Verge Coin has faced a lot of issues lately such as a hack of their blockchain via an exploit in how it is mined. Then, recently they announced a big mystery partner but they wouldn’t release who it is without people buying about $3M USD of XVG coins.
This upsets me, it reminds me of the Finom ICO scam (tokens I paid for but never received) and how instead of delivering the tokens they instead did another ICO asking for more money.
Because of how Verge did it, people accused them of trying to do a pump and dump as an exit scam. In all fairness they did come through with a fairly big announcement, partnering with Pornhub which could increase the coin’s popularity and usage. From an investment standpoint I don’t think it is the silver bullet people are looking for. We want to see a coin that is actively used in everyday transactions and that actually replaces fiat.
But the bigger question to me is concern about the Verge team, tactics like this get you labeled as a scam fairly quickly. It really seems a lot of teams are just that, scammers or they are completely out of teach with reality and basic practices of business, communication and how to treat your investors.
They have based it on Metcalfe’s law which says at this point that Bitcoin could lose another 27%. The group also cites the part I agree with, in that so far cryptocurrency prices are mainly driven by Bitcoin which means Altcoins (other than Bitcoin) have risen and fallen in direct correlation.
Where I am not sure if I agree or disagree is their theory that a lot of this is driven by fear in the news. While I am sure it is, if the fear is unfounded why should bad news reflect on the long-term valuation?
A sensible market would be wise to react to say the hacks that have happened to Ethereum or the fact that illegal content has been inserted into the Bitcoin Blockchain. That is bad news that has relevance since these issues potentially threaten the integrity of the entire blockchain.
While we’re on the topic of Metcalfe’s law, since cryptocurrency is a completely new and largely irrational market can we trust this is a valid predictor? I am not aware that any other traditional models have successfully called any of the major events in cryptocurrency.
I do agree it was time for a significant correction but the same has happened in commodities and stocks before, yet the stock markets keep moving (albeit with a lot of money printing and manipulation-is that what regulators mean by regulation for cryptocurrency? ).
Only time will tell where things head but I do think that currencies that are efficient, secure and easy to use will stand the test of time (which admittedly are very few and I cannot think of a single one that solves all of the issues just yet).