A fiery debate has been triggered by an admission from John McAfee that he's been lending his support to cryptocurrencies in exchange for hefty compensation.
The Amulet Platform team believes that it is important to look at why smart informed experts are making their endorsement available for purchase, and what impact this is having on investors.
Let’s put aside the ethics of John’s practice and examine the systemic structure that is resulting in commentators all over the internet selling endorsement. And then let’s take a look at how the emerging crypto industry can use blockchain technology to get on a better path and change the incentives for folks like McAfee.
Popular commentators possess large audiences who are self-selected around common interests that advertisers want to be able to reach. Right now, it is lucrative for folks like McAfee to post a favorable tweet to their large audience promoting crypto projects in exchange for direct compensation, affiliate earnings, etc.
But does this harm investors? It’s one thing if a qualified expert thinks a given crypto project has merit and explains why they believe this merit exists. Where there starts to be a problem is if crypto projects who lack the merit to achieve organic means of promotion, are being elevated and are able to co-opt the credibility and popularity of celebrity-commentators.
At Amulet, we envision a future in which crypto experts’ ‘Proof of Accuracy’ on the Amulet Decentralized Reputation Ledger becomes their most bankable, valuable asset. Investors should be able to look at whether predictions and recommendations an expert makes are committed to the blockchain or not, and how accurate their past predictions have been via a distributed ledger.
This will create a natural disincentive for experts to promote projects that they don’t genuinely believe to have staying power. In this paradigm, it will be harmful to a given expert’s bottom line to sell their endorsement to weak projects because their compensation will be tied directly to their blockchain-verifiable reputation.
We think that experts will rush to this platform because it represents an opportunity for them to show off how accurate they are—and upcharge their advice more effectively if they are able to show objectively that they are more accurate than others. If for instance, McAfee continued selling tweets to some folks requesting his services, he could point to his reputation to show that he is accurate to quell any detractors. And this also represents a new way for experts to earn compensation for being right (not just for being popular) because it will be possible for them to earn [XAM] Amulet token when they make accurate predictions requested by investors.
