Image via Coinyeco.in
Now that cryptocurrencies have invaded the land of internet memes, international pop stars, and right-wing politicians, they’ve evolved into a new hip form of viral branding, which brings its own problems. What the Coinye episode evokes in particular is the potential issue of "coin-squatting."
News broke Tuesday of the cryptocurrency's apparent early launch. After an unhappy Kanye sought legal remedies to stop it from happening, an announcement posted by Coinye West’s creators on the Bitcoin Talk Forum explained the hasty launch was “due to legal pressure”—also known as a cease and desist letter (PDF) from Kanye’s lawyers.
Mildly heeding some of the letter's requests, the creators slimmed down the name of the currency from Coinye West to Coinye, and relocated to an Indian web host (Coinyeco.in). “We want to release this to the public before the man can try to crush it,” one of the creators told the Wall Street Journal Monday night.
Not to worry though: “We are not a PR firm,” said the creators in their announcement. “We're just a few guys who want to take cryptocurrency to the mainstream.” And much to their credit, that’s precisely what they’ve accomplished. I mean, when else would Noisey, VICE's music vertical, write about a cryptocurrency?
Promisingly, there are already dozens of mining pools unleashing blocks of 666,666 Coinyes at a time, and according to the Coinye Twitter account earlier today, "Difficulty is now 70, and out net hashrate is 18GH/s wow," which means it's attracting quite a bit of mining activity. Hell—I'll be mining it as soon as I finish writing this article.
And all of this is despite the currency belonging to any of the regular exchanges yet, which surely should change in a matter of days.
So why, when an über-successful entertainer's legal staff are hounding you to stop, would you go right ahead and pull the trigger? Simple: because the people demanded Coinyes despite Kanye West being a poor sport about it. Also, it will be much more difficult (or even impossible) to cease and desist the hundreds—potentially thousands—of people who already own Coinyes at the time of this writing.
Still, as a well-documented perfectionist, West’s grievances are understandable. While the inherent nature of cryptocurrency technology means no one theoretically controls them, the creators are instrumental in driving the branding. And when that branding is a trademark, politician, or in this case, a voraciously opinionated rap singer, legal questions emerge.
The parallels to domain name squatting are obvious. In such cases, individuals or organizations have the benefit of a centralized authority in ICANN. Under the Uniform Domain-Name Dispute-Resolution Policy, “most types of trademark-based domain-name disputes must be resolved by agreement, court action, or arbitration before a registrar will cancel, suspend, or transfer a domain name.”
Cryptocurrencies, on the other hand, are inherently decentralized. That being said, they’re still created by people, who then become the prime target if litigation is involved—unless, of course, they’ve covered their tracks as carefully as Satoshi Nakamoto. Still, this is unprecedented legal territory, a testament to the crypto-movement’s innovative qualities.
Plus, having a central arbiter isn’t always a clear-cut solution. VICE only acquired the domain vice.com in 2011, after negotiating a deal with its previous owner. Coinye's founders might argue their subtle use of West's name is satire. The creators of the Ron Paul coin would have a tougher time making that case.
New platforms for self-expression inevitably become a target for opportunistic land grabs. Namecoin, another altcoin that’s gained prominence, and which uses a decentralized domain name system (DNS) based on Bitcoin’s model, has already suffered from rampant cybersquatting.
The question, then, is what happens next, and the outcome of the dispute between Coinye’s founders and West’s legal team could set a precedent for future cryptocurrency brands. It’s also a reflection of how far the movement has come.
“They were no amateurs,” one Bitcoin insider told Motherboard of the team behind Coinye West, noting the apparent professionalism of the operation. “They’re not kids anymore.”
Indeed, the movement is growing up, and now that having your own cryptocurrency is the trendy new accessory, one can only wonder what’s next. It’s maybe only a matter of time before major corporations get in on the game. What happens when Walmart has their own coin?
Additional reporting by Alec Liu.