John McAfee is a British-American programmer and businessman best known for his creation of the first commercially available antivirus software, McAfee. He is an eccentric personality on social media with a following that adores his viewpoints. Over the last year, McAfee has reached a newer, more hungry audience, that of the crypto enthusiast. He now offers a $105,000 price tag to tweet about a crypto project.
He has made a name for himself in the crypto community because of his tweets on certain blockchain projects, and the resulting market movement. Known as “The McAfee Effect” he boasts about his influence on the community with his website he has dedicated to cryptocurrency:
“Within the cryptocurrency industry, nothing can match the power of a McAfee tweet. Frequently, a single tweet has resulted in more than a million dollars of investment into an ICO, and multiple currencies have increased more than 100% in price from a single tweet.”
Now, this sounds just fine and dandy doesn’t it? Is there anything wrong with causing such rapid market movement with tweeting? The first thing we must look at is the makeup of his followers
Mcafee caters to a following of “crypto traders”. From my experience of talking with people who idolize McAfee’s tweets, most have not the slightest clue about how blockchain works or care to learn why it’s important. It’s a money game. If we take a look at the “McAfee Effect” result we can see a spike when he tweeted about a token, in this case Electroneum:
ELECTRONEUM – The first of my daily coin reports: pic.twitter.com/sKf9WNirot
— John McAfee (@officialmcafee) December 21, 2017
The token rose in value nearly 60% immediately and was followed by a series of pump and dumps as the price began a trend downwards.
This does nothing to help legitimate companies progress. What is the interest of a company to receive promotion from McAfee? Raising capital is the only result, very few of these “McAfee Effect” drones are looking to use a token to benefit from a decentralized platform. This does more harm than good in crypto and it’s clear to anyone in traditional markets that the subsequent “pumping” following a tweet is dangerous market manipulation.
Anyone who is new to crypto will see this in one of three ways:
- This is a great way to get rich quick
- This smells and discourages me from involvement in this ecosystem
- This really smells but if you look past it there is legitimate technology
I subscribe to option 3 personally. Partly because I like tech, but also because I fully believe that “get rich quick” is neither real nor sustainable.
On McAfee’s website he breaks down the pricing structure for ICO teams that would like to experience the bliss of the “McAfee Effect”:
“Individual tweets, whether created in Mr. McAfee’s voice or by the company whose products we are promoting, cost $105,000 per tweet. Unless there are special circumstances we will do no more than seven tweets per promotion” Additionally, “We turn down over 90% of all companies wanting to buy our services. The reason is that only products and services that Mr. McAfee truly believes in will be promoted. These are products or services that Mr. McAfee has personally purchased or used and is pleased enough with to engage in promotions or ICOs whose white paper describes a vision in line with Mr. McAfee’s vision and the company producing it has passed our thorough audit.”
If McAfee truly believed in the success of projects he “promotes”, it would be better suited not to promote them to a population of new “traders” looking to chase a pump. Those people don’t care about progression other than that of their own wallet balance. Furthermore, auditing projects is fantastic, but blindly following a tweet with the trust of a person’s audit is dangerous, and is more often than not just manipulation.
Having a basic understanding of ICOs and blockchain use-cases is a good way to start your own personal “audit”. Figuring out applicability and speculating whether or not a project is capable of executing on its idea is extremely difficult. On top of that, scam projects put in a lot of work to make it seem like they are legitimate.
The Blockchain ecosystem moves at a mile a minute. The predominant reason is that there is a massive monetary incentive for innovation in the space. This opens up great opportunities, but also attracts those who are trying to make a quick buck. It will always be hard to deter those who are in it purely for the money and nothing else, but this shows why education is really necessary for the blockchain ecosystem.
It is important to note that marketing in the blockchain space isn’t inherently bad, but it does carry a massive burden of responsibility. There is a line between nonsensical market movement and legitimate marketing strategy. It takes into account how that marketing is performed, who the audience is, and the overall goal of both the project and campaign.
With McAfee, the audience motivated by greed, speculation, and blind following. The best way to spread the word on a project revolves around transparency, not being a “yes man” (where everything is great all the time). Legitimate knowledge is required on the subject in order to understand the technical intricacies of a project on a case-by-case basis. Blockchain can’t solve everything and many projects in the ecosystem currently aren’t capable of solving anything. Do your own research and ask yourself if you’re in it to actually learn or do you just want money fast?
What’s Wrong With Blockchain?
Cryptocurrency is one of the most captivating innovations of the 21st century, but it needs a lot of work. There are a few issues I have with the cryptocurrency space currently, most of which are not easily solved but still need addressing.
I don’t want readers to think that I’m a pessimist, or some “nocoiner” that hates blockchain, I’m quite the opposite really. I love blockchain and I dedicate my work and free-time to researching the space on a daily basis. The problem in crypto lies within the echochamber that often envelops community as a whole, which makes it hard to look at from an outside perspective.
From the outside looking in, these problems facing blockchain make people question the legitimacy of the industry as a whole. The biggest obstacles in my opinion are all social problems: Volatility, Shady People, and Lack of Consistency and Standard.
When trying to talk to people about crypto and blockchain, the biggest roadblock is always Volatility. Cryptocurrency is touted as the holy grail for the unbanked and for the less fortunate, painting a picture of optimism and utopia for those who may have been left behind due to lack of industrialization or subjectivity to a corrupt government. While cryptocurrency certainly is capable of helping people in those situations, I have a hard time thinking its the end-all-be-all solution for at-risk people.
Many might argue “Well having *insert coin name* is better than a hyper inflated national currency run by a corrupt government” and to that, I agree completely. But to imagine some volatile asset encompassing one’s life savings is sad to think about, especially when talking about people who are inherently at-risk due to circumstances out of their control. Those who have the benefit of living in economically stable countries scoff at those who want to dump all their money into crypto, so why is that ok for vulnerable people to do so?
Shady people in crypto are why people raise an eyebrow when they hear about blockchain. The sheer amount of garbage in crypto is blinding, and it makes it difficult to sift through in order to find legitimate growth of ideas and innovation. A majority of people interested in crypto are there only because of their personal greed. I’m talking about people who talk about a new ICO every week, or people shilling something as “the next bitcoin”. If crypto collectively gave a yearly ROI of 3% how many of these people would have been interested in the first place?
There are too many people that believe in quick money. A lot of these people don’t have a huge depth in technical knowledge so they trust others whom they believe to be telling the truth, and invest accordingly. If you come looking for money and nothing else in this space, I don’t think this is the right place for you. Its ok if you came to crypto because you heard about the money, but there are more important things at stake. To quote Andreas Antonopolous, “Come for the money, stay for the principle.”
I should also refute my own last statement because that hype does help to an extent. If you look at other existing industries such as Machine Learning and Artificial Intelligence, those have been around for decades, yet most people have just started hearing about it. That progression has been gradual yet slow. The innovations and expectations in blockchain move at a breakneck speed. Most of the driving force behind that rapid progression is the direct monetary incentive. So in a way, it’s a necessary evil, but one that makes me cringe nonetheless.
Lack of consistency is an interesting problem, and probably the most difficult to solve. With ICOs that pop up on a daily basis touting a new platform and solution to some problem, I think of the users. Say there are 5 dApps that have raised funding and from ICOs, all with their own dedicated token. As a user who wants to use these 5 dApps, how is it appealing to use 5 different tokens to execute on all the things I want to do? That whole process of acquiring the tokens and interacting with the respective dApps is a massive bottleneck.
Imagine someone new to blockchain who is told that they must first buy BTC, then make an account on some crypto exchange, and buy these 5 different volatile tokens just to use 5 different dApps. Not too appealing and extremely inefficient. To the average blockchain aficionado, this process would still be agitating.
Like I said earlier, I am the furthest thing from a crypto pessimist, also I am aware of certain solutions that are trying to solve some of the problems I identified. Rather than pitch a solution I decided to keep this open-ended in order to make people think.
When we’re talking about driving “mass adoption” for these beautiful systems that use breakthroughs in cryptography and gamification, we should be thinking about the average user who just wants to use something cool and new.
How can we make this beneficial, brilliant, and easy?