The War On Shitcoins Episode 16: Bitcoin 2 (BTC2). The war on shitcoins is a Crypto.IQ series that targets and shoots down cryptocurrencies that are not worth investing in either due to their being scams, having serious design flaws, being centralized, or in general just being worthless copies of other cryptocurrencies. There are thousands of shitcoins that are ruining the markets, and Crypto.IQ intends to expose all of them. The crypto space needs an exorcism, and we are happy to provide it.
A new Bitcoin (BTC) knockoff has been listed on CoinMarketCap as of May 28, joining the ranks of other Bitcoin (BTC) knockoffs like Bitcoin Cash (BCH), Bitcoin SV (BSV), Bitcoin Gold (BTG), and Bitcoin Diamond (BCD).
Bitcoin 2 (BTC2) is perhaps the laziest Bitcoin (BTC) knockoff to date with the name simply being the same as Bitcoin (BTC) but with a “2” added, and the original Bitcoin (BTC) logo only slightly altered.
Despite having almost exactly the same name and logo, the underlying technology of Bitcoin 2 (BTC2) is completely different from Bitcoin (BTC). Bitcoin 2 (BTC2) uses the Zerocoin protocol from the popular stealth cryptocurrency Zcoin (XZC) for anonymous transactions. Also, Bitcoin 2 (BTC2) is proof of stake rather than proof of work, which is why Bitcoin 2 (BTC2) says it is more energy efficient and scalable than Bitcoin (BTC). Indeed, PoS is more energy efficient and scalable, but it comes with the drawback of being more centralized than PoW. Aside from that, there are already numerous popular PoS cryptocurrencies such as Peercoin (PPC), ReddCoin (RDD), and BlackCoin (BLK).
Overall, Bitcoin 2 (BTC2) is a frankenstein mishmosh of a stealth crypto and a PoS crypto with Bitcoin’s (BTC) brand slapped on it, which seems dishonest from the get go.
Bitcoin 2’s (BTC2) lack of originality did not stop speculators from pumping up Bitcoin 2’s (BTC2) price 7,200% on June 6 from $0.40 to $29.27, a week after Bitcoin 2 (BTC2) was listed on CoinMarketCap. This pump momentarily pushed the Bitcoin 2 (BTC2) market cap up to $506 million, which landed Bitcoin 2 (BTC) in the top 25 on CoinMarketCap among major cryptocurrencies such as Zcash (ZEC), VeChain (VET), and Dogecoin (DOGE).
Unsurprisingly, the price of Bitcoin 2 (BTC2) crashed to $2.45 only hours after the pump peaked, since there were no fundamentals behind the rally. This pump and dump got Bitcoin 2 (BTC2) attention from some crypto traders however. Bitcoin 2 (BTC2) is at $2.41 currently.
The Bitcoin 2 (BTC2) pump to $29.27 was a farce for a couple of reasons. First off, Bitcoin 2 (BTC2) is only listed on a couple of small exchanges, Crex24 and Escodex. Despite the pump increasing the Bitcoin 2 (BTC2) market cap by $500 million, there was only $500,000 of trading volume during the entire pump and dump. Essentially, Bitcoin 2 (BTC2) has practically no liquidity on the two obscure exchanges it is listed on, and the peak market cap of $506 million was nowhere near realistic. $500,000 of Bitcoin 2 (BTC2) being sold at once would be more than enough to crash the price of Bitcoin 2 (BTC2) to zero.
In general, this is a good example of why you should investigate a cryptocurrency’s liquidity and trading before you buy it, no matter how high its rank is on CoinMarketCap.
Additionally, only 5% of all Bitcoin 2 (BTC2) in existence has been redeemed, so the market supply of Bitcoin 2 (BTC2) is tiny at this point. If more people claimed their Bitcoin 2 (BTC2), it would crash the Bitcoin 2 (BTC2) market to zero.
However, it is a good thing that more people are not claiming their Bitcoin 2 (BTC2). Bitcoin 2 (BTC2) has been distributed via an airdrop at a 1:1 ratio with Bitcoin (BTC) for those holding Bitcoin (BTC) at block 507,850 on February 5 2018. In order to redeem Bitcoin 2 (BTC2), users must download the Bitcoin 2 (BTC2) Core Wallet and then import their Bitcoin (BTC) private keys into the wallet.
Importing Bitcoin (BTC) private keys into the unvetted Bitcoin 2 (BTC2) wallet software is an unsafe decision and should not be done. For example, if a user has one Bitcoin (BTC) in their wallet worth roughly $8,000 currently, the user would be risking this $8,000 of Bitcoin (BTC) to claim $6 worth of Bitcoin 2 (BTC2). Further, in order to redeem the Bitcoin 2 (BTC2) the user would have to sign up for one of the two obscure exchanges that offer Bitcoin 2 (BTC2) trading.
Exposing Bitcoin (BTC) private keys for any reason should be avoided, and it is also risky to use obscure low-volume exchanges. The miniscule value of Bitcoin 2 (BTC2) is certainly not worth the risk.
Overall, Bitcoin 2 (BTC2) is a cryptocurrency that is dishonestly using the Bitcoin (BTC) brand even though it is nothing like Bitcoin (BTC). The code of Bitcoin 2 (BTC) is copied from Zcoin (XZC) and PoS cryptocurrencies. Further, the distribution mechanism for Bitcoin 2 (BTC2) requires Bitcoin (BTC) private keys, putting users at risk of losing all of their Bitcoin (BTC). Also, Bitcoin 2 (BTC2) is only listed on two obscure exchanges and has no liquidity to back its value.
Bottom line: Bitcoin 2 (BTC2) is a shitcoin that should be avoided.