Obscure Cryptocurrencies and Where to Find Them
by Grayson Earle
January 27, 2020
I’m recently finished teaching a class at Eugene Lang entitled “Cryptocurrency: Money as Medium” which explores cryptocurrencies, blockchain technology, and artists who have engaged monetary systems in critical or otherwise interesting ways. As part of this course, I had my students participate in a crypto-trading game in which they were asked to spend $100 (play money) on two or three cryptocurrencies. This was intended to get them to pay attention to market fluctuations and do some independent research on various blockchain companies and projects.t
A few interesting strategies emerged, including the cynics investing in mostly Tether (a cryptocurrency pegged to the dollar) as a rhetorical statement against the rampant speculation of cryptocurrency. Others weighed the volume of search queries on various currencies, or just made intuitive decisions based on design choices. At the end of the exercise, I revealed my choices as well: Monero (XMR), New York Coin (NYC), and Photon (PHO).
I chose Monero because it’s what my project Bail Bloc uses, and I’m just superstitious enough to invite a little luck. The latter choices were based solely on the extremely low value of the tokens. In theory, the token value could increase dramatically (or just as easily plummet). I told my students that I would actually invest the $100 to make our experiment more dramatic. This led to the question: “How would you go about buying those coins?” For more established assets like Bitcoin, this is fairly trivial. Set up a Coinbase account and click a few buttons. But all three of my picks are unavailable on Coinbase, so how could I possibly acquire them?
My first instinct was to purchase some Bitcoin that I could then trade for these other coins. I’ve done it before, so I know that it works in some cases. I opted to use Coinbase because of the ease of use, but another option is Local Bitcoins. I won’t detail how to sign up for these services, because that information is widely available elsewhere. The important part is, once signed up you can buy Bitcoin (among other coins) for US Dollars.
Buying $100 worth of Bitcoin on Coinbase (including fees)
Coinbase is a few different things. It’s important to make the distinction that in this case it is acting as both a wallet for my Bitcoin, as well as an exchange that sells Bitcoin for USD, for a fee. It is not ideal to leave the purchased Bitcoin in my Coinbase-controlled wallet, but I will soon transfer the money out, in any case.
Time to buy some Monero. After a bit of searching, I found CoinSwitch, a website that allows you to convert between currencies. In this case, I can convert BTC to XMR (Bitcoin to Monero). One convenient aspect of CoinSwitch at the time of writing this is that it does not require an account to convert small amounts.
Converting .00776 BTC for 1.02713 XMR
It’s worth noting the exchange rate I’m getting. According to CoinGecko (again, at the time of writing this) .00776 BTC should be equivalent to 1.07 XMR. Clearly, I’m getting ripped off. This is unavoidable to some extent, though I did shop around a bit and found a better deal on SwapCoins.com. The moral of the story here is to look around a bit. I don’t want to shill any particular company in writing any of this, but if I am to give a realistic account of purchasing and exchanging cryptocurrencies, I need to give details.
Confirming that I want to send my BTC from Coinbase to the exchange, in order to be converted into XMR
The idea with these exchanges is that they find buyers for your trading pair. So if I want to exchange BTC for XMR, they find someone who wants to trade XMR for BTC. The exchange takes a bit off the top as a fee. In this case I sent the .00776 BTC into escrow on SwapCoins. It takes a while to verify that I actually sent the BTC from Coinbase, and you will usually see that represented on exchanges with something like this.
Waiting for my BTC to be exchanged for XMR
At this point it’s just a waiting game. You can optionally view the transaction on a block explorer, which will show in real time the transaction being processed.
At this point, it only has 1 confirmation and thus the exchange has not yet executed the trade
But where does the Monero (XMR) go? I need to have a Monero wallet set up, with an address at which the coins can be delivered. The basic explanation of what a wallet in this context is: Software that allows one to access her crypto via a password. For a more in depth explanation of wallets, check out this great Medium article. In this case, I use MyMonero wallet which I’ve already initialized. Eventually, the XMR materializes in my wallet.
It is seen as a pending transaction since it is still being confirmed on the Monero network
Now that I have the Monero in my possession, let’s review how this all happened. I purchased $80 worth of Bitcoin using Coinbase. I sent the Bitcoin to an exchange, SwapCoins, which asked for a destination Monero address. They facilitated an exchange that resulted in someone buying my BTC and sending the requested XMR. The XMR ended up in my wallet via the address I had provided the exchange. If you are confused or regard this process as a pain in the ass you aren’t alone.
Unfortunately, that was the easy part. I have no idea where to purchase Photon (PHO) or New York Coin (NYC). In fact, when I decided to purchase them I had little idea what either of these are. I picked these solely based on their low values and favorable abbreviated names, since I’m a New Yorker who loves Vietnamese food. I would wager that this is about the extent of the marketing strategy that’s gone into NYC to date, and my vapid decision making serves as some small evidence of its effectiveness. This is all part of the fun, though, and I’m hoping that this story will end up with me buying a beer in New York Coin at Keats Bar in Midtown, which was apparently the first business to accept the digital currency. I have serious doubts, of course, as my initial phone call with the bar led me to have an awkward conversation with a confused bartender.
Further evidence that I am New York Coin’s target demographic
Some big news on the New York Coin subreddit
There are two ways one can acquire NYCoin. I could attempt to purchase some for US dollars from a current holder, or I could mine it. The latter is essentially a process of tasking a computer with the job of verifying transactions on the network and creating new blocks of data (this is why it’s called a blockchain) that prove the record of transactions, the ledger. To set up a miner involves downloading mining software and running it on a dedicated computer. Since many people can mine a cryptocurrency simultaneously, there is a lottery system involved that rewards miners for being the first to solve an arbitrarily difficult math problem. The more miners there are on the network at any given time, the more difficult the problem is so that miners are adding new blocks at a predictable rate. This is an incomplete explanation of the process and certainly confusing for those unfamiliar with the topic, but in a nutshell: Run software on a computer that contributes to the upkeep of the ledger to earn some of the coins as a reward for doing so.
Regardless of whether I’m buying it or mining it, I need somewhere to put it. Cryptocurrency is held in a software wallet, which is a password protected interface that allows you to send and receive digital currency. Each cryptocurrency needs to be stored in a specialized wallet, so New York Coin provides one on its website. Installing it is the same process as any other software.
Installing the New York Coin wallet
Once the software is installed it must synchronize to the network
In order to use the wallet it first needs to be synchronized to the network, which means downloading the entire transaction history of the NYCoin blockchain. Once that’s up to date, recent transactions (including coins sent to me via mining rewards or other users) will be available for me to spend.
The only thing left to do is start mining. I downloaded CGminer which allows me to specify a wallet for hopeful rewards, and then sets to work verifying transactions on the New York Coin network. I can feel the additional heat being produced by my desktop computer while it begins participating in the network, which I appreciate in my cold Brooklyn art studio during this brutally cold time of year.
Rewards are unpredictable and it could take days before I win the aforementioned lottery. So for now, I’m left to wait.