Allegations of premining – the mining or creation of a number of crypto coins before the cryptocurrency is launched to the public – has brought down the price of Bitcoin Private (BTCP), the fork-merge of Bitcoin and ZClassic. The team has only come forward to tell the community that they are “looking into it.”
The initial supply of Bitcoin Private was determined as the sum of the outstanding supply of Bitcoin at the time (16.8 million), ZClassic (3.4 million) and a small 62,500-unit miner program, which brought it to circa 20.4 million. However, an additional 2.04 million BTCP coins somehow appeared – most likely the result of a premining operation – and out of those, 300,000 BTCP were seemingly moved to exchanges. The problem stems from the fact that BTCP did not see sufficient adoption, so those 300,000 units are problematic as they make up 10% of all BTCP in circulation.
In a study by Coinmetrics, a cryptoasset analytics company, it can be seen that both the BTCP whitepaper and the statistics of its parent coins, Bitcoin and ZClassic, come to a number of 20.4 million BTCP at the time of launch. Even after factoring in the mining reward and the amount of blocks mined until now, with a little technical knowhow, the team was able to determine that there are more coins in circulation than there should be.
"Bitcoin Private’s mainnet was released in March 2018, meaning that the fact that the 21M cap was broken was detectable for months," according to Coinmetrics.
In total, 2.04 million BTCP were created that were undeclared in the whitepaper and should not have existed in any way. The developer team claimed that there was no premine in Bitcoin Private, and Bitcoin Private’s own block explorer shows no sign of those additional funds. The official Twitter account belonging to the Bitcoin Private team wrote today, “We are aware of the recent ‘premine’ allegations and are looking into it. We will let the community know more once we have all the details.”
I again dumped all of my $BTCP
So much shame in that community.. :’(
Good tech means nothing with so much corruption. Currency only has value if it is backed by something, this is a tough argument for crypto, but $BTCP is so corrupt that they can’t even begin to argue this.
— Crypto Fart (@EncryptedFart) December 24, 2018
The community is blaming the team, referencing allegations of foul play that have surfaced in May this year, where a Medium post by one of the founders – Rhett Creighton – showed several team chats full of shady practices and alleging a “much larger scam.”
I'm now blocking people who are spreading false slander and libel with no evidence that I had any involvement or knowledge of the Bitcoin Private inflation hack (possible, still being reported)
— Rhett (@HeyRhett) December 23, 2018
“So many shady things have happened since the inception of BTCP. It’s projects like this that give crypto a bad name,” writes Twitter user @sawinc24.
Bitcoin Private is down almost 22% in the past 24 hours as of the time of writing (UTC 11:33 AM), and its plummet started after the Coinmetrics analysis was published – before that, the coin had had a relatively stable period, with only a 4% net price decrease in the past week.
BTCP price chart: