Bitcoiin: Not Creative Spelling, but an ICO

A hard fork of Bitcoin is one thing, but now, there is an ICO to produce "the next Bitcoin".

Bitcoin hard forks are still in fashion. However, others are taking an easier route, by creating an almost-Bitcoin asset. A new project has started with the promise of making a second-generation Bitcoin, called Bitcoiin, or B2G.

In the case of Bitcoiin, the team had to fight off immediate accusations of a scam. The reason for this is the temporary referral and reward scheme during the ICO, which has triggered skepticism that the project has the elements of a Ponzi scheme.

PRESS RELEASE: TO CLARIFY SOME FACTS AND RESPONSE ON ALLEGATIONS BY COINDESK, TNW, CNET, MASHABLE AND BUSINESS INSIDER https://t.co/g3qKWFAiKm via @Bitcoiin2Gen

— Bitcoiin2Gen (@bitcoiin2gen) February 20, 2018

What is even more amusing about Bitcoiin is that is has recruited Steven Seagal, the martial arts movie star known for his eccentric behavior, has now joined the crypto world by becoming an ambassador for the new project:

From Team Seagal
Steven has just become the worldwide ambassador for the Bitcoiin 2nd Generation crypto currency. Press Release https://t.co/aY13wDCbzh
More to Follow
Love and Peace
Team Seagal

— Steven Seagal (@sseagalofficial) February 20, 2018

In about 33 days, Bitcoiin would launch, claiming to be a completely separate digital asset, promising to build a large mining farm. The Bitcoiin B2G asset claims to use the Hashcash algorithm, which is somewhat mystifying, given that it is mostly used for spam protection and in DDOS attacks, and there are actually no coins using that asset.

Forking the real Bitcoin with the same mining algorithm may not be viable in 2018, since ASIC mining has large, but still limited resources. And in 2018, creating a mined coin may mean running up against a scarcity of GPUs as well.

Selling Cloud Mining?

The project claims that B2G would use the same “proof of work”. However, this is quite misleading, as the anti-spam SHA-1 hash function is far less complex compared to the SHA-256 algorithm for Bitcoin. It is indeed a form of proof-of-work, but much lighter compared to Bitcoin.

The promise of B2G to launch complete with a farm raises many red flags, the first one being a form of centralized mining. Then, there is the question of why the farm would need a “massive” amount of mining rigs for a much simpler hash function used to filter out spam mail.

The other red flag is the opportunity to buy “cloud mining”, which has been seen as a form of scam around the crypto community.

“Bitcoiin B2G miners have access to Dragon Mining’s massive array of mining rigs.”

Usually, in a fair coin launch, mining starts off as voluntary effort. In the case of Bitcoiin, 80% of the ICO proceeds would go toward building a mining farm, then sub-letting it for cloud mining.

The presence of a large mining farm that would potentially mine all the coins in a centralized manner, while selling mining shares, should be highly worrying.

In the case of Bitcoiin, the strange approach to distribute the tokens in an ICO raises red flags. What is more worrying is that the token sale is inviting direct cash payments, and has collected relatively few crypto coins. Allowing cash investments invites sometimes naive outsiders, who may believe outlandish promises about the rise of Bitcoin.

Price Red Flags

Usually, new assets related to Bitcoin will trade independently and achieve a certain price level, but this is highly unpredictable. In the case of Bitcoiin, the roadmap states that the price of the asset would be $388 at the end of 2018.

This recalls BitConnect, where the project somewhat had a crystal ball to predict the price. Indeed, there was a price growth, but it was achieved by market manipulation on Bitconnect’s closed exchange.

So promising an exact price for an asset months into the future raises questions of how the project could be so daring as to predict the market – unless there is some form of manipulation involved.

Who Else is On the Bandwaggon?

Bitcoiin is not the only project posing as “the new Bitcoin”. Even now, several Ethereum-based “fake forks” exist, such as Bitcoin Silver, and ETH tokens can basically copy anything, like Litecoin, Dash, and other larger coins with their own mining pools.

With the rise in airdrops and free bounties, there are other projects trying to woo the community with freebies. In this case, a very similar idea is making a token out of Bitcoin, and calling it “Bitcoin Token”.

I’m convinced bitcointoken is a scam. Don’t fall for it. Be cautious of extraordinary claims https://t.co/JqMDSDhmgD

— Andreas M. Antonopoulos (@aantonop) February 20, 2018

What to Remember About Bitcoin Copycats

Bitcoin whales would never touch their cold storage to honor the constantly spawning forks and tokens.

The two most important things to avoid are not to expose a full wallet’s private keys to a dubious online service or new wallet.

The second thing is not to send actual Bitcoin to obscure exchanges. With hard forks, exchanges are sometimes the earliest respondents to provide a balance for the new asset. But this means your Bitcoin would need to be on a small, insecure exchange with an unknown withdrawal policy.

And if users can safely claim some free coins, no one would be hurt. But going out to buy the new coins with valuable assets may lead to losses, as the new tokens could go through a pump-and-dump, or trade on very small volumes.

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