As of 11/15/15 I’ve discovered that Whycoin was produced with a “staking exploit” whatever that means. Plans at this point are to release the coin over with better guild-lines for distribution. There were issues with multiple sock puppet accounts being made to take advantage of the free coins.
Links for more information:
Block explorer http://whyexplorer.infernopool.com/richlist
I’ve been lucky to get in near the beginning of Whycoin and have received a few coins for free. (They are currently giving the coin away for early adopters through Reddit.) They are not traded on any exchange and so they have no market value yet. I thought I would ramble on a bit about what I feel creates value in a system and what I initially think of the coin; there is not much information yet so things may change.
In the case of Whycoin the majority of the coins are currently held by a 501(c)(3) charitable foundation Why Fund Inc. By charter these coins cannot be sold by the foundation and must be gifted through trusties to those that satisfy “Proof of Knowledge” or participate in furthering the goals of the fund or make cash donations.
What a concept! Giving coins away for free to people who support the coin or learn new things, play educational games or take quizzes. From an investors point of view how do you build value from giving away coins for activities like these? Many people have questioned what the value will be with 50 billion coins available and asking for people to “do the math”. (The math around it is a complex system analysis that is beyond the scope of this blogger.) 🙂
How many people are going to hold onto the coins and get their 20 percent reward and how many will dump on the market? How careful will the foundation be about losses from theft or the control of the rate of coin gifting? What type of effort will be made by the community to support the coin? Even though there are currently 50 plus billion coins, by charter the foundation can’t dump them on the market except through free gifting and have the watchful eye of the US government to keep them honest. I wonder if they can buy them back to support the market price if need be?
In only a few days there are close to a thousand coin holders with a distribution that is unpresidented in the coin communities. It is a very interesting coin I’m very excited to see how things work out and the price is right right now. 😉
A Possible New Market – Africa
With Facebook planning to provide free satellite Internet access to Africa a whole new area could open up needing banking services. Jumping straight into cell phone use to move and store value makes a great deal of sense where bank services are not currently available. There are places where carrying cash could be very dangerous and corruption and other issues can prevent funding from getting where it can be of use.
Anytime you can gift something to someone without them incurring a liability of some sort I believe you can build value. If you can get them to do something that improves their own knowledge and ability to make additional resources for themselves, it is even better.
A quote from okie75: “It is my personal dream that one day a nine year old girl in deepest Africa can dial in on her cell phone and learn to read and write in her own language…and receive coins for her achievement. Thereby being able to purchase goods and services…and gain economic inclusion in her world.”
Why Buy this Coin?
If it holds a price, a 20 percent return on investment is attractive. It is an economic activity that creates value. It could develop community through incentive payments and build value by encouraging the pursuit of knowledge.
We should start thinking about how to build value through non-traditional ways. With jobs being lost it would be a way of getting income without forcing the creation of unnecessary employment (such as laws that make it illegal to pump your own gas) or relying on government subsidies. It could help people get started learning new skills.
Putting money into a coin community does not feel the same to me as investing in the stock market although the markets and the basics appear the same. For some time people have been playing pump and dump and releasing coins that were developed by asking for IPO type funding or by so called angel investors pushing funding into marketing. Most coins that have taken this route end up with the insiders cashing in and abandoning the project. Even coins backed by non-profit foundations have been prone to failure, for example Clean Water Coin. It has been a jungle out there so buyer beware.
What is refreshing about Whycoin so far is that your can’t buy it yet and there was no initial offering to try to get investors into some type of presale and those in the foundation should not directly benefit from the type of price manipulation so prevalent in other coins. It is refreshing to think that funding invested in this coin should go towards helping create value in Proof of Knowledge and support of the community that values this coin. When it hits the market it should be interesting to see where it goes.
At this point things are just getting started and very much under construction. A few issues to think about:
- How open will the foundation be to code additions from the open source community? (Code is currently not on Github as yet)
- How is inflation control handled? Is there a block reward cap? (At 20 percent compounding the first doubling of coins will quickly approach the 100 billion limit, yet there is time to deal with this)
- With a free coin will people immediately try to cash out or will they feel like contributing efforts to build up more value in the coin community?
- How well organized is the foundation? Will they do what they claim and be supported?
The Marginal Cost of Banking
I believe we have a chance to reduce the marginal cost of banking to near zero and a social obligation in my opinion to try to do so. Please don’t feel offended if this is your business model but the way things are going loans at high rates is a ticket to the poor house both individually and nation wide. Our current methods of banking and debt obligation do little to raise the standard of living for the population most in need of it. The concentration of wealth into the hands of too few people is dangerous in an Plutocracy (government by the wealthy) and profit oriented values with no regards to externalities are not helpful in solving the ecological problems we are currently experiencing. We know from historical experience that the concentration of power in too few individuals, even if they have the best interests of society at heart, often results in outcomes that produce much suffering.
For a long time having capital or control over resources was the way to financial success. The rules are quickly changing, and having corporate backing or a 9 to 5 job are not the same key to success as they were in the past. Things are opening up for individuals to make a much bigger impact through entrepreneurial and other value building efforts.
Exchange rates between counties and so called free trade agreements have created imbalances, job loss and host of problems and issues. Cash based transactions make illegal activities much more difficult to trace and counterfeiting and inflation removes value. Many resources are used by society printing cash, moving it around, and safeguarding it.
I believe the future of banking is in coins like Whycoin where new opportunities can be opened up for individuals without saddling them with 30 year mortgages. However, who knows where things will go, so please do your own due diligence and don’t take this as investment advice.