Launched just shy of 4 months ago, megacoin has been quite successful, reaching a market capitalization of $325,000 at the time of writing. But beware, not all that glitters is gold.
First off, megacoin is a simple litecoin clone, with no real innovation to speak of. Which is not a problem in of itself, but the history of this coin makes it one of the well orchestrated scams in cryptocurrency history.
One of the most damning issues surrounding megacoin is the way in which it was launched. You see, megacoin originally launched without source code, in the height of altcoin frenzy; a period during which new coins were release daily. Around this time period, altcoin clients embedded with bitcoin wallet stealers started popping. This combined with the very amateurish logo and poor grammar skills of the developer caused people to be suspicious of megacoin, and rightly so. As a result, the coin failed to get noticed, and was dead on arrival.
Consider this scenario for a moment – that this was all part of the plan. Now that the coin had been released, the developer, kimoto, could begin mining with little competition. The below graph shows the network hashrate of Megacoin during the first 48 hours:
We can see that the difficulty peaks at 600KHash, the equivalent of just one 7950 mining it. This highly suggests that no more than 2 or 3 people, at most, were mining it during this time period. Next, let’s take a look at the total coin supply during this period as well:
That’s a whole lot of coins being questionably generated, a good chunk of which we can assume went directly to kimoto. This continued for about a week, until kimoto decided to finally release the source code and promote his coin seriously. Network hashrate spiked to 50MHash at this point, and marks the TRUE launch of the coin. The earlier “launch” amounted to a nice cover story for the effective premining of the coin.
All told, during the first week, network hashrate reached no higher than 5MHash, and almost 6,000,000 coins were illegitimately generated. For reference, there are currently just over 18,000,000 coins in existence today (4 months later).
So, in short, it is likely that kimoto purposely botched the launch of his coin, so that he could mine it with little to no competition for almost a week, at which point he launched the coin properly. A clever way to get around the much hated premine, but having the same result in the end.
Speculation aside, where those six million coins went, no one can say for sure. Either way, it doesn’t make for a good launch.
It’s also important to point out that the reward structure of megacoin is disproportionately front-loaded. 50% of all coins are slated to be generated during the first 5 months. This makes it lucrative for all of its early supporters, but a poor prospect for anyone looking to get in later on. That might explain why the community is so fervent. They have a lot to gain – at your expense.
Take a second to look at the main megacoin thread. You’ll notice that the community is very reminiscent of a cult. Some of them seem to be truly convinced that kimoto is none other than Kim Dotcom, founder of megaupload. They’ll tell you straight faced that megacoin is on track to overtake bitcoin. They’ll preach about how fairly megacoin was launched. It’s all rather ridiculous. Whether or not they truly believe the nonsense they spew or if they’re just trying to lure in ignorant investors is up for debate.
In closing, megacoin offers nothing new. It was effectively premined to an extreme, and has a neurotic community behind it. The reward structure only favors those who got in extremely early.
source: http://cryptolife.net/in-depth-altcoin-analysis-megacoin/
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http://www.guugll.eu/altcoin-analysis-megacoin/
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