Part 11. What is happening?
First of all, sorry I’m a little late with this edition of the blog. This delays quite obviously has a lot to do with me consuming unnecessarily excessive amounts of food and wine in Georgia (which I highly recommend visiting btw!), there were other contributing factors. In short, that’s what happened:
Scrolling through Reddit right now feels like the apocalypse might feel like. A lot of people are angry and disappointed, someone said they’re now done with crypto after losing $25,000, someone else lost twice as much and is just freaking out, other people are preaching patience, drawing parallels with whatever happened 3, 5, 7 years ago and even with the dot com bubble.
Some people are happy and cheering the collapse on, some are posting huge monologues of text which can simply be summed up as ‘I told you so’. Personally, I followed the most important rule and never invested more than I can afford to lose, so I’m calm and optimistic.
Among all the panic and self-assurance attempts (which I’m sure is mostly coming from people who bought crypto at its peak in January) I saw one post saying that now is the time to tell all your friends about cryptocurrencies. Now is the time to buy low.
Personally, I don’t really have a lot of money to spare. At a stretch, I can afford to get $200 worth of crypto a month, and that’s if I’m not buying anything expensive or planning a trip. Still, I’m going to be buying as much as I can now and I honestly recommend you do the same. I don’t expect immediate profits, but even if bitcoin returns to its all-time high in two years time, that $200 I would’ve forgotten about by then will turn into $700.
As the market went down and I was in Georgia refusing to pay roaming charges, I realised that I can’t even access Binance to at least try and do something to save my assets. As you might remember, I still had all my Satoshis invested in Verge and TRON, which were nowhere near the limit prices I’ve set.
Still in Georgia, I gave in and switched my phone on, but the text from Binance just wouldn’t come through. I waited an hour, requesting several new codes, but nothing happened. I blamed it on roaming and forgot about it until the next day when one of the codes finally came through. Just one, out of at least 15 that I requested. I came back to Russia, tried accessing Binance again and the same thing happened. For the entire day their texts just weren’t coming through. I got so annoyed that I did one thing I almost never do - contacted their support.
I understand how busy they must be, so I didn’t expect much. I described my problem, they immediately got back with an automated email asking me to try a few things like reloading my phone and so on. None of the things worked, so as they asked I replied to the email with my location information, my phone number and all that.
It took Binance exactly one hour to get back to me saying they’ve contacted the SMS service provider to further handle the issue and they offered me a manual reset of two-factor authentication. Their website says it might take up to two days but I wasn’t really up for waiting that long.
Next morning one of the codes went through. I opened my laptop, requested a new one and it was on my phone within 5 seconds. I don’t think the Binance support had anything to do with it, must’ve been a temporarily malfunction on the SMS service provider’s part, but props to the support team for actually being helpful and quick with their responses.
Also, this was the e-mail address they replied from:
It’s interesting, but let’s move on: after finally managing to access Binance I saw that my $230 ‘portfolio’ lost around $60 in value over one week. Obviously, neither of the orders were filled, so I’m still stuck with TRON and verge tokens that are now even cheaper. I’m not sure what to do here - I really don’t want to sell them at a loss. I might wait for another week and try to at least break even. For now, I don’t really have funds to continue trading and that's utterly annoying.
At that moment I remembered a news article I saw the day before:
So yeah, I went ether shopping to cheer myself up. Also, I thought this would be a great opportunity to finally explore LocalEthereum, which I actually tried to use back in the first instalment of this blog, but the SignUp page just wouldn’t load in Google Chrome. I switched to Safari and everything worked.
LocalEthereum is very similar to LocalBitcoins, both in function and in design. Using location and payment method filters, I quickly narrowed my search down to two high-ranking sellers and opted for the one that was offering a slightly cheaper price. Not that the trade became open the difference between the platform became apparent.
As I said in the first part of this blog, judging solely by the way those platforms work I would always opt for LocalEthereum when exchanging fiat for crypto and vice-versa. Simply because they use smart contracts for their escrow services. Now that I’ve actually got to using it first hand, I know for a fact, I’ll be back here.
There are a few thing about this platform that I really like. One of them is this:
LocalBitcoins saves all the chats. Not that I need them automatically destroyed or even deleted - it’s just nice to see a crypto-service care about their users’ privacy.
So, I opened a small trade: $70 at just under $300 for 1 ETH and saw this:
So, the seller needs to fund a smart-contract escrow even before I transfer my money. They’ve done it within a couple of minutes after I opened the trade, here’s how it changed:
So, you get all the information about a smart contract responsible for this particular deal. Honestly, I see hash - I’m happy, which might be the easiest way to scam me out of my money, but still. At least to an amateur eye this looks super safe and legit. So I transferred the money and pressed ‘paid’.
This is a nice little ‘roadmap’, isn’t it? But this is where I kind of stopped understanding what exactly is stopping a just-registered user making my first trade from getting robbed? The seller’s money is protected in escrow, and its them that need to release the funds upon receiving my money via a payment system that isn’t even remotely connected to LocalEthereum.
I thought, nothing would really stop them from pretending they never received my transaction and not releasing the funds from escrow, right? In theory, I could report them, but I’m a newly registered user with zero trades to my name, while they have 2500+ trades. To be fair, this and their rating is the only reason why I trusted this seller. Yet again, one complaint from me wouldn’t have changed anything.
But just a couple of minutes later it became apparent that I had nothing to worry about:
As you can see, the trade took just 9 minutes and a couple more minutes later I had some ether in my wallet. I think I got around $68 worth. The following day, ether dipped even more, but at the time of writing, it seems to have started recovering. Right now, I have $70.3 worth.
One thing that I feel needs to be said about both LocalBitcoins and LocalEthereum is that you’re very unlikely to buy crypto at current market prices. The rates are set by the sellers and they are usually higher than current market rates. With this deal, I bought Ether at $295 when according to Coinmarketcap it was traded at $280. But, if you need to quickly and safely buy crypto for fiat - this is the best way, at least that I know of.
So now the burning question was: what to do with just a little under a quarter of an ether? The first thing that came to my mind was investing in an ICO, as most of them are held on ethereum, so it only seemed natural. Also, I’ve never even tried to explore this space (which, to be honest, I have absolutely no faith in right now), so I thought I’d give it a go.
As you may know already, I have zero patience. So, naturally, my first criteria in looking for a project was the ICO’s end date. On August, 14th I found two projects that were meant to finish their sales the day after. One of them is called SKYFchain - I opened their website and immediately said ‘hell no’.
I mean, just look at this thing:
Yeah, alright, their ICO has decent ratings, but Business-to-Robots? And what in the world is that video preview? In the video, they’re saying that ‘autonomous cargo-robots are transforming logistics NOW’ as they show this:
To clarify: this isn’t remotely possible. Drones are BANNED in at least 15 countries, ranging from Belgium to North Korea, with dozens of other jurisdictions imposing heavy restrictions on the use of them. For instance, apparently in Canada if you fly 90 meters high and you have to be 70 meters away from EVERYTHING.
It came as no surprise that the team is all-Russian. I think I’ve said enough about how careful you need to be when investing into Russian ICO projects in week 2 of this blog. Still, I scrolled through their website a bit more and I found this:
I see the Russian Post here. Some of you may already be laughing your backside off, but in case you don’t know, check this out:
So SKYFchains are saying they were part of this as well? It’s a definite NO-NO from me.
Another ICO that was meant to be closing on August, 15 was Humancoin. Again, good ratings and all that, so I figured I’ll have a look at them. It’s meant to be a charity project - which immediately was way more attractive to me than the cargo drones. For a while, it looked kind of believable - I scrolled through half a dozen pages of their announcement thread on BitcoinTalk forum and the comments were generally favourable.
I left the decision until the next day and signed up on their website. According to most ICO trackers, their ICO was meant to be over, but apparently it was just the presale. This is their Twitter:
Very conveniently they’ve managed to collect exactly $1 million just in time before the presale ‘closed’. I’ve registered on their website and had a look at how I could contribute:
So, according to this the pre-sale goes on until September, the 15th? But they said on Twitter they’ve closed it?
This is kind of suspicious, so I went back on BitcoinTalk forum and Reddit to look for warning signs. The more I digged, the more suspicious all the similar encouraging comments started to look. Then I found this:
And I found this post on BitcoinTalk.
The final straw was when I saw this:
They’re clearly trying to lure people in by using those logos. They don’t have official partnership with any of those services, nor are they endorsed by them. My conclusion is that they’re way too suspicious and there’s a huge chance of Humancoin being a scam.
my One of the reasons why I wanted to try investing in an ICO was to see what the process is actually like. With Humancoin all I had to do is put in my email address and password. I was expecting some kind of a whitelist or identification or something similar. Overall, the process was WAY too easy. Another alarm bell ringing?
Besides, there are already quite a lot of charity-focused blockchain projects. If these people from Humancoin are actually using charity as another way of luring people’s money in - shame on them. I’m going to take mine elsewhere.
I think for now, my ether is better off in my own wallet. Over this week, I’ll scout for more ICO projects or find another way to utilize the ether. Stay tuned, see you next week!