Hey Everybody, Marcus here,
I have never involved myself in youTube drama nor do I any particular desire to start. However, there have been a number of incidents where this community of ours has been fleeced of money; whether or not the intention of those doing the fleecing was there from the start or it just played itself out that way, the fleecing took place nonetheless.
One example is MAYOR OF MGTOWN. MAYOR OF MGTOWN raised around 7 thousand dollars from my recollection to run a homeless outreach project. He did follow up to a minor extent but nowhere near did he supply evidence to account for all the money he raised. The last video he put out that related to that money had the MAYOR showing us land that he bought in some desert with some vague allusions to it being devoted to MGTOW or something silly like that. Ultimately, though the MAYOR seemed to have good intentions, he failed miserably in execution which ultimately resulted in the same outcome as if he were running a scam from the start.
The same scenario occurred with Barbarossa. Barbarossa raised several thousands of dollars in order to fund the writing of a MGTOW book which he ultimately has yet to deliver after 2 years. In fact, Barbarossa has completed stopped creating content altogether. Though I do not believe Barbarossa was running a scam, the outcome, again, was very much the same as if he were.
The point is that both these men demonstrated moral failings sufficiently egregious to warrant the accusation of scammers even if those accusations may not accurately reflect their intentions.
I see the situation occurring once again. Kris Kantu has been advertising his invention of the Red Pill Coin and currently has an active ICO in place. I will explain the term in a moment.
Firstly, I do not know Kris’s intentions other than what he publicly advertises. I need not infer maliciousness into them in order to know that the outcome of the Red Pill Coin will end up a scam in the same manner as that of what happened with the MAYOR OF MGTOW and that of Barbarossa. Simply put, Kris is either grossly naïve, ignorant, or a con artist with his Red Pill Coin initiative.
Now, you might be asking yourself: “Marcus, what justifies you in your beliefs?” Well, let me step you through my thought process and you draw your own conclusions.
Firstly, I need to explain a little bit about my background and what I do for a living. As many may know I as a software developer. However, I am not merely a developer but an entrepreneur running a software company with several members of staff, venture capital backing, and a very relevant product roadmap. You see, I run a blockchain company. Not only do I run a blockchain company, but my company is in the process of issuing its own ICO.
Now, an ICO, for those who do not know what that is, is an acronym that stands for “Initial Coin Offering.” ICOs are a relatively new thing in the tech space. They started creeping up only really in the last 2 years or so. An ICO serves a function often times very similar to an IPO. An IPO, or Initial Public Offering is when a company, for the first time ever, starts selling their stocks to the general public on the stock exchange. The IPO is when the company is said to “go public.”
So, what is the purpose of an IPO? Well, to raise money and other reasons irrelevant to this video. When a company first starts out it normally needs to be funded by money coming from the founders or from private investors. However, at some point it may make sense to raise money from the general public. This is done by undergoing an IPO and selling shares to anyone who wants to buy them. The shares that you buy, in turn, come with certain rules and rights for both the seller and the buyer. The company offering the shares is either going to issue a dividend on profits to the buyer or the buyer is merely speculating on the stock price based on their prediction of future performance of the company.
So now that we talked about an IPO, let us talk about the purpose of an ICO. An ICO, or initial coin offering, has mostly been done when a company wishes to raise money without selling off ownership of the company. This is what many blockchain companies have done. For a blockchain company, it makes sense to sell a custom crypto-token and retain 100% ownership of the company as oppose to selling equity. However, when you sell equity, what secures the value of the stock is the value and performance of the company; namely, a seller buys stock in a company because in some way that entitles them to a portion of the profits that company makes. This, however, is not the case when a company sells crypto-tokens in an ICO. So, what backs the value of a token sold through an ICO?
Well, whatever the company selling the tokens defines as the backing value. Before putting up an ICO, a blockchain company will write a whitepaper defining the rules governing the crypto-token. Imagine the white paper as a long essay that explain to you the mechanism by which the tokens you are buying will actually be worth something. Let me give you a concrete example. When Civic, a blockchain based real-world identity platform raised 33 Million in their ICO round, they promised the buyers a number of things.
Firstly, Civic promised that they will build out a very specific feature set appended to their already existing and robust platform. Additionally, Civic promised that the tokens themselves can be redeemed to leverage the services of that platform. So, let us break down what Civic did. Firstly, Civic already built a platform with private investment. From what I recall they have privately raised 3.8 million which they used to build this platform of theirs. Then, they decided to raise more money, but this time through an ICO. They promised the buyers of their crypto-token that the money they raise in the ICO would go towards developing substantial expansions of their platform and that the buyers of the token can trade their coin on open exchanges if they wish to speculate or they can use those tokens to directly pay for real business services that Civic was developing. So, the Civic’s coin’s value was ultimately based on the fact that you can pay for their real-world identity platform with their coin. You know, sort of like putting a quarter into an arcade machine.
Civics coin was grounded in real value, as Civic’s pricing was in fiat currency and Civic told you exactly how much service you would get for any given coin in the future. In this way Civic used the ICO model in the same way as near to 99% of all companies that issues ICOs. They used the ICO as a cash raising mechanism to fund their business and guaranteed the coin against something they could control.
But let me give you guys some behind the scenes insights into what goes into a legitimate ICO; and when I use the word legitimate, I mean an ICO that has every intention of seeing its cryto-token purchasers get their money back and then some. Firstly, you need to have a business model that incorporates the crypto-token whereby the token itself is fed value externally to the token itself. Secondly, you need to have all your legal work in place. You cannot, for example, all willy nilly just launch an ICO from a company operating just anywhere in the world. Crypto-tokens are a grey area in most countries. The safest bets are the Isle of Man, Switzerland, and Singapore as those are the places where crypto-token sales have clear and friendly laws applicable to them.
This of course means lawyer fees. The lawyer my company is using, for example, has a number of ICOs in the work and this is a firm that represents some of the largest tech companies in the industry. An average ICO costs around 80k in legal fees if you, as a buyer, expect the token to come with the seal of approval from a solicitor firm. Which, I would hope, would be the bare minimum standard a purchaser would look for in their due diligence process. Next comes the board of backers. The board of backers is like a review committee composed of notable industry experts who the company selling the crypto-token have composed to review the white paper and vouch for the integrity of the project.
If you look at any large successful ICO you will see the names of important men backing an ICO. This, in addition to the legal credibility of the ICO, gives social proof to the buyers that experts have confirmed what the seller is offering is realistic. Obviously, in order to convince any industry relevant person to even look at your ICO you need to offer them something. Usually the offer comes in the form of part ownership of the coins themselves and sometimes equity in the company.
When you add up all the costs in putting together an ICO, it is no surprise that most companies reserve upwards of 1% of the tokens themselves to cover the costs alone.
Now, these are the sort of things you can come to expect from a serious ICO. But let us look at the actual technical detail of issuing the actual crypto-tokens. Crypto tokens costs near to nothing to create. You are literally printing money. As such, from a technical point of view, putting up an ICO costs near to nothing. I can go out and create a hundred different tokens in near infinite quantities with virtually no effort. So can you. In fact, anyone with a little blockchain knowledge can do this. How is this possible? Because you literally use existing free tools and software for everything involved in the process.
For example, the wallet you would use to store any token created on the Ethereum blockchain can be any of the countless wallets created by any of the countless open source projects out there. These tokens work out of the box in terms of exchange. And all of these custom-made tokens have all the security features, privacy features, and countless other features of the underlining blockchain upon which they were created. This means that issuing these tokens requires no real work and you end up with a token almost as feature as rich as bitcoin. So where is the value in the token if anyone can issue this shit on a whim? Like I previously said; the value will only be that which is injected into it externally by the issuer.
If I issue a million Marcus Coins and back them with nothing, then the coins are worth nothing.
With all of this groundwork laid out, let us look at the Red Pill Coin. The Red Pill Coin has a website which I have linked to in the description. On that site you will find the whitepaper describing the coin.
The 21-page whitepaper, which, to someone who does not have domain knowledge of blockchain, reads very impressively. In fact, it is very impressive. It is very impressive because 99% of that paper is talking about what comes out of the box from issuing your coin on the Ethereum blockchain. This white paper is a love letter to the Ethereum blockchain and not a whitepaper talking about the Red Pill Coin. 99% of that whitepaper is true about every other ERC-20 token including the one my company will be putting out.
So, lets get to the 1% that is specifically unique to the Red Pill Coin.
The first unique element is the following paragraph:
The Red Pill Coin represents more than just a cryptocurrency; it is a community with a shared philosophy for greater control and autonomy over its finances. It is not just another Altcoin but rather, it is a representation of the freedom to use one’s funds anonymously. All of these core Philosophies are built into the architecture and main features of Red Pill, making it a one of a kind cryptocurrency.
Okay. So, let us break that down. The Red Pill Coin represents more than just a cryptocurrency. It is, therefore, if nothing else a cryptocurrency meant to act as a form of money. Gotcha; so far it is identical with bitcoin, Ether, Litecoin, etc.
Next it says: it is a community with a shared philosophy for greater control and autonomy over its finances. Hold on a moment? The Red Pill Coin is a community now? A community who share a philosophy for greater control and autonomy over its finances? That sounds like pretty much the sentiment of anyone investing in any cryptocurrency whatsoever. Does the bitcoin owner not share this desire? Surely, he does. So, 2 sentences in and the Red Pill Coin is still no different that bitcoin, ether, etc.
Next it says: It is not just another Altcoin but rather, it is a representation of the freedom to use one’s funds anonymously. Well, I don’t know about you but I do distinctly remember mentioning that any token created in the blockchain shares the same set of faculties out of the box. Since this is true, then the anonymity present in the Red Pill Coin is the same anonymity ether holders would experience. 3 sentences in and still the Red Pill Coin is no different in kind to bitcoin, ether, etc.
And the last sentence: All of these core Philosophies are built into the architecture and main features of Red Pill, making it a one of a kind cryptocurrency. Well, it surely is true that the philosophies are built into the architecture of the Red Pill Coin because this philosophy is built into the Ethereum blockchain as well as the bitcoin blockchain architecture so technically this is correct. The last part of the last sentences is false; namely, “making it a one of a kind cryptocurrency.” This part is completely false. The Red Pill Coin is literally identical in both features, function, and philosophy to every single other cookie cutter token popping up on the Ethereum blockchain.
But perhaps I jump to conclusions too quickly. Indeed, I am actually mistaken. There is something radically unique about the Red Pill Coin not present with bitcoin, Ether, and every other coin on the Ethereum blockchain. My apologies. This difference comes out in the second paragraph of what is unique in the 1% of the whitepaper.
The second paragraph from the whitepaper says:
The target plan for the initial distribution of Red Pill coins begins with an Initial Coin Offering (ICO) of 100 Million Coins. The total supply of Red Pill coins is 200 Million which means that the ICO will account for 50% of the total supply. In subsequent years, 10 million coins will be made available until the total currency amount is reached. The minimum bidding price for the coin auction will be determined by the current market value of Red Pill coins as at the time of the sale. Red Pill coins will be listed based on Ethereum upon release, with one eth being equivalent to 5361 Red Pills.
There are two very important things to take from this paragraph. Firstly, that the coin is capped at 200 million units, and that the initial price for the Red Pill Coin in the ICO will be 5361 Red Pill Coins to 1 Ether.
The price of Ether at the point of writing this script is at 760 American dollars. So, for 760 dollars you can own 5361 Red Pill Coins. This means you are paying 14.2 cents per coin. Kris is selling 100 million coins in the ICO at the price of 14.2 cents per coin which means that if the ICO sells out he will have banked: 14,176,459.61 in the ICO. If he sells the additional 100 million coins he intends to sell at say the same price, that will leave him with a total of 28,352,919.23 for the entire lot of all Red Pill Coins to ever be created. However, let us forget about the second hundred million of the coins and just go with the ICO sum itself.
You see, this is what the Red Pill Coin can do that neither bitcoin nor ether can do. The Red Pill Coin can bank Kris 14.2 million dollars. Kris cannot issue bitcoin or ether, well established and trusted cryptocurrencies, but he can issue the Red Pill Coin and bank 14.2 million in an ICO.
And what pray tell is Kris offering in exchange for 14.2 million dollars? After all, like I mentioned with the Civic ICO example, Civic offered to give you services in exchange for their coins. What does Kris offer? Well, this is revealed further in the whitepaper.
The section describes the 2-stage plan Kris is proposing:
Stage 1: The first stage of Red Pills technical implementation, was the development of the coin itself. By making the coin ERC20 compliant, it is now capable of being stored and traded on multiple platforms.
Stage 2: The second stage of the technical implementation, is the development of a chrome extention and mobile apps, that will allow users to easily store and or send Red Pills to their favorite content creators, bloggers ect. The extension and apps work by allowing users to enter an Ethereum address of the creator or person that they want to send funds to, or to search for verified users on the platform, that will have, a little checkmark like on YouTube and twitter (next to a verified creators name), verifying that they are the creators/public figures that they claim to be; this will also make it easier for people to quickly send funds.
There you have it guys. Kris wants to build you a Google Chrome plugin to send Red Pill Coins. He will also build an iOS and Android app to send these coins. These apps, I can imagine will take the form of an out of the box existing open source wallet white labelled to whatever he wants it to be.
Kris, will give you, things you basically get out of the box already in any wallet app you can get for free. All of this for a mere 14.2 million dollars.
Let me give you guys some context on the work involved with this. When we hired interns in my company, these guys were pretty ignorant of blockchain. We gave them a throwaway exercise to build an Ethereum wallet to help them learn blockchain. Kris is literally offering you what I have in the past considered a throwaway project to teach interns on.
But perhaps I misinterpreted the nature of the project? Perhaps I did not read the details of stage 2 correctly. After all, stage 2 can, in an honest way be interpreted as some form of Patreon like app but it uses Red Pill Coins as oppose to fiat currency. This itself should already raise red flags as there is literally no need for a crypto-token to do this as fiat currency will necessarily need to be involved regardless. A crypto-token only allows for mostly free transactions within the ecosystem in such a Patreon Knockoff. Though mostly free transactions are a good thing, there is no reason to advertise the mechanism as a feature in of itself as people will still need to swipe a credit card to buy these coins. This means that you are advertising a crypto-token for the sake of saying you have a crypto-token.
Let us take this as the genuine intent and say that Kris wants to build some sort of Red Pill Coin Patreon knockoff.
How are we to look at this ICO from that point of view? After all, now it seems to be moving into the familiar grounds of what ICOs are for. Namely, to raise money for project work. Under this interpretation the buyers of the Red Pill Coin are, in essence, meant to act as investors in a Start-Up where they get no equity in return for their investment.
So, it must be the case that Kris is backing up the value of the Red Pill Coin with something else? But alas he is not. Nowhere in the whitepaper is any promise made based on any clear business model of injecting value into the Red Pill Coin to justify anyone parting with a broken cent in buying it. This is the first problem with the plan; the total absence of an actual business model.
But there are other problem with this plan. Kris is a marketing guy. Where is his team of developers? Where is the Proof of Concept to demonstrate he is even capable of organizing a software project? What could anyone possible use as a basis in justifying in handing this man 14.2 million dollars? What is his track record in developing software project? Who is he competing with? What is his marketing plan? Where will this 14.2 million dollars go? How long is it meant to last? What is the corporate structure? Who are the directors?
None of these questions have answers. Let me tell you how this project could be executed if Kris was actually serious in bringing this into being. I will tell you how I would manage this whole Red Pill Coin initiative. Firstly, I would make good friends with a couple of software devs. Secondly, I would design the core mobile offering and bring a proof of concept into being which fulfils the core use cases. Next, I would write up a comprehensive business plan. I would pilot the proof of concept on a subset of the MGTOW community to wager the apetite for actually using it. Next, if viable, I would finish up the dev work to get a closed beta going on a small scale on a test blockchain using a throwaway coin to collect user feedback. All of this would be done on my dime of course. It has to be done on my dime because I know that no sane investor would even look at me unless I had already done this at a minimum.
Finally, if I concluded that this Red Pill Coin Patreon knockoff had any evidence for its viability, then I would go for an ICO for a reasonable sum of money that can see me through around 3 years of runway to profitability. The Red Pill Coin I would back with some exclusive monetizable feature accessible only through spending these Red Pill Coins and make my promises to the buyers on that. I would identify a law firm with experience in ICOs and make sure I am not breaking any local laws in my ICO. I would properly identify the jurisdictional regions where it is legal for me to sell such a coin as it is not legal to do so everywhere. In the meantime, I would court a venture capital fund because I understand that running a successful business is more than about raising money. I would make sure the VC I found had proper connections among its coterie of high net worth individuals to help push through my marketing as well as provide guidance on how to scale the business internationally. I would be sourcing industry experts to vouch for my ICO as well as for building up my board of directors with at least two independent directors and potentially one credibility director.
However, Kris has done none of these things that can be inferred from any of the material provided. If he did do these things, he would be advertising them openly and vocally. This proves to me he is entirely incapable on delivering on even my generous interpretation of this project much less delivering a profitable business when the money runs out.
My prediction are as follows. Firstly, he will fall grossly short of his anticipated 14.2 million ICO round. If the sum of money is less than a million raised, it will most likely be pocketed and some token effort will be presented with a “Sorry guys but we ran out of money to finish the project message.” However, I suspect he will raise less than 100k in total which in turn will most likely be pocketed as it will be interpreted by Kris and his co-founders that the sum is insufficient to execute on their vision.
If anyone listening to this video bought into the Red Pill Coin, I recommend you get your money back and judge Kris on his behavior when you ask for it back. If Kris is serious, he will honor the returns and perhaps take the content of this video to heart, chalk up this incident as a false start, and try again in the manner I have enumerated with an ICO happening only when all the other ducks are in line. Not only when the ducks are in line but when he has any evidence for him himself believing this project has any merit whatsoever other than faith.
The Red Pill Coin ICO is worse than a Kickstarter campaign. In a kickstarter campaign, the backers know exactly what rewards they are entitled to based on the sum they pledge. In the Red Pill Coin ICO, based on the whitepaper, you are entitled to literally nothing other than possession of the Red Pill token itself; while the coin itself, as advertised in the white paper, is backed by nothing.
The sentiment that as soon as the coin comes into being some fairy will fly around and sprinkle some dust on the coin causing it to magically go up in value is the lunatic pipe dream of the ignorant. Ask yourself one simple question. Why would any content producer want to receive a Red Pill Coin as oppose to Bitcoin?
Thanks for listening,