When Bitcoin Maximalists are Promoting/Shilling an Altcoin

[plr]

I don't see anything surprising here. I see this kind of hypocrisy every day and I'm used to it.

I've seen this done by John McAfee he used to shill Bitcoin very much even telling people that Bitcoin will reach $20 k this year, only to call Bitcoin a shitcoin later on, this is really expected, these people just realized that there are a lot of money from creating your token from Ethereum and where the money is, that's where they go.

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[gentlemand]

I've seen this done by John McAfee he used to shill Bitcoin very much even telling people that Bitcoin will reach $20 k this year, only to call Bitcoin a shitcoin later on, this is really expected, these people just realized that there are a lot of money from creating your token from Ethereum and where the money is, that's where they go.

The difference here is that even McAfee himself will happily acknowledge that he's a drug soaked buffoon. The subjects of this thread have been casting down holy edicts, verdicts and decrees from their self appointed Mount Olympus for many years.

[DooMAD]

I'm trying to keep an open mind about this one.  

If this INX token had been any sort of attempt at emulating what Bitcoin does, then sure, it would be a slam dunk, they'd be absolute hypocrites for promoting this.  But, this doesn't appear to be emulating Bitcoin in any way.  It's a different beast entirely.  The project seems to have different goals and a different target audience.  

How many of you, over the years, have discussed the potential of blockchain impacting other industries and having different tokens for things like property deeds or other assets?  I don't see any difference between that and this, except that with this, they're actually building it this time.  If you want to pigeon-hole these people and believe that they're only permitted to talk about Bitcoin for the rest of forever while you believe you're still free to discuss the application of blockchain in other places, then maybe the hypocrisy lies with you.  I'd argue it's perfectly permissible to call a shitcoin a shitcoin whilst also still being able to experiment with cryptography in other areas where Bitcoin clearly isn't appropriate to use.  

I mean, consider the alternative.  Imagine the uproar if they started clogging up the Bitcoin blockchain with corporate playthings like this and other projects started springing up to do the same.  We don't want any part of that, so just leave them to it.

[figmentofmyass]

The difference here is that even McAfee himself will happily acknowledge that he's a drug soaked buffoon. The subjects of this thread have been casting down holy edicts, verdicts and decrees from their self appointed Mount Olympus for many years.

indeed, at this moment, i have more respect for john mcafee tbh. at least he's always been unapologetic about his antics and doesn't project the "holier than thou" attitude.

i do think outspoken bitcoin maximalists ought to learn from lopp's mistakes. if you make your bed, be prepared to lie in it. if you spend years incessantly talking shit about everything that is not bitcoin, expect some blowback when you start shilling tokens. you can't build up a reputation and following that way then turn around and leverage it for ICO profits without pissing people off. hypocrisy is detestable. there's no way around that.

Jameson sorte a self defence blog post.
You can read it here:

On Shitcoins and STOs

A breakdown of different types of cryptographic tokens and the controversies generated by their proponents.

Warning: as suggested on Twitter, a little bit of mental gymnastic required when reading this (guess much more had to be applied writing it).

you can say that again. i could barely make it halfway through.

[Alan Silbert]

Think the first problem Greg is that you went to Francis for the source of your info instead of going straight to the source. The prospectus (https://www.sec.gov/Archives/edgar/data/1725882/000121390020023202/ea125858-424b1_inxlimited.htm) lays out a lot of answers to your concerns, and the company is here to answer questions.  Let me make some things clear here on the facts about the company:

(1) the Cash Fund that is ~$63MM upon the target raise the tokenholders have priority to (equity holders signed subordination agreements in this respect and since the tokens are carried as debt on the balance sheet they are in the capital stack above equity anyway),
(2) Tokenholders get liquidation priority to the Cash Fund in a liquidation,
(3) Tokenholders get their pro rata share of the Cash Fund in a change of control and the token lives on with its contractual rights,
(4) The tokenholder profit share is a contractual right, any dividends to shareholders would need to be decided on by the Board,
(5) Senior management, directors, insiders all have significant amounts of tokens aligning us with the public (again in the prospectus),
(6) We have 35MM tokens in reserve for extraordinary situations including acquisitions so why would we jeopardize the value of these,
(7) All ‘control persons’ that are insiders - all of senior management and all Board members - have 24-month lockups on our tokens,
(8 ) Advisors have 6 month lockups on their tokens and gave us 2 years of their time with zero compensation other than tokens that were worthless at the time (SEC clearance was a near miracle),
(9) Our Board is majority independent and governs the company; the independent directors all visible, prominent, easily-vetted individuals with a lot to lose in terms of their liability,
(10) Said independent Board members govern executive compensation going forward,
(11) Every single material agreement is in the public domain, and
(12) By the very nature of what we are doing, making this a public security, a publicly reporting company, a regulated company, everybody in senior management has a giant target on their back for liability reasons.

So we basically did everything that every scam didn’t do in the history of the space.  I think people need to dig in more, ask more questions of us, dig into our very transparent document.

Here is an email I wrote about this a few days ago:

I am really disappointed-- on the basis the content excerpted in this thread: https://twitter.com/francispouliot_/status/1298423415594840066

Long before cryptocurrency existed I was regularly asked by friends to help them understand investments, taxes, and finance stuff-- since I'm the sort of person that finds numbers and contract terms fun.  If cryptocurrency had never existed and a friend came to me asking about an investment with INX's terms I would strongly caution them away from it;  I might even say it smells like a scam.

-- because if it's a scam or not depends critically on unknowable post issuance management decisions: Do they actually pay out income or do they shovel all income back into operations and grow the company until they ultimately sell it out from under the token holders? AFAICT nothing about the terms suggests that they're particularly incentivized to ever pay the token holders even if their revenue becomes substantial, much less obligated.  I think at a minimum to be equitable there would need to be an option-like component to the terms which in the event that the company was sold token holders would receive a share of the companies' gain in value minus the dividends already paid out.  Otherwise, I think an argument can be made that the management is legally obligated to the shareholders to rip off the token holders in this manner.

Even with that I'd still probably caution against the investment due to how complex and unusual it is and the potential for gotchas.

The fact that it is issued on some cryptocurrency system just makes it a little less trustworthy (potential for technical snafu), taps into an established market of read-made victims, and imports a collection of people incentivized to pump a sketchy investment.  None of this helps but it is not the most fundamental issue.

Some people have pointed out that unlike many ICO's this one doesn't appear to be an outright scam.  I think it would be more accurate to say that it's not necessarily true that it is a scam, maybe it turns out to be one, maybe it doesn't.  Then again, if someone were making a really attractive offering in a market of scammy products you would expect them to put in a real effort to make it extremely clear that their investment isn't a bad one.  They haven't done that and I think that is a pretty bad sign.

So, sure, while they might meet a "not certainly a scam" bar, that is an extremely low bar and the fact people think this is noteworthy is really just an indictment of the ecosystem.

That well respected Bitcoiners are sticking their names on it-- for what sounds like more or less an immediate $250k payment-- is really disappointing to me.  If INX merely goes as poorly as explicitly permitted by the contracts their reputations should be justifiably trashed-- because it'll be impossible to tell if the holders weren't paid because the company tunnelled out real profits as payroll and other expenses vs just failed in the marketplace.  Considering the failure rate of businesses, even if all intentions are good, the odds of it going poorly can't be extremely low.

So to me that says that they assign a fairly low value to their reputations, or that they believe that it's likely that even if it fails and takes everyone's money they won't take a substantial reputational hit from it, or that they're being foolish and don't actually see what an inequitable setup the whole thing is.  I think the first two are likely and the last isn't likely. All of them are bad.

I don't know if other people have similar thoughts but this is my impression.

[DooMAD]

i do think outspoken bitcoin maximalists ought to learn from lopp's mistakes. if you make your bed, be prepared to lie in it. if you spend years incessantly talking shit about everything that is not bitcoin, expect some blowback when you start shilling tokens. you can't build up a reputation and following that way then turn around and leverage it for ICO profits without pissing people off. hypocrisy is detestable. there's no way around that.

I see what you're saying in general, since their motivation behind this particular instance does seem to be profit-driven.  But again I'd emphasise that making a name for yourself by telling people when a shitcoin is a shitcoin shouldn't preclude them entirely from talking about other projects.  They definitely need to be a bit more tactful when they do, though.  Bitcoin is great, but it can't do everything.

I'm pretty dismissive of most altcoins, but I'd like to think, if there was a niche in the market that I was particularly interested in which Bitcoin doesn't cater to and I discussed a project that does, that people wouldn't be lining up to call me a hypocrite.

[figmentofmyass]

i do think outspoken bitcoin maximalists ought to learn from lopp's mistakes. if you make your bed, be prepared to lie in it. if you spend years incessantly talking shit about everything that is not bitcoin, expect some blowback when you start shilling tokens. you can't build up a reputation and following that way then turn around and leverage it for ICO profits without pissing people off. hypocrisy is detestable. there's no way around that.

I see what you're saying in general, since their motivation behind this particular instance does seem to be profit-driven.  But again I'd emphasise that making a name for yourself by telling people when a shitcoin is a shitcoin shouldn't preclude them entirely from talking about other projects.

the bolded is what lopp's backpedaling would suggest, but this is actually what he made a name for himself doing: https://twitter.com/lopp/status/1151581157164797953

LET IT BE ENTERED INTO THE RECORD "There's Bitcoin and then there's shitcoin." -jameson lopp, july 2019

I'm pretty dismissive of most altcoins, but I'd like to think, if there was a niche in the market that I was particularly interested in which Bitcoin doesn't cater to and I discussed a project that does, that people wouldn't be lining up to call me a hypocrite.

that's why i don't take such a black-and-white position towards altcoins and spend all my time talking shit about them. i acknowledge most of the space is scams (not so unlike the startup space in general) but i also acknowledge that bitcoin's features and ability to port changes are very limited---and rightfully so.

[Sadlife]

The hypocrisy is rich in these one, we all know regulated coins always are centralized, and the main concept about Cryptocurrency is financial freedom.
This IPO Token maybe pegged to the dollar that has an unlimited supply.
I'd stay away from it, as Bitcoin maximalist themselves they should have thought that people, hates control.

[nutildah]

Reading this thread has been depressing.

Disclaimer: I'm not a maximalist per se but the longer I hang around the more maximalist tendencies I develop.

If this INX token had been any sort of attempt at emulating what Bitcoin does, then sure, it would be a slam dunk, they'd be absolute hypocrites for promoting this.  But, this doesn't appear to be emulating Bitcoin in any way.  It's a different beast entirely.  The project seems to have different goals and a different target audience.

How many of you, over the years, have discussed the potential of blockchain impacting other industries and having different tokens for things like property deeds or other assets?  I don't see any difference between that and this, except that with this, they're actually building it this time.  If you want to pigeon-hole these people and believe that they're only permitted to talk about Bitcoin for the rest of forever while you believe you're still free to discuss the application of blockchain in other places, then maybe the hypocrisy lies with you.  I'd argue it's perfectly permissible to call a shitcoin a shitcoin whilst also still being able to experiment with cryptography in other areas where Bitcoin clearly isn't appropriate to use.  

The problem is that the likes of Lopp, Mow and Back have for years found delight in taking massive dumps on Ethereum. A combined hundreds of cheap shots which nobody asked for or were at all necessary. Especially Mow -- pretty much all he ever does is shit on Ethereum and Ethereum-based projects; he's made it a personality trait. By accepting ETH tokens of any sort as payment to shill a project, he's going against everything he's stood for over the last 3 years or so.

This whole debacle is probably the real reason Mow recently stopped letting non-followeds post on his tweets.

Lopp and Mow pigeon-holed themselves: they built a brand around being anti-Ethereum. They're just pretending everything is cool now that they've come out of the hole for the sake of making some quick cash.

Frankly they've lost all respect in my eyes (as well as Back to a certain extent) -- not because they are backing an Ethereum project but because they have been exposed as being utterly full of shit.

Just 12 hours ago:



 

[pooya87]

I'm pretty dismissive of most altcoins, but I'd like to think, if there was a niche in the market that I was particularly interested in which Bitcoin doesn't cater to and I discussed a project that does, that people wouldn't be lining up to call me a hypocrite.

there is a massive distinction between cryptocurrencies (we can call them altcoins) and tokens (that must be referred to as fund-raising schemes). a cryptocurrency could potentially be respectable and do what bitcoin doesn't like you said but the only purpose of a token (ICO, IEO, STO, DEFI,...) is to raise funds and nothing else.

if a legitimate company wants to do what they do in this space they should do it through legitimate and regulated channels such as going to stock market. but they don't. why? because they can get away with scam if they create an ICO. there is no regulation, no law or anything else that can prevent or prosecute them from or after scamming people.
and it doesn't cost anything to create a token. it is not even that hard or time consuming. there is no innovation in it, it also doesn't solve anything at all.

on the other hand a cryptocurrency even the shittiest copy coins are actually doing something and the developer who copies had to spend some time doing it. and there is a cost to running it too.
that is why after 5 years and thousands of tokens we have never seen a single one that is remotely good while we have seen many cryptocurrencies that have had some potential and a handful that were at least decent.

[nutildah]

that is why after 5 years and thousands of tokens we have never seen a single one that is remotely good while we have seen many cryptocurrencies that have had some potential and a handful that were at least decent.

To be fair, Binance Coin (BNB) was quite decent before it moved to its own blockchain as it had an underlying and highly utilized functionality. Thanks to their team possessing relatively decent ethics and good business practices, it became the embodiment of the Ethereum token spirit -- a rare success story of a use case scenario successfully employed.

However, you are otherwise overwhelmingly correct.

Sad really because there were some great ideas on paper and presentation but once these teams collected massive amounts of ICO cash they quickly became lazy and uninterested in seeing their idea through to fruition.

I chalk up the entire DeFi trend to being the newest wave of scams; most of which is Ethereum-based, so your statement remains intact there.

[pooya87]

To be fair, Binance Coin (BNB) was quite decent before it moved to its own blockchain as it had an underlying and highly utilized functionality.

to be honest i don't call using a centralized token created by a centralized platform and only used internally in that centralized platform to trade against while the creator (aka Binance) makes millions by selling something they created out of thin air to have a "utility".
Tether is doing basically the same thing in a much better way even though it is also centralized and very shady.

[nutildah]

To be fair, Binance Coin (BNB) was quite decent before it moved to its own blockchain as it had an underlying and highly utilized functionality.

to be honest i don't call using a centralized token created by a centralized platform and only used internally in that centralized platform to trade against while the creator (aka Binance) makes millions by selling something they created out of thin air to have a "utility".

I'm not sure if it is anymore but for the longest time it could be applied by Binance users to reduce trading fees. In addition, its holders were offered extra perks like access to special parts of the exchange and invites to this or that event. That's a utility. Most Ethereum tokens (except for other exchange tokens) lack this aspect altogether.

[pooya87]

To be fair, Binance Coin (BNB) was quite decent before it moved to its own blockchain as it had an underlying and highly utilized functionality.

to be honest i don't call using a centralized token created by a centralized platform and only used internally in that centralized platform to trade against while the creator (aka Binance) makes millions by selling something they created out of thin air to have a "utility".

I'm not sure if it is anymore but for the longest time it could be applied by Binance users to reduce trading fees. In addition, its holders were offered extra perks like access to special parts of the exchange and invites to this or that event. That's a utility. Most Ethereum tokens (except for other exchange tokens) lack this aspect altogether.

all of these features could have been offered without any tokens.
what you are describing is more like the point system that most exchanges already apply. for example for the long term users that trade a lot they reduce their trading fee by some percentage. all the "perks" of BNB were like that to first advertise the platform and attract more users and second to sell BNB to users and make money from it. remember they printed BNB out of thin air and were selling it.

[nutildah]

all of these features could have been offered without any tokens.
what you are describing is more like the point system that most exchanges already apply. for example for the long term users that trade a lot they reduce their trading fee by some percentage. all the "perks" of BNB were like that to first advertise the platform and attract more users and second to sell BNB to users and make money from it. remember they printed BNB out of thin air and were selling it.

We're getting pretty far off topic but most exchanges have their own "utility token" and not a "point system." Referring to 30-day trading volume as a basis for fee discounts is the second most popular system, a "point system" is a distant 3rd.

They printed BNB out of thin air to raise funds for their exchange, which has since become the world's most popular altcoin exchange. They are an exception to the rule and their token (now coin) continues to place in the top 10 or 20 by market cap year after year. Regardless of how you feel about them, they are the most successful Ethereum token ever, unless you want to count LINK.

[figmentofmyass]

if a legitimate company wants to do what they do in this space they should do it through legitimate and regulated channels such as going to stock market. but they don't. why? because they can get away with scam if they create an ICO. there is no regulation, no law or anything else that can prevent or prosecute them from or after scamming people.

if life has taught me anything, it's that laws and regulations do not stop people from scamming others, nor do they guarantee the success of an enterprise. do you have any idea how VC-backed startups and public companies fail and/or engage in fraud? even massive companies and those considered blue chip investments---enron, madoff investment securities, worldcom, tyco international are a few recent big ones that come to mind.

it's just a nanny state mentality that says we need the government to protect investors from the boogeyman. nanny state regulations create massive, massive barriers to market entry for perfectly legitimate enterprises---permitting and licensing fees, undue capital requirements, the need to hire legal teams for every area of compliance, the need to actively lobby regulators and legislators, etc. this is one of the key reasons why a handful of giant multi-national mega corporations are able consolidate every sector of industry. small businesses could never compete in this environment.

and that's exactly the value ICOs provide to small startups. they find loopholes in existing regulations to allow for much greater market access---for both fundraisers and investors. cross-border investment, micro-investment, no need for accredited investor restrictions.

retail investors like me are cut off from so many profitable high growth investment opportunities because of the SEC's accredited investor restrictions. i'm too poor to invest in high risk "regulated" ventures, which leaves me with conventional stocks, mutual funds, blue chips---all of which have extremely limited upside. gotta love the nanny state for protecting me!

investors who are unwilling to engage in due diligence should pay the price IMO. that goes for ICOs, it goes for IPOs, it goes for angel investing. morons putting all their money in absurdly risky investments and then crying to the SEC is the reason we are where we are today. nobody fucking gauges investment risk anymore. everybody thinks profits should be handed to them on a silver platter. caveat emptor!

[Welsh]

Great example why you shouldn't let influencers influence you and your brain. Money speaks words here - they've probably been paid well enough to say "fuck it" and jump in the other team's boat.
Yeah, why not promote something you used to stand against if you get money, huh?

Its unfortunately the world we live in. Most people in the world, will blindly trust their favorite celebrity, and lose countless money because of it. I mean, just take a look at the recent Twitter compromise, and how many people blindly followed the doubling scam that occurred. Instagram, used to be the worst for these sort of trends, but it seems Twitter is now the place for posting things with political motivations. I've also noticed Youtube infulencers/creators are now getting much more comfortable with ramming sponsorships, and brand deals without doing their own research on just what they might be talking about. A few big Youtubers have been caught out promoting scams for this exact reason.

I wish people just wised up, and understood that an infulencer has a price, and they will push any agenda on you if their price is met. Of course, there are some influencer ith a bit of integrity, but they are far, and few between.

[bearexin]

I shouldn’t pity them, they brought it upon themselves. If you don’t like altcoins, it’s better to keep quiet and mind your business instead of talking bad about the ideas and work of others. Why they are tackling him is because he has said bad about other altcoin projects, and finally he’s working on the same altcoin that he was saying bad about and he expects everyone to support him?

It’s just like a leader telling his subjects not to do something and then the same leader does the same thing he’s warning his subjects about, what kind of leader does such thing? It’s totally wrong. If you say you’re a Bitcoin maximalist, then stick to that and don’t expect people to support you when you come up with something that is not Bitcoin related.

[DooMAD]

I'm pretty dismissive of most altcoins, but I'd like to think, if there was a niche in the market that I was particularly interested in which Bitcoin doesn't cater to and I discussed a project that does, that people wouldn't be lining up to call me a hypocrite.

there is a massive distinction between cryptocurrencies (we can call them altcoins) and tokens (that must be referred to as fund-raising schemes). a cryptocurrency could potentially be respectable and do what bitcoin doesn't like you said but the only purpose of a token (ICO, IEO, STO, DEFI,...) is to raise funds and nothing else.

if a legitimate company wants to do what they do in this space they should do it through legitimate and regulated channels such as going to stock market. but they don't. why? because they can get away with scam if they create an ICO.

Based on everything we've seen in crypto so far, I understand your cynicism.  And if it were a different group of people, I'd probably think the same.  But considering some of the names who've given their support to this project, I'm not going to write it off as a scam yet.  A novelty, yes.  A corporate plaything, definitely.  Highly experimental and not guaranteed to be a success, probably.  But a scam?  I'm not seeing it.

there is no regulation, no law or anything else that can prevent or prosecute them from or after scamming people.
and it doesn't cost anything to create a token. it is not even that hard or time consuming. there is no innovation in it, it also doesn't solve anything at all.

It sounds like there was some effort involved in overcoming some regulatory hurdles getting this one set up.  See this post:

SEC clearance was a near miracle

(...)

making this a public security, a publicly reporting company, a regulated company

I've seen enough run-of-the-mill shitcoins to recognise one.  This project appears different.  It's not any type of ICO we've seen thus far.  Am I investing in it?  Hell no.  But I'm willing to give them the benefit of the doubt.  After all, it's their money they've put on the line.  Not to mention their collective reputations.  I honestly believe people are judging too quickly out of habit with this one.  

[dunfida]

Great example why you shouldn't let influencers influence you and your brain. Money speaks words here - they've probably been paid well enough to say "fuck it" and jump in the other team's boat.
Yeah, why not promote something you used to stand against if you get money, huh?

Its unfortunately the world we live in. Most people in the world, will blindly trust their favorite celebrity, and lose countless money because of it. I mean, just take a look at the recent Twitter compromise, and how many people blindly followed the doubling scam that occurred. Instagram, used to be the worst for these sort of trends, but it seems Twitter is now the place for posting things with political motivations. I've also noticed Youtube infulencers/creators are now getting much more comfortable with ramming sponsorships, and brand deals without doing their own research on just what they might be talking about. A few big Youtubers have been caught out promoting scams for this exact reason.

I wish people just wised up, and understood that an infulencer has a price, and they will push any agenda on you if their price is met. Of course, there are some influencer ith a bit of integrity, but they are far, and few between.

This had been the reality and it would continue to be like this yet there are really people whom do really follow blindly and when someone whom they follow do suggest a particular thing then they do
directly believe without any hesitations and in result it would really be surely a lost of money.They do only realize when its too late or the damage had already been done but for sure in next time
they would really be aware.

We know that new people do comes in to the market as adoption is on the move.When they do first encounter these investment tips then  the cycle repeats once again.
Everything can really be changed up when it comes to money, minding for their pride would surely be set aside when money is on the line.