Bitcoin’s whitepaper was released just 8 years ago in 2009. Since then, one Bitcoin’s price has climbed up to $11,000 and thousands of other cryptocurrencies have popped up alongside it. This meteoric rise has polarised public opinion around this new digital asset class. Those who are invested in cryptocurrencies are diehard fans (who more often than not are making a crap ton of money) while those who don’t are adamant that cryptocurrencies are a scam and equivalent to tulips in the Dutch Tulip mania.
It’s not surprising many are adamant that cryptocurrencies are a scam. It’s really the wild wild west in such a nascent market. With a lack of regulation, low fees trading, skyrocketing prices, and investors who are often quite liberal with their wallets, there is rampant speculation and scams abound. Additionally, cryptocurrencies have a cold and unforgiving user interface that doesn’t mesh well with clumsiness and large sums of money can be lost in an instant with a single typo or misclick.
Put all this together and you have the perfect breeding grounds for some incredible and jaw dropping stories. Here are some of the craziest things that have happened in the cryptocurrency community.
Bitcoin’s price drops $3000 in 6 hours
At the start of this most recent bull run, there was one point when Bitcoin finally broke through $10,000 and hit a peak of $11,485 on GDAX. The ensuing euphoria was swiftly shattered when Bitcoin suddenly plunged $3000 as profit taking peaked and long postion after long position were liquidated.
User “accidentally” locks out more than 1 million ether (worth $280 million at the time)
Parity wallet offers multi-signature wallets as a service. Multi-signature wallets are great because of their security and many ICOs and wealthy organizations/individuals use Parity wallets to store their Ether battle chests.
Back in November, one user was playing around with one smart contract that turned out to be a critical dependency for all Parity multi-signature wallets created since July 20th. This effectively locked out all ether in these wallets. This amounted to more than 1 million Ether locked out worth around $280 million at the time.
The infamous user subsequently went on Gitter and wrote “i’m eth newbie..just learning”.
An eager ICO investor spends 236 ETH in fees and still fails to get into the AirSwap ICO
During an Ethereum-hosted ICO, especially a popular one, the network can become exceedingly congested as a large number of investors attempt to send their ether to the ICO’s smart contract in order to purchase the ICO’s tokens. Transaction fees during this time can skyrocket, leaving low fee transactions in the dust.
This one evidently very rich user decided to guarantee him/herself a spot in the popular AirSwap ICO by spending 236 ether in transaction fees in order to buy 1,700 ether worth of AirSwap tokens. Unfortunately, the transaction was sent too late and the overall ICO funding cap was hit before the user could purchase the AirSwap tokens.
The transaction was cancelled, leaving the user 236 ether poor. Although the 1,700 ether in the transaction came back, the 236 ether was paid as a transaction fee and was not recuperable.
Checkout the transaction on EtherScan here: https://etherscan.io/tx/0x167b6e3217536e66e69f906a457b2457c6cc4f95928a47b0443ad895b23c6e76
A Bitcoin exchange gets hacked for 850,000 Bitcoins
MtGox was one of the first major Bitcoin exchanges. Due to mismanagement and poor coding practices, hackers were able to slowly siphon hundreds of thousands of Bitcoins from MtGox’s reserves. By the time the company found out, 850,000 Bitcoins were lost. This was worth over $460 million at the time and $14.4 billion today at $17,000 a coin.
Trading was halted in February 2014 and in April 2014, the company began liquidation proceedings. At one point in time, MtGox was handling 70% of all Bitcoin transactions worldwide. The hack triggered a year-long bear market in which the price of Bitcoin dropped from $1000 to $200.
This was the largest Bitcoin exchange hack, ever.
A large market sell order on GDAX causes the price of ether to drop from $320 to $0.1
This happened earlier in the summer when a trader placed a multimillion dollar market sell order on GDAX that caused a massive dip in price, which started a huge chain reaction of stop loss orders being hit and margin funding liquidations. The price of Ethereum on GDAX briefly hit $0.1 from $320.
/r/dogecoin sponsors a NASCAR racer
A campaign started in /r/NASCAR to sponsor John Wise’s No. 98 Phil Parsons Racing for the NASCAR Sprint Cup Series race at Talladega Superspeedway in May 2014.
An unlikely subreddit decided to step up and crowdfund a sponsorship: /r/dogecoin. The amount needed for the sponsorship was $55,000, at the time worth 100,541,093.89 Dogecoins. One user accidentally donated 20,000,000 Dogecoins instead of the 2,000,000 he intended (a difference of $13,500) but stood by his decision.
The $55,000 was reached with more than 1,200 redditors participating. Wise’s NASCAR was decorated with a Dogecoin themed skin and he gave an AMA on /r/dogecoin.
An obscure YouTuber convinces thousands to “Pump and HODL” Chaincoin
YouTuber HighOnCoins started a movement earlier this year called “Pump and HODL”. He convinced his community to start buying Chaincoin and holding it. The movement obtained some virality and caused its price to pump from $0.04 to $6 in a week.
Chaincoin was an abandoned project that traded on a couple exchanges with a daily volume under $100,000. HighOnCoins was a YouTuber that often looked disheveled whilst smoking and drinking during his streams. His selling point was that whales controlled all the major cryptocurrencies and were wringing the noobs dry, so this was the chance for the noobs to take control. But guess what? Him and all his followers that got in at the start were the Chaincoin whales.
I documented the timeline of events of the Chaincoin pump and dump scam in this blog post: Timeline Of The ChainCoin Scam - Massive Cryptocurrency Pump And Dump Scheme
Exploring old posts in /r/Bitcoin brings current price levels into perspective
This was posted in April 2013.