It's stupid at face value. No pyramid required. You cannot intrinsically link real world items to tokens. The source of truth is the real world, not the token.<p>Add an unlimited supply of unique things, and how could anyone expect to make money from this?
I wrote my first Fortran program in 1969. I have been active in the field of computing since then, both as an academic and as a programmer in industry. During this time, there have been several times when I first heard about something new, something potentially game changing. I remember some of them very clearly:<p>1. Around 1971: a Wang desktop computer. Imagine: a computer that fit on a desk!<p>2. Visicalc (spreadsheet). Wow! I remember thinking finally, a breakthrough for non-programmers.<p>3. Relational databases.<p>4. UUCP - a way to talk to remote computers.<p>5. HTML/HTTP - we knew from the start that this was big<p>And then there were many that were hyped but which I rejected as hype. Even when I was wrong, I still felt that there was something intrinsically wrong about this category of things.<p>These things either vanished, limped along (and still do), or which I rejected out of hand, but actually succeeded. Like Virtual Reality (back in about 1984), Fuzzy Logic, Proving programs correct, and, of course Bitcoin.<p>The latest in this category are NFTs which my intuition tells me is rubbish on so many levels. However, I think they will have some success, although I will never have anything to do with them (or Bitcoin for that matter).
Don’t forget the wash trading aspect:<p>Since this occurs on the blockchain, it’s trivially easy for someone to create two wallets and then “sell” an NFT to themself for whatever amount of money they have.<p>If you have $10K in ETH, you can buy a $1 NFT and then trade it among your own wallets for increasing amounts of ETH up to $10K. Now your $1 NFT is “worth” $10K and you only spent as much money as the gas costs at the time.<p>Use that momentum to flip the NFT to an unsuspecting buyer who sees the value skyrocketing, and you’ve made a huge return by selling nothing at all. Or simply show your friends that you have an expensive NFT as a way to flex. Or talk to a reporter who wants to write a story on how people are getting rich with NFTs. Amazing.<p>Contrast this with something like eBay where the buyer would lose 10-20% on each sham transaction, limiting the profits. With NFTs, the transaction costs (gas) are fixed so the more money you wash trade, the lower percentage you lose. Some NFTs are designed to kick money back to the artist with each transaction, but curiously those aren’t trading at exorbitant prices in most cases. Of course, there’s nothing stopping the artist themself from using this scheme to pump up the price of their own artwork.
At first I thought Bitcoin and crypto currencies were bunk. Totally useless compared to USD or any other national currency. Although I still believe I'm correct, I've pretty much been shown that a lot of other people disagree with that premise because I've seen Bitcoin go from about $10 to $60,000. I still think it's a total bubble but have to admin there's a lot of other people who disagree. The one thing we can agree is that people who want to own Bitcoin do own Bitcoin and those that don't want to spend $60k on a coin dont.<p>But with NFT.... You don't have to spend any money at all. You can just download the item. Why would you pay any money at all. If Van Gough painted two "starry night" painting and sold the 1st for $10MM but offered me the 2nd one for free, I'd take the free one. Why would anyone pay money for something that you can get for free?<p>I think its because we're in a time of massive inflation of assets, probably brought on my the Fed's policies. We've inflated housing with low interest rates, stocks with QE and salaries for the lucky few in certain industries have risen much faster than the rest. This has lead to a group of people with excess cash chasing return. Once all the low hanging fruit has become out of reach in terms of value (ie: TLSA), money is seeking any other place to get returns - Crypto, penny stocks, SPAC's and now NFTs.
An acquaintance of mine made 15k euros in 6 days with auto-generated artworks, he even made it to the local newspaper.<p>I don't even know why I bother learning new frameworks and languages anymore.
This is, very literally, the old scam of selling a bill of goods. The mark has bought just a bill (list) of goods, not the goods themselves.<p>The author appears to be comparing it to a pyramid scheme because artists are being encouraged to buy other artists' NFTs, so earlier entrants into the scheme are being paid by more recent ones.
Someone once said that there's a sucker born every minute.<p>It doesn't matter who said it but if you look back at the time period when it could've been said by the person it was initially attributed to, PT Barnum, then you have an approximate period between 1835 when he began his sideshow of oddities tour and 1850 when he shifted focus to theaters and a new audience.<p>If during that time period it was true that there was a sucker born every minute, then today it is probably reasonable to expect that the number of suckers born every minute is firmly in the double digits and maybe higher when the difference between the number of women of child-bearing age available then versus now is considered.
Suppose I was someone with money to launder. I'd draw a cat's arse, and buy it with my anonymous BTC wallet "money". No one would ever know where the money come from, especially if I anonymise transactions with one of the many services (e.g.: from what i read, some buy mining services, pay with the dirty money and viola, "clean" coin, while other services just make thousands of transactions to distribute payments and lose one's trace).<p>If I wanted to be real clever, I'd buy Elon Musk's or Jack's NFT, and sell it for more because hey "it's made by someone popular" so its more credible.<p>That's one explanation I have for the crazy amount of money moving around NFTs. Sure there are naive people, or some genuine traders, swapping NFT but those are a small percentage, and as the quote goes:
"When you have eliminated the impossible, whatever remains, however improbable, must be the truth?". Literally 90% of the coins and NFT's i dug into have no application and look at least dodgy if not outright scammy.<p>I have no proof other than my observations, just adding my thoughts to the conversation. The "it's rare" and "non fungible" arguments don't really stand in my view. There is a ton of rare stuff out in the real world that's simply useless.
NFTs are paying for a signature in a blockchain that links to a random URL. If you're lucky, it's IPFS and it'll go down when people stop hosting it. If you're slightly less lucky, it's whatever platform you went through that's operating an IPFS tunnel because cryptobros can't figure it out, and it will go down whenever your flavor or the month NFT site goes out of business, which is any time between six months and 5 years. IF you're even less unlucky, it's just a random link to a website, and I can't wait for people's art to be replaced with penises because that's what happens to hotlinkers.
Jacob Collier was going to sell an nft that granted lifetime access to any of his concerts.<p>That seemed like a not terrible use case for an nft.<p>He changed his mind when people pointed out the environmental impact of cryptocurrency.
The problem with NFTs is that they're not linked to any real legal contract. You basically buy a pointer to a file, not the file. Not even usage rights.<p>For NFTs to become more than a Ponzi, they have to be bound to legal contracts.
I've been watching the @cryptopunksbot Twitter account: <a href="https://twitter.com/theshawwn/status/1373488203785629698" rel="nofollow">https://twitter.com/theshawwn/status/1373488203785629698</a><p>It's a bot that tweets whenever someone "buys" a cryptopunk, which is apparently a pixel artwork of a face.<p>These have supposedly been being sold at a rate of around one per hour, for around 20 ETH each ($35k).<p>I could see a rich person buying one of these out of boredom. But it seems certain that insiders must be buying these to create a false sense of demand.<p>It's probably time for some sort of awareness campaign (which this article is doing).
Let people do whatever the F they wanna do with their money. If they lose it, <i>shrug</i>, it’s their money.<p>I hate this idea of people telling other people what to do or what’s good for them.
The only situation I see NFTs making sense is if there’s a virtual reality social network bigger than Facebook.<p>In that scenario perhaps. Then again even in that scenario blockchains are unnecessary.
This is exactly same as art 99.9% of non-utilitarian art is wothless and people who buy any of it will never see their money again. But 0.1% is fasionable among wealthy. And people pour millions into it and gain and loose millions, same way they do on the stock market.
I would have thought that is obvious to all. It still has a place in the world - a bit like fortnite skins or something. Bit of harmless fun.<p>What I don't get is the insane amount of money people are willing to pay. $5 here or there I could understand but thousands??
> these platforms are owned by millionaires such as the Winklevoss twins, who famously sued Mark Zuckerberg for stealing their idea for Facebook.<p>Makes you wonder if Facebook would have been worse under these two.
Many many many years ago an artist did a linoleum tile etching of Heisenberg ( yes from Breaking Bad) in blank & white, sold a limited number for Bitcoin, and then destroyed the original linoleum tile (supposedly)<p>It’s one of my favorite pieces because the niche and how I acquired it, directly from the artist.<p>This NFT stuff... whooooosh
I was on board with this article: a genuine criticism of the entire NFT/cryptoart scene without making use of the environmental impact retort... up until, of course, it was brought up. The impact is not <i>insignificant</i> but it's grossly overstated [0], and it's been used as a tool for harassment which I have to staunchly reject.<p>[0] <a href="https://twitter.com/memotv/status/1369594107488829441?s=19" rel="nofollow">https://twitter.com/memotv/status/1369594107488829441?s=19</a>
Where our parents would hedge with gold, Gen-x and younger who got a foothold on finance are hedging with digital.<p>Consider this: We have 2 generations who are digital native. They have digital relationships. They buy digital. They consume digital. The missing part has been to earn and spend digital.<p>No that digital natives have been handed $$$ in govt handouts which has caused an explosion of economic activity in crypto.<p>Now they can and will speculate in markets with digital. And do it with provable scarcity<p>They are discovering scarcity
Calling things a pyramid scheme is a ponzi scheme.<p>People using these terms incorrectly to describe "bad investment they don't like" gets old quick.
A picture sold as NFT is akin a football ball signed by Ronaldo, it derives its value from 1) fame 2) scarcity. A ball is a cheap and easily replicated object, but with a signature on it, it becomes valuable.<p>NFT offers several advantages in this respect.<p>1) Ronaldo's identity is verified by the NFT site, and blockchain ensures authenticity for eternity. Let's remember, how many famous pieces of art turned out to be fakes. Can't happen with NFT. And no need to pay astronomical amounts to art experts for that.<p>2) Ronaldo must promise that he will sign only a limited amount of digital balls. Yes, the buyers should just trust Ronaldo on this, but Ronaldo has an incentive to keep his promise, because NFT contracts usually include "royalties": every time in the future, when the digital ball is resold, original issuer receives 10-20% of the price increase. So he is interested in objects retaining value.
So basically: NFTs are a scam since the early adopters are not very good artists. And there is no unique value in them since its just Pepe memes, which are stupid to be NFTed, since it's just Gifs?<p>Oh and let's not forget about the Ethereum fees and how shitty the tech is.<p>This really reminds me on how everybody perceived internet in early noughties, when everybody was telling me it's shit and it will never ammount to anything.<p>Man they were right, there was literally no value, just like there couldn't be value in standardized mode of exchange for digital goods - it doesn't have to be Pepe GIFs only.
Ironic coming from a website like fstoppers. What exactly is the "value" of fine art photography ? Why do people pay exorbitant amounts for basically a few hours of photos during their wedding, given that a wedding might end up divorce ?
People pay for whatever has "intrinsic" value to them. If Digitally generated/cryptographic art is it, so be it.