rpietila Altcoin Observer

[smooth]

I consider the association with the botnet to be far less eggregious than association with the bytecoin pre-mine, personally.  That is the more likely of the two adverse identifications which have been hypothesized.

I agree with you and I would add that the bytecoin scheme is far more than just a premine. There is deception on top of deception with a side helping of deception. If you want to call out something that is absolute poison when it comes to finance and fraud risk you could hardly come up with a better example. I have idea what if anything BBR has to do with the bytecoin scheme.

[aminorex]

I have (no?) idea what if anything BBR has to do with the bytecoin scheme.

I would put it more strongly:  Event though it seems probable that CZ involved in cryptonote development, and hence in bytecoin development, there is nothing to link him directly with the pre-mine scam.  If CZ was involved early in development but not in the fraud, almost certainly he was at least aware of it, so perhaps the distinction is too fine.  If he was involved late, he could have been aware of it, but have no culpability in it.  The closeness of the association, however, still would damage the risk profile of BBR in the market's view.

Scenarios in order of increasing investor risk:

1) CZ had nothing to do with BCN, and is not AS.
2) CZ is AS but had nothing to do with BCN.
3) CZ was involved in BCN, but after the pre-mine.
4) CZ was involved in the fraud, but is reformed. 
5) CZ was involved in the fraud, and plans to exploit the next suitable opportunity to take money from more honest people.

In the best of these scenarios, BBR still suffers from the risks inherent in centralization of governance.  It just gets worse from there on.

[canonsburg]

I think it's worth pointing out at least that 1) Sabelnikov was never found guilty of any wrong doing and Microsoft agreed that it was not him who ran the botnet. 2) Even if CZ was part of the original CryptoNote team, there's no indication that he was involved with Bytecoin at all. Not only that, but if he was involved with CryptoNote, the act of creating BBR(with the new PoW) alone by himself would be strong statement that he disagreed with what Bytecoin did and wanted no part in any sort of scam.

Personally, I don't think it's likely CZ is a bad actor. Whoever he is. At worst it appears he could be a famous hacker responsible for writing some code that other people used in a malicious way(the botnet). I'm not going to defend that if that happened. But we don't know anything about that what happened in that situation and there's a whole range of possibilities, including being coerced in to writing code. We will likely never have sufficient information to make any sort of judgment either way.

So there is some risk with an anonymous developer, that is a constant. On the other hand with BBR you also seem to get someone who is an expert at dealing with what is becoming apparent is a very shaky code base. So there is some trade off there. I'm not making the argument that BBR is less risky with a single developer than XMR is with 7 or 8. But I do hope that anyone considering the situation will at least take the time to make a fair evaluation of CZ on what he's done so far.

edit: and that's not meant as a reply to aminorex specially since I know he knows all of this already, but anyone who is just looking in to this crazy CN world in general.

The evidence seems to point to CryptoNote and Bytecoin as part of the same scheme but were made to appear independent. (Note: the CryptoNote technology itself is impressive, but their ethics are apparent not)

The line of thinking is, in order to carry out the scam, Bytecoin was created and chosen to take the fall so that in the event that the whole thing crashed and burned (and it did), there would be separation between CryptoNote and Bytecoin. Thus Bytecoin can be seen as a malicious off-branch that independently developed the coin and the massive scam, but CryptoNote is the innocent provider of technology and watched on the sidelines as its brilliant technology was misused. But people were not convinced by either the Bytecoin scam or the CryptoNote independence.

Now not accusing BBR as a off-branch of the CN/BCN scam and coming for the same family but let's say that Zoidberg was involved in CryptoNote, why would his involvement, even if BBR does not look "scammy" be of concern?

Because that's how the scam was originally suppose to work. Create a scam hoping that it would work (Bytecoin), but when it failed, create a new "clean" coin to replace it (Bitmonero), while maintaining clean hands (CryptoNote independence).

But the community didn't buy that, and Monero was the result. BBR would be like Bitmonero, a "clean" coin designed to be "fair" after the scam but was controlled by the original "scammers".

[surfer43]

I have (no?) idea what if anything BBR has to do with the bytecoin scheme.

I would put it more strongly:  Event though it seems probable that CZ involved in cryptonote development, and hence in bytecoin development, there is nothing to link him directly with the pre-mine scam.  If CZ was involved early in development but not in the fraud, almost certainly he was at least aware of it, so perhaps the distinction is too fine.  If he was involved late, he could have been aware of it, but have no culpability in it.  The closeness of the association, however, still would damage the risk profile of BBR in the market's view.

Scenarios in order of increasing investor risk:

1) CZ had nothing to do with BCN, and is not AS.
2) CZ is AS but had nothing to do with BCN.
3) CZ was involved in BCN, but after the pre-mine.
4) CZ was involved in the fraud, but is reformed. 
5) CZ was involved in the fraud, and plans to exploit the next suitable opportunity to take money from more honest people.

In the best of these scenarios, BBR still suffers from the risks inherent in centralization of governance.  It just gets worse from there on.

Scenarios 2-4 cannot negatively affect Boolberry or its investors, so they have no investor risk. It is implausible that there is any way for CZ to take money from more honest people using Boolberry, so scenario 5 is extremely unlikely. Oligarchy is just as centralized as monarchy.

[Este Nuno]

2) Even if CZ was part of the original CryptoNote team, there's no indication that he was involved with Bytecoin at all.

There is no credible evidence (i.e.  evidence not coming from them) that cryptonote and bytecoin are actually separate. The evidence from rethink-your-strategy would suggest otherwise. That evidence might be not totally definitive but the preponderance of the evidence definitely points in that direction (since there is no contradictory evidence at all)

What I meant to say was he could have been part of the CryptoNote team but refused to participate in the Bytecoin scam. I agree that it's likely the Bytecoin creator(s) were part of the the original CN team. Someone could have helped create the CN tech and be completely innocent too.

I think it's worth pointing out at least that 1) Sabelnikov was never found guilty of any wrong doing and Microsoft agreed that it was not him who ran the botnet. 2) Even if CZ was part of the original CryptoNote team, there's no indication that he was involved with Bytecoin at all. Not only that, but if he was involved with CryptoNote, the act of creating BBR(with the new PoW) alone by himself would be strong statement that he disagreed with what Bytecoin did and wanted no part in any sort of scam.

Personally, I don't think it's likely CZ is a bad actor. Whoever he is. At worst it appears he could be a famous hacker responsible for writing some code that other people used in a malicious way(the botnet). I'm not going to defend that if that happened. But we don't know anything about that what happened in that situation and there's a whole range of possibilities, including being coerced in to writing code. We will likely never have sufficient information to make any sort of judgment either way.

So there is some risk with an anonymous developer, that is a constant. On the other hand with BBR you also seem to get someone who is an expert at dealing with what is becoming apparent is a very shaky code base. So there is some trade off there. I'm not making the argument that BBR is less risky with a single developer than XMR is with 7 or 8. But I do hope that anyone considering the situation will at least take the time to make a fair evaluation of CZ on what he's done so far.

edit: and that's not meant as a reply to aminorex specially since I know he knows all of this already, but anyone who is just looking in to this crazy CN world in general.

The evidence seems to point to CryptoNote and Bytecoin as part of the same scheme but were made to appear independent. (Note: the CryptoNote technology itself is impressive, but their ethics are apparent not)

The line of thinking is, in order to carry out the scam, Bytecoin was created and chosen to take the fall so that in the event that the whole thing crashed and burned (and it did), there would be separation between CryptoNote and Bytecoin. Thus Bytecoin can be seen as a malicious off-branch that independently developed the coin and the massive scam, but CryptoNote is the innocent provider of technology and watched on the sidelines as its brilliant technology was misused. But people were not convinced by either the Bytecoin scam or the CryptoNote independence.

Now not accusing BBR as a off-branch of the CN/BCN scam and coming for the same family but let's say that Zoidberg was involved in CryptoNote, why would his involvement, even if BBR does not look "scammy" be of concern?

Because that's how the scam was originally suppose to work. Create a scam hoping that it would work (Bytecoin), but when it failed, create a new "clean" coin to replace it (Bitmonero), while maintaining clean hands (CryptoNote independence).

But the community didn't buy that, and Monero was the result. BBR would be like Bitmonero, a "clean" coin designed to be "fair" after the scam but was controlled by the original "scammers".

But even if this were the case, it doesn't look to me like BBR fits in with this pattern at all. The fact that CZ deliberately chose a different PoW makes BBR the odd one out.

[ShroomsKit_Disgrace]

Every time Nekomata posts here it is a shame for him and for everybody who decides to read his bullshit.

[Este Nuno]

As a technical experiment, that's fine.  For timing speculation, okay.  In the competition for the natural monopoly of private liquidity, 0.00001% more risk on one side than on the other pre-determines the outcome.

When you put it in that context, doesn't the increasing uncertainty surrounding the code base and recent events pretty much disqualify both BBR and XMR from holding that title? At what point will you and other stakeholders decide your money is better spent recreating the technology from scratch?

I have (no?) idea what if anything BBR has to do with the bytecoin scheme.

I would put it more strongly:  Event though it seems probable that CZ involved in cryptonote development, and hence in bytecoin development, there is nothing to link him directly with the pre-mine scam.  If CZ was involved early in development but not in the fraud, almost certainly he was at least aware of it, so perhaps the distinction is too fine.  If he was involved late, he could have been aware of it, but have no culpability in it.  The closeness of the association, however, still would damage the risk profile of BBR in the market's view.

Scenarios in order of increasing investor risk:

1) CZ had nothing to do with BCN, and is not AS.
2) CZ is AS but had nothing to do with BCN.
3) CZ was involved in BCN, but after the pre-mine.
4) CZ was involved in the fraud, but is reformed.  
5) CZ was involved in the fraud, and plans to exploit the next suitable opportunity to take money from more honest people.

In the best of these scenarios, BBR still suffers from the risks inherent in centralization of governance.  It just gets worse from there on.

That sounds reasonable. My guess is that he wanted nothing to do with BCN and thus went out on his own. As time goes on, if BBR continues to grow I think it's safe to say that CZ will not remain the sole developer past a certain point. And if for whatever reason he resisted that and wanted to stay in control alone, I believe that would be the end of BBR.

[dga]

That sounds reasonable. My guess is that he wanted nothing to do with BCN and thus went out on his own. As time goes on, if BBR continues to grow I think it's safe to say that CZ will not remain the sole developer past a certain point. And if for whatever reason he resisted that and wanted to stay in control alone, I believe that would be the end of BBR.

My experience suggests that you're right - I submitted several patches to BBR for the miner and a few typo fixes, etc., and CZ accepted them rapidly and graciously.  I didn't get any weird vibe from him about not wanting to let others into the code -- in fact, quite the opposite.  For completeness, since this entire discussion just *reeks* of confirmation bias with everybody trying to find evidence that their decision was correct, that mirrors my experience with the XMR crew.  Both have been very happy to have help from outside.

[aminorex]

Scenarios 2-4 cannot negatively affect Boolberry or its investors, so they have no investor risk. It is implausible that there is any way for CZ to take money from more honest people using Boolberry, so scenario 5 is extremely unlikely. Oligarchy is just as centralized as monarchy.

Firstly, oligarchy is not as centralized as monarchy.  That's just wrong.  An oligarchy of all would be maximally decentralized.

I think scenarios 2-4 are an investor risk because it removes upside from the coin.  Adoption will be impeded.  In the extreme case, adoption goes backwards until the coin coins to zero.

If one person is in control of what code runs the network, they can certainly extract value from the network by takings.

[aminorex]

As a technical experiment, that's fine.  For timing speculation, okay.  In the competition for the natural monopoly of private liquidity, 0.00001% more risk on one side than on the other pre-determines the outcome.

When you put it in that context, doesn't the increasing uncertainty surrounding the code base and recent events pretty much disqualify both BBR and XMR from holding that title? At what point will you and other stakeholders decide your money is better spent recreating the technology from scratch?

Certainly that has been considered.  But bootstrapping a competitor would destroy existing value.  It's immoral, and it's a defection strategy.  That makes it risky.  If you just forked, it would probably take USD $30mm or more to compete with XMR.  If you required a fresh codebase, it would take longer, and XMR value would grow in the meantime.  You might require in excess of $200 mm by the time you were market-ready.  It's a very expensive crap-shoot.

if for whatever reason he resisted that and wanted to stay in control alone, I believe that would be the end of BBR.

Right.  So depending on the timing:

1) now - BBR achieves its best feasible growth with CZ the strong leader of a doxxed team with the ability to enforce open process
2) later - BBR is dragged down, but eventually gets a fair shake, after market position has deteriorated
3) never - BBR is dragged down forever

(1) seems unlikely.

[drawingthesun]

Do we still have fund managers here managing XMR for their clients? Are you planning any exit strategy for them in the wake of consistent exploits/attacks on XMR mainnet? I know it is much easier to still speculate in XMR with own money, but is there any concern for other people's monies yet?

You're a troll through and through.

The exploit could have affected all the CryptoNote coins.

What do you suggest, that we stop investing in new experimental currencies because of risk?

This whole game is risk, bitcoin, monero, boolberry, nxt, ethereum.

You're an idiot. No one is investing in crypto today because it's safe and free of exploits.

[devphp]

No one is investing in crypto today because it's safe and free of exploits.

Oh, we don't? j/k

[aminorex]

this entire discussion just *reeks* of confirmation bias with everybody trying to find evidence that their decision was correct

Personally, my greatest hope is that someone will prove my reasons incorrect, to my satisfaction.  It would allow me to avoid the longer-term consequences of the error.  There is a substantial difference between reasons and rationales. 

My standards are fairly high, but not extreme.  I'm happy with probabilistic arguments, if I have some epistemic color on the actual distributions involved.

[aminorex]

I find it almost impossible to believe fund managers are involved in any cryptocurrency < 100 mil.  Can somebody point to a quote?

I personally know fund managers who have invested in XMR.  At least one was formerly invested in DRK.  And no, I can't point to quote.  It was not a press release.

[Este Nuno]

Do we still have fund managers here managing XMR for their clients? Are you planning any exit strategy for them in the wake of consistent exploits/attacks on XMR mainnet? I know it is much easier to still speculate in XMR with own money, but is there any concern for other people's monies yet?

I find it almost impossible to believe fund managers are involved in any cryptocurrency < 100 mil.  Can somebody point to a quote?

James

What's with the fake jl777 account?

I hope it's not for scamming purposes.

[kbm]

James

I find it very convenient that both you and jl777 share the name James

[SlipperySlope]

Here is the three-day resolution chart for Dogecoin vs CNY on Bter as presented by BitcoinWisdom. Note what appears to be an upwards breakout of the resistance trendline that I drew from the early 2014 peak.

[rpietila]

I have (no?) idea what if anything BBR has to do with the bytecoin scheme.

I would put it more strongly:  Event though it seems probable that CZ involved in cryptonote development, and hence in bytecoin development, there is nothing to link him directly with the pre-mine scam.  If CZ was involved early in development but not in the fraud, almost certainly he was at least aware of it, so perhaps the distinction is too fine.  If he was involved late, he could have been aware of it, but have no culpability in it.  The closeness of the association, however, still would damage the risk profile of BBR in the market's view.

Scenarios in order of increasing investor risk:

1) CZ had nothing to do with BCN, and is not AS.
2) CZ is AS but had nothing to do with BCN.
3) CZ was involved in BCN, but after the pre-mine.
4) CZ was involved in the fraud, but is reformed. 
5) CZ was involved in the fraud, and plans to exploit the next suitable opportunity to take money from more honest people.

In the best of these scenarios, BBR still suffers from the risks inherent in centralization of governance.  It just gets worse from there on.

Scenarios 2-4 cannot negatively affect Boolberry or its investors, so they have no investor risk. It is implausible that there is any way for CZ to take money from more honest people using Boolberry, so scenario 5 is extremely unlikely. Oligarchy is just as centralized as monarchy.

False. Take an example of XMR. If David Latapie, fluffypony or any of the others was exposed as a scammer, I would race to the exits, and so would everybody. Why? Because they knew I would, and wanted to exit first. The value of the coin would be destroyed.

If this would not happen with BBR, well, it talks more about the great divide concerning what kind of people invest in that vs. in Monero, and to each his own...

[dga]

I have (no?) idea what if anything BBR has to do with the bytecoin scheme.

I would put it more strongly:  Event though it seems probable that CZ involved in cryptonote development, and hence in bytecoin development, there is nothing to link him directly with the pre-mine scam.  If CZ was involved early in development but not in the fraud, almost certainly he was at least aware of it, so perhaps the distinction is too fine.  If he was involved late, he could have been aware of it, but have no culpability in it.  The closeness of the association, however, still would damage the risk profile of BBR in the market's view.

Scenarios in order of increasing investor risk:

1) CZ had nothing to do with BCN, and is not AS.
2) CZ is AS but had nothing to do with BCN.
3) CZ was involved in BCN, but after the pre-mine.
4) CZ was involved in the fraud, but is reformed. 
5) CZ was involved in the fraud, and plans to exploit the next suitable opportunity to take money from more honest people.

In the best of these scenarios, BBR still suffers from the risks inherent in centralization of governance.  It just gets worse from there on.

Scenarios 2-4 cannot negatively affect Boolberry or its investors, so they have no investor risk. It is implausible that there is any way for CZ to take money from more honest people using Boolberry, so scenario 5 is extremely unlikely. Oligarchy is just as centralized as monarchy.

False. Take an example of XMR. If David Latapie, fluffypony or any of the others was exposed as a scammer, I would race to the exits, and so would everybody. Why? Because they knew I would, and wanted to exit first. The value of the coin would be destroyed.

If this would not happen with BBR, well, it talks more about the great divide concerning what kind of people invest in that vs. in Monero, and to each his own...

I bet that the average hodlr would rationalize it as the behavior of a single bad actor not reflective of the behavior of the entire team.

Would you?

And would you honor an options contract shorting xmr under those circumstances?

[smooth]

I have (no?) idea what if anything BBR has to do with the bytecoin scheme.

I would put it more strongly:  Event though it seems probable that CZ involved in cryptonote development, and hence in bytecoin development, there is nothing to link him directly with the pre-mine scam.  If CZ was involved early in development but not in the fraud, almost certainly he was at least aware of it, so perhaps the distinction is too fine.  If he was involved late, he could have been aware of it, but have no culpability in it.  The closeness of the association, however, still would damage the risk profile of BBR in the market's view.

Imagine for example that he wrote all of the code (all makes it simpler, we don't need to make fine distinctions about which code he wrote) but had nothing to do with premining or even launching or managing the coin at all. Just purely a programmer. There seems to be some evidence of a coin-mill at work where some or all of the various coins (BCN/BMR/FCN/QCN/XDN/etc.) being run by the same operation. Given that business structure it seems plausible that programming might be entirely separate from packaging, releasing, marketing, pumping-and-dumping, etc. and he could have nothing whatsoever to do with any of their actions (fraudulent premines, etc.).

Now the issue to me in this hypothetical scenario is that it sounds an awful lot like the established facts of the botnet case (write the code but not running it). If that happened twice with the same guy you have to either wonder if he has the worst possible luck in getting jobs, or perhaps is not that innocent. Twice should make us question luck, but certainly luck can't be ruled out.

We don't know if it is the same guy and if it is the same guy we don't know whether anything like I wrote above has actually happened.