[dropcap size=small]A[/dropcap]t this point in time, Maidsafe is still in the process of raising Bitcoin in their safecoin presale. Safecoin can be “saved” by sending BTC to their address, which will then guarantee you a certain amount of Maidsafecoin. Once the SAFE network is fully released (date still unknown) Maidsafecoins can be exchanged 1:1 with Safecoins. At that point, “farmers” will also be able to generate Safecoins by dedicated portions of their computers’ resources in a new breakthrough called “proof of resource.” For more information about the promise of Maidsafe, read their whitepaper. It is worth noting that Maidsafe’s David Irvine has been working on this groundbreaking project for longer than Mastercoin, or even Bitcoin has existed in this world. However, there are multiple projects around the world that seek to alleviate the implied problems of our current centralized internet. Outernet is another different approach that warrants looking into.
Large Mastercoin holders who were primed to liquidate their MSC for MSafecoin were able to buy millions of dollars worth of MaidSafeCoin at the promised 0.2 MSC/BTC exchange rate in the first hours of the presale, which prompted David Irvine to close Mastercoin presales in order to “leave something for Bitcoiners” while really leaving nothing for many smaller Bitcoin enthusiasts. Whom, on the the word of MaidSafe, bought Mastercoin to buy MaidSafeCoin and whom ended up not even able to buy them.
Update 1: 456 million MaidSafeCoins were sold instead of the promised 429 million. The Mastercoin community is retrospective…
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At the end of the day, Maidsafe may have had their heart in the right place, but they handled the situation poorly and were supremely unprepared. They should have been ready for any eventuality, and their lack of foresight concerns me as an investor.
Unfortunately, there will be a large number of angry mastercoiners that are now unable to purchase MaidSafeCoin, this will have no doubt destroyed some goodwill. Clearly this is not a good thing.
Anyway, moving on.
Enough about MaidSafe, I’m sure you’ve already read about it… On to the pump and dump. The initial guidelines for the presale published on the site were this:
…The sale event will run until ten percent of all safecoins (429,496,729) are sold or 30 days have passed, which ever happens first…
Pump: Initially, prior to the presale, Maidsafe had promised to accept Bitcoin at 1:17000, and Mastercoin at 1:3400 in exchange for Maidsafecoin.
Shortly after the presale, Maidsafe stopped accepting Mastercoin purchases entirely, and the Mastercoin Exchange rate tanked.
What’s more, Maidsafe hasn’t made any official statement about the change. Many, many “investors” bought Mastercoin with their Bitcoin in the days prior to the presale in hopes to cash in on the implied 0.2 MSC/BTC exchange rate. Instead, they aren’t even able to make presale purchases even at the vastly diminished exchange rate.
Timeline Of Events
On 4/8/14, Maidsafe announced their Safecoin presale at the New York Inside Bitcoin Conference.
In the weeks following, media caught on to the Maidsafe project and told the world about it. Kashmir Hill of Forbes wrote about decentralizing all the things on the internet shortly after Maidsafe’s announcement. The Maidsafe Safecoin presale was hyped up by a Coindesk article which specifically mentioned the promised Mastercoin for Maidsafecoin exchange rate. Bitcoin Magazine’s Tim Swanson, on the other hand, made no mention to Mastercoin at all in his article and instead focused on the truly revolutionary technological changes promised by Maidsafe’s David Irvine.
Maidsafe also launched safecoin.io and buysafecoins.com with explicit instructions and rules for the presale that would open on 4/22/14. Currently, the buysafecoins.com website only shows the Bitcoin to safecoin instructions, with the “Buying Safecoins For Mastercoins” set of instructions removed hours ago.
Finally, in the middle of the night on 4/22/14, for Americans at least, Maidsafe Safecoin Presale opened up about eight hours ago.
Just waiting for the block to become valid then the sale starts. Address published at safecoin.io in 2 minutes
— MaidSafe (@maidsafe) April 22, 2014
That was the last meaningful tweet from @Maidsafe.
This is How Not To Handle Things
The majority of communication between the Maidsafe group and interested parties occurs on the Maidsafe Development google group and email chain.
At 8:14 AM: David took to the Maidsafe Development Google group to post this message:
That address is being closed out now, please do not send MSC to this address or publish it any more. It was removed from our site for good reason.
At 9:04 AM: David’s “good reason”:
…Then I was outside thinking and thinking, what is happening this is too fast, the MSC holders are at great advantage and BTC supporters are going to be disadvantaged a lot. We cannot type quickly enough for this to even out. At this rate no BTC person will get in and they will miss out. We never seen this level of support coming.
I quite quickly decided that we would use all of the MSC loan fund we had been given for the sale and buy all the remaining MSAFE. Rather than manually doing a few steps in the background we would simply transfer the MSAFE to BTC holder on confirmation of any deposit. This removed a few steps…
Currently, Maidsafe employees on the google group and elsewhere on the internet are simply promoting the Bitcoin side of their presale. Since the entire presale was done on the Mastercoin protocol, MSC orders were being processed automatically and BTC orders were not. Hence, Maidsafe decided to halt Mastercoin orders.
On a Bitcointalk.org thread dedicated to the Maidsafe Safecoin Presale, angry would-have-been investors voiced their opinion:
The rules said: 17000 MaidSafe for 1BTC and 3400 MaidSafe for 1MSC; i.e. .2BTC/MSC. This is why the MSC price rose and nearly reached .2 (as anyone would expect) in the days preceding the sale. Then, it was announced via google groups that they would not accept MSC and would not exchange MSC for 3400 MaidSafe in a clear contradiction of the rules stated.Those who prepared themselves by relying upon the rules and buying MSC to participate in accordance with the stated scheme – were left holding a bag of tokens having severely diminished value – up to about 50%.
Once you set the rules – you can’t change them.
The Mastercoin Exchange Rate
On the news of Maidsafe’s Safecoin presale plans, the Mastercoin exchange rate at MasterxChange jumped from a low of ~0.08 to a high of ~0.16 on the bid side. In the hours since, Maidsafe has announced that they would be closing Mastercoin presales, in contradiction to their stated rules. What’s more, Maidsafe hasn’t gone and publicized the end of their Mastercoin presale the same way that they publicized the beginning of their Mastercoin presale. The Mastercoin exchange rate has returned to its previous level of ~0.9.