With the short squeeze speculation on stocks, the crypto run+crash and NFT's. The market is a very confusing place nowadays. You'd have to be bonkers to invest in these things on paper, but yet, lot's of people are making bank from it every day (and vice versa).
NFT is probably the most confusing of the bunch. I understand the technology and what it actually is, but I see little to no value in it. I strongly suspect that the vast majority of these NFT sales are just people buying from themselves to inflate perceived value or just money laundering. That said, it actually looks like this false hype has turned into real hype somehow and people are actually making money from this. NFT's are probably the closest thing we'll see to Tulip mania for long time, at least cryptocurrency has some (largely unrealized) utility and potential to become something widely used in the future.
In order to make lot's of money nowadays, you shouldn't ask yourself "What is actually going to make a profit and/or provide utility in the future?" but rather "What are all the stupid people going to pile in on next so i can get in and out before it crashes?".
> What are all the stupid people going to pile in on next so i can get in and out before it crashes?
Haha that's awesome. I spent so many hours researching stuff to invest in so I could make a good decision or at least an educated one. Company stock, cryptocurrency projects, whitepapers... And then I watched people making ridiculous amounts of money off of DOGE of all things just because a billionaire tweeted funny dogecoin memes. Then people pumped the huge wave of animal shitcoin scams that came after to ridiculous prices as well. Now I'm watching people spend millions on non-fungible tokens that do nothing.
It's the kind of mind screw that makes you lose all sense of right and wrong. The world just stops making sense.
Presumably ritualized tribal combat has a long history.
As does religion.
Hence magnetism and homeopathy, still limping along to this day, came to have huge amounts of followers. "if you can turn on a powerful light at night, surely you can cure with magnetic fields coming out of your hands".
Here is the same, if you can store value simply by convincing each other without central authorities (bitcoin), surely you can explore it to its conclusion with NFTs. Ill remind you that before the 2017 crash, we were already seeing joke tokens, it just disappears once the hangover starts.
Cryptocurrency has actual value though. I don't think bitcoin has any inherent value, it's just famous because it came first. Technology like Ethereum and Monero are extremely valuable though. They aren't made up tokens that do nothing.
If they observe you are doing this and don’t play so loose against you, then I would take issue with the claim that they are not playing seriously.
Perhaps an excellent player might be able to crack the code (or at least be up over the course of enough games), but I'm not an excellent player.
Then, I needed a way to make sure people were actually sharing farts, and not other noises (like burps or dog barks).
So, ML to the rescue. Train on a corpus of real fart audio and other sounds.
But then, I needed to make sure the farts were not copies or derivative works.
So, audio fingerprinting.
Then, I figured why not throw in blockchain (does not need to be distributed to be able to use the buzzword), to ensure the verified, original farts could not be tampered with.
Now, I believe I have a way for anybody to create unique content that can be ‘converted’ into an NFT.
Investors?
Possibly you!
This could be a network for farters and poopers.
I think some people have just gotten very very crypto rich over the past year or two and this is just something they are spending their money on.
Me: “but this is a giant bubble! None of this is intrinsically valuable! You’re buying to sell! A huge crash will wipe you out!”
Them: “you must be new around here... there is always a bubble, the key is riding it as long as you can safely do so.”
I found this so enlightening. I wonder if economic cycles are a result of this thinking.
GME as an NFT?
Gamestop's whole business was used games. I mean they'd sell you a new copy happily, and you could sell it back at discount and spend the money on a different used game
Playstation / Xbox digital stores killed the market, now I pay $60 for the new assassin's creed and can never sell it, there's no such thing as a used game anymore
If Gamestop has streaming rights for certain games, then NFTs can represent who ones a copy of a game. If you're bored of a game, sell the license to play to someone else. (This is not even mentioning in-game items that could be traded on secondary markets)
Of course GameStop could conceivably build a tech stack that lets them manage 'who owns what license to what game' and a whole marketplace around that, but why build it yourself when people are already out there sending NFTs from one wallet to another.
- Games and consoles made years ago still generating revenue. - It would incentivise companies to support repair and continued use of old products.
I think it would be instant buy-in from those larger companies.
One key issue I see is that it's still quite centralised - you have to resell through their store and can't just exchange a game license for crypto at an arbitrary price. No surprise though that this is a necessary step on the way to getting publishers on board.
This has always been true [0]. Your comment had generated a thought for me: maybe as humanity has covered its essential needs, the idea of what has utility and value has progressively become less clear? Or is it just a side effect of QE and Central bank excess? Time will tell...
The craziness i'm pointing out is the apparent sale/purchase of NFT tokens for lackluster pieces of digital art at insane amounts. You aren't really investing in the technology in this case, you're investing in that piece of art. It confers no proven legal privileges, meaningful ownership or protection from being copied. It just gives you the ability to prove to someone that at a specific point in time you made a token for that bitstring or bought it from someone who did. Would these pieces fetch the similar prices on the art market right now where you can actually buy real proven legal rights/ownership of the piece? I highly doubt it.
NFTs aren't commodities or assets, they're just conspicuous consumption. Dramatically showing off how much money a person can waste on an illusion is cringe-worthy. It makes me annoyed in the same way pay-to-play games annoy me.
They should.
You should be concerned about where society consumes resources. labor. concrete. gold. machine time. These things, in a given year, have limited supply.
You should not be very concerned about society consuming dollars - which is impossible to do (apart from burning it or fed decisions). Dollars are often a useful proxy for resources, but are not intrinsically linked. In the case of NFTs, the stock market, etc, they don’t consume as many resources as the large dollar figures would imply.
Yes there is some electricity use, I know. etc.
Point being, a wealth transfer does not consume resources. Carry on.
I mean aren't they arguably also wealth redistribution from the stupid-enough-to-buy-an-nft to the insanely-lucky?
This is going to put Charlie through college no doubt.
Investing the fruits of one's labor is widely considered a human right, and is even explicitly listed in the Declaration of Human Rights. And hedging ones investments with gold, silver, bonds or crypto is not an unreasonable thing to do.
Like, why is this worth $58 million? It's a 10-foot tall balloon animal.
https://www.doublestonesteel.com/blog/art-and-sculpture/koon...
Or why is this worth $200 million? It's something a 5-year-old would make if you gave them an unlimited amount of finger paint.
https://en.wikipedia.org/wiki/Number_17A
At least NFT creators tend to be honest about how ridiculous they are (see any interview with Beeple, for example), as opposed to conventional artists who like to pretend there's some sort of objective reason why their work is so highly valued.
An artist renouncing the copyright (as in putting it into the public domain) does not per se devalue the NFT. It is not strictly obvious if you legally need to own the copyright to sell an NFT of something in the first place (it is likely just fraud to misrepresent your authorship of the work).
The creator of a famous photograph which they have previously put into the public domain would likely find a buyer for its NFT, while you would not. NFT buyers are under no illusion about what they are buying here - it is the official sanction of the creator of a digital edition of the artwork.
Similarly, a creator could print billions of NFTs, but Damien Hirst could also sell 499 more further sharks in formaldehyde. NFTs cannot and do not set out to solve this problem.
It’s funny to think back at how many people were horrified about that being considered “art” at the time.
Compared to {what I see as} the complete lack of *actual value* in some of these high profile NFTs, I’d say that bed now looks like the highest of high art.
I appreciate I might be missing something, but I do not understand one bit of the psychology behind NFT sales like this. I don’t understand where even the perceived value is.
Unless it was bought by that guy that refused to sit in the front of his Tesla, perhaps to watch on his headrest display while streaming the cops chasing him…
And that's what we have on record today.
I can imagine some hominid tribe prized the perfectly straight banana, or whatever, beyond belief.
This paragraph interests me deeply. It is clearly a personal feeling and one that I have empathy for. However, a few things came to my mind when I read it.
1) You and I were born into a world where inheritance, lotteries, and celebrities existed, but NFTs were invented in our lifetime. Is it the newness/novelty of NFTs at issue?
2) Suppose the answer to 1) is no i.e. I am not troubled by the newness of NFTs. Alright, instead let’s imagine the first incidence of inheritance, or lotteries, or celebrity status that yielded material/monetary reward. Did people feel similarly about these ways of acquiring money back when these ways were novel?
3) What about applying the general idea of finding/inventing/innovating to create new industries e.g. advertising technology? Some people have similar feelings about the nominal value being created versus the perceived value of a whole host of activities: venture capital, e-sports, advertising, sex work, content creation, financial services/instruments, the creative arts and their subfields, etc. You can search for posts and comments on this forum expressing exactly that on each of the examples I listed.
4) What do we call it? I would say the word jealousy captures one side of the dimension where perceived value doesn’t match up with actual value that was exchanged (perceived value is less than the value exchanged).
5) Why do we do it? Why do we judge the perceived fairness of transactions that we are not party to?
6) Now, back to the initial question: what makes some forms of wealth transfer fair and others not?
How could we not? Someone dropping millions of dollars on a useless token really puts into perspective the value of my actual work and contributions to society. If literally nothing is worth millions, I must be worth less than nothing because I'm certainly not getting paid millions.
Imagine buying a painting for a million dollars. Or a hand crafted watch. The markets for these talk a whole lot about the intrinsic value, the workmanship, the creativity. And people do love them for those things, but that's not why they pay so much for them.
Imagine being able to park a retirement fund into something that fits in your pocket. You can't even do that with gold bricks. But you can do that with watches.
It's just a way to store a very large amount of money in something you can take with you anywhere in the world without anyone noticing. NFTs are even smaller than a watch. They're just the new version of the art dealing hustle that has been going on for centuries.
IE... somebody could sell the object and keep the NFT, or vice versa. There's no legal concept tying the NFT to ownership of the object, except perhaps indirectly via contract.
It's similar to what's been done in the high-end art world for years. People who buy a $50M painting don't usually hang it on their walls, they just leave it in a vault and get their name recorded on a public art registry saying they own it.
Seems like a similar legal framework granting NFT owners either copyright ownership or a usage license could be interesting.
What happens if someone buys my NFT but I refuse to deliver the physical item? It seems we need to pull in the legacy legal system to enforce the transfer, at which point I wonder what value the blockchain added in the first place.
Blockchains can be useful without totally replacing the legal system. Just making things a little better and more efficient is fine. In this case, it lets people easily trade collectibles without all the hassle of shipping physical items.
Today when you buy a home you have someone go down to the local courthouse and check that there are no leans against the property and no one else is claiming ownership. In the future, you can imagine a world where that title would live on the blockchain and everyone could see the true owner based on their ability to sign a message with their wallet. You could transfer your title just as easily as any other blockchain transaction. While blockchain titles have obvious advantages, they are hard to pull off because you need 100% participation of everyone in the community for it to work.
The reason we're seeing art NFTs take off first, is that you only need the participation of the creator and a small group of collectors. The creator promises to sign all of their work with their digital wallet and as long as the buyer of the NFT trusts the creator, it works.
Isn't it more like "I own an NFT that refers to that thing"? There's nothing to stop the actual owner from 'printing' as many NFTs as they want, right?
About inherited wealth: once you grok the ideological arguments for heavily taxing inheritances, and then also realize that above a certain threshold people can just spend a minute fraction of that wealth to ensure that those rules don't apply to them and their offspring, you might feel the same way depending on your idealogical outlook. The idea that taxation is unfair or even theft is very pervasive in society though, and it is such a sucesful memetic device that people who stand to lose the most by it are often staunch supporters of tax evasion. The idea being that just as with the lottery, one day they too might hit it big time, and then they too would benefit! Statistically, this is unlikely to the point of being negligible, but it is easier on the mind than understanding the situation for what it really is.
https://stockx.com/nike-dunk-sb-low-paris
That is an $80k shoe currently.
If you can get somebody to buy it, that is what it is worth.
If you start selling a proof of flat earth, 5G tower cause the COVID-19, a herb that cure cancer or similar nonsense, there are people willing to pay a huge money for. But would you?
NFT in its current implementation is totally bullshit. They relies on SaaS wallet service rather than running full Ethereum node, and instead of embed all data to Ethereum blockchain, they relies on traditional HTTP server hosted by... wallet service itself!
If you relies on a central authority, there are better and more efficient services to use. But oh the ignorance and speculation.
It's almost as if transferring some of the (marginally useless) money from the 1% to the 99% might actually be a better investment in the future than some of these dubious "assets". But there's no NFT for that.
Look at blockchain today versus 4-5 years ago. There might actually be some legitimate uses for the technology, but that market has been soiled by the scammers and their ICOs.
At least that's where my frustration comes from.
Definitely not as fun as making millions on meme’d speculation.
And as for the lottery, the reason that states/countries have lotteries is because they make buckets of money off of them. Is the state at fault, then? While I personally think it's a waste of money to participate, people choose to give money to the lottery, and are told up front what the odds are of winning, which are very bad.
In the context that, otherwise, it would go to the state in taxation and everyone would benefit to a tiny extent.
> Is the state at fault [for running the lottery]
I'm not sure what you mean by 'at fault', exactly. As you say, people participate of their own accord. The only thing that you could take slight issue with is the "are told up front what the odds are of winning" because (many? most?) humans are notoriously bad at rationalising probabilities, especially astronomically low ones such as the chance of profiting from a lottery.
Unless I really should read up on it because I'll be blown away, just seems like any uniqueness necessarily hinges entirely on hoe you choose to encode a thing, which is arbitrary, meaningless, and pointless?
But then, I haven't made any money from it, people have, what do I know.
for instance the beeple one that sold for a lot was purchased by a guy who runs and nft website as basically an advertisement for his site.
who knows if they even had a prior deal before the auction where the artist would return some of the money
It feels like NFTs are a mockery of the "market" for lack of a better word. When I think of what I would need to sell (items or time doing labor) to get these amounts and how incredibly useless NFTs actually are... It's frustrating.
I don't feel this way about inherited wealth, or people who got money through the lottery, or for being famous reality show people, but something about NFTs really rubs me the wrong way.