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“When the destiny of a great fortune is at stake, men's greed spreads like a poison in the bloodstream.”
Bitcoin scams and frauds
revealing nxt scam
missing nxt, Blue Meanie, Missing 1,000,000 NXT, investigation, scam, news, nextcoin, cryptocurrency
In a series that I hope I rarely have to write, I cast a light on the somewhat unsavory elements that exist in our burgeoning eco-system. My hope being that such elements cannot survive the light of day. That by merely exposing their actions we can in some way diminish the upside of partaking in them.
However, to quote the great Mr. Moustafa himself: “When the destiny of a great fortune is at stake, men's greed spreads like a poison in the bloodstream.”Now this brings us to our very first case dealing with the now notorious “Blue Meanie” aka Joshua Zeidner of Altchain. I stumbled upon this case while researching an unrelated story but was immediately reminded of a saying my father once imparted upon me and that I think bears significant relevance to this case:
“A pickpocket goes through life with his hand on his wallet because he’s sure someone will steal it and an honest man just assumes everyone is always telling the truth.”
The overarching lesson being that we project ourselves onto the world around us. Meaning you can always tell a lot about a person by the types of accusations and claims they consistently make about others. To liars the world is full of liars. To crooks everyone is out to cheat them.
An important lesson to keep in mind as we progress forward into this curious tale…
It begins, as so many stories begin, with a proposition. NXT’s top market maker Jl777 aka “James”, while seeking opportunity around the creation of DACs (that’s distributed autonomous corporations for the uninitiated) petitioned “Blue Meanie” to begin development work on a new undertaking that would be crowd funded and listed under the name “NXTautoDAC”.
Now Blue Meanie denied to me in email that he ever agreed to take part in or promote “NXTautoDac” however here he is in a PGP signed message promoting the digital asset:
Now what “NXTautoDAC” does or was intended to do is less important to understand than the terms of the agreement. According to sources in the NXT community that agreement was something akin to as follows:
1) “Blue Meanie” aka Joshua Zeidner will receive 1,000,000 NXT and 300,000 NXTautoDAC units in exchange for development work directly related to the project.And that’s pretty much it. Not the most complicated of scenarios I know but these things sometimes escape us. Unfortunately, according to sources on the development team it seems Joshua Zeidner not only failed to login even once to work on the project, he also began a long string of convoluted accusations levied at Jl777 and the NXT community; ranging from threats to call the FBI and the SEC to accusations of NXT community members being part of the Russian Mob.
- Joshua Zeidner did not login even once to work on the project
At one point he got as far as to suggest “money was transferred (sic) to me. It was worth roughly 15k.” However, when pressed for the actual amount in terms of NXT he was quick to evade the issue and to attempt to point the finger elsewhere without actually ever saying how much NXT he had received.If only there was some kind of… “publically available distributed ledger” that was capable of proving that at around the time NXTautoDAC was being formed an account already known to be under Jl777’s control actually sent 1,000,000 NXT to an account already known to be associated with and controlled by “Blue Meanie” (pssst! It’s the same one that Joshua used to issue his ALTCHAIN asset on May 23rd, 2014).
I mean this isn’t a futuristic sci-fi film where everyone trades galactic credits on a global consensus platform… here in the real world we have to rely on actual evidence, right?
Naturally I thought Joshua deserved to offer his perspective on the whole sordid affair. So I was relieved when I contacted him via twitter for comment and was immediately met with a short flurry of responses, not the least of which was:
I could tell he and I were going to get along famously.
The contributions valiant bloggers make to the field of journalism notwithstanding, we eventually got past our initial awkwardness and were able to clear a few things up via email. Indeed, during our correspondence I was able to ascertain a few things about him that seemed highly relevant to this case.The first thing I learned was that even after emailing him from my company outbox, identifying myself as a writer, showing him where he can find samples of my work, and pointing him towards my Linkedin Profile (that is quite specific and open about who I am), he remained ever the skeptic about my identity. Perhaps he just didn’t want to embarrass himself by sharing info with someone not as important as him? His motives as such remain unclear.What is clear, however, is that he seems to belong to that special class of citizen that completely lacks the ability to ever answer a direct question. Multiple times I gave him the opportunity to clear the matter up with direct questions, finally even resorting to a numbering system (because you never know maybe he struggles with context):
- Email conversation screenshot
The first question, which I had asked numerous times throughout our dialogue, seems simple enough but its one Joshua refused to answer time and time again. Thankfully, we live in post blockchain times and I don’t necessarily need him to verify whether he received 1 million NXT, I simply need him to explain why he is being duplicitous about clarifying the nature of the transaction.The second question was to determine what, if any, influence “Blue Meanie” has had on Jeff Garzik’s recent, heavy handed attacks on NXT. While I have been unable to reach Jeff Garzik directly for comment there does at least seem to be a running dialogue between the two on twitter. While I would not assert a substantive relationship between the two at this time, I would like to hear what Jeff (whom I have mentioned in my work before and admire sincerely) has to say on the matter.
When I reached out to find out more about this case, I was bowled over with responses (this must be what Joshua has repeatedly referred to as the “sockpuppet brigade” but I would loosely refer to as “community”). While I’m certain a great deal of the claims forwarded to me were inflammatory and lack merit, I was directed towards something Chris Odom (the big brain whom we should all be thanking for bringing us Open Transactions) mentioned about Blue Meanie:
- Chris OdomThis was more or less my impression of “Blue Meanie” as well but being unprofessional and abrasive is hardly a criminal offense. Actually come to think of it, given the fact that regulation surrounding unforgeable digital tokens is still an unclear matter, there’s not much else to do here except say that we as a community should strongly consider policing ourselves.Many people still fear blockchain based applications like Bitcoin as unsafe and unregulated. To which I say that they are only as a safe or as dangerous as we make them. Much in the way we must now take personal responsibility when it comes to safeguarding our accounts we must also become more mindful of both whom we transact with and what application we use to do so.A simple escrow application such as David Zimbeck of Blackcoin’s Bit/Blackhalo, with perhaps the added feature of multisig, could have prevented this situation from arising in the first place. Since smart contracts of that nature create strong incentives to work together while also preventing funds from being released until multiple members of the dev team can sign off on the work performed. However, until such time as those transaction types become commonplace it’s up to us to be wary and point out bad behavior whenever we can.So while I sincerely hope this series does not become a regularly occurring piece, I suspect that given the current stage of development blockchain technology is in that there will be plenty of other dubious incidents, scam artists and artful dodgers to discuss.
Faced with such an abundance of deceit what else can we do but point it out with a smile?If you know of any notable cases that you’d like to see reported on, please mention the incident(s) in the comments section below.
NXT users feel free to send anonymous tips and related news via my NXT account:
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