Some of you have may have seen this CNBC article making the rounds, titled Greek Island Agrees To Test Digital Currency. Now, before you rush over to Cryptsy to buy this coin, let’s take a moment to look at what’s really going on.
NautilusCoin is the creation of Brian Kelly. Actually, that’s giving him a little bit too much credit, because NautilusCoin was created using the now defunct coingen.io service, which means that his knowledge of cryptocurrency is no stronger than his ability to plug in numbers to a web form. Brief history lesson for those new to the game: coingen.io was a web-based service that automatically created an altcoin based on various parameters entered into a form (coin per block, block time, etc). These coins are inherently worthless because they lack a developer.
Note that the Greece article on CNBC is written by Mr. Kelly, and that no other news site has a mention of this news. It is a disgusting example of self promotion using a trusted platform, and should throw up major red flags for anyone considering investing in it.
Prior to this, Mr. Kelly has published several cringe-worthy articles demonstrating his lack of knowledge, here is just one of them. One need not read past the very first paragraph to see just how elementary his understanding of cryptocurrency us:
Bitcoin, the elegant elixir for our fractured financial system, is actually flawed. It’s vulnerable to attacks. There is, however, a fix — something I had installed on my own coin experiment. Here’s how it works:
Mr. Kelly seriously believes that his automatically generated cryptoabortion has fixed “problems” that Gavin and the rest of the core bitcoin developers do not see. Even more amusing is that Mr. Kelly is on the record years ago stating that Bitcoin is nothing more than “Tulipmania 2.0”, yet here he is with his inferior clone of Bitcoin and proclaiming its superiority. Incredible.
Just another scam?
Like most scamcoins, there is a premine involved here. Mr. Kelly touts that NautilusCoin is the first digital currency with a stabilization mechanism to reduce volatility. In reality, this “stabilization mechanism” is nothing more a huge chunk of premined coins that Mr. Kelly alone holds the keys to.
Moving on, let’s talk about Agistri, Greece. This is the island that has adopted NautilusCoin for this so-called test. As per wikipedia, Agistri covers a whopping 13.37 km^2 and has a population of just 1142. This is an insignificant number of people, especially compared to the total population of Greece, which is over 11 million. Why is this information not stated in the article? Could it be, possibly, an attempt to overstate the importance and magnitude of this event? You be the judge.
Traditional wisdom suggests that a competitor (altcoin) must be magnitudes better than the incumbent (bitcoin) to steal away market share. Some examples that come to mind are Myspace being replaced by Facebook, Digg being dethroned by Reddit, Blackberry being pushed into obscurity by Apple/Google. All of these companies had significant advantages that let them surpass the incumbent.
Being a spawn of coingen.io means that NautilusCoin brings absolutely nothing new to the table. It has no advantages. It’s nothing more than an awful clone that lacks everything that makes Bitcoin great – the huge network, the businesses and infrastructure built around it, and most importantly, the thousands of brilliant individuals that work on the codebase. It doesn’t stand a chance.
In the unlikely event of Greece adopting a national cryptocurrency, it would be Bitcoin, certainly not a fringe altcoin. The fact that one insignificant island is sponsoring NautilusCoin does not change that.
NautilusCoin is yet another slimy cryptocurrency that preys on the uninformed. Nonetheless, we can expect events like this to increase the price of the coin. As of the time of writing, it is up 80% over the past 24 hours on Cryptsy. However, the opportunity for non-holders to profit is long gone. You have already missed the train. By buying now, you will be on the receiving end of the dump. Those who currently hold the coin should sell now, before the initial hype dissipates.