It’s about time. Someone has finally discovered what the adult entertainment industry has been missing for so many years: blockchain.
It’s true: a bunch of porn stars have recently gotten together to launch Bunny Software Ltd, a new cryptofinance startup that aims to ‘disrupt’ how people pay for pornography.
Instead of charging your credit card for that Pornhub Premium account, now you can charge your credit card for Bitcoin… then trade Bitcoin for Bunny Tokens, then trade your Bunny Tokens for porn.
A few years ago, crypto hedge funds were all the rage. As cryptocurrencies rose in value, hundreds of hedge funds specializing in digital assets launched to try and capitalize on investor demand. Some of these funds recorded double-digit gains in 2020 and 2021 as cryptocurrencies surged in value. However, this year, cryptocurrencies have been under Read More
Seems like quite a bit of extra work to go through– especially considering there are already a number of ways to discreetly make purchases online.
Dozens of services exist, for example, that offer disposable credit card numbers to help anonymize online transactions.
They’re cheap. Safe. Efficient. And proven.
But in the heady world of cryptofinance, none of those benefits matters.
The only thing people seem to care about is whether or not you’re doing something with the Blockchain.
If you are, then your business must obviously be a winner… even when there is absolutely no rational reason why your product or service would even need the blockchain.
Remember– the Blockchain is essentially a de-centralized ledger… a public database that isn’t controlled by any single individual.
Think about your bank account as an example.
Every record of every financial transaction you’ve ever made at your bank is kept in a giant database… a database that is controlled by the bank.
The blockchain, however, isn’t controlled by any single individual. It’s a database whose contents are securely distributed among everyone who uses it.
There are certainly some spectacular uses of the blockchain, especially in finance.
Stock purchases. Property titles. Shareholder records.
But that doesn’t mean that EVERYTHING should be in the Blockchain.
I mean, seriously, do we really need to upload our weekly grocery lists, or childrens’ report cards, into the Blockchain?
Some data doesn’t need to be made public. Or decentralized. Or distributed.
But in their zeal to grab onto the hottest financial trend in the world right now, people are coming up with the most idiotic uses of the Blockchain.
I recently read an article on Bloomberg about an ex-Google employee that wants to use Blockchain to track pigs from the field to the grocery store shelf.
I’ve read about other guys using Blockchain to track tips that people pay to bloggers.
IBM is studying how to use the blockchain to track cannabis distribution.
There’s just no end to these useless applications of the Blockchain.
And now we’ve got Bunny Tokens… a way for people to pay for porn using the Blockchain.
The company recently launched an ICO to raise money.
And if you spend some time on Bunny’s website you’ll learn that the board consists of several porn stars and a porn director.
You also learn the company has already partnered with a few businesses whose names are so explicit I can’t mention them here.
Yet after reading through 42-page white paper and watching their pitch videos, I realized that Bunny isn’t relying on a sound business plan or any actual technology to attract investors.
Sex sells. And BunnyToken is using porn stars its board members to bait the crypto rich into investing.
The message is clear: “Don’t worry about how we’re going to make money. Instead, just watch this video of a Russian porn actress explaining why you should invest in Bunny’s ICO.”
As ridiculous as this all sounds, though, the company has already raised $3 million. And they’re just getting started.
Across the entire crypto sector, more than $9 billion has been through ICOs.
And as I told you earlier this month, nearly half of all 2017 ICOs have already failed.
That failure rate will only increase with time.
Remember that ICOs aren’t even an asset class. That’s the craziest part of all.
Companies looking to raise cash simply need to publish a white paper explaining how their incomprehensibly silly use of the blockchain will ‘disrupt’ some industry.
And then the money starts rolling in.
Instead of traditional equity, though, companies sell “tokens” that are essentially pre-paid credits to be used within their very limited eco-system.
Imagine your neighbor wants to open an ice cream shop and came to you for investment capital.
But instead of offering you a stake in the business, he promises you a bunch of gift certificates that you can use to buy ice cream.
That’s basically what these ICO tokens are– gift cards.
Whether or not these tokens will have any value in the future depends entirely on the executives’ abilities to grow and build a sustainable business.
If your neighbor is a moron and runs the ice cream shop into the ground, your gift card will be worthless.
Similarly, if Bunny’s board of porn stars fall a little bit short of Richard Branson’s business acumen, the company will fail, and Bunny Tokens will go to zero.
And even if by some miracle, Bunny becomes a real business, token holders have no stake in the company.
That’s precisely the problem with most of these ICOs… too much downside, not enough upside.
And the entire sector is littered with stupidity, fraud, and senseless investors who aren’t thinking rationally.
What could possibly go wrong?
If you’ve been a reader for more than a few weeks, you know that I’m not anti-crypto.
I was a very early adopter of Bitcoin and have made a number of crypto investments over the years… including a six figure investment just a few weeks ago.
But this is about avoiding big mistakes.
And most of these ICOs are huge mistakes… incredible opportunities to lose money.
99% of them are going to zero because they’re not real businesses.
They’re just a quick fad… an easy way to dress up some silly idea in grown-up clothes and pass it off as a credible investment.