WHY PEOPLE HATED ME SO MUCH BECAUSE OF MY BITCOIN ADS.
In August of 2017, when Bitcoin was at $3500 I went on CNBC and said Bitcoin would be worth $1,000,000.
Then I spent about $60,000,000 on ads (Note: I don’t know the exact number. This is a total guess).
Bitcoin today is at $11,000. It’s not at $1,000,000. Not yet (see below).
[Bitcoin is at $11,862.79 as of 07/04/2019]
A lot of people started to hate me after August, 2017. “You are a fraud!” “Your ads are so scammy!”
Every single day I still get hate mail of some sort or other from both friends and strangers about how disgusted they are with me because of “cryptocurrencies”.
I spiraled into a depression that was unbearable.
One time, in January 2018, I couldn’t help myself. I posted my phone number on Twitter and said, “If anyone has a problem with me, call me.”
For the next 12 hours I spoke to people from all over the world. I was insane.
I think there were many reasons people didn’t like me after I started getting involved in Bitcoin.
And, in some cases, they might have been right.
A) “IN EARLY 2013, YOU CALLED BITCOIN A SCAM”
Yes, I did.
[Twitter exchange back in 2013]
So people thought I had changed my mind in 2017 just to make some quick money.
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.
He convinced me. And then I read 1000s of additional articles. And then I looked at the code for Bitcoin.
I changed my mind.
In fact, in May 2013, a month before I was planning on releasing my book, “Choose Yourself” on Amazon, I created my own “Bitcoin-only” store to sell my book.
Maybe it was the first online Bitcoin store ever created.
After I created the store, I sold about 100 copies of my book for 0.1 Bitcoin. At the time Bitcoin was about $60 so I sold each copy for $6. Now 0.1 Bitcoin is $1100.
I went on CNBC to discuss “the first Bitcoin-only store”. Herb Greenberg said to me, “Did you just do this for the publicity for your book?”
I answered, “Well, I’m on national TV. So it worked!”
It’s not bragging if it’s true.
B) WHY DID I CHARGE FOR A NEWSLETTER?
99.99% of what I write is for free.
I’ve been writing material for free since 2002. Almost every article I write can be read for free.
I often write books and offer them for free. Or charge as little as I possibly can.
In 2017, as Bitcoin was moving up, I saw that many of my readers were discussing cryptocurrencies.
In particular, they were discussing cryptocurrencies that I was convinced were a scam.
How would I get my voice to rise above all the voices that I truly considered to be scams.
I wrote some free articles explaining my beliefs about cryptocurrencies. but i wanted to do more.
I hired people to help me.
I identified currencies that I felt were not scams.
And I advertised my advice. I didn’t know how to do a newsletter, customer service, marketing, etc. So I worked with great people who do.
I like to write for free. But in this case I had to pay people.
So although I still wrote a lot about cryptocurrencies for free, I had to charge for some of it.
C) “YOU WERE PUMPING ‘SHITCOINS’ “
I still get this. People say, “Weren’t you pump-and-dumping “shitcoins” “?
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.”
[CNBC interview 2017 about bitcoin, minute 1:38]
Since that point, the cryptocurrency portfolio I recommend has about 12 currencies. ZERO of them have been scams. All solve huge huge problems in the currency space.
About 80% of the cryptocurrencies that were out there when I was making my prediction on CNBC have gone to zero, as predicted. Most of them were scams or had no real problems they solved.
I still think 95% will go to zero. My goal is to find the ones that won’t. None of the ones I’ve recommended are scams.
I have not personally sold a single coin from my personal portfolio.
D) WHO THE HELL ARE YOU? WHY NOW?
Even people close to me questioned my credentials.
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.
I have been a professional money manager for almost 20 years now.
I have also been a software developer for almost 35 years.
I’ve started software companies, hedge funds, and invested in many software companies.
I’ve also written books about many types of investing strategies.
So not only did I understand cryptocurrencies from a very technical perspective (I could read the code) but from a money management and economics perspective.
Many of the people criticizing me had only expertise in software or only money management but not both. I had both.
D) I WANTED MAINSTREAM AMERICA TO UNDERSTAND BITCOIN
A lot of the “hate” that I got came from people who were from Silicon Valley.
Whenever they publicly explained Bitcoin they would go into “cryptography” and “blockchain” and “mining”.
All of this is interesting, but failed to explain to regular people what Bitcoin was about.
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.
Eventually Bitcoin won’t be called a “cryptocurrency”. It will be called a “currency”.
Da) HOW I EXPLAINED BITCOIN AND OTHER DIGITAL CURRENCIES
I had two viewpoints. And in this explanation I did the math on why I think Bitcoin will go as high, or higher, than I predicted.
EVOLUTION: Nobody knows the true origin of money.
Was it barter? Was it some unit of accounting for debts?
I simplified it and said this: “Money went from Barter → Precious metals → Paper money backed by precious metals → Fiat Money (money backed by a government).”
Each form of money solved the problems of the prior form.
For instance, a barter system is too complicated. How much grain should a pair of shoes cost? How much corn could I get for a shirt that I sew?
This was solved by precious metals, which were hard to mine and easier to transport and come up with exchange rates.
But with metals, it was hard to transport long distances. And it was random where there was gold and silver and this would lead to wars (I am simplifying).
So paper money backed by resources were created.
But again, why should the spending of a country be limited by a country’s closeness to a gold mine.
So fiat paper money was created to allow for a growing country to pay for that growth.
But paper money has it’s limitations. Centralized control (a central bank) which created the potential for human error (as almost happened in the bank bailout in 2009).
Paper money transferred electronically has too many fees.
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).
Each step of the way there is:
- loss of privacy
- potential for human error
- time (ever send a wire and before it settles in the other account you wonder, “where in the currency ether is my money?” )
Cryptocurrencies solve this problem. And since each form of money eventually takes over 100% of the prior form, I felt (and still feel) this will happen as cryptocurrencies, in some way, replaces regular currencies.
Demand for money is $150 trillion (the amount of money on the planet).
Supply of Bitcoin is about $150 billion.
The math then suggests a potential 1000x increase in the price of Bitcoin, since supply of Bitcoin is fixed (as opposed to the supply of paper money).
That was my first argument.
For a good resource on understanding how evolution works in various industries, read Matt Ridley’s “The Evolution of Everything”. I was applying his ideas on evolution to the industry of currency.
THEISM → HUMANISM → DATAISM
My second argument was similar to Yuval Harari’s theory from his book “Homo Deus” that every industry goes through three phases: theism, humanism, dataism.
For instance: Medicine
A) Theism: if you were sick 1000 years ago, you prayed to your shaman or god or whatever in hopes of getting better.
B) Humanism: 100 years ago you would go to a doctor.
C) Dataism: now you get blood work, even DNA work, and a doctor interprets that data (for now) and recommends treatment, which may include robotic surgery or eventually personalized medicine recommended by AI analyzing your genome.
Currency is the same. Simplified: “In God We Trust” → George Washington we trust → “In Data We Trust”.
Cryptocurrencies solve the basic problems of fiat money (or paper money): privacy issues, fee issues, human error problems, supply and demand issues, forgery, and even the basics of contract law and problems with it.
I felt that explaining everything in layman terms that were easy to understand would increase the adoption of cryptocurrencies and solve many societal problems.
Bitcoin doesn’t solve all of the problems. So I picked out a portfolio of cryptocurrencies that solve many of the problems. And it changes as more currencies are developed.
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.
This is how I explain: Who am I? Why am I? Why now?
E) “YOUR ADS ARE SLIMY!!!!”
I agree. The ads were outrageous.
Alain de Botton has an excellent video: NICE GUYS NEED TO USE MACHIAVELLIAN TACTICS
His point is that if there are ten people trying to get attention, the nice guy (saying “please listen to me”) will get no attention and the scams will get the most attention.
So the nice guy, if he truly believes in the integrity of what he or she is offering, must use the same tactics.
I am not an Internet marketer and have no experience as one.
But we live in an attention glutted economy. And internet marketers know how to get people to pay attention.
One time I wrote an ad myself and ran it side by side an ad created by an Internet marketer.
Despite my 30 years of writing convincingly, and despite the horrible sliminess of the other ad, the ad created by the Internet Marketer was clicked on ten times as much as mine.
It was successful and mine wasn’t.
So my technique was not effective if I wanted to get an important message across to as many people as possible.
So I decided to go full force on Internet Marketing because I believed and still believe in what I am saying about cryptocurrencies.
And, yes, it is easier to write this now that bitcoin is the best performing asset class of the year.
F) “YOU WERE EVERYWHERE! I HATE SEEING YOUR FACE! “
People would say, “I hope I never see that guy’s face again.”
I get it. I’m the one who has to look at it every day in the mirror.
Most of the ads had my face on them. One ad had my face with Bitcoins in my eyes and fire behind my head. It felt vaguely anti-semitic to me.
And yet that was the ad that got the most people to click.
I hated looking at it. The ugliest picture of me ever (and that says a lot) was the one that was most successful.
But people didn’t buy because they clicked. The ads took them to videos I did explaining my opinions on why I felt cryptocurrencies were going to be enormous.
People got, for free, videos where I explained all my beliefs on cryptocurrencies. They got a free six video class on how to invest in cryptocurrencies. The also got a free book that I wrote called, “Crypto 101”.
I do not recommending trading in and out of cryptocurrencies. For me, this is a worldwide change in how we view money.
Other newsletters were suggesting day trading cryptocurrencies. I was 100% against this.
I was also 100% against many of the slimy “shitcoins” out there that I felt were going to zero and I was clear on this.
Because I explained in layman’s terms, my ads were more successful than other people’s ads.
Because I offered a product I believed in, and still do, my ads were much more successful than all other ads.
I don’t know how much the marketing company spent.
But it was probably close to $60,000,000 or even much more. They didn’t spend this because they were trying to beat everyone else with more money.
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.
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.
G) “THE ADS LIED. THEY SAID [YOU WERE] AN ‘ECCENTRIC GENIUS’ AND OTHER SLIMY THINGS.”
I agree. I was embarrassed about the ads. I don’t consider myself an eccentric genius.
But I had a viewpoint that I wanted people to listen to.
And my mother does think I am eccentric.
H) “CRYPTO IS A SCAM, SO YOU ARE ALSO!”
Crypto is definitely not a scam. Digital currencies are coming, whether we like it or not.
The Facebook digital currency will be the first global currency in history.
And almost every bank and major retail store are using some form (or developing) of cryptocurrency.
Up from ZERO when I started writing about Bitcoin.
[Bitcoin lifetime chart as of 07/04/2019]
Lately, the global political landscape has become more nationalistic.
But the Internet itself has connected up the world in ways we never would have expected 20 years ago.
And now, with cryptocurrency, the world of transactions will be truly global, instead of going through 8 banks (for country to country transactions), dealing with privacy issues, exorbitant fees, trade finance legal issues, etc.
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.
I was selling. But stores are not scams. You simply don’t have to buy.
Crypto is not a scam.
And I never ever sold a single coin, nor have any of the coins recommended by my newsletter have been a “shitcoin” despite the fact that now 80% of coins have disappeared, something I predicted on CNBC almost two years ago.
I) “YOU GUARANTEED HUGE RETURNS. ONLY SCAMS DO THAT.”
I did guarantee huge returns. My math is explained above. I very much believe that math.
But I also made a financial guarantee: If someone wasn’t satisfied, they could get another year for free.
And I am a firm believer that huge returns are coming. Bitcoin is up more than any other financial asset in 2019.
And when I first started this product (in August 2017 when i was on CNBC), Bitcoin was at $3500. now its almost 3x higher.
— — —
Before I started the crypto ads I was approached by several people to do a “crypto hedge fund”. I don’t know if I would have made more money if I started a hedge fund.
It certainly would have been more private.
And typically a new hedge fund in a new financial industry makes an enormous amount of money.
I’ve been in that business before for many years.
I didn’t want to just help a handful of already wealthy investors.
It sounds like a lie or cliche when I say this: but making more money is not the only reason to do things.
Else, believe me, I would not have bought part of a comedy club. I would not spend most of my days writing or doing podcasts.
I wanted to express my opinions, hire resources to help me, and get my opinions on this important new innovation out to as many people as possible.
I like doing that.
I’ve experienced a lot of hate for unpopular positions in the past. When I said “nobody should buy a house” or “don’t send your kids to college” or “no war is justified”.
“Crypto” was about 100 times that. It was incredible. And the positive response was also incredible.
But it’s natural to focus on the negative. We focus on the negative for evolutionary reasons.
If a bush shakes, our ancestors would RUN rather than wait to see if it was just the wind, or a lion about to jump on us. Better to just assume the worst and run.
Which is why negativity is painful. Which is why mainstream media preys on our fears rather than our hopes. Which is why people love to hate rather than love.
I have greatly appreciated all of the amazing things that have happened to me this past year.
In my professional life (my podcast bigger than ever, my investments in companies helping millions of people), in the ways I’ve been blessed to help people, and in my personal life (getting married and bringing three more children into my life).
I don’t really regret anything that happened.
I do wonder why many people lied about me without reading a single thing I was saying.
I do wonder why the ad with Bitcoins in my eyes and fire behind me and the ugliest picture of me ever was the most successful.
Why did people click on that one?