Why The Hate Towards Long Time Bitcoin Supporter James Altucher?
Why Hate James Altucher? Why Not? According To A Large Number Of Crypto Users
He made headlines and begun scornful discussions on cryptocurrency based forums across the world back in August 2017, thanks to some of his activities during that time. One of the first that stands out is when he took to CNBC during this same month, when Bitcoin had managed to reach a record high (at the time) of $3,500.
On the news show, he took to the airways to profess that Bitcoin would soon be worth 1 million dollars. This was capped off by him spending millions of dollars on a wide range of advertisements online. While the exact figure escaped him, he gives a ball park figure near the tens of millions.
Since this remarkable prediction, Bitcoin has only managed to reach 1 percent of his prediction, currently being valued at $11,000 give or take. So you would think that championing the banner of cryptocurrencies and specifically Bitcoin would make him a hero online. Instead, James Altucher has been the subject of more than a few scornful comments and piles of angry emails.
The kind of messages that Altucher were pretty uniform in their vitriol, being some kind of combination of:
“You're nothing but a fraud,” or “Your ads are just so scammy!”
For him, these became a lot more commonplace over the years, unfortunately. And by his own admission, he still receives various quantities of this hate mail from friendly faces and unknown people about the kind of disgust they feel with him because of cryptocurrencies to some dubious degree.
It's not too much of a surprise that this didn't exactly do ‘wonders' for his mental health; slipping into depressive episodes, to the point where he actually provided his community with his mobile number in order to personally take their calls. So, needless to say, the pressure got to him.
So is this wholly down to the fact that his face appears on a range of adverts online? Not exactly, there are a number of reasons for why this well of bile has erupted all over him.
Back in early 2013, Altucher Went On Record Calling Bitcoin A Scam
This is something that has followed Altucher around for some time, and still does. But, in all fairness – opinions change over time. But here is a record of what exactly he said to whip up the community's distaste:
April 4th, 2013 –
James Altucher (@jaltucher) in a reply to @ScrobTV
“The Prob w Bitcoin is that theoretically is sounds great but in practice there's fear of constant hacking”
In another reply to @ctormey1 – “Bitcoin is unfortunately a fad because every time it looks legit someone hacks it”
A further reply he gave to @Scottbalster on March 28th 2013 included the following:
“Bitcoin will never get huge because too many worries about its mysterious beginning.”
It's with this kind of background that people believed that there were more selfish motivations behind why he suddenly changed his tune in 2017. While the more hostile consensus was that he merely changed is mind during the boom year of 2017, the reality is a lot more nuanced than that. At least from Altucher's perspective:
“So people thought I had changed my mind in 2017 just to make some quick money.” Altucher continues on to explain.
“However, in 2013, a month after I had called it a scam, I learned more. A friend of mine, Naval Ravikant, visited town and he was generous with his time. He answered probably over 200 questions I had about Bitcoin.”
This resulted in him reading up on a lot more of the literature behind Bitcoin, reading thousands of articles on the subject before delving into the code and white paper of Bitcoin in more detail.
“I changed my mind.”
One of the pre-eminent examples of Altucher's about face on Bitcoin is demonstrated in the very same year – with Altucher planning on releasing his own book “Choose Yourself” on Amazon, while also launching his own online store which only accepted Bitcoin.
Altucher likes to think of it as one of, if not the first online Bitcoin only store ever created. It was during this time that he had managed to sell more than 100 copies of his book through this store, being sold for 0.1 BTC, meaning that he sold these for around $6.
After this pivot, Altucher was invited onto CNBC to discuss the launch of his Bitcoin only store. The host of the show asked him whether this was just a stunt to raise the profile of his book.
To which Altucher retorted – “Well, I'm on national TV. So it worked.”
He Levied A Charge For His Newsletter
While this does seem like a pretty interesting thing to be condemned for. Especially since content is time and time is a pretty valuable asset. Especially for those that have been writing for a considerably long time.
By Altucher's own admission, he has been writing for a varying amount of time weekly for nearly 20 years. With “99.99 percent” of what he writes is available for free.
With this in mind, while trying to keep charges to an absolute minimum, it does seem as though having a newsletter that you pay for is hardly extortion.
With the cryptocurrency market undergoing a boom phase in 2017, there was a greater desire on the investment side of things, to understand what were legitimate cryptos and what were fraudulent. This is where Altucher's newsletter comes in.
The online articles he circulated for free were pooled into a compilation for newsletter recipients, allowing users and potential investors to come to grips with the legitimate and allegedly fraudulent crypto assets out there.
With such a long track record of free content, and a feverish demand for more information, Altucher resolved to hire more people in order to get to the bottom of potentially scammy currencies while fulfilling the intellectual appetites of his readers. Again, hardly sounds like something worth putting someone in the guillotine for.
These same people he hired weren't simply there to add to the content; not having as much in the way of content marketing knowledge, Altucher began to collaborate with people who were more experienced than he was in this field.
While he was more than happy to keep advertisements and monetization to a minimum, you can't expect employees who make a living from their skills to work for free. That's not exactly how economics work. Much to Altucher's own admission.
“So although I still wrote a lot about cryptocurrencies for free, I had to charge for some of it.”
Altucher Was Accused Of ‘Pumping Shitcoins'
Out of the digital crimes that a person can commit in the cryptocurrency world, there are none as perceivable heinous as the capital offense of ‘pumping and dumping' crypto assets. Even when considering ‘shitcoins' are not exactly known for their quality, it does a reputation no favors to be caught in a pump and dump scheme.
But even though Altucher is accused of this more often than he can count. He remains resolute that he has never been involved in this kind of activity.
“The answer: NO. Never. Absolutely not. In fact, the opposite. I went on CNBC in 2017 and I said, “About 95% of the cryptocurrencies out there are scams.” “
Since going on air with CNBC, Altucher has since whittled down the number of crypto assets he would recommend for someone's digital portfolio down to 12. Among them, to date, none of them has demonstrated any kind of scam behaviors.
About 80 percent of cryptocurrencies highlighted within the market since Altucher made his predictions on CNBC in 2017 have since plummeted down to zero, much as he predicted. Most of them have demonstrated long-term that they were scams or had no tangible value associated with them.
Altucher has remained relatively resolute in his prediction that 95 percent of cryptocurrencies will go down to zero. According to Altucher, his overall goal is to find out which cryptos will be able to stand the test of time over the years.
When it comes to his own portolio, he goes on to state that he has been a firm ‘hodl-er' since he created it.
“I have not personally sold a single coin from my personal portfolio.”
Criticized Over His Credentials
Having worked in the software development and money management world for 35 and 20 years respectively, there's a special kind of perspective that Altucher brings to conversations about cryptocurrencies.
For those getting involved in crypto assets, they criticized Altucher for not adhering to what we should consider some of the more superficial elements of the industry, which he goes on to list off
“They thought because I wasn’t living in Silicon Valley and I wasn’t involved in making any cryptocurrencies then I should not have a voice.”
Along with having an impressive lineage of experience in these industries, Altucher has proven himself to be an entrepreneurial mind in more ways than one. Having worked to establish software companies, hedge funds, along with being a highly active investor.
This interesting lineage of entrepreneurship and personal involvement in industries directly related to crypto. This meant that Altucher could understand it from a money management and economic point of view, but also from a technical standpoint.
Hardly seems as though he doesn't deserve a voice for living in a highly taxed region of the world that is steadily declining in relevance.
Opening Up Bitcoin To The American People
A great degree of the scorn that Altucher faced were from a range of developers and people from Silicon Valley. And while they spent time publically trying to explain Bitcoin, they did it in a pretty bad way.
While they would go into areas like the underlying blockchain technology, cryptography and concept of mining, these attributes were interesting for those more technically minded or already ensconced in the crypto world. It did absolutely no good for regular people, and left them feeling even more in the woods.
Altucher goes on to explain why this approach is a terrible one for trying to obtain mass adoption.
“This is like saying “Amazon is a software application built on top of the TCP/IP protocol” instead of saying “Amazon is a store”. The Internet got widespread adoption when everyone understood it. Not just tech people.”
The end goal of any Bitcoin 101 course of people is to get them ensconced in the broad application of it as a cryptocurrency. And so used to it that, in the future, they'll merely see it as a wholly dynamic kind of currency.
Altucher's Bitcoin Explanation Turned Heads
When it comes to any kind of discussion of money, there's one thing that Altucher informs listeners to when it comes to this fundamental fact – nobody truly knows the full origin of money.
This isn't exactly new for those more historically minded; much akin to the first religious belief systems – money evolved up in different ways geographically speaking. So acting as though there's a singular origin story is ludicrous.
If we were to simplify the whole origin of money, Altucher cuts it down to several stages: the first being that money manifested as an alternative to a ‘goods in kind' barter system to one where solid stores of value were exchanged. Whether this took the shape of metal spears (Obols) in Greece, paper notes in China, or metal coins in Lydia, this is where money cropped up.
Any kind of barter system would simply become too unweildy for any major city or nation-state to sustain over time; taxes would become too much of a headache to regulate if you're operating off some non-money based barter system.
From there, precious metals began to take more of precedence; being used in currencies such as in Athens (Coins minted in silver), Rome (Gold and Silver) and beyond. After this, we began to have sovereign currencies backed by precious metals, before governments cut ties with the Gold Standard and allowed for fiat to free float, with central banks backing its value (Bank of England, US Federal Reserve and so on).
But with this new centralized fiat system, there were and still are serious limitations to it for the average user. Centralized control is subject to political pressure at times, as we've seen from the US Federal Reserve, Banks of England and Central Bank of China. There are potential limitations in human error and bureaucratic incompetence.
While this solution is perfectly fine for bit businesses and wealthy individuals, it's not exactly a good deal for individual account holders, as paper money, when electronically transferred, incurs way too many fees.
Altucher gives the following example.
“Imagine transferring money from your bank to a friend in China.
Your local bank → Your local reserve bank → Federal Reserve → SWIFT wiring system → China’s Central Bank → local reserve bank → local bank).”
Throughout the entire process of moving money from one area of the world to another, there are designated fees, an intermediary that is trawling through your personal information, all the while, the whole process is subject, at any point in time, to the pain of human error.
In addition to all these issues with a third party sending your payment internationally, that's not even factoring in just how long the whole process can take; which ranges anywhere from 24 hours to one week or more. This is why financial remittance services are such an untapped market for blockchain technology.
Crypto, much like this underlying technology, represent an immediate solution to this issue. Considering as well that, regardless of any predecessor systems used in the world of finance – the modern iteration will eventually make up 100 percent of the former. So, it stands to reason that this is what will happen with cryptocurrencies – with cryptocurrencies eventually succeeding in the place of currencies.
If we look at it from the standpoint of mathematics, for example, with supply and demand. At the moment, the current demand for money internationally stands at $150 trillion, which is roughly the same amount of money in circulation on the planet.
In comparison, interestingly, the current supply of Bitcoin is around $150 billion. So, with this in mind, having this kind of demand would result in a more than 1,000 times increase in the price of Bitcoin, especially considering the fact that there will only ever be this specific amount of Bitcoin, in stark contrast to fiat currencies.
What can make for a good resource when it comes to understanding the evolution of industries, is Matt Ridley's ‘The Evolution of Everything.' This is the book in question that Altucher models his ideas of evolution within the world of currency.
While this is the first of his arguments, Altucher also models a part of this on a similar model to Yuval Noah Hurari's three phasal theory within his book – ‘Homo Deus.'
Within the book, Noah Hurari argues that every single industry goes through three distinct phases – Theism, Humanism, Dataism.
One of the examples that is used by Altucher is the world of medicine. Which doesn't fully stand up 100 percent, but it's a good hypothetical to use.
Theism is demonstrated from less settled, civilized societies; if you were sick or injured in a way that was not readily visible, religion would be the first port of call. The hope being that you could pray or complete a ritual to save the patient.
Humanism is shown during the period of the same name; if you were ill, doctors, physicians or surgeons would have a logic-driven approach towards what was ailing you. And as more knowledge would be accrued and technology advances, this approach would improve, leading to the ‘next phase.'
Dataism, in which the humanistic approach intermingles with an increasing application of innovative technology in order to provide as much information as possible about a given patient. Any doctor knows the first steps when approaching a patient displaying particular conditions; they would run blood tests, ECG, blood tests, etc.
While there are some holes in this phased thinking, it still provides an interesting model upon which we can see the kind of transitions that currencies will likely go through.
Cryptocurrencies represent an interesting data evolution to currencies; for one they solve some of the fundamental problems that have proven chronic within the fiat money world. These being issues of privacy, often extortionate fees, the continuing issues of human error, bureaucratic incompetence, forgery, corruption such as money laundering among other areas.
The best way to really lay out these advantages to users is to explain it in as streamlined a way as possible while making sure that it's laid out in layman terms that are easy to understand and more than straight forward enough for people to know how to get involved in using it.
While Bitcoin doesn't exactly solve all of the problems within the world of currencies, but cryptocurrencies do successfully solve a good number. Altucher does go on to highlight a range of cryptocurrencies that he believes do address these problems.
This portfolio, along with Altucher's own advocacy for cryptocurrencies, along with the support and talks that he provides are all to accomplish one thing – help people – at least this is according to him:
“I wanted to help people: avoid scams, find the currencies (based on my technical expertise and investment expertise) that had the most potential for replacing all or part of fiat money.”
The Advertisements Were Slimy
This is something that Altucher is actually in agreement with, to his own admission, it seems.
“I agree. The ads were outrageous.”
But one of the quotes that is most relevant for this kind of approach that Altucher took towards advertising tactics is Shakespeare's Richard the Third, or ‘The Prince' by Nicolo Machiavelli.
Whether you “seem a saint when most I play the devil,” or understand that “Politics have no relation to morals” is besides the point because Altucher points out the fact that advertisement, at times, has to be slimy in order to catch attention.
Referencing Alain De Botton's ‘Nice Guys need to use Machiavellian Tactics,' his underlying point is that if you're trying to appeal to ten people: the nice guy will only ever capture one of those people using ‘nice guy' tactics. The more surreptitious tactics will, on the other hand, capture the most attention.
The ultimate reality? We live in a market economy where capturing attention is key to being the winning product on the market. And there are millions of dollars involved in the process of marketing on the internet.
Comparing advertisements between Altucher's own compared to one created by an internet marketer – the marketer's advert was clicked on more than ten times compared to that one developed by Altucher.
As a result of this, Altucher resolved to dive more into funding for these advertisements. A testament, he professes, to the kind of belief that he has regarding cryptocurrencies.
“And, yes, it is easier to write this now that bitcoin is the best performing asset class of the year.”
The Obnoxiousness Of Seeing His Face Everywhere
Altucher has been more than understanding of the fact that people have been getting more than exhausted and just angry with seeing the same face over and over again.
“I get it. I’m the one who has to look at it every day in the mirror.”
One of the ‘Machiavellian' ways in which these advertisements have proven successful is by having Altucher's face on them, and these tended to range from a surprised look on his face to some that came off as somewhat outrageous and even somewhat racist in his opinion.
While this was a very obnoxious way of promoting a product, these were the kinds that got the highest click rates. Not that Altucher was highly enthusiastic about it himself by his own admission.
“I hated looking at it. The ugliest picture of me ever (and that says a lot) was the one that was most successful.”
While these adverts did result in a lot of clicks, people didn't simply go to a product that they were going to buy – these ads took them to instructional videos that he had produced explaining why he felt that cryptocurrencies were going to be an international phenomenon.
No pay-walls were involved, he wasn't selling any kind of additional product. Instead, those visiting the page got access to a free six video class on how exactly to invest in cryptocurrencies. In addition to this, visitors got a free book he wrote known as ‘Crypto 101'.
While Altucher does concede that there is a lot of potential for cryptocurrencies in the foreseeable future. When it comes to investing, he's a HODL kind of guy, stressing that the best kind of investment strategy is a long-term bite and hold.
“I do not recommending trading in and out of cryptocurrencies. For me, this is a worldwide change in how we view money.”
Having made his opinion quite clear on the subject of investing, there were plenty of other kinds of investors that have since recommended day to day short trading of crypto. Something that Altucher himself was wholly against.
Along with this, his personal investment portfolio, consisting of only 12 cryptos out of the hundreds out there does go a long way to show the kind of opinion he has of ‘shitcoins'. The value he affixed to them was zero, and he has since been proven right.
So what is it that his portfolio proves exactly? For one, it represents a range of cryptos and products that Altucher believes in.
While he's not exactly clear on just how much was spent on his own marketing campaign, he estimates that it was “probably close” to $60 million or even more than that. What makes this capital even more interesting is the fact that it wasn't directed towards out-performing rival products, at least that is according to Altucher.
“The marketing company only spent that money because they saw that every $1 spent was earning greater than $1 because people were resonating with the message I had.”
While his newsletter was one that you had to pay for, it was performing far better than a staggering number of others out there. But why? Altucher attributes this to the fact that there was far more explaining going on in his compared to others.
“The only reason my newsletter was selling better than the other 5,000 out there was because I was the only one explaining cryptocurrencies in a way people could relate to and make sense of.”
Advertisements [Again] And The Barefaced Lying
Once again, Altucher is pretty forthcoming about his own embarrassment about the kind of advertisements that he's been affiliated with. But one of the elements that comes into play more frequently than any other aspect is the fact that people accuse him of claiming to be some kind of ‘Eccentric genius.'
This is something that is fiercely contested by Altucher, as he argues in his own blog:
“I don’t consider myself an eccentric genius. But I had a viewpoint that I wanted people to listen to.”
Those Just Flaming Out Cryptocurrencies As A Scam, Making Altucher A Fraud By Extention
Cryptocurrencies have gone past the point where they can be just shrugged off as a scam. And with the increasing number of institutional investors getting involved in the world of digital assets, crypto and blockchain technology, we have to simply conclude that cryptocurrencies are not scams.
If we need any further proof of this – it's with Facebook's Libra project. While being a wholly polarizing project, the fact that it's a crypto, backed by a blockchain, and being used by a multinational, multi billion dollar company, we have to realize that cryptos are either game changing, or the single biggest and most incredible scam we have ever seen. And the money here is not on the latter.
There is also a greater international need for cryptocurrencies, especially when you look at the international political landscape. The great game of nationalism is unfortunately a-foot and, as a result, the borders are becoming harder and more glaringly apparent.
If we compare this to the landscape that we have created online – it is one that is wholly internationalized, making the formers state of affairs something that can't be tolerated
With cryptocurrencies, transactions will be joining up with the internet and even revolutionizing the latter as a whole – making it a truly internationalized system online.
Rather than having to cleave through transactions through a wave of third parties and multiple banks. Cryptos allow you to complete wholly trustless (thanks to the proof solution that is applied), peer to peer transaction without any external interference.
People have since been pretty resolute in labelling Altucher as a scam artist or shill for a number of reasons:
“Many people called me a “scam” because I was : i) selling, ii) they thought crypto was a scam iii) they though I was “pumping” “shitcoins” for personal profit.”
James Altucher has gone on record in a number of instances professing that the vast majority of ‘shitcoins' will effectively vanish in some way because they are wholly without value apart from the value that is affixed to them by buyers. He goes on to argue that he has never once sold a single coin, other than those seen within his investment portfolio. Even then, he has not been out there shilling various cryptos.
You Gave The Impression That You Were Selling Something Scammy
While he does admit that he did profess that anyone getting involved in investing in cryptocurrencies. He contends that this is not so much of shilling a scam as it is just being the reality of investing in crypto assets.
In some of the calculations that Altucher made not only in his range of videos but within his content, there is statistically a strong case for investing in crypto as opposed to just dismissing it as some kind of scam.
Altucher goes so far as to argue that he is a “firm believer” in the kind of returns that he had previously argued in written and video based content. Bitcoin is the best kind of example that we have seen in the past – accelerating upwards by a significant degree over this quarter alone. Rising more than any other kind of asset, digital, conventional or otherwise.
Before he got into the world that we know now with his crypto advertisements, Altucher admits that he was initially approached by a number of people to take part in a crypto hedge fund. In spite of the fact that he chose the advertisements, it remains a particularly interesting ‘what if' for if he chose to actually start up a hedge fund.
Any hedge fund would have certainly given him more privacy to him, all things considered. Whenever a new hedge fund is set up within a major new financial industry do have an impressive habit of raking in a massive amount of money.
Altucher has been in that industry before.
It Was About Bringing In A Mass Audience – Not A Handful Of Wealthy Investors
Altuchers intentions seem to be a little more than financially based, and a little less than altruistic by his own admission.
“It sounds like a lie or cliche when I say this: but making more money is not the only reason to do things.”
He points out that these videos and written content are all in order to do one simple thing, and that is to express his own opinions, from hiring the necessary resources and people with skills in order to help with marketing his opinions, while working to get his opinions on new innovations and developments within the crypto world.
This seems to be his strong point.
Over the years, Altucher has spent a great degree of time experiencing his fair share of hate and scorn, especially for his less than popular opinions over that same stretch of time. It was as though he was advocating against buying a house or going to college etc, in light of the kind of returns it would bring you.
Crypto has all of the potential to go beyond that and by a staggering degree; 100 times that, according to Altucher. And there is a good amount of positivity that he got to his messages over the years.
If we ever extended a silver platter with whatever we wanted on top of it. The last thing that we should be doing in that situation is reaching out and grabbing it. We are suspicious and highly cautious as a species for a reason.
While negativity and scepticism are, in general, survival techniques used by our ancestors, negativity remains a highly painful thing, especially when it's something that is readily exploited. We see this all the time with mainstream media outlets; commonly preying on fears instead of hopes, making it far easier for us to hate rather than love.
This comes as a ‘duh' moment, however, considering the kind of clique-y, tribalistic species we are.