How I roll...

So in one of my earlier blogs, I extolled the value of namecoin (that it had infrastructure value, and not just speculation value).  So when all the bitcoin chaos began, I slid my little fraction of a bitcoin over into namecoin and parked it.  Just left it alone since I know Mondays are the absolute worst day for trading cryptocurrency.  (Run back the charts and have a look...  you'll see.  So if you move on a Monday, you get what you get).

Anyway, while the bitcoin charts look like this:

The namecoin chart looks like this:

There are differences between these 2 charts.  The first one is BTC/USD while the second is NMC/BTC.

So, my namecoins are gaining against the bitcoin, as bitcoin loses against the dollar (and I figured it would play out that way because worse case scenario, the people snatching up Namecoins are buying namespace in a cryptologically secured .bit domain).  But if you'll recall, I believe that bitcoin will rebound on Friday.  So the more bitcoins I can get with my namecoins before it flipflops is more for me.  :D

Of course I've only been moving things around between cryptocurrencies.  See, I got the "money" to buy my bitcoins by mining Doge coins.  So until I cash out, I've neither spent nor earned any money. Which means...  no taxes.  It's all virtual crap until it turns into dollars.  And its only when it becomes cash that its taxable income.  So as long as I keep working it and flipping it, it just fluff.  Funny money.

Anyway, I've spent about $5 in electricity mining Doge coins.  And my little portfolio of nonsense would have a cash out value of about $30. LOL  How hard do I work at it.  My computer mines while I sleep and while I work.  ANd I move my coins around through various currencies and back and forth between exchanges (doing a little arbitrage).  But in the end, just like I said at the very beginning - its all a game to me.

It really hasn't cost me much of anything, but it sure has been fun and educational.  Edutainment.

Oh, and since I brought up my old pal the Doge coin, how is it doing against the bitcoin?  Hmmm...

Also gaining against the bitcoin.  :D  Ah, good times.  Bitcoin gets all the news, makes people go ooo and ah...  or god damn it.  While the little piddly coins keep on keeping on.  But its like Public Enemy said way back in the '80s.  Don't believe the hype.

Free falling: Bitcoin takes a pounding.

Wow, watch that bitcoin drop!  LOL    Express elevator to Hell...  going down.

I'm free...  free falling...

As to why, I've seen so many conjectures coming from mainstream news mostly based on information that is 10 days old.  If you know anything about the rate at which cryptocurrency responds and rebounds from news...  10 day old news is ancient history.

As for why its happening, there are (I think) 2 major factors.

The first is the heist on the Sheep Market.  I really liked this article on the topic - well written, and exciting.

Another factor is that coinbase.com lost liquidity on Friday and was unable to do provide their usual corn purchase function.  Their website states they will resume buying this Friday.  The reason I think this is important is that coinbase brings over $160 million dollars to market.  Their activity has served to stabilize and keep prices fixed.  Without them in the market to offset the chaos...  this fall has been larger than usual.  But I suspect that bitcoin will be back above $800 by Friday.

I guess time will tell.

So robbed....

For those who haven't been following this blog - I've been mining dogecoin this weekend.

Anyway, the pool I was mining with is (was?) called luckyminer.  Anyway, they were hacked last night and someone from Spain made off with over 54 million dogecoins.

So what does that amount to in real money?

Dogecoin has been going on average for 0.00000055 coins.  So

54271654.44546228 DOGE * 0.00000055 Bitcoin = 29.849409945 Bitcoin

And

29.849409945 Bitcoin * $876.83 = $26172.86

So someone made over $26,000 overnight hacking.  I have to say - that's quite a haul for 1 night's work.

The pool operator described it like this:

At 21:06:03 (09:06:03pm) someone from IP 147.83.175.33 broke into the system, used the problems the server had with its own database.
He came through the Servers ISP Config and transferred all of the Doge, the system had stored for its miners (who had not enabled auto-payout + waiting for transfer) to his Wallet

DHqLa4Z9iQyBZgtPP2oR9tMVPDVzzBBJST

http://dogechain.info/address/DHqLa4Z9iQyBZgtPP2oR9tMVPDVzzBBJST

I think it was nice of him to take the heat, and to provide the IP address, wallet and chain information on the coins. I think it will win him a lot of foregiveness because it shares the trail of bread crumbs and people can verify that something shitty happened.

Anyway.  Myself, I lost about $3000 dogecoin in the attack.  But if you're supposed to tithe 10%, well then, I guess god just took what was his.  LOL  Since I'm doing all of this for a lark anyway, I just find the whole thing interesting.  Or in doge:

Wow.  Such hacking.  Much theft.  Many doges. Wow.

OF course, I wonder what impact all of this will have on namecoin?  If this pool's domain had been secured via namecoin instead of the typical ICANN method...  would it have been hacked?  Hell if I know.  :)

NEWSFLASH:

The reddit thread was homing in on the hacker so fast - I can only guess he went into panic mode, since he gifted the entire amount back to the pool operator.  So if you have coins with luckyminer, sign in and cash them out.

The Dodgey Dogey

Watching the whole dogecoin thing go down, I have to say - cryptocurrencies are a dog eat dog thing.  LOL

Since this silly little coin took off, bouyed by meme power, I've seen some thing.  For example the coinedup.com exchange keeps getting hammered.  I don't know if this is due to sheer volume or cyber attacks.  (After all the crypto crowd would be very capable).  I've also watched ridiculous exchanges like 0.00000001 dogecoin sold for 5 bitcoin.  And I don't know what that was all about.  As I see it, it could be one of 3 things.

1)  Someone is using this fledgling currency to launder bitcoin.  Receiving them through an exchange as the purchase price for dogecoin.  So instead of directly receiving the bitcoins for the service or goods - they're instead having the person on the other end by a ridiculously priced dogecoin.

2)  Since coined charges nothing for trades, they could also have been trying to give the other markets the end around - bypassing the fees they would have been charged on other exchanges.

or

3)  There are people posting sky high prices, then buying them themselves - this cost them nothing, but wrecks the grandularity of the charts, making it difficult to access real time value.

Very dodgey on the dogey.  Bad shibes!

In other news - the dodgecoin mining pool I joined (luckyminers) seems to be having some problems this morning.  Either something has gone amiss, or we're currently mining the worst block ever.  On the other hand, I'm new to mining and maybe bad blocks are a result of increasing difficulty.  After all, when I started the difficulty was 17 and now its up to 32.  But the block I mine keep getting rejected on divide by 0 errors.  Just not sure what's up.  Hopefully it stabilizes or I may need to find a new pool.  I'll give it a while.

Anyway, I guess many of the outages and problems revolve around the sheer volume of work generates by such a silly meme.  It's been a fun ride though.  :)  What I can say is - I'm glad it retained its value over night.  Such staying power.  Many value.

PS.  Word on the ground is that dogecoin is being implemented on chinese exchange site (for direct purchase with the yuan).  If that turns out to be true and sees the usual impact of the asian market... this thing might actually take off.  Time will tell though - all I have seen is a picture of chinese site that someone poked at and found this...

Dogecoin: So pow. Such to the moon. Wow. Many Profits.

Such profits...

So to the moon...

Wow.

much dogecoin, wow

So a friend of mine was asking me about mining bitcoin.  While I was looking at cloud mining, his enquiry made me take a look at solo and farm mining.

Anyway, I ran a miner for a bit trying it on bitcoin.  Suffice it to say (as is already known) that the difficulty is so high, its highly unlikely you'll find a block.  And with the sheer amount of processing power some people and groups are throwing at it, even if you join a farm its hard to get shares.

So I remembered, diversity is good.  And as irony would have it, about the same time I was applying the doge meme to namecoin in my last entry - someone was had released a new currency called dogecoin less than 48 hours before.  I find this interesting.  When you consider fiat currencies, its their nation that backs them - but beyond that, it is belief that it has value.  So if you look at the US dollar, it's obviously emblazoned with, "In God We Trust."

So that got me thinking - that's a meme.  And dogecoin is backed by the power of a meme.  Sure, the God meme is long enduring with a large chunk of the world population who follow.  Since the doge meme is going viral and will easily hit millions - I figured, what the Hell.  I'll mine that shit.  Though, my machine is weak - so I'm relying on the mining pool and shares approach to get smaller slices of the pie at a faster pace.

If you want to follow me, I joined the luckyminers doge pool.  Bring much hash.  So crunchy,  Many block.  Such profit.  Wow.

While the coin itself has little traction, the community is so silly an entertaining I've lost so much time to it  LOL  But little doesn't mean none.  There is obviously the coinedup exchange I already mentioned.  There are also forums where exchanges are occuring.  Also, places where you can buy real goods.  And someone out there is selling real Shiba inus (dogs) for dogecoin.  I kid you not.  Heck, you can even buy dogecoins on ebay.

Meanwhile - things to consider.  Is dogecoin decentralized?  Yes.  Does it have any utility value beyond being an exchange veseel?  No (as opposed to namecoin for example).  Can you cash it out?  In a round about arbitrage kind of way - yes you can.  You can use coinedup.com to convert to bitcoin or litecoin.  And you can send either of those coins to another exchange to liquidate them.

So you can go:  Dogecoin -> Bitcoin -> Exhange-> Cash.
Or:  Dogecoin -> Litecoin -> Exchange -> Cash.

And when you're fiddling with these cryptocurrencies you always want to know how they're trading - so here's much chart.

Anyway, I thought I'd catch you up on my current cryptocurrency hijinks.

And since dogecoin is still relatively easy to come by...  feel free to send me a donation for turning you on to the dogecoin shuffle and it memetic goodness.

Send dogecoins here:  DJMjXchP7bfQxH9ykqRCYnEXw6qTZSu8sY

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.