Why Hardforks In Cryptocurrency Are Bad

I’ve always felt this but hardforks are simply bad, even if in the rare case they intend to fix a problem with the original currency.  Most currencies which have issues like Bitcoin are simply not just a “single problem” but a collective bunch of inherent problems.   But most often it is so clear like is the case with Bitcoin Gold that the team just copies and counterfeits a coin to unjustly enrich themselves.

Risks and Issues with Hardforks

  1. Loss of value, normally the original coin is at least temporarily devalued when a hardfork is done.  People wonder which coin will survive or be more popular?
  2. Confusion leading to scams and fraud.  Which is the real Bitcoin or real Bitcoin Gold?
  3. Many forks don’t make a wallet (more evidence of bad intention) and more likely that fraudsters will make a wallet that steals your coins (eg. John Dass and the Bitcoin Gold team).
  4. Community frustration and division.

Instead of hardforking it is much better to do what Cloakcoin or Litecoin did and the many others did by just copying it, making changes and starting their own blockchain.  This ensures the process won’t allow fraud, confusion or devaluation of the original coin and no harm comes to the community that way.

All these coins have stolen value from the main coins like Bitcoin and then people ask why the value went down?  If Bitcoin was not hardforkable I think it should be several times the value we see now, almost certainly 2/3s or more of the crypto market cap.

Trezor Hardware Wallet to Support Bitcoin Cash

A maker of hardware wallets for cryptocurrency has recently confirmed they will add support for Bitcoin Cash.  I’ve also been an advocate of not using these even before the Ledger Nano hack came out.

I suspect that some will lose their currency or at least have to try to recover it based on confusion over the two.  I really think it’s a bad idea since most currencies have no built-in protection to sending into the abyss to a non-existent address of another blockchain.

 

Hardforks Are Scams Says Charlie Lee LTC Creator

Charlie has been saying exactly what I’ve been.  Hardforks are essentially scams that devalue the original coin and cause confusion.  At the same time, I’m sure he meant well but it never helped that he announced he sold all of his LTC.  It’s akin to a CEO selling all of their stock and saying “I still believe in the company”.  Granted this happened well before this scam hardfork so the hardfork is surely what caused the latest drop.

CharlieLee-LTC-Litecoin-Founder-Says-Forks-Scam-Confusing

As we can see after Litecoin Cash, the real and original Litecoin went down in value.

Charlie also correctly warns not to give your private keys to these scammers.  Whether Bitcoin Cash, Bitcoin Gold, Litcoin Cash and the many scam coins they require you to give your private keys to their wallets (if they even create one).  The risk there is that the developers or wallet creator will steal your original coins and this has happened already with the Bitcoin Gold Scam.

LitecoinSlide

I think exchanges should outright refuse to deal with these scam coins.

The underlying issue is simply that why are hardforks possible at all?  Counterfeiting is so easy with these opensource, public and permssionless blockchains.  To me it is a complete security and privacy flaw that was well-intentioned but simply doesn’t work.

Going forward, community maintained coins that cannot be forked, that are secure, private and are real time will be the long-term ones to invest in and the long-term winners.

IRS / US Taxman Says Cryptocurrency Income IS Taxable

Like the old saying goes one thing is certain “taxes and death”.  The IRS definitely hasn’t disappointed even cryptocurrency owners by clearly stating cryptocurrency is taxable.

Hopefully the rules will be fair.  I feel it should only be taxable like any stock, so when there is a capital gain through resale.

The same rules of the IRS apply for tax evasion if you’re a US citizen and don’t report your crypto earnings.  One other interesting thing is how the IRS has got their hands on Coinbase data for some users.  This will certainly be used to go after users who’ve made profits.

US Cryptocurrency and ICO Regulations Push Business Overseas

First of all bravo for Coinbase, with a lot at stake itself, for getting this issue right in the following quote:

There is so much uncertainty about the definition of a security and the scope of regulatory control that the market is being chilled. This is bad for everyone because the technology won’t stop — it will simply move overseas and we will miss out on the opportunity to cultivate the benefits in the U.S.

Much like I’ve been saying is that governments who are overly aggressive, ambiguous and don’t create a fair playing field for cryptocurrency and related companies will be sidelined.  Cryptocurrency cannot be contained by borders anymore than the web could be.  Naturally, I do agree certain practical laws and regulations should apply but the laws should be clear and easy to follow.  If companies are essentially being threatened, raided and faced with uncertainty it hurts both the company and investors.  Ultimately as I’ve said before it will drive these huge sums of money away to countries that treat cryptocurrency users, traders and companies well.

There are so many conflicting statements from governments around the world and multiple bodies in the US.  It sometimes seems as if government officials and bankers who have a lot of input in these matters diverge on the matter.  This is OK but it should not be reflected by creating an atmosphere of fear and confusion whether by design or by fluke.

We all see the market has been impacted significantly with nothing but negative press for cryptocurrency but I believe it will resolve on the upside as investors realize it isn’t going anywhere and no single government or bank can ever stop it.  In fact I predict that the market may just start using more privacy and security based coins and trade them exclusively and directly for goods, bypassing fiat altogether.  Ironically this is probably the last thing governments and banks want but this is where all of this action is heading towards in my opinion.

 

Why I Didn’t Get In On QASH Coin from Quoine/Liquid ICO

I actually saw this ICO days before but got very frustrated why it was so complicated.  I still struggle to figure out what’s what with so many terms and names behind this project.

To break it down they are the following as I understand it.

  1. Quoine is the name of the company at Quoine.com
  2. QASH Coin is the name of their token
  3. Liquid is the name of their trading platform at https://liquid.plus ….no clue what it is for
  4. Qryptos is actually the name of their trading site (all of this is super confusing and extremely frustrating in my opinion-it would be very easy for a phishing attack to be successful when these companies have several different sites and names associated with a project)

What initially stopped me from even getting in was the fact they force you to signup for their exchange and want your ID so I didn’t complete it.

However with their fantastic marketing of the ICO following I did proceed and one thing I give them is that my ID was approved fast (I believe within a day or less).  However they were advertising an ICO that was over which wasn’t at all clear until after poking around their site.  I couldn’t understand why I couldn’t buy the coins (this is not a normal ICO where you just send coins to a certain address).

The most confusing thing is that there was still an ICO section that made it look like you could buy the tokens which never worked.

Qryptos-QASH-ICO-Fail

I eventually assumed I needed BTC to buy their coin but that didn’t work either.

Then I e-mailed their support (like most Crypto teams/ICOs/Companies they never replied to this day).

Quoine-No-Support

That’s not entirely true though they have been sending me SPAM happily and even an angry e-mail about the issue being ignored before was ignored by the person sending the SPAM.  To me it’s absolute confirmation that this company doesn’t care about its users or investors.

Quoine-No-Support1

Their system

In all honesty their exchange worked fairly well outside of the ICO fail.  When I went to withdraw my BTC I was a bit miffed at how there was some delay for security reasons they said which seemed to imply human intervention was required to release my funds.  This makes me worry that you could run into a situation where your funds could be held.   With this company being from Japan I don’t trust it because I was thinking Mt. Gox bad (the famous Bitcoin scam/heist of a large Japanese trading site).  It is also weird that their address is in Singapore but it is a Japanese company.

I think this is the “typical ICO” which I will definitely avoid.  I’m certain I am not the only upset and frustrated investor with how these companies treat their investors.  To me it screams of arrogance and simply not caring/poor customer service that you could send large amounts of money and they won’t even give you an answer or any help at all.

And for that reason I don’t really trust their system or their company if they can just ignore you like that.  What if you are using their exchange and something else goes wrong such as your coins going missing or a withdrawal that doesn’t work? I’d expect there would be no response just like the issue I had with their ICO.

In terms of performance their coin has done quite well, it would have been a good investment if I could have only purchased their coins but it wasn’t meant to be.

The future of this company is unclear like many in this industry and it will depend on their service (or lack of it) which I suspect will do many exchanges and crypto companies in the coming years.