A dozen websites could be devoted to the proliferation of alternative cryptocoins and still many would never get any coverage at all. Typically, a coin must do something extraordinary to be considered worthy of press coverage. Media outlets worry about the probability of a coin being a “pump and dump scheme” whose only purpose is to enrich its creators before leaving everyone else holding a lot of junk currency.
There are several metrics that can be used to determine whether a coin is legitimate or not, such as regularity of software updates, amount of “premined” coins, and history of the developer team.
Enter Netcoin, launched in September, 2013 with zero “pre-mine” and a solid, steady development effort. “Pre-mining” is when a coin’s developers set aside a certain number of coins for themselves and various purposes such as marketing and the payment of bounties. Often, a pre-mine scenario is a sure sign of a scam, with coins some coins pre-mining as much as 98% of the total supply before the coin is even launched. It would be nice to be able to say that such coins always fail, but, unfortunately, that has not been the case.
On one of the BitcoinTalk forum page dedicated to the coin, an unnamed member of the development team claimed that none of the development and marketing teams hold more than seven million coins.
Did you know that the majority of the foundation members themselves are not “bag” holders? In fact, I don’t think any single member has more than 7 million coins that is part of the foundation.
(Seven million coins at present market rate is equal to roughly 24BTC. )
Netcoin’s wallet is modeled on Peercoin, which remains one of the more expensive coins to buy with Bitcoin, sitting today at just over 150,000 Satoshi each. It was not a simple copy and paste job, however. The wallet is beautiful, and according to recent announcements, upcoming releases will allow the user to customize the design. Here is a compare/contrast image of the Peercoin and Netcoin wallets:
Recently it was announced that Netcoin would be ending its Proof-of-Work phase in favor of a strict Proof-of-Stake future. Unlike other proof-of-stake coins, however, Netcoin will limit the weight calculation to 100,000 coins. A wallet containing 100,000 or 1 million coins will have equal chances of confirming blocks.
While there have long been grumblings from the traditional Bitcoin community that Proof-of-Stake simply does not work, the fact is that new coin generation is one of the surest ways to keep expanding the user base. Offering a more fair way to stake where a big holder simply confirms all the blocks and reaps all the rewards is a good way to keep the system from attracting new users.
Additionally, Netcoin offers two unique features in its staking called Personal Investment Rate (PIR) and the Open Wallet Initiative (OWI). The Personal Investment Rate pays coin holders based on how much they are holding. However, holders who do not open their wallet at least once every thirty days will not receive the same amount as those who do. PIR is unique to Netcoin at the present time, though, as is the nature of the cryptocurrency development world, other Proof-of-Stake coins are likely to implement it as time goes on. Here is the interest rate table from the PIR white paper:
These two features create a situation where coin holders who have an open wallet receive greater rewards than those who leave their wallets closed for months on end. The white paper on the subject of the OWI is somewhat comical:
Long History, Longer Future
The features and facts mentioned above all add up to a coin that has steadily garnered a reputation as having a strong community and growing adoption. For instance, it is accepted anywhere that CoinPayments.net’s full list is accepted. There are also a few gambling websites that accept Netcoin.
As to its market performance, the coin has seen a high of roughly 2,500 Satoshi each back in December, 2013. Recently, as Bittrex delisted it, the coin saw a resurgence in trading on Cryptsy, doubling up from 200 Satoshi, cresting 500, and settling back in the 350 range. Here is Netcoin’s historical valuation, courtesy of Coinmarketcap.com:
The development team has for some time been planning a migration to a 100% proof-of-stake system, and to compensate for this, a pool that mines other coins and pays out in Netcoin has been established.
This journalist would say that, overall, the curious rise of Netcoin isn’t curious at all – it is the product of hard work by a group of genuine people who want to do something different.
Disclaimer: the author is a holder of Netcoin.