This is going to be my first post on Steemit and I wanted to make a good topic for everyone to enjoy.
My
Background ( 1.5 years in cryptoworld )
I am a day trader on several exchanges and also own a decent size mining setup. 15 rigs. Mining ETH.
My day started out on May 30th 2017 at around 7pm. I logged into slack and was preparing for the ICO of BAT.
In case you don't know what BAT was or is.
BAT - Basic Attention Token . It's a new coin that had its ICO today May 31st 2017. Its lead dev team is Brendan Eich and Brian Bondy. They developed Javascript, Mozilla, and evernote to name a few. Long story short the Cryptocurrency looked good and had a solid team. So I thought why not invest a good chunk of money for a decent sized return on my money. So i did as everyone else followed the pdf guide and added eth to wallet and was ready to send at specific time on May 31st 2017. At this point I got several family members involved too who liked the dev team of BAT.
As the time neared around 6am Pacific we were all drinking coffee and had the web browsers open and ready to participate in the ICO. Keep in mind this was the first ICO i've done with ETH.
So the time hits about 1 min before BAT ICO launch. Then BOOM. Ethereum blockchain and https://etherscan.io had a hiccup. For a second I thought because of all the madness maybe just maybe etherscan was getting DDOSed. So i ran over to my mining rigs and checked if they were all online. Ironically the blockchain updating was halted for about 3-5minutes. I thought to myself "What the hell is going on???" "Did China just wipe us out?" I quickly refreshed my browser and so did about 3 other people I know. Nothing on the screens. No updates nada Ethereum blockchain not updating on the website. It's like it was frozen. I even tried to send the Ether tokens to specific address for crowdsale after about 5 mins of no info from blockchain. Sure enough error code came back and nothing. About 30 minutes later the etherscan.io started working and the blockchain was updating again. I also just found out the crowdsale was over and the donation max was reached. I thought to myself how in the hell and why?
At this point about 2,000 users in the BAT slack forums are going nuts. Complaining and going crazy about how it was over in 3 seconds. Some people didn't even know what happened until it was all over. Some people probably still do not know what happened which is why I'm writing this article. I'm taking time out of my day to give you guys/girls some quality info.
So what did happen and how does this apply to the rest of ICO/ETH and crypto world.
- BAT TOKEN ICO was a complete insider trading job. This was not a initial coin offering for the public. This was a marketing ploy with private funding by greedy people.
We can start with the facts
A - 10 Minutes to ICO launch etherscan.io stops working and ETH blockchain stops updating.
B - Without a updating blockchain people don't know what block number they chain is on.
C - Lots of people just guessed on time zones and current time calculations on when to send money to address
D - The only way to stop the blockchain from updating is by disconnecting the internet of the current mining farm/rig temporary cutting it off from updating to the network.
E - All BAT tokens are held by as few as under 200 different people. Did each person put in a large amount? Or perhaps know the dev team or just a group of mining whales.
- BAT TOKEN ICO was a complete insider trading job. This was not a initial coin offering for the public. This was a marketing ploy with private funding by greedy people.
After looking at some of the information you can see that a small % of people own a very large amount of BAT.
How could they pull this off? and How can others pull this off? And how is this bad for ICO launches with ETH.
- You have coin you want to launch and have all the hype built about it. Everyone is looking for the contracts to be sent and start when ETH hits block number XXXXX. If you have enough contacts with big mining pools. Or you simply are a mining pool and want to grab a nice portion of the sale yourself. One would do the following.
- Wait for the blocknumbers to be announced for the specific ICO. Whenever the crowdsale is going on you would be in contact with the mining farm or be the worker with the block being hashed you would disable the internet connection temporarily from it. This would allow the blockchain to be temporarily frozen from updates. Nobody would know exactly when blocknumber XXXX started. Essentially you would be first in line with a ticket in your hand to buy however much you wanted. Then you coordinate the buys and send them in as the farm/rig comes backonline to update the blockchain. Everyone else was frozen in time for the past 15-30 minutes wondering why it stopped. You on the other hand had just sent the required Ether to create the contracts and now the limit is up. Nobody else can buy into the crowdsale. You are now the proud owner of X amount of tokens of whatever ICO is lauching.
Now why would you call out a ICO if it were really a Private fundraising event? The reasons are countless but basically for marketing strategy and to gauge market value of what your about to launch and keep it all in house. You see in stocks we have the SEC and regulations. In Crypto world its unregulated these guys can do whatever they want when they want. I love the volatility but lets be transparent. ICO's are almost all going to be rigged at the end of the day.
This is a concerning issue for me as a investor and day trader. I normally would never even post articles but I figured since i wasted alot of time and lost out on a chance to make some good money, I'd share some wisdom.
If you would like to donate please do so. Maybe it will help me write some more articles.
Either way thanks for reading my post.
Happy Trading.
-S-
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- Wait for the blocknumbers to be announced for the specific ICO. Whenever the crowdsale is going on you would be in contact with the mining farm or be the worker with the block being hashed you would disable the internet connection temporarily from it. This would allow the blockchain to be temporarily frozen from updates. Nobody would know exactly when blocknumber XXXX started. Essentially you would be first in line with a ticket in your hand to buy however much you wanted. Then you coordinate the buys and send them in as the farm/rig comes backonline to update the blockchain. Everyone else was frozen in time for the past 15-30 minutes wondering why it stopped. You on the other hand had just sent the required Ether to create the contracts and now the limit is up. Nobody else can buy into the crowdsale. You are now the proud owner of X amount of tokens of whatever ICO is lauching.
Update. 6-4-17
I'd just like to update you guys. It's been about a week now since the ICO. I've Seen prices as high as 28-30 cents per BAT. its on Bittrex exchange right now. Must have felt good to be an insider one of the 200 people who got a share at 3 cents. to 6-8 times your money in a week on something not proven.