March is almost out the door, and what an up and down it’s been. We survived a crazy ZClassic fork, started mining RavenCoin and have been looking at ways to set up our first masternode as price action in the markets have been all over the map.
First up, about the ZClassic (ZCL) fork to Bitcoin Private (BTCP). The last fork that I really paid a lot of attention to was the IGNIS airdrop for NXT holders, and I expected that this new one would follow a similar pattern, with the source coin rocketing up as the snapshot date approached, followed by a violent dump after the snap, (indicated by the dashed yellow line on the charts). Things played out pretty much as we expected, but the runup to the BTCP fork was a lot more sustained and had bigger volume than the IGNIS airdrop was. Since we were only holding a small position of ZCL we decided to do nothing, holding onto our original position and taking our reward in the forked BTCP. That seems have been the correct call versus selling prior to the fork, but the best short-term move would have been to dump our positions as soon after the fork as we were able – all four of these coins have lost a significant portion of value since.
One last note about BTCP: this was a dual chain fork, meaning that both ZCL and Bitcoin Core (BTC) holders can claim similar amounts of BTCP. The process to do so involves importing your private keys into the BTCP client. We didn’t have an issue with doing that for our ZCL wallet, but we have no intention of doing so for our various personal BTC wallets. We are unaware of reports of BTC wallets being compromised, but we do not plan on taking any chances with our long-term cold storage and do not think that transferring all of our various holdings to new wallets is worth the time investment to claim our BTCP. This may change in the future if the price of Bitcoin Private recovers.
In our last update, we said that our original plan when we set up our first rig was to mine, accumulate and hold whatever was profitable until we could identify a new project to mine exclusively. Well, in late February we found it when the CEO of Overstock.com announced that his company had sunk millions or dollars into an unknown project called Ravencoin (RVN). We jumped in the Discord, fired up the miner and started accumulating like crazy. This is the first time we’ve been involved with a project so close to its kickoff, and we’ve learned a lot about the opportunities that are available for enterprising teams with new projects like these.
Without getting into too much about what exactly RVN does – ASIC resistant algo but not much else yet – let me explain a bit about how this coin has grown over the past few weeks. When I came in on Feb. 24, a number of wallets were available and a few mining pools were up and running with various success. There was already a block explorer up and running with an API which allowed us to monitor our wallet balance through our spreadsheet, but there were no exchanges up and running to allow trades between RVN and other cryptos. What soon happened was that an escrow system came about, with certain designated community leaders responsible for being the trusted third party. After a few days of this, the demand became so high that the escrow services had to move to a different server.
There are huge opportunities for automated trading escrow services in these new coin spaces. I’ve been bouncing the idea around in my head to design a system for RVN, and someone has already created a working implementation. This current version requires trust that the third parties are honest and requires manual administration if that’s not the case, but it appears to be working in the real world. And while the need for an escrow bot that trades RVN may be taken care of, there are new projects popping up all the time for which this need still applies. And it’s not just escrow bots, but mining pools for new projects have great promise as well. If one has the resources and knowledge to set up a stable mining pool, and can convince enough miners to come on board, the site owner can easily reap up to one percent of all coins found in the pool.
We’ve been able to accumulate a large stack of RVN over the past few weeks, and it’s quickly grown to account for almost 60% of our total mining holdings. Rather than sell any of this, I’ve started looking for other projects that we can spec mine. I decided to take a look at masternode coins, which use a proof-of-stake system where large amounts of coins are locked up in special nodes which receive block rewards as dividends. The most expensive MN coin out there is DASH, which requires one thousand coins for a MN, or over $400,000, for a monthly reward of around $1800. These masternodes, and other proof-of-stake systems serve as an alternative to the power-hungry proof-of-work systems that bitcoin and others rely on.
I’ve been keeping an eye out for new MN projects that would give me the opportunity to get in at the ground floor and test the process of setting up a masternode. Most established coins will set you back several thousand dollars in collateral, but there are some smaller ones just getting started that are available for a few hundred dollars. Getting your hands on them is still a bit of a challenge, as newer projects require mining or some kind of bounty system for inviting people to Discord or other marketing actions. I’ve been following a few projects over the past few weeks with names like Kraken, and Escrow Coin, and when I was invited to check out a project called Kingston I spent a few days mining it to see what it was all about. The mining payouts were too low compared to RVN; they seem to be concentrated on selling masternodes, and most of the rewards go to MN owners, so I swapped back over to RVN again while I continued my research.
That was a few days ago, and I’ve since learned of another project that we switched over to last night. We’re going to continue to mine on this for a few days before we reveal any more about it, and in the meantime we’re going to follow through with our first MN setup of our own. We’ll fill you in once that’s done in a few days. In the meantime, if you’d like to chat, join our Blockheads Crypto Facebook group or hop on in the Hampton Roads Bitcoin Slack server for a more technical and entrepreneurial discussion. You can also DM me on Discord at elohim#8744.
And of course, if you are in the Hampton Roads area, join the Blockheads Meetup group and come join us for our next get together. See ya!