FaZe Clan has seen so much growth thanks to their young fans that the group was even able to raise $40 million in funding last year. The esports team and streaming superstars have amassed a huge following, with tens of millions of followers across their social media accounts and video channels. This month FaZe Clan made history as the first ever gaming organization to grace the cover of Sports Illustrated magazine. ![]() So when it comes to these coins being promoted by influencers on social media, they appear to be straight-up scams. "The only difference is usually these schemes are done with fiat currency." "I can't tell you how many Ponzi schemes have done exactly what you're describing, using exactly the mechanisms you're referring to," she explained. Pump and dump schemes are basically when someone tries to boost the value of an investment, such as a stock or cryptocurrency, by generating fake news or buzz around it. "It could also be a ponzi scheme or a pyramid scheme or even both." "What you've described is called pump and dump," Springer explained in a phone call where we walked through the various altcoins and their marketing schemes. I reached out to her in order to find out exactly how to classify these altcoins. Marie Springer is an Adjunct Associate Professor in the Department of Public Management at John Jay College, who recently authored the book The Politics of Ponzi Schemes: History, Theory and Policy. It's basically the same sort of scheme, to try to make the sucker feel like they're a big player." "Once he did that, the floodgates were open and this is where we got thousands of cryptos from. "The developer put out this coin and he disappeared less than a month later," he explained. Gerard brought up one of the earliest altcoin scams, IXcoin, which launched in August 2011. "A lot of people have a history of scams." "As soon as you could exchange Bitcoin for money, every scammer came out of the woodwork," he said. Gerard, a longtime critic of cryptocurrency, explained to me how what we're seeing now with altcoins has permeated throughout cryptocurrency since the earliest days. "If you buy the coin, your money is gone, and maybe you can get it back if you sell the magic beans to someone else, which is basically the story of crypto in general." Tweet may have been deleted "You only ever hear from the people who won and never from the people who lost." he continued. "Let's be clear, these things are absolutely worthless bullshit," David Gerard, author of Libra Shrugged: How Facebook Tried to Take Over the Money and Attack of the 50 Foot Blockchain, explained to me in a phone conversation. These coins are usually built on existing blockchains and buying them often requires a number of steps and hoops to jump through, and there are usually various transaction fees. While Bitcoin and other established cryptocurrencies are already considered highly volatile investments, altcoins are even more risky. But even if you mostly hang out on more mainstream social media channels like Twitter and YouTube, you very likely have seen some of your favorite internet celebrities promoting one of these newly launched altcoins over the past few months.Īltcoins - which are also often referred to as "memecoins" or even "shitcoins" – are cryptocurrencies based on some sort of online joke or tied to some sort of money-making scheme. If you look at forums on Discord, Reddit, and Telegram, you find dozens of new cryptocurrencies launching every week. ![]() ![]() New cryptocurrencies have been popping up everyday in order to take advantage of the hype around well-known crypto, such as Bitcoin and the meme-inspired Dogecoin, as the more established cryptocurrencies' value spiked to new heights. What's going on here? Why are so many of them promoting it, and how invested are they personally? A flood of altcoins They're urging their followers to look into new altcoins on a regular basis, if not flat out encouraging them to invest. YouTubers, streamers, and all kinds of social media influencers are jumping aboard the altcoin train. Kardashian was promoting a new alternative cryptocurrency, or altcoin, called Ethereum Max. Everyone knows Kim Kardashian, the influencer and reality TV show star, but do you know Kim Kardashian, the cryptocurrency advocate?Įarlier this month, the billionaire mega star posted something a bit out of the ordinary to her Instagram Stories.
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