Utxo Not Found Please Try Again Bitcoinhex

What if Bitcoin was an ERC20 token on the Ethereum blockchain, didn't require its own hardware to secure the network, and had its unabridged supply redistributed? This must be the premises on which the veteran bitcoiner and successful YouTuber Richard Heart based his quest on to build Bitcoin Hex.

However, the projection seems to me more of an attempt to print new money to concenter the followers of thought leadership into a sketchy scheme which isn't necessarily fair, transparent, or even viable as a way to achieve the goals of BTC.

The idea of inventing a meliorate version of Bitcoin, which solves some bug or adds extra features, has been around for a long time and precedes the popularization of the term "altcoin". Notwithstanding, the effort has always been faced with technical shortcomings, a questionable caste of decentralization, and poor user adoption.

People trust Satoshi'due south blockchain considering the code is transparent and has been reviewed by countless reckoner science and cryptography experts. The changes made to the Bitcoin Core software client are fabricated conservatively and merely after thorough debates which prioritize decentralization every bit the accented quality. The ten-twelvemonth long uninterrupted running time is a testament of reliability.

Conversely, Bitcoin Hex is advertised as the project which takes away Satoshi'due south coins and redistributes them to the holders. Simply beyond this romantic ideal, which seems to come up straight out of Robin Hood, hides a scheme whose game theory isn't necessarily fair. Information technology volition not be the next Bitcoin, information technology will not get adopted by the whales it tries to penalize during the airdrop (or during the distribution via smart contract). And information technology certainly doesn't deserve the proper noun Bitcoin since it holds no merits in contributing to the network's Proof of Work.

Start of all, what happened to Richard Heart?

If you watch the Baronial 2017 debate between Richard Heart and Roger Ver, y'all will detect that the flamboyant show host used to be a hardcore bitcoiner who defends the store of value qualities and tries to find ideological middle ground with the Bitcoin Cash proponent. When Ver mentions that Bitcoin had lost most its market place potency due to its inability to scale via bigger blocks and meet the demand for space, Schueler (stage-named Richard Middle) smartly replies that the new world figurer projection (aka Ethereum) has brought lots of new money into the infinite. Ethereum investors aren't necessarily libertarians who understand the value of audio coin and long for the days of the Gold Standard. Rather they can be said to exist geeks who invest in the promise of globe-computer on blockchain and left-wing idealists who think they can decentralize everything with a blockchain.

The concern-minded Roger Ver reminds everybody that Vitalik Buterin's initial plan was to build Ethereum on superlative of Bitcoin – and information technology if wasn't for the selfish Cadre devs, all the money which was poured into Ethereum would have benefited the Bitcoin project instead. This is where the near important part comes in: Richard Heart points out many Ethereum protocol flaws, ranging from poor coding to bad decisions in terms of programming language implementations. Too much coding diversification leads to a large mess which doesn't fulfill its goal as effectively and may never achieve its world calculator ambitions.

Here's a quote from Richard Heart himself, as he defends Bitcoin during the debate with Roger Ver (video with verbal timestamp is attached too):

"The Ethereum network is down oft because they apply a blockchain that fills up simply similar ours. And information technology fills up faster considering they have larger blocks. And then there is literally a contest to shove your transaction into the new ICO every bit a miner before you lot let bodily normal retail people in, and so that you can get the coins before they run out. And so there's already front-running going on in Ethereum mining, in that location is already full blocks going on in Ethereum minig, there's already millions upon millions of dollars beingness lost to attack surfaces being lost to gigantic attack surface in Ethereum.

And I'thousand glad that the toxicant and the bug and the design decisions that Vitalik and his crew made, which are unrepairable I might add: multiple consensus implementations from different software languages from different teams are very much more than likely to autumn out of consensus than a single software implementation. It's very hard to write ane matter that doesn't have bugs, it's exponentially harder to write 2 or more things that don't take bugs."

A year and a one-half later, the same Richard Heart is trying to promote what he proposes every bit a better version of Bitcoin which is built on top of the same Ethereum which he accounted "unrepairable", "down so often", biased towards ICOs, more likely to fail than Bitcoin, and the reason why millions of people lose money.

This change of heart (terrible pun intended) comes in a moment when the market is downwards and the involvement for new cryptocurrency projects (be that ICO tokens or new coins on proprietary blockchains) is the lowest it has been since 2017. Bold that no whale volition sign up for Bitcoin Hex and Richard Eye is the wealthiest of bitcoiners to join the project, he volition then too become the biggest participant who has the godly power to manipulate the cost as before long as the coin gets listed on exchanges. The market sentiment can be adjusted past the self-entitled "thought leader" every week on the show, equally the viewers will about likely get encouraged to HODL their Hex through mysterious dumps. Information technology almost sounds besides skilful to exist true.

Bitcoin Hex resembles a Ponzi scheme much more than many other cryptocurrency projects, and is definitely the virtually centralized of all coins to comport the proper name "Bitcoin" (at to the lowest degree the other ones are actual Proof-of-Work forks where anyone tin run a node which can be mined fairly). But earlier jumping to conclusions, let's have a look at the team behind this initiative.

All Richard Centre'due south men: the people backside Bitcoin Hex.

A thought leader similar Richard Heart, who benefits from the attention of tens of thousands of viewers for each YouTube livestream he makes, should theoretically have no bug alluring bright minds who can nurture the thought of a Proof-of-Pale Bitcoin that's built on the Ethereum blockchain. Sure, the Bitcoin Core developers are busy with their piece of work and probably experience to jealous about this brilliant concept anyway. The folks working on the development of Ethereum clients must also detect fascination in tokenizing Bitcoin on their blockchain on a 1 to 1 ratio. However, they must be busy working on Casper, Raiden, or some blazon of blockchain sharding solution.

So who is left in this infinite to assistance develop Bitcoin Hex? Well, it'southward all in the hands of three software developers and a marketing executive. The first ruby flag about the situation (aside from the absence of academic peer-reviewers, advisors, and big names who endorse the project) is the lack of social media links: nobody except for Richard Centre has them listed, so extra inquiry about each individual'southward background is required. Thankfully, the team is very small.

The following department volition scrutinize the experience of each team member. Before diving into the analysis, it's important to mention that none of this is an ad-hominem insult, every person mentioned has the correct to comment on the statements (and their words will definitely get added to this article). It's not malevolence or the willing to do personal harm that fuels these statements.

The ultimate benchmark and assumption for the process is given by the fact that Richard Center is a "thought leader" who knows all of the greatest people in the field and can beget to rent the near qualified team to piece of work on his project. Or who knows, perchance that he does it all by himself and wants some lesser-known people to stick effectually thanks to his outstanding generosity to elevate others.

The offset fellow member is Cody Lamson, who might just be the most transparent person in the team. In his case, what you run into is what you get. He has a portfolio website to support every project he'due south worked on. He'due south the i with the about proven experience in smart contracts, ERC20 tokens, and Ethereum projects development. He may non have the greatest credentials in the Ethereum space, but everything well-nigh his work is crystal clear and appears to be legitimate, as he's worked on interesting (albeit gimmicky) projects similar Crypto Weddings and Noob Coin. Interestingly, none of his GitHub work has been done in the defended Bitcoin Hex repository.

The other developer in the Bitcoin Hex team is Dan Emmons, who is listed as a correspondent. On his LinkedIn contour, Emmons looks like Jameson Lopp, merely likes to utilise large words in a rather loose way (much like the thought leader behind Hex): he calls himself a Bitcoin maximalist, simply he'south also a certified Ethereum developer who likes fintech and the trading side of affairs. This sum of buzzwords rounds up the image of what seems to be a Jack of all trades whose interests seem to be a match made in heaven, and who is compatible with the polygamous nature of Bitcoin Hex. His experience in programming and software evolution can definitely come in handy, simply it'due south unclear what it is exactly that he does for Richard Heart'due south project. Since joining GitHub in 2017, he has fabricated zero contributions to annihilation Hex-related.

Final simply non least, we have market executive Brent Morrissey. According to his clarification, he'southward a "cryptocurrency investor and business management professional". Yet a simple search engine search reveals more results virtually his activities equally the lead vocalizer of a British stone band. You won't find anything crypto-related, and his habiliment company Vegeshirt with relatively minimal amounts of social media followers. The information is pretty underwhelming, to say the to the lowest degree. Mr. Morrissey'south "extensive feel in digital marketing, search engine optimization, and social media marketing" isn't backed by numbers, but there's still a chance that he'due south done piece of work backside the curtains.

However, when the influential idea leader behind Bitcoin Hex gets tens of thousands of views on each video, information technology's unlikely that the project needs whatsoever specialized marketing work. At all-time, it'due south about doing social media management, responding to east-mails, and handling referral links and so the large boss can focus on the grand vision instead of handling these smaller tasks.

None of these men is amongst the most reputed and best known developers of either Bitcoin or Ethereum. And in some cases, the information presented is misleading, incomplete, or fifty-fifty fictional – all of which are the usual carmine flags for a scam.If any of the data presented is flawed, incomplete, or unfair in relation to the real situation, and then the commodity will receive amendments with special notes and public apologies with full acknowledgments.

Nevertheless, the ambitions behind Hex are pretty high and far exceed the amount of piece of work five homo can complete in a truly flawless and trustworthy. Speaking of trust, the entire BHex protocol relies on trust in a smart contract that's stored on the Ethereum blockchain. And information technology would be a expert idea to talk about some technicalities besides.

Why Bitcoin Hex is technically worse than whatever other coin project bearing the Bitcoin name.

If you enquire Bitcoin Cadre developers Greg Maxwell, Andrew Poelstra, or Luke Dash Jr. most what makes Bitcoin special, then they volition definitely point out to the censorship resistance, the fourth dimension-tested immutability, the autonomy-oriented philosophy, the system of incentives, and the network result. In reality, an ERC20 token like Bitcoin Hex has none of these qualities. Instead, it steps into the scene with a hope of redistributing the lost coins and unclaimed coins to the holders, too as the airdrop ethos.

By not directly selling you the coins, Hex escapes the mandate of the SEC and probably won't get classified as a security (at to the lowest degree not until it hits exchanges and the real trading begins). By not using any dedicated minting equipment which swallow valuable resource, Hex is manner besides convenient. But if fifty-fifty BTC is criticized for not having an intrinsic value, then Richard Centre'southward projection is naught merely fool'southward aureate which emerges out of thin air and promises to make everybody richer at the expense of a simple sign-upward process.

People watching the weekly interviews and understanding the process will probably recollect that they have nothing to lose. Merely the price to pay is privacy itself, as participants to the Hex scheme willingly reveal to the public how many bitcoins they own (unless they obfuscate their transaction history with a tool like Wasabi wallet, that is). This can be a pretty smart experiment to measure greed and desperation in the centre of a prolonged deport marketplace, as the advantage for this questionable voluntary deed is a worthless token that may go up in price if everyone gets fooled to spend existent BTC to acquire it.

Just now permit'southward talk about the technical flaws of any ERC20 token. Start of all, it relies on the security of the Ethereum blockchain – which, as Richard Heart himself acknowledged dorsum in 2017, is flawed and requires a lot of work before actually reaching its true potential. Secondly, at that place are plenty of known issues and loopholes in Ethereum smart contracts adult in languages similar Solidity, and not even Vitalik & co. were able to foreclose the DAO hack. It'southward also ane of the reasons why companies similar Blockstream are actively working on developing simplified and more secure smart contract programming languages – with Simplicity being a prime example.

If you actually want to build a fairer Bitcoin, so you must take into consideration every little pattern flaw and exist prepared to fix it on time. As Satoshi Nakamoto famously said: "When designing Bitcoin, even aliens need to be accounted for". While this is a witty and cryptic remark, it definitely implies that everything that tin peradventure go incorrect with the protocol has to be taken into consideration, and then that quick fixes are ready to be deployed without affecting the nature of the network itself.

Hex doesn't take into account the unpredictability of the Ethereum network, the fact that changes in the roadmap are made within days of deliberation by a few thought leaders (*coughing coughing* Constantinople), and the lack of control that it possesses equally part of a greater scheme. There is no real autonomy for the Hex project, its resistance to attacks or censorship is limited to the security granted by Ethereum, and the smart contracts have been proven to have design flaws fifty-fifty when they're developed by the brightest minds in the industry (and one time over again, the DAO hack must exist mentioned).

Another criticism has to exercise with the unmarried bespeak of failure and was presented to Heart himself during the live interview we shot on Dec 29th, 2018. Yet, due to a terrible error, the first hour of the debate was not recorded, and the beginning of the video features Mr. Middle summarizing some of the ideas which have been discussed prior to realizing the streaming issue. The problem with the summary is that the catamenia of the debate, the expressiveness through which the arguments have been presented, and the greater context are absent.

Withal, I did tell him that since there is a clear precedent of the Ethereum blockchain being rolled back through a difficult fork, i can easily imagine how a malevolent nation-country actor tin can kidnap Vitalik Buterin and make him bring capricious modifications to the network. The idea might exist far-fetched and unlikely, but it'southward even so a scenario that wouldn't bear on the real Bitcoin or whatsoever of its forks which are decentralized plenty to be immune to the decisions of their founders.

Whatsoever difficult fork which rolls back the blockchain can spell doom for a project like Bitcoin Hex. Just then again, no part of the planning seems to business organisation the longer term. The existing carmine flags point out to a Ponzi scheme: people become their free worthless tokens, they go encouraged every week during the testify to use their BTC to purchase more, the distribution becomes concentrated in the hands of a few, and every bit soon as exchanges somehow accept to listing Hex, the pump and dump game tin begin.

There is no Bitcoin-ness in Hex.

The unabridged premise of Bitcoin Hex is to aid BTC holders get richer in the heart of the acquit market, so perhaps this entire analysis is pointless. There is nothing "Bitcoin" nigh Richard Heart'due south projection, and it'due south unlikely that the project will survive past the point where the founders make extra money by dumping their bags on the greedy latecomers.

If Mr. Heart is so benevolent and wants to help his viewers brand money, mayhap that he himself shouldn't participate, every bit it's very likely that he owns the nearly bitcoins of everybody following the development of Hex. No whale would ever compromise their privacy by becoming associated with this kind of scheme, and then the entire "10% whale tax" gimmick is just a psychological trick to reassure people who ain small amounts of BTC that this project was made for them.

But it won't be long that the Hex holders will be encouraged to exchange their bitcoins for Hex, under the hope of maximizing their wealth. And it's just then that the tragedy of complimentary money truly occurs. BHex (because information technology doesn't deserve the Bitcoin proper noun) is cipher but a diversion and a Trojan equus caballus for greedy people.

The airdrop is scheduled to take place about half dozen weeks afterward this article is published, and all owners of BTC are promised to become millionaires in Hex for just filling in a sign-up class. And then if you're greedy plenty to take a shot at this project, and so y'all're absolutely gratis to do so. But just call back this: by joining the Hex project, you have zilch to lose simply your privacy. And maybe somebody will find slap-up uses for the data generated in commutation for some worthless Hex tokens.

Trading gilt for stones.

The Bitcoin Hex tokens are given for free to BTC holders who sign up – but until somebody really trades some other cryptocurrency for BHex on exchanges, the tokens are worth zero. This is an important clarification to make, since Hex is not a real Bitcoin fork, has no mining costs, and its development and maintenance require significantly lower efforts every bit compared to a Proof of Piece of work coin.

Therefore, the issued tokens are the equivalent of stones: common, bachelor in high amounts, like shooting fish in a barrel to go, and undesirable to people outside the cult which is led by the stone-loving thought leader. There is an important distinction betwixt BHex and rocks too: the latter can be fun when you throw them to skip across h2o.

Bhex tin can merely exist valued on the market place if people trade their precious BTC in exchange for millions of worthless tokens. To some, this can seem like a smart investment that tin potentially double the investment and later larn more BTC. Withal, what we have at stake is a zero-sum game where the supply of Hex would get traded back and fourth at key moments.

When are these primal moments? Well, allow's just say that the right time to sell your complimentary tokens is when someone becomes willing to purchase. And the market sentiment can be influenced by the charismatic idea leader who volition remind those who missed on the airdrop that they can still become tokens for a relatively small price.

It's not like the wise early adopters of Bhex will get to dump their bags on the fools who willingly trade gilded for stones. The only knowledgeable person in this project is Richard Heart himself, and he tin switch the narrative according to his purchase and sell orders. People will be watching his show waiting for trading signals, just notice that they get outplayed by a mastermind who has it all figured out to maximize profits. The big dump doesn't even accept to happen all of a sudden or in the get-go twelvemonth: but soon enough the folks who greedily bought Bhex will cease up holding a expressionless token that nobody is willing to trade.

Just keep in mind that Hex has no utility, doesn't serve any other purpose other than boosting the founder's ego and financial upper-case letter, and will eventually leave a lot of people with less BTC. Fifty-fifty if the stones were bread, you wouldn't exist able to make money out of them if you didn't convince somebody to give you salmon for your loaf. Cost is always relative in relation to another good or article, so owning a 1000000 Hex means cipher unless somebody else trades a more valuable cryptocurrency for a hope of quick enrichment.

If BitcoinHex was an ICO, then the SEC would prosecute it in no fourth dimension. But given the "costless" nature of the offering and the unregulated state of affairs in the cryptocurrency space, people tin still get away with creating such schemes. This isn't a call for stricter regulations, but a call for reason – when it'due south all over, just the founders who become to detect out kickoff virtually substitution listings and incoming money volition get rich. Everybody else is a loser, in either financial or time-direction terms.

The Hidden Premine/Founder Reward

Upon discovering this investigation, Twitter user Mark Rex has decided to reveal "the biggest flag" that the assay has missed. This important piece of evidence is hidden in the smart contract, and eliminates the relevance of every other debate near the legitimacy of BHex. In a nutshell, the contract file chosen "ITXORedeemableToken.sol" contains a couple of code lines which mint HEX coins to the founder'southward wallet each time a new user claims their own.

@TheVladCostea it seems you and this commodity miss the biggest flag; the smart contract pays Richard/hex team 1 token for every token created. Fifty-fifty if he claims 0 hex w/btc address the contract pays him one hex for every hex claimed – read the damn contract

— Mark King ⚡️BTC⚡️ (@mark_rex_h) January 23, 2019

According to the instructions of this Solidity smart contract, whenever somebody decides to claim their tokens, we see a minting procedure which benefits the "origin" accost. Furthermore, when Bhex enthusiasts decide to refer their friends to the scheme, special bonuses besides become to what might be Richard Heart's wallet (equally shown in line 164 of the contract).

What does this hateful? Fifty-fifty if Richard Heart himself doesn't claim BHex with the BTC that he owns, he nonetheless receives rewards proportional to the number of users who sign up. HEX tokens go minted into his wallet whenever a new user joins by virtue of private registration or referral. This is the equivalent of having a pre-mine or a founder's reward, only that the extent of this advantage isn't predetermined and varies on the amount of new users signing up. Therefore, the BHex premine tin be insignificant or huge, depending on the buzz and enthusiasm surrounding the projection (which is expected to increase as presently every bit the referral organisation starts working).

This is unfair in regards to the supply, yet the information provided and then far simply scratches the surface. Afterwards finding out virtually this "origin" wallet affair, I've decided to open all of the files from the GitHub repository and look for that specific keyword. In theory, it could signal all the cases where an calumniating and hidden transaction gets made.

I got lucky at line 392 of the contract file "StakeableToken.sol", where all penalties seem to exist carve up with the origin wallet. What does this mean? Well, if you sign up late and so all of the coins that you're missing on are going to be divided between the "origin" wallet and the pool. Furthermore, if y'all're a whale and get penalized for trying to sign up with and then much BTC in your wallet, and so half of the HEX tokens that you're missing on are going directly to the founders. This is an interesting fee organization that should definitely exist discussed during the next Richard Heart live stream.

As it turns out, the case of Bitcoin Hex is the gift that but keeps on giving. The more than people discover out virtually the shady premise of the project and its value proposition, the more research is made to scrutinize everything from the history of Hex to the underlying code itself. In this regard, this article will get updated regularly whenever new discoveries get reported. If something weird is going on, it's our duty as a customs to spread the word and try to inform those with a predisposition to fall for "quick enrichment" schemes.

Last but non least, hither is a thank you note to everybody contributing to this cause (specially Marking Rex). Investigations affair and this space needs more of them in order to deter bad actors from even attempting them.

Update: Upon receiving a message from lead developer Kieran Mesquita, I've adapted the information about his previous work to include the bounty he submitted on the Bitcoin Talk forum back in 2012. While this isn't quite "writing early code", it reveals interest and involvement in the infinite.

Update 2: The "Trading Aureate for Stones" subchapter was added to further clarify about the value proffer of Hex.

Update 3: Added another subchapter called "The Hidden Premine/Founder Advantage" to highlight how the smart contract actually sends HEX to the origin wallet whenever somebody claims their coins.

Update 4: Co-ordinate to article 17 of GDPR regarding the right to exist forgotten, since he has decided to leave Bitcoin Hex due to an alleged disagreement regarding the management towards which the project is heading and is now pursuing other projects, developer Kieran Mesquita has been removed from the investigation.

Update 5: Richard Heart has addressed the following message to the Crypto Insider editors. Since his input isn't quite clear or specific, the comments will get added to this section in the same form that they were presented in, as a way to admit the contribution.

"Would be cool if the commodity didn't lie about the projection. Origin address gets bonuses only, phrased in lodge of performance speed, refer, satoshi, viral, crit, one/two early/tardily endstake. Nothing on base of operations claim. Nothing on interest.There'south not even a contract chosen that. Such dogshit, Perhaps he means utxo. Garbage commodity dude."

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Source: https://cryptoinsider.media/why-richard-hearts-bitcoin-hex-is-a-scam/

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