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[Maidsafe] wound up with less than half that amount in usable money because the majority of its take was in an illiquid alternative crypto-coin, disastercoin, with a trading market so anemic it can’t be cashed out.
Oh? Well maybe things worked out then, right? Not really.
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And its trading volume has been one of the lowest of the altcoins. It’s hard to sell it. “With $23,000, the price of a Honda Civic, you could crash the Mastercoin market to $0,” says Dan Held, founder of Bitcoin market information app ZeroBlock, and director of product for Blockchain, a Bitcoin wallet service. “Owners of Mastercoin are stuck holding an absolutely illiquid currency.”
That doesn't sound good... so Maidsafe is stuck with a bunch of coins it can't move? How "innovative". Did anyone see the danger of using an illiquid "currency"?
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At least one person interested in the MaidSafe project tried to sound an alarm bell on a company forum before the sale. John Kypri, who is based in Thailand, warned that it was a huge business mistake, given Mastercoin the currency’s lack of liquidity and Mastercoin the company’s struggles as competitors like Ethereum enter the space. His criticisms were dismissed; MaidSafe employees said the majority of the sale would be for Bitcoin and David Johnston chimed in to defend Mastercoin and assured Kypri that trading volume would be increasing.
Ah, that is familiar, anyone who protests, much like I have about MSC in general - get dismissed and hand-waved away... seems like a pattern with the MSC devs and "frontmen".
So, any concluding thoughts? Lets hear from economist Daniel Krawisz, who summed up MSC's problems succinctly:
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Appcoins are just copies of Bitcoin and make things more inconvenient because to use them, there are more transaction costs. You have to go through more barriers to be able to spend them,” says Krawisz by phone. “I can’t tell if the altcoin people are trying to deliberately scam people or just not thinking ahead to the logical conclusions of these schemes. They’re trying to hit another bubble. They regret not buying Bitcoin when they could have. So they want to replay it. It’s like replaying a childhood trauma to overcome it but you just make it worse.
And the final kicker:
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Mastercoin has nine more crowd sales planned in coming months. Caveat crypto-emptor.
Yes, you could end up holding an illiquid trading vehicle for a coin nearing its 1-year anniversary with very little to show for it.
