Altcoin Influencers Gave into Greed with Giacomo Zucco
Influencing Altcoins: Navigating Fraud as an Independent Banker
On this episode of Magic Internet Money, host Brad Mills invites Bitcoin maximalist and entrepreneur, Giacomo Zucco onto the show to discuss how altcoins and the influencers behind them are changing the crypto landscape. Specifically, not for the better. Zucco shares much of his technical and financial knowledge relating to the importance of sticking with the philosophy of Bitcoin. The duo discuss their experience with altcoin influencers pumping and dumping currencies like Dogecoin and the effects they have on the cryptocurrency community. The two talk about the fallout from these pump and dumps and the importance of maintaining consistency within the Bitcoin community, and how that can increase or decrease value.
How Valuable is One’s Reputation?
Brad kicks things off by asking guest Giacomo about his altcoin portfolio. Giacomo follows this up with a discussion about Zucks Bucks and altcoin pump and dumps. To add some context before a full explanation, recently this year, the volatility of cryptocurrency has been making headlines. Altcoins have been fluctuating and growing in price after Bitcoin jumped up to $40,000 USD in value. In addition to this, influencers from all sides of the cryptoverse are contributing to quick pump and dump profits by shilling altcoins for a while and then selling them when they reach a specific value. A big part of what Giacomo is discussing throughout the episode is the effects on personal reputation as a cryptocurrency trader participating in pump and dumps can have on one’s portfolio.
Giacomo says “a pumper is not a trader” and that’s an excellent point. The presence of pump and dump scams in altcoins is at a perceivable record high. Zucco points out that influencers have an affect on these schemes because pumpers use any means to increase value. Meaning that if they can use somebody else’s personality and misconstrue what they say or promote, they can increase the value of their asset and then cash out after they’ve falsely pumped up the value. This is a part of the malicious side of “being your own bank” when you hold cryptocurrency. Giacomo’s advice is to stick with Bitcoin, and not be swayed towards altcoins and “shitcoins”.
For example, let’s say that we have two altcoin traders, Tom and Harry. Tom is a known pump and dumper, so when people look at his portfolio, they can see where his public financial records are and they know that when he’s investing, he’s looking for a fast return and what he’s currently holding will not last. Harry however is a trader and is looking for more long term gains. Harry’s reputation and part of the value he’s providing his position, is the confidence he gives to others because he’s known for sticking with long term profits. Giacomo says that switching between these two extremes can be damaging to a portfolio and to yourself at the cost of likely making more money.
Responsibilities that Come With Being Your own Bank
An advantage that Bitcoin may offer is privacy. Not only are you your own bank, you also get to hold the cards close to your chest. Meaning that your financial records are not public if you follow the right steps. Historically, there’s a fair amount of financial information that has to be made public in order to prevent fraud and increase transparency. In traditional finance, you can see a lot of where individuals are putting their money and thus plan accordingly.
Brad asks Giacomo why Bitcoiners switch to altcoins? How do people, even intelligent and well known Bitcoiners, fall for pump and dump scams? Giacomo believes it’s in part because of how altcoins are pitched. Atop of the scams, you do have people that come to believe very strongly in the technology behind a given blockchain project. Then this project has a token and that token is sold for short term profits primarily. The favourite example used by both Brad and Giacomo, is Ethereum. Brad explains well that Ethereum is more like a blockchain technology stock than a real currency. While Ethereum’s technology may have value, both Giacomo and Brad agree that it shouldn’t really be held in the same regard as Bitcoin.
This is the case for many altcoins. They’ve got new function or niche that is solved or made more convenient by blockchain technology, however they get branded as true currency. This problem is exacerbated when influencers bandwagon on to these altcoins and then shill them as whatever it is that sells. The comparison is sometimes made to the film, The Wolf of Wall Street. Altcoins sort of resemble the penny stocks that Belfort was exaggerating the value of and lying to customers to get them to buy the stock which he was making a huge commission off of. The same is true for altcoins in some cases. An influencer can make people believe that a given cryptocurrency is valuable, and then run off with the money after it peaks and also devalue it on their way out.
Time Stamps
00:00:20 - Introduction
00:04:09 - Show start
00:07:04 - Brad asks Giacomo what makes people switch to altcoins? The two discuss technology of altcoins
00:15:25 - Giacomo goes on a long tangent about influencers, Brad asks for the context about Trace Mayer and other early bitcoiners
00:20:40 - Brad and Giacomo discuss their thoughts on coin joining and its effects it can have
00:35:02 - Conversation shifts to discussion about the concept of clean coins and dirty coins
00:40:52 - Giacomo talks about his experience scamming in the crypto community and how they’re perpetuated
00:45:01 - Giacomo explains in depth how personal reputation affects crypto value
00:46:58 - Brad talks about his thoughts about DeFi and educating people about tech scams
00:55:21 - Brad and Giacomo get into the technical sides of Bitcoin and Ethereum
01:00:18 - How altcoins resemble Intranets from the dotcom bubble and closing remarks