Post-Mortem — Activist Investing in the Cryptocurrency Boolberry, Results
In 2016 there had been a crypto bear market that was lasting over 2 years already. Bitcoin was the most dominant cryptocurrency in all metrics, and it was trading for 80% below its prior peak, last seen in November 2013.
People had become disillusioned with altcoins and everything not-bitcoin, and thats assuming they had not become disillusioned with bitcoin itself.
People had given up because there was no interest and seemingly no new money coming into the space, so how could any altcoin attract new buyers?
Sound familiar? This is a story about people’s predictably low attention spans and capitalizing from that, pioneering cryptocurrency activist investment in an abandoned asset called Boolberry.
Blockchain Research and Development
Through my company Blockchain Development Company LLC, formed in 2014, I spearhead research into privacy technologies. Cryptocurrencies that offered financial privacy were just coming on to the market in 2014. On Bitcoin there were stealth addresses, obfuscation and various mixing technologies being released, but they needed cooperation with the respected bitcoin developers and this was not a priority. Other technologies leapfrogged anything happening on the bitcoin network, and were released as their own digital asset on new networks: alternative cryptocurrencies, or altcoins.
Enter Cryptonote, this technology offers privacy by default and has been the genesis of a family of cryptocurrencies. Monero is an opaque blockchain that uses cryptonote technology. It shares a common ancestor with a few sibling blockchains, notably Boolberry.
Boolberry had experienced abandonment. Its valuation had never gone over $500,000 for more than a week, and by 2016 it had reached a valuation of $50,000.
Advancements in the Monero project had shown that there is a market for these technologies, these advancements were open source and compatible with Boolberry. Boolberry also offered differences which the Monero team was not interested in, it had a more advanced way to keep its blockchain smaller, and also allowed people to alias their addresses. The Boolberry team also was pioneering research in the cryptonote and cryptographic proof space which was totally different and parallel to the efforts Monero was making in the space. By any indication, Boolberry was and is a science project amongst several academics and had fallen both into disuse and disrepair.
Blockchains never die.
Regardless of its disuse and disrepair, I silently started buying Boolberry, and mining Boolberry, until I had 10% of the total outstanding supply. Sometimes I would purchase at a premium of over 100% of the last price, to get my fill. My average purchase price was lower and I knew what would come next, because I was the market.
The plan was then to take this activist position, dust off the asset, polish it, and sell it at a higher price. This is exactly what I did while ignoring the very strange things happening on the Boolberry network, and the strange people that would be involved in it.
Why? Well there were at least two reasons
- Make a lot of money, seize opportunity
- Establish clout in a public project, which would be used in the future
Enter my alias, 1blockologist. This was a green field alias dissociated from my longer held aliases in the crypto space since 2011. It is a play on the naming schema of a bitcoin address, which at the time started with the number 1, followed by alphanumeric combinations for example 1BitcoinEaterAddressDontSendf59kuE. It is a portmanteau of bitcoin addresses and the disciplined academia of “Blockology”. Science of blockchains.
You see, prior to 2016 there were many more reasons to NOT have any professional experience in the Bitcoin/Blockchain/Cryptocurrency space. Very few people would have the flexibility in their life to publicly promote cryptocurrencies, have anything related to that on their resume, or derive benefits from society with that information. Anybody building a career would be risking that career, by people who couldn’t, wouldn’t and shouldn’t have any affiliation with bitcoin because of association with illicit markets. There was a large reputational risk. Anybody exchanging time for food and shelter would not be able to do that anymore. In 2016 that was changing, and that meant I needed to drop my anonymous aliases and associate them with my identity, that meant in 2 years everyone will talk about how early I was. These goals were successful.
It is important that the crypto community understand that Boolberry’s long term viability is irrelevant, Boolberry’s original announcement thread from the first developer has a cookie cutter “this coin is going to be the one coin used for global payments ” bullshit that you can get a rolling set of crypto investors to believe in 6-month intervals. My role wasn’t to make that happen. My “takeover’s” efficacy was irrelevant. Any expectation of me proving elite programming and cryptography skills were irrelevant. The value of my activist position and etching history was extremely relevant. Activist investors were new in the crypto space, which had until then been dominated by egotistic cryptographers with poor communication skills.
My vision for Boolberry was any circumstance that improved its utility and scarcity. I had over a dozen ways to do that, through code, and I proposed a handful of them to the community in a new white paper.
After analyzing the network and community, disrepair in Boolberry meant that:
- 1 Mining Pool had 75% of the hashpower, and the hashpower was low, there were maybe a dozen miners in that mining pool. I could take over the network with a rented GPU on Amazon Web Services if I wanted, but I didn’t, partially because:
- New users could not easily join the network. The built in ‘seed nodes’ were all dead.
- The wallet was never finished, and needed some updates pulled in from Monero’s codebase.
- The checkpoints were old, meaning the wallet would sync very slowly.
- The other 25% of the hashpower by an unknown phantom was being used to attack the 1 mining pool, sometimes causing chain splits, double spends and other denials of service when the DDOS was successful. What is going on here? Assuming this is intentional and not just bad settings on a computer, what motive supports doing this on this worthless cryptocurrency?
Finally, I added more checkpoints, for myself, and offered it to the community in a new github page. This was accompanied with a new whitepaper, and announcement thread.
Boolberry zoomed 300% percent in value the next day, and that was the free advertising I wanted.
I went through the old git commits and contacted the authors of those code contributions, via email. Some people I had to search down in other ways. People were generally receptive, and a few programmers that had previously worked on Boolberry were ready to work on it again, now that there was some — any — direction.
Through the whole project, my role quickly became business development and project management, more than actual programming. To some people in the community, they had mistakenly assumed that mattered at all.
“Hey our new fearless leader of this decentralized leaderless project isn’t the one doing the programming!”
This but one example to recognize that crypto traders have no experience trading, what they latch on to as important is usually irrelevant. Just like how XRP traders are mentally invested in the company Ripple, which is irrelevant to what would make the XRP market have future value. Crypto traders grasp at air to rationalize their ongoing ownership and speculation, typically it is the hopes of mimicking something they saw in another cryptocurrency which also happened while its price went up. Correlation equals causation to crypto traders, and there is no deeper rationale presented about how a certain action would influence demand or scarcity.
With that in mind, with regard to actual programming, we got stuck! We had created a better build, but it only worked reliably on Windows. We stopped releasing anything until it would stay stable on OSX and Linux.
A new challenger appears
Actually an old challenger. The original developer of Boolberry had disappeared and left the network in disrepair, after my new whitepaper came out and the code changes were being promulgated, the original developer came back.
He was not helpful at all.
Cryptozoidberg (CZ) was his alias, and he had a following. A following of neglected orphans that were awaiting the second coming, assuming this time would be different.
I was expecting he would come back. I read all the public threads about Boolberry, going back to the beginning in 2014, and I knew what I was going to be dealing with. A very prideful person, to say the least.
What I did not expect, is the level of influence and abuse that some of his followers would tolerate from him!
I didn’t realize that some of the other disciples in the Boolberry community were also superior intelligent academics in the cryptography space.
They were also not amused at my changes to the network, and their skepticism did exacerbate unproductive rifts in the community, and hampering market sentiment, especially when CZ returned and they flocked to him.
The strangest thing of all of this was that they eventually became helpful to my efforts — as they were compatible with Zoidberg’s ideas — and they even proposed helping add new kinds of proofs and everything into Boolberry. Things far advanced — in my opinion — of the direction Monero went. CryptoZoidberg shot them down, but it isn’t just that, it was how they retracted all of their research immediately upon this disagreement.
What is going on here?
It became clear that cooperation was not possible, and the opportunity cost for dealing with the Boolberry project was growing.
In late 2016 and early 2017 the crypto bull market began again. Yet large portions of my capital and attention span were dealing with the Boolberry project, so that I could parlay this into a success story for my goals. There were more profitable crypto assets to trade suddenly, and here I am dealing with the twilight zone of Portuguese(?) academics enacting their “Senpai” submission fantasy.
My business development had turned into keeping Boolberry on the exchanges, or getting onto new exchanges, and sometimes design work and collaborations.
This was fine, and effective enough.
Despite sentiment being distorted in the Boolberry community by this lack of consensus, it was possible to work with that story by revealing that both Cryptozoidberg and I had similar goals, there was no possibility of a contentious fork and now we had distributed marketing. Every scenario was good for Boolberry, and this inspired enough people. These projects are supposed to be decentralized and have multiple teams working on them, yet this was unfamiliar to the crypto trader who is supposed to understand that. They began to accept that, and occasionally a “whale” would buy large amounts of Boolberry at premiums. Activist investing at its finest.
As a self proclaimed steward of the Boolberry project, I realized the crypto community was unfamiliar with another important aspect: survivorship. The concept of aligning a new person with a joint interest in the project to continue work on the project after an old steward steps down. The crypto community fully expects people to get married to their pet projects forever, with no professional exit strategy or conversion to a future steward. There is a general theme of childlike abandonment here, and setting themselves up for it, as if project leaders are to stand in for their uninvolved fathers that were married to the town factory for a pension three decades later. The irony being that the exact opposite is true for the people that run projects in the crypto space, as the project leaders are serial entrepreneurs in silicon valley and traders in financial centers.
I made a line in the sand, if Boolberry looses a liquid market then I stop contributing to it.
Trading Advantages
Despite people being afraid of a market participant owning a large percentage of Boolberry and selling on them, I was able to trade in very illiquid environments very effectively. I routinely traded over 10% of the entire Boolberry float without the market noticing, directly on the order books of Poloniex and Bittrex, experiencing no slippage.
While trading, chatrooms and message boards are monitored to see if people’s sentiment changes. The traders and bots on the exchanges are monitored via their order patterns to see if they change behavior based on my own trades.
In general, patience. I could wait for an order to appear, my general analysis involved understanding the extent of non-posted liquidity, so I knew what market participants were there. In the crypto space the retail traders and the financial professionals only look at historical volume and a current snapshot of posted liquidity to come to the conclusion that there is a liquidity issue. This is an inaccurate conclusion and there is an art to trading in an illiquid environment which has no market makers or liquidity providers.
Blockchain Development Company was monitoring order book depth changes and also created a profile of distinct market participants to know exactly who was there, or when a new market participant arrived.
Denouement
Finally Bittrex delisted Boolberry and the community did not want to use the next bucketshop exchange, for fear of losing their money.
Cryptozoidberg finally had discussions with me, and at this point I was greatly skeptical of the stockholm syndrome his other academic disciples were undergoing. He banned me from the developer chatrooms, and I decided it was time to be done.
I had already liquidated the positions at great profit, and also donated some Boolberry to one of the disciples’ parallel efforts.
In the end, enough people had been inspired by the new efforts to carry the baton of Boolberry forward.
Conclusion
When this project started, Boolberry had valuation of around $500,000, today Boolberry has a valuation of $11,000,000 and reached peaks of $46,000,000. The broader crypto bull market throughout 2017 helped, but only served to amplify the reinvigorated efforts of development and community growth in the Boolberry project, whether they were contentious or not.
There is an art to activist investing in the crypto space, and any project can be revitalized at extremely low expense, and no legal work, which is a great advantage over doing this in the private equities market or with publicly traded companies.
Despite the lack of formalities, immaturity of the developers and traders, phantom miners from the intelligence community using an obscure private cryptocurrency to manage their blackops finances and use their power to DDOS other miners and debilitate exchanges via sealed court order, only one thing matters: code is law and the longest chain wins.
Get involved with my latest projects in the blockchain and distributed ledger space by following me on Twitter
