Your favorite altcoin’s path to becoming the “next Bitcoin” is a lot more treacherous than you think.
The CEO of uPlexa (UPX) told CCN.com about the financial and ethical minefield faced by upstart altcoin projects in the cryptocurrency industry. Kyle Pierce – the project’s co-founder and lead developer – paints a miserable picture of an industry that may already have been taken over by its worst people.
The “king-making” ability of centralized exchanges is no secret. The CEO of DigiByte (DGB) claims he was asked for $300,000, plus 3% of his 58th ranked altcoin’s entire coin supply, to get listed on Binance.
The demands made of the 1,371st-ranked uPlexa were equally outrageous. According to Pierce:
We’ve had offers for 50% of the premine to get listed on an exchange. 50% of our premine that’s allocated to exchange listings, marketing, hiring, founding team, core members, security audits, etc. They somehow believe that one hour of their time is worth nearly 6,000+ of our current man hours into this project.
Pierce says the saturation of centralized exchanges is making matters worse. Over 1,500 exchanges now compete for the same territory. As that number increases, the desperation of each rises accordingly.
There’s 1500+ centralized exchanges that offer the exact same service, and they’re starting to lose volume. So they artificially boost the volume and hire VA’s to go around soliciting every team member of every project in hopes to quickly make a quick buck before their watering hole dries up.
These exchanges have become a choke-point for the cryptocurrency industry. The only way to get listed is to play their game. That means new cryptocurrency projects have their development plans dictated to them before they’ve even begun.
For projects who did not participate in the IEO/ICO stages and have no funding, it is nearly impossible to get listed on an exchange. So, firstly, not only are people predominantly trading on centralized exchanges in a decentralized area, but the exchanges that are making huge sums of money are killing off the potential for real-world technologies to get noticed/adopted.
Another exchange told Pierce they would be happy to list his project, if only they moved away from “the whole privacy thing.”
Pierce told us that when uPlexa finally got listed on its first exchange (for around 1 BTC), even more scammers emerged from the woodwork. Pierce says he was contacted by someone asking to buy 20 BTC worth of UPX over-the-counter – for 30% less than its market price.
The stated plan was to become invested in the coin, and then get behind its marketing efforts for their own benefit – and that of the community. Pierce was suspicious, but he directed the buyer towards a miner with large UPX holdings.
After promoting the coin for two days and then moving on, Pierce realized the buyer was basically a pump and dump artist, who buys coins at a markdown then sells them for profit.
At this time, I had pretty much told them to “f*ck off” with their pump & dump scheme after reading about other groups who participated in major supression of other coins and then trying to sell to their group of “investors” who they make calls to on a daily basis.
According to Pierce, these solicitations are not uncommon. In fact, he thinks the cryptocurrency industry is largely dominated by these market manipulators.
Most of the time, when you see people talking about cryptos, it’s because they already got their bag at a cheap price and are looking to unload their bag at a quick 2x profit on you. Investors come into the market looking to make 5-10x (which, yes, may be unreasonable in most circumstances), only to be eaten alive by these types of manipulators.
Pierce states that even cryptocurrency influencers are twisting the screw as hard as they possibly can. When reaching out to Twitter and YouTube content creators, he found that every one demanded close to half a Bitcoin just to talk about uPlexa.
Every single one expected to be paid anywhere from 0.35-5BTC to talk about our technology. It became very clear to me at that moment, that 99% of all media regarding cryptocurrencies is paid by projects with massive amounts of funding. Little to nothing in the crypto world is organic.
Almost every service imaginable seems to be hidden behind a paywall in the cryptocurrency world. Even those which are free, such as CoinMarketCap listings.
…we had a flock of different users advertising new services to us: CMC listings (even though this is free), exchange listings, supposed market making services, and even “dumping strategies.” One user even went so far to say they could help us sell our entire premine on the exchanges without market selling, which was obviously not in our interest.
Every service offered by exchanges comes at a cost. If an update is required, they charge 0.25 Bitcoin. If you want a new trading pair added, it costs another quarter of a Bitcoin. That’s despite the widespread use of modern technologies that make these services a five-minute job.
Pierce says he does see the industry changing over time, and his outlook for the future remains optimistic. But in the meantime, he says centralized exchanges will continue to reign as the “banks of the crypto world.”
I want to see everybody have a chance at succeeding and for ground-breaking technologies to run wild. Instead, centralised exchanges have become the new banks of the crypto world, and are just as greedy and corrupt. If you’re not partnered up at the top 1% with them, it’s going to be a very long journey for your project.
Disclaimer: The opinions in this article do not represent investment or trading advice from CCN.com.