Kim Kardashian and Crypto

Brendan Burgess

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An excellent article in the FT

A lot of investment in Cryptos comes after endorsements by celebrities.

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An October survey by consumer research firm Cardify found that for cryptocurrency holders, mainstream celebrities and executives are the number one source of information. Almost 60 per cent of survey respondents turned to these high-profile individuals for information on cryptocurrencies more than half the time. And celebrities have become an increasingly important source of validity for the volatile tokens. In a document released by EthereumMax in October, the brand listed its celebrity and influencer marketing as a top strength of the token. Many other well-known individuals have publicly joined the crypto fray as digital asset markets have boomed. Actors Matt Damon, Lindsay Lohan and Steven Seagal, and director Spike Lee are among those with crypto partnerships.
 
The distinction should be made that not all crypto projects have been devised from the outset to be baseless moneygrabs, pump n' dump schemes or rug pulls. Anyone that has spent any length of time in the crypto-sphere would tell you they exist. However, it would be wayward for anyone to suggest that there aren't genuine projects out there working hard in pursuing a specific use case also. They may be incredibly risky and they may not end up category winners - resulting in major loss for anyone that has participated in them. However, there is a major distinction between such projects and out and out pump n dump schemes. Furthermore, there will be a handful of projects that will succeed in the use cases they're targeting with exponential upside as a consequence.

The whole world of influencers and fin-fluencers didn't start with crypto. It's been an unhealthy development outside of crypto since a few years already. If the suggestion is that a cohort of people are basing decisions to participate in crypto projects solely on the utterances of celebrities, there are plenty of other folk in the crypto space that wouldn't dream of taking this approach.

I've no doubt that many are misguided in thinking that fast and easy money is possible in crypto but the reality is quite the opposite most of the time. There are also a cohort who on introducing themselves to crypto think that they have missed out when it comes to the leading cryptos such as Bitcoin & Ethereum. They're then attracted to the notion of outsized gains by getting involved with projects at an embryonic stage. At this point in the game - with a couple of thousand projects out there already and blockchain development being incredibly hard and slow - they're going way out the risk curve in chasing something that becomes less and less likely to deliver. This approach doesn't belong to credible participants in the crypto sector as far as I'm concerned - although there's no doubt but that it does amount to and account for significant capital.
 
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A genuine question to @tecate , who pays these influencers or the sponsorship of football teams? Is is the creator of the coin? If crypto is decentralised, shouldn't there be no owner to it? Would it not be like the Federal Reserve promoting the dollar?

If it is the creator of the coin paying for it, how is this any different from a company's marketing bill to increase its product i.e. get people to buy its coins.

I do think there is a future for crypto but I also think a lot of them are a big ponzi scheme.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Not tecate, but I can answer
These scam-coins are often not dentralised, or if they are the protocol is designed to award the creators a bunch coins for free (known as an unfair launch, as opposed to a fair launch where no one gets free coins, and mining is open to the public).
Steven Barrett said:
If it is the creator of the coin paying for it, how is this any different from a company's marketing bill to increase its product i.e. get people to buy its coins.
Click to expand...
It's not really any different. They're launching a crap product (the 'cryptocurrency'), awarding themselves a bunch of it upfront for free, then paying celebrities to shill it so they can sell their bags for profit.
Steven Barrett said:
I do think there is a future for crypto but I also think a lot of them are a big ponzi scheme.
Click to expand...
They are not strictly ponzi schemes, but they are launched with the sole intent of being a cash grab from people who don't know better.
 

Not dissimilar to IPOs in many cases, owners create coins and keep 70%, issue 30% to public for trading and the founders keep ownership.

Creating an Ethereum coin can be done quite simply (there are easy to follow guides on the internet), however you do need some startup cash. I assume, the owners of EthereumMax in this case had a pot of money to begin with and they reached out to Celebrities and paid them out of that plus gave them a number of coins. Not to dissimilar from how any company reaches out to influencers to do sponsored posts etc. I am sure Kim Kardashians people woulnd't accept payment in coins only.
 
What the others have said in the last two posts and kind of what I was getting at myself. There are plenty of projects that are a sham from inception, there are those that are genuine but misguided and will never make it and then there are a handful that have something tangible, are creating a community (developers, users, etc) and will make it.
As regards who pays, it could be two fold. It could be totally sharp practice and those that conceived the network may have some arrangement with celebrities or others to endorse. It may be the celebrities themselves that simply talk up their own book - and get out the moment their followers have bought in.
With regard to decentralisation, there are varying degrees of decentralisation. Some are not decentralised at all - some aspire to become decentralised within the roadmap they set out and others claim to be decentralised but have varying degrees of centralised elements to them. In any event, whether they are decentralised or not doesn't really matter for what we're discussing here. If - from the outset - the project is devised to pay out the project team to a disproportionate degree, then they may have captured a certain proportion of tokens already - regardless of whether the network itself is centralised/decentralised, etc.
I had never heard of Ethereummax until Brendan posted about it...but then I wouldn't be the type to be following Kim on Instagram! Another red flag for me is a project that tries to lift itself up on the coat tails of another brand (in this case, Ethereum). If someone is going to make a financial decision based solely on what Kim posts on social media, then it's pretty obvious what the outcome is likely to be.

And in summary, I agree with you insofar as some will succeed and many more will not (whether that's because they've made a genuine attempt but its just not good enough or the project was simply conceived as a cash grab from day 1).

Do your own research (DYOR) is not just a meme - it's a necessity when delving into crypto.
 
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Thanks for your replies.

Bitcoin for instance were a sleeve sponsor on Watford the premier league a couple of seasons ago (It's now Dogecoin!!). Bitcoin is supposed to be a decentralised currency. So who paid Watford? Satoshi Nakamoto?
 
They originally had sportsbet.io as a sponser (on the front of the shirt) who chose to have the bitcoin symbol on the sleeve. The current deal is apparently with stake.com who chose to put doge on the sleeve.

These are a bit different of course as in both cases neither company directly benefits from you buying/using bitcoin/dogecoin in general. I guess they could have bought some of either before announcing the deal and hoping it would influence the price, but if so I imagine they may have vastly overestimated the goal scoring prowess of Troy Deeney.
 
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