Is Bytecoin (BCN) a scam?

What is Bytecoin (BCN)?Bytecoin (BCN) is a cryptocurrency based on CryptoNote, a protocol which uses mathematical analysis and innovative ideas to empower end-users with true privacy, both financial and...

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What is Bytecoin (BCN)?

Bytecoin (BCN) is a cryptocurrency based on CryptoNote, a protocol which uses mathematical analysis and innovative ideas to empower end-users with true privacy, both financial and personal. CryptoNote provides users with a completely anonymous payment scheme. It implements the ring signature technology which allows you to sign a message on behalf of a group. The signature only proves the message was created by someone from the group, but all the possible signers are indistinguishable from each other.

Bytecoin team claimed to have started working on the project some years ago after Bitcoin’s release. They developed the code and released the whitepaper, so the team says Bytecoin was released in April 2012.

Why I think Bytecoin is a scam ?

The first strange fact is that is nobody of the team is a known entity. “Antonio Juarez” is not a known entity, “DStrange” is not a known entity, none of the names on the Bytecoin website exist (they’ve even removed their “team” page), and none of the names mentioned on CryptoNote website exist (Johannes Meier, Maurice Planck, Max Jameson, Brandon Hawking, Catherine Erwin, Albert Werner, Marec Plíškov).

The other strange thing is that nobody had heard of Bytecoin before 2014. Bytecoin claimed it had existed “on the deep web” for 2 years, but not a single vendor, user, miner, cryptographer, Tor developer, or anyone else that is a known person had ever encountered “Bytecoin” on Tor before 2014.

Note, again, that there is no doubt on the efficacy of the algorithms and cryptography behind CryptoNote, nor there are backdoors in the code. What is certain is that the team and the people involved in the development of CryptoNote and Bytecoin could have deceived the cryptocurrency community. If you believe in the fundamentals of CryptoNote, the only 100% trustworthy coin based on that protocol is definitely Monero.

bytecoin scam

Let’s now analyze the first two released white papers:

Both v1 and v2 Whitepaper Signatures are valid Adobe signatures, signed on 12/12/2012 and 17/10/2013 respectively. Here’s where it gets interesting. When we inspect this file in Adobe Acrobat we get a little more information on the signature:



Have you noticed the software reporting that “signing time is from the clock on the signer’s computer”? Now, normally you would use a Timestamp Authority (TSA) to validate your system time. There are enough public, free, compatible TSAs to make this process very easy. CryptoNote chose not to do this. But should we have any reason to doubt the time of the signature?

These are the references contained on the white paper footnotes. Those two underlined also appear in the v2 white paper. Neither of those footnotes refer to anything in the main body of the v1 white paper’s text: they’re non-existent (in the v2 white paper they are used in text). The problem, though, is that the Bitcointalk post linked in the footnote is not from early 2012: it was written in May 5, 2013. The footnote is referencing to a post that didn’t exist until then. And yet we are to believe that the white paper was signed on 12/12/2012!

Besides, the document properties for both the v1 whitepaper as well as the v2 whitepaper confirms they were made in TeX Live 2013, which did not exist on 12/12/2012. The XMP properties are also quite revealing.

XMP properties for the v1 whitepaper
XMP properties for the v2 white paper

According to that, the v1 white paper PDF was created on 10/04/2014 and the v2 white paper was created on 13/03/2014. And yet both of these documents were then modified in the past (when they were signed).

The final confirmation that these dates are correct is revealed by those XMP properties. The properties on both documents confirm that the PDF itself was generated from the LaTeX source using pdfTeX-1.40.14. Now, pdfTeX is a very old piece of software that isn’t updated very often, so the minor version (the .14) becomes relevant.

This version of pdfTeX was only pushed to the pdfTeX source repository on February 14, 2014, although it was included in a very early version of TeX Live 2013 (version 2013.20130523-1) that was released on May 23, 2013. The earliest mentions on the Internet of this version of pdfTeX are in two Stack Exchange comments that confirm its general availability at the end of May 2013 (here and here).

Final considerations

The conclusion we draw from this is that the CryptoNote developers have intentionally deceived everyone into believing that the CryptoNote whitepapers were signed in 2012 and 2013, when the reality is that the v2 whitepaper was created in March, 2014, and the v1 whitepaper haphazardly created a month later by stripping bits out of the v2 whitepaper (accidentally leaving dead footnotes in).

Why would they created this fake v2 white paper first? Why not just creating a v1 white paper, or even version it at all? The answer is simple: they wanted to give credibility to the Bytecoin “2 years on the darkweb” claim so that everyone involved in CryptoNote and Bytecoin could profit from the 2 year fake mine of 82% of Bytecoin.

Important: this is an edited version of the investigation on the presumed bytecoin scam conducted by the user “rethink-your-strategy” on the bitcointalk forum (August 15, 2014).

If you’re planning to invest on Bytecoin be aware: the fact it is the 20th biggest coin by market cap doesn’t mean it is trustworthy.

The Crypto Whisperer

Published a year ago


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