Speculating with Bitcoins and gambling with ICOs – Bancor, Status, Tezos

When I decided to buy some Bitcoins in 2013, it was like wild west – price of BTC was skyrocketing from $100 to $1000, everyone was writing about it and exchanges were crashing from lame code, high load and hacker attacks.

bitcoin-24.de 

At that time the biggest exchange in Europe was bitcoin-24.de, so I opened an account there, bought some Bitcoins and did some trades. But then it started receiving DDoS attacks and at one point transactions were duplicating.

If I bought 1 BTC, suddenly I received 2 BTC. If I sold 2 BTC, I got money for 4 BTC, etc. I got lucky to withdraw some bitcoins, but of course the withdrawals stopped working very soon, and I was left with an account “worth” 60k EUR and 7.7 BTC.

After some update my account showed -5.24 BTC and 498 EUR. Owners promised to get the exchange working again, but it never did.

mtgox.com

With bitcoin-24.de down, I turned to the biggest exchange in the world – MtGox. Got my account approved in 2 weeks and bought some more Bitcoins.

But this time luck was not on my side. Lost about 1-2k USD after MtGox was “hacked” (later turned out – scammed by owner and stolen money laundered by another big exchange BTCe) and went bankrupt:

-100% vs +1000%

After having this much fun I still had some Bitcoins left, but because of fuckups with exchanges my average buying price had gone up to 400 USD per bitcoin.

I lost interest in doing trades on exchanges so I decided to just hold the coins for a while and wait to either loose everything or get a return of +1000%.

Ethereum vs Bitcoin

For couple of years I forgot about the coins, but when a friend of mine introduced me to Ethereum and I found out how Bitcoin core team is just fucking around, I decided to convert 50% of BTC to ETH. That was in Jan 2016.

Since then price of Ethereum and Bitcoin has reached new records and  I could achieve my +1000% return goal, if I sold everything.

But instead of cashing out, I’ve decided to take out small part of it and have some fun with the rest – so I do some trades once in a while, and also participated in 3 ICOs.

Gambling with ICOs

If buying Bitcoin in 2013 seemed like the riskiest thing you could do, then participating in ICOs is 10x more riskier – you could compare it to buying tech stocks in 1999. With good timing you might get lucky and couple of coins might survive, but I’m quite convinced – that at some point 90% of alt-coins will go to zero.

Bancor

Bancor was the first ICO I participated in. As soon as it started, the network was flooded and many transactions did not go through. First of all myetherwallet.com could not handle the load, but even after 10-20 times of trying to send payment and finally getting a transaction with status “Pending”, it later just disappeared:

I tried to repeat the process again for several times, and the same transaction ID showed up again, but with different timestamp:

In the end I got my Bancor tokens, but the process was annoying – so much hype, but so big issues just because of one ICO that even Ethereum network went down.

Bancor raised $150 million and also had a big reserve to buy back Bancor tokens, so investors could get a 100% refund as long as it lasted. Some investors felt scammed because ICO was extended from 1h to 3h, but really bad news came a week later with this post: “Bancor is flawed” – and also a recent article here: “Front-running Bancor“.

So when their reserve was near the limit, on July 18th I sent back my tokens to Bancor and got back my Ethereum coins. Return? 0%. If I would have kept them, then right now with price BNT = 0.006681 ETH I would have lost 1/3 of my investment.

Status

Status ICO was quite similar to Bancor – lot of hype, but again the same technical problems. Below you can see how many transactions per hour were sent on various ICOs:

After several tries somehow got a valid transaction and exchanged 7.01 ETH to  59546 SNT. In the beginning their price increased, but right now I would get only 5 ETH if I exchanged them back to ETH, so about -30% loss.

What will I do with them? Probably hold for a long time and see if some day I can get a positive return.

Tezos

To be honest, Tezos seemed to me the most promising ICO, and I had no problem waiting for 4-5 months (their estimate) before they even issue tokens. And as they raised $232 million and broke another record – I was not alone in my thinking.

But at this point it also seems the most doomed ICO. Looks like with raising 10x more than expected, the Tezos team has turned to fights about money instead of building the product. More info in Reuters, but the best quote was this:

The fundraiser’s terms called the contributions “a non-refundable donation” and not a “speculative investment.”

Result of their fight? Breitmans have pushed shipping date to Feb 2018, Futures Price is diving 75% and San Diego law firm considers to file a class action lawsuit.

Likelihood of my donation to generate any return? Probably below 10%.

Should you participate in an ICO?

In short – no. If you like to gamble and fully understand that scaling, security, lawsuits, scams, insider conflicts are all big risks of any ICO, maybe consider it. But if you just want to join the big hype of crypto – then buying & holding Bitcoins and Ethereum coins might be more reasonable.

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3 thoughts on “Speculating with Bitcoins and gambling with ICOs – Bancor, Status, Tezos”

  1. Es ar biš gambloju ar ICO, bet pagaidām nav gan tik daudz zudumi. Žēl ka tev ar tiem bitkoiniem tā nepaveicās, es jau pasen hardware wallet nopirku lai nebūtu tādu piedzīvojumu

  2. Paspēju nedaudz bitcoin nopirkt septembrī, kad Ķīnas biržām sāka piegriezt skābekli. Un pēc tam arī nedaudz ķīniešu ICOs ieguldīt, konkrēti Waltcoin.

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