!
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