TL;DR. Ecology:-. Technology:-. Decentralization:-. Valuation:-. Rating:1/10. Scam.
BD Ratings jumps straight to it: there are many indications that Bytecoin is a scam. The details are mainly outlined in a bitcointalk.org thread where multiple independent pieces of evidence are presented, mainly by user rethink-your-strategy but to some degree also by other people in that thread, like fluffypony and smooth. It is an astonishing read, and this write-up here is only a supplement to that work. Aspects of it needed verification before BD Ratings could proceed with a ratings analysis. And there are also new findings that will help paint a clearer picture (rethink-your-strategy did all digging back in 2014). Those findings are detailed below and are mainly: dormant accounts waking up with seemingly new owners, as well as patterns of user account registration and normalization.
The main takeaway from the facts presented by rethink-your-strategy (as well as here in this article) is not that certain coins are plagued by sockpuppets; that itself is not a very uncommon phenomenon. No, the danger with Bytecoin is that instrumental people within the Bytecoin project have been proven to be part of a larger net of carefully orchestrated user accounts. This net of users all attacks anyone criticizing the coin, and continuously obfuscate the fact that over 80% of the total supply was pre-mined. Bytecoin has a market cap of around 700 000 000 USD, why it is important to have a clear picture of the project’s history and current setup.
Bytecoin was announced on the 12th of March 2014 by user DStrange on bitcointalk.org (BCT). The coin was based on the new, privacy focused CryptoNote technology, thus using the memory-bound CryptoNight consensus algorithm that was quite resistant to ASIC’s back then. DStrange was not a developer; he appears to have stumbled upon Bytecoin when trying to mine a useless Bitcoin clone with the same name. He quickly put on the Bytecoin cloak and started handing out free coins. This is the first thing that seems a bit odd; a BCT user stumbles upon a two year old coin and immediately starts doing marketing operations like giveaways.
Registration Dates, Inactive Users, and Account Normalization
First to reply to DStrange’s post was user Lamalicious, hailing the project as looking like Satoshi’s second venture. Lamalicious registered on BCT on the 23rd of December 2013, the exact same date as DStrange. Another early poster in the thread, EndlessWin, also registered on the 23rd.
Another user, Rias, appeared in the Bytecoin thread and showed great interest in the project. Rias wrote his first post on BCT on 20th of Jan 2014. So did the user Denni. DStrange first wrote something on BCT on the 21st of Jan 2014. EndlessWin created his first post on the 21st as well. Lamalicious created his first BCT post on the 22nd of Jan 2014, as did user Hexah. Cheesus first posted on BCT on the 23rd. Hexah, Cheesus and Denni registered their accounts with minutes apart.
And this is where it gets even stranger. From the 5th of February to the 5th of March, all seven of these users go completely dark. Just before the 5th of February, and just after the 5th of March, two weird things happened as well. All seven are posting on the BCT “Beginners & Help” section, welcoming newcomers. DStrange even welcomes Rias in person. Denni interacts with DStrange in another thread about favorite movies. In one thread, Rias welcomes one person two separate times, probably forgetting to switch logged in account. Hexah is in that same thread saying hello as well. Note that this is one week before DStrange gets the Bytecoin announcement thread going, so they are not supposed to have met yet.
Putin and Crimea
The second weird thing is that the seven supposedly independent users all show an interest in Putin and the invasion of Ukraine that occurred by this time. So to spell it out clearly, seven users that started writing on BCT at more or less the exact same time (many of which registered on the same day even), went dormant for one month, activated at the exact same time to post in the welcome-section of BCT as well as about the Crimea conflict, to finally rally under the Bytecoin flag later that March.
A couple of pages in, on 11th of April and onward, user Keeminakar ignites the rumor that Satoshi is involved with Bytecoin. FasterStronger joins the discussion, praising the coin. MadridReal perpetuates the Satoshi rumor. Qwerty777, and Agent99 add to the discussion as well. They are all registered on the dates 20th, 21st or 22nd of March 2014. They are all likely Russian (notice the use of Russian emoticons where semicolon is omitted, as well as the interest in Russian translations, talk of Russian relatives etc.). All five of these users stop posting altogether on the 14th, 15th and 28th of September 2014. Then they are dormant for almost 4 years, when out of nowhere, four of them start posting again in February 2018, seemingly sold to new owners considering the change of writing style.
Skepticism on the Rise
In the announcement thread, it was soon suspected by some that the blockchain seemed to have been started recently and not in 2012 (as was the official year), with a large majority of the total supply being mined by the Bytecoin team. No one had heard of Bytecoin before 2014, yet CryptoNote developers hinted at tens of thousands of active users. Around the same time, in April, a fork of Bytecoin was initiated. BitMonero supposedly wanted to tackle mainly what many deemed to be an unfair coin distribution.
In June that same year, rethink-your-strategy starts uncovering discrepancies in the CryptoNote web page and whitepaper. He quickly also confirms that a certain BCT user that performed detailed blockchain analysis on the Bytecoin chain to prove its legitimacy, was actually a bought account. This is when more sockpuppets come forward to defend Bytecoin. madzooka is the first one, and a quick user analysis reveals a common pattern. madzooka’s earlier posts complain about missing some Bitcoin meet-up in Cleveland, USA. He also writes that he is interested in a certain California meet-up. What is evident is that English is not his first language, and a few posts later — there they are — the Russian emoticons. He also discussed the Ukrainian crisis prior to Bytecoin involvement, and he wrote in the newbie section of BCT, exactly according to pattern. User DNScode repeats the operation; defending Bytecoin against rethink-your-strategy’s accusations, while having earlier written in the newbie section, discussed the Ukraine conflict, and lastly used Russian emoticons. His account was registered on the 19th of March 2014, just in line with the other sockpuppets created on the 20th, 21st and 22nd. greenteanosugar chimes in. This user is registered 19th of March, then goes silent on 15th of September like most of the others. GreedyBoy, registered on the 20th of March, fiercely defends Bytecoin short thereafter. He gives away his background by Russian emoticons, then goes dark September 13th 2014 before re-appearing 4 years later with what seems to be a new account owner.
Honestly, it is getting tiresome documenting more sockpuppets by now. Here is a list of very probable sockpuppets, and they can serve as an exercise for anyone who want to train in how to spot them according to above outlined patterns: AtomicDoge, werrindor, David1978, Rockefeller, Meggie, JJKirsch, Monkeyseemonkeydo, TonyZX, Stanford, jolipenria, JPSelzer.
The Scam Reborn
On the 25th of July 2017, new BCT user BCN_official announces that she, Jenny Goldberg, is the new Bytecoin community manager. She confirms that old Bytecoin developers are still involved with the project, and that there is a strong roadmap going forward. From that point in time, she has been extremely active on the Bytecoin Reddit, Twitter and bitcointalk.org. The problem here is, to no ones surprise, that Jenny Goldberg uses Russian emoticons. It is not evidence of connection to the 2014 sockpuppets, but it sure as hell must be uncommon to be named Jenny Goldberg as a Russian.
In their latest AMA, it seems a number of accounts were created for the purpose of asking soft questions to the Bytecoin team. Note that none of these users have had any other function than to contribute to the AMA thread: chuntaro18, ozunupanda, spawn7777, vivek5882, johnnychronny, hsndndnd. None of the hard questions are answered properly, like scam accusations, or a case of the CryptoNote issuance bug found in 2017 by Monero researchers.
All the above indicates that the use of sockpuppets is a practice very likely utilized by the team working on Bytecoin right now. And even in the unlikely scenario the sockpuppets are owned by a Bytecoin-friendly third party, it still is the case that no one involved with Bytecoin has ever recognized the sockpuppets’ existence nor condemned the practice.