Cryptocurrency Zombies

The first thing you need to know when working with bitcoin is that there are frauds everywhere.  You never trust anyone without checking into them first.  Many of these frauds start out as frauds.  Take for example, MMM in the Philipines... from the day it began, its purpose was to appear to run honestly for a short time, and then take everyone's money.  How do we know?  The management of MMM already ran one Ponzi scheme in Russia... that was called.... believe it or not... MMM.  Can you believe that MMM's Management was so confident that there were so many marks in the Phillipines... that MMM did not even need to go by a different name.

Sometimes, the name might be different... but the same bad management gives it away.  For example OneCoin was started by fraudsters in Bulgaria.  OneCoin might have some of the appearances of a real cryptocurrency, but it is really nothing more than a front for stealing your money.

There is a different kind of fraud, in which the people who started it off did not have the intend to rip anybody off.  After a few mistakes, and lots of bad decisions, the management suddenly realize that the cannot pay off on all of their debts.  Sometimes this management will continue to run things after the writing is on the wall... hoping to come up with a solution that will make everything all right.  

This kind of fraud may still have many of the functions of a legitimate business, but seems unable to perform others.  I call this the Crytpocurrency Zombie.  Some people will continue to interact with the Cryptocurrency Zombie and be ok... however, the Cryptocurrency Zombie needs to eat brains... and that means somebodies brains have to get eaten.

The notable current example is the former exchange called Cryptsy.  Now, Cryptsy did not start off with an appetite for eating brains.  All you have to do is look at the elaborate highly functional consumer interface to realize that its creators... although noted for keeping some bad company... completely intended to provide full service to customers.  All those great functions continue to run, with one exception.  You cannot withdraw Bitcoin.  You can withdraw small amounts of other crytocurrencies, but apparently Crypsy has somehow spent the Bitcoin which is supposed to be in reserve.  When you ask for it, they don't have it....

Now, if you are currently putting any kind of currency into Crptsy, there is a good chance that you will have your brain eaten.  That is, you will not get your money back.  

Of course the scary thing is that Cryptsy was viewed as solid.  How many other supposedly solid places have your bitcoin.  What should you do with the Bitcoin you now have?  

There is one thing about Bitcoin that you need to know, if you don't know already... that is, you have to think about everything carefully.  There is the possibility of making money, but only if you don't lose it all.... to the many clever thieves.