By Danny Scott, CEO of CoinCorner
We appreciate attempts to innovate and create new products for consumers; it’s what we’re all about at CoinCorner and in the Bitcoin industry as a whole. However, celebrities (and I’m a big personal fan of Manny Pacquiao and Michael Owen – so, I’m sorry in advance guys!) releasing their own cryptocurrencies for the purpose of selling merchandise and allowing fans to connect with them is wrong on so many different levels, here’s why (using Pacquiao’s coin as the example):
PAC token isn’t a world first
Reports are saying that Pacquiao’s PAC token is the first branded coin to hit the market, but this is completely incorrect. What about Akon’s “Akoin” or Ghostface Killah’s “Cream”, and I’m sure there are plenty more out there already. There are also many other celebs that haven’t put their name on a coin, but have used their fame to endorse a particular cryptocurrency. Unfortunately, both Akoin and Cream no longer seem to be running, making this a great first learning opportunity.
In the vague news stories around PAC, it’s explained that the purpose of the token is to help Pacquioa to connect to his fans and allow them to purchase his merchandise. That’s great, but what’s wrong with using social media, Twitter, YouTube and Instagram? These work pretty well for most celebrities, so why should fans have to buy PAC tokens to interact with their idol, Manny? What problem is this solving? Seems to be creating a problem rather than solving one.
There is also no mention as to what platform the PAC token is built on, except for “Blockchain”. Blockchain is the buzzword of the decade, used by those who know only enough to know it’s complicated and that others won’t question their knowledge. I’m hoping more experts from the Bitcoin industry will begin to question these projects going forward as I personally see this as nothing more than snake-oil salesmen at work. It’s a shame Manny Pacquiao has allowed himself to become muddled in with this as it’s most likely being sold as a dream on the blockchain… a dream that is just hot air at the end of the day.
It’s complicating cryptocurrencies
Bitcoin and cryptocurrency are already complicated worlds, and throwing in new cryptocurrencies for every single celebrity (or company for that matter – think Facebook’s “Libra”, J.P. Morgan’s “JPM Coin” or the recent rumour of Amazon creating their own coin) just confuses things more for the general public. This is especially true as the majority of these altcoins and tokens could simply use Bitcoin instead; a cryptocurrency which is actually decentralised, trustless (meaning you do not have to trust any third party for the system to function) and immutable, unlike these alternatives.
Cryptocurrencies have been notorious for investment/speculation opportunities, with ICOs being the most popular choice from 2017 onward. Unfortunately, around 90% of ICOs have failed or are worth less than their launch price.
ICOs were seen as a quick way for people to raise capital, without the need for any regulation around them and with the majority of investors hoping for a quick win on the price rise at launch. Most of them even launched with nothing more than an idea and a 10-page white paper explaining the concept. I’m unsure if PAC Token is going to be an ICO, but this would not surprise me.
I thought we had moved past the celebrity coins, but maybe not. I hope that Manny Pacquiao, Michael Owen and the rest don’t get caught up and stung in this PR attempt, along with their fans that may buy in to the cryptocurrency under false pretences.