Milestones and exploration...

I obviously took a day off from blogging yesterday.  Yay me!   :)

So to bring you up to speed.  If you've been reading along, you know that I've been working on getting an cloud based wallet and setting up a means to purchase coins.  As of yesterday my account finally reached the point where I can "instabuy" up to 10 coins.  And the instabuy/sell functionality keeps with that whole real time motif I started with.  To be able to flip back and forth between coins and cash quickly.  To perform the old in out as it were. LOL

With regards to Mt.Gox, as I've read more and came up to speed on the exchanges.  I think I chose poorly and plan to start the application process with BTC-E (and chime in if you have an opinion - I'm still evaluating).  And the reason for this is that the BTC-E exchange is both here on American soil and allows the buying and selling of a range of crytocurrencies (instead of just bitcoin).  My concern about Mt.Gox is that it has been plagued with issued sending money to America in the last year (as well as being attacked, having accounts seized and being robbed).  That worries me.

The importance of the alternate coins came to light as I looked into cloud mining (costly) and ways to use my hardware and join a mining pool.  I wouldn't be able to earn squat solo mining.  And am highly dubious that I produce enough processing power to do very well at pool mining either.  BUT, as I explored the topic of mining, I discovered that namecoin derives its algorithm from bitcoin, and can be performed concurrently with bitcoin.  (So 1 mining ring can mine 2 types of coin.  Some are likening bitcoins to cybergold, and namecoins to cyber-silver.)  Since mining started at different times, the difficulty for solving (mining) namecoins is much lower than bitcoins.  So if you join a pool that is dual mining bitcoin and namecoin to get the most out of the available hardware...  you're going to earn more namecoins than bitcoins.  And you want to be able to cash those out too... right?  So... an exchange that supports multiple cryptocurrencies becomes a must.  So that's the next prong of my attack.  To finish up my research on the current exchanges and pick one that keeps my fiat transactions on american soil - so that when currency is going in or coming out, it remains within the laws of my native country.  (I think this is wise).

With regards to mining - ultimately, I don't know if that will be worth it.  But it did open my eyes to namecoin and I have to say...  what they are and what they're used for is pretty interesting.

And along with the namecoins, there's a whole assortment of new types.  And in mainstream news, even J. P. Morgan is currently patenting what they're calling the bitcoin killer - that mirrors its operation but never mentions it.  So American bank is planning to roll out their own currency.  And of course Amazon has launched their own (called simply Coins).

This lead to a greater realization.  While some are heralding these coins as "the next big thing in currency," what is actually happening is that it is opening the door for corporations to create their own currencies.  And if an avalanche of new cryptocurrencies emerge, it won't lead to earnings.  It will lead to the fragmentation of fiat currencies into separate corporate silos.  (As you buy in).  And they will make it so that you can shop nowhere else...  all your buying power held hostage within their store.  So beware of centralized cryptocurrencies.  They may be a trap - and there will be no way out with your money.  Of course, I also may just be paranoid.  But in the age of hypergreed...  I think you can agree, this concern isn't wholly unrealistic.  Not mention, the world simply can't support the number of emerging coins.  There is no infrastructure for it - and if multiple coins compete, support/development is going to go sideways all over the place.  There is a tolerance that if exceeded will destroy the whole thing.  And if that leads to cybercrime that get people robbed...  the immediate collapse of trust will end it.

So when evaluating coins (like you were building a diversified portfolio), you should ask yourself 2 things.  What is the purpose of the coin, and if I buy in...  can I get out?

And I bring up purpose to get back briefly to namecoin.  Is it centralized?  No.  What is its purpose?  It can be used as an alternate form of DNS that is outside of ICANN control.  And in this age of the TOR network and the deep web, I think its safe to say that encrypted domain names that can't be shut down will have value.  If someone manages to trace through the TOR network to reveal a host's domain name, they hit an unregistered wall of encryption instead.

And can you sell them off (if you don't want to use them for their designed purpose yourself)?  Yes you can.  So beyond cryptology, there is also utility and sellability.

So if I ever successfully mine a namecoin, you'll know I minted it if you check the embedded text. It will say:

Rule of Acquisition 9:  Opportunity plus instinct equals profit.

or maybe

Rule of Acquisition 10:  Greed is Eternal

I haven't quite decided.

Note:  I oversold namecoin a bit.  It isn't unregistered, but it is registered in a decentralized way.  So no individual source holds the registry data.