5 Reasons to Stay Away from Bytecoin Right Now
The Bytecoin project gave indications of an overhaul, but sudden fame showed the network and exchange wallets could not handle the stress test.
Bytecoin (BCN) caused a mix of enthusiasm and ridicule. A coin jumping out of the sub-penny range into the price of a few cents is seen as the perfect opportunity for high returns. And Bytecoin in some ways resembled Verge (XVG), for being an older and forgotten digital asset which became famous on the renewed interest in crypto coins in late 2017.
But in the coming weeks, the attitude to BCN is to “hurry up and wait”, and here are the 5 reasons why:
Network Issues: Make sure you are able to send and receive coins, as delays are unnerving, and losses may hurt deeply. For now, exchanges have closed wallets, and it may take a while before the market calms down. The Bytecoin Network produces a block every two minutes, which may be inadequate even for a small run to move coins between exchanges. Waiting for a less congested time may be a good idea.
In a hasty message on Telegram, the Bytecoin community got a brief explanation of the situation:
“Network is overloaded, thats why Binance, Poloniex, other exchangers and your Wallet don`t work properly now.. Core devs very cool boys, and solved problems this night with new version of bytecoin daemons 3.0.3 but anyway blockchain is highly loaded so [there] might be problems.”
The Bytecoin Team: What is known about the old and the new Bytecoin team is their propensity for exotic pseudonyms. This is the biggest issue with the project, where developers and community leaders wish to remain concealed. Granted, there are other anonymous lead developers. But in the case of Bytecoin, the new team will have to prove itself first.
Also, time will tell if there are just temporary network issues, or if Bytecoin is merely a slow coin incapable of handling increased traffic. The asset has always seen low activity as a niche digital asset.
Mining is Risky: Since Bytecoin is the first CryptoNote anonymous coin, it is, in theory, minable by GPU. But the most common pool, Minergate, is also suffering from the network congestion and rewards are not paid out.
Additionally, there is no way to estimate who is mining on the network, and with what equipment. It is possible that some hashing power is mining this coin, now that Monero has become ASIC- resistant. Which means that attempting to mine Bytecoin through a wallet and a GPU may be a futile exercise. Additionally, CryptoNote mining software is sometimes intentionally inefficient, with smaller rewards and ways to abduct hashing power to benefit other wallets.
Too Much Publicity: Twitter served Bytecoin well, and the latest peak in prices caused a massive spike in social media activity. Which means that now, the Bytecoin price may be swayed this and that way by varying opinions. It is best to wait out for the hype to slow down, and for the panic to settle, then do proper research on the technology and limitations of the project.
There is also panic talk, such as the idea that the locked tokens may, in fact, be secretly traded. There is no way to prove that information, leading us to the next point, the volatile price:
Price Volatility: The sudden fame of Bytecoin may lead the price of the BCN digital asset to swing wildly. With trading, deposits and withdrawals frozen, currently, the BCN price has, in effect, dropped to zero - at least temporarily. But it is hard to predict what would happen in the coming days. Whales and large wallets may decide to liquidate coins, additional pumps may follow - and the price may remain volatile.
In case of rapid price spikes, the experience shows that FOMO buying usually hurts newcomers. This happened with Bytecoin as well, so the best decision is to “hurry up and wait” to see how trading would unfold.