Twenty percent of a picture of a dog
bloomberg.com
bloomberg.com
It's like 'because this is ridiculous, it is therefore obvious that it's only about the money invested in it, not in any sense what it's 'about'. Therefore, the money has to keep getting more valuable. Because money, that's why.
If that argument holds, then it is money, full stop. No matter what else it is or isn't. The entire difference between it being a weird speculative prank, and it being money in the weightiest possible sense of the word, is how it's treated by society and any governments that have jurisdiction.
This just reminds me of how society screwed over future generations once the decision was made to treat housing as an investment. There is now a tremendous amount of social, political, and legal pressure to keep values going up in order to protect the financial health of a good percentage of people which is diametrically opposed with the financial health of a separate group of people who cannot afford those rising costs.
Market dynamics are fine in their place, even useful, but nothing about them is inherently free from exploit. Crypto and finance operate in a context that's set by law and custom. We agree 'if your crypto fails, hard luck, you lost money'.
If it was beneficial to literally threaten government until they changed the rule to 'if your crypto fails, but you are entity X, Y or Z, then you are to apply to the government and they will make you whole, printing 'money' if necessary'. This would be pitched in the name of 'stability' but it'd be a straight power play. The benefit to X, Y, and Z is obvious.
Doesn't matter much what kind of pressure they would impose, only the end result matters. It could be negotiation, blackmail, threat of physical harm: view this pressure as stepping outside the rules of the system to rig the rules of the system, secretly or explicitly. The idea is to legislate that markets can't be irrational, because (if you're X, Y, or Z) markets will be guaranteed to do what you want. No risk. Therefore, rational.
“If you would allow me to continue..."
Ford nodded dejectedly.
“Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.”
-Douglas Adams, The Restaurant at the End of the Universe
https://www.goodreads.com/quotes/685739-if-the-management-co...
NFTs are just a new name for a concept that's been around in bitcoin since the very early years: Colored coins https://en.bitcoin.it/wiki/Colored_Coins
This means NFT's have the ability of dynamically change the money supply based on the prevaliling Keynsian animal spirits across society, versus bitcoins pre-determined money supply schedule. This is a novel feature to the crypto ecosystem: in a way it's moving the activity of mining for block rewards from a robotic and silicon-based process into a creative human process of mining for memetic uptake.
Another interesting opportunity is for patronage to sponsor our society's artists. Just like Florentine status competitions of religious paintings supported Da Vinci's works, our crypto merchants could be supporting the man who will still be going viral five hundred years later. Let me know if you find him.
On the one hand, I regard crypto-foo in general as a failure to grok foo for all foo other than “graphy” and “nomicon”.
On the other, NFTs seem to fit into the same category as all other collectibles: I have no interest in used stamps, my dad collected them; original paintings and sculptures from famous artists fetch high prices, if I wanted one I’d get a (2D or 3D) print; autographs fetch vast sums and have zero valence for me.
Pretty much the only thing I care to collect are achievement badges in games and gamified educational services.
Which of these NFTs represent — magical thinking or collectibility — I do not know.
You can own it and say it's rare, but it's not actually rare.
People buy NFT JPEGs and then put them as their Twitter avatars. Anyone can do that.
Basically a scammer hired a master forger to create new/"original" paintings in the style of a few abstract expressionists (Rothko, Pollack, Motherwell). They came up with a fake provenance and sold them to a prestigious New York gallery for 25 years, making millions of dollars. The gallery then resold them to rich people for even more money.
They consulted the top experts in the world to authenticate them and no one raised any doubts.
Everyone was happy for a long time until the scam fell apart. They interviewed one of the people who purchased a fake painting and had hung it on her wall for years. She was furious.
As a nice little kicker, one of the attorneys on the case has a bunch of these paintings (which had been sold for millions a piece) hanging in his office.
There's a little blurb here https://en.wikipedia.org/wiki/Knoedler#Art_fraud_scandal_and...
Whether or not it will be successful is a different question, though the most prominent ones will probably remain collectable to some degree purely because they represent the first iteration of a historical precedent (digital scarcity in art).
If I buy an NFT, I have a monkey as my Twitter avatar. You don’t (not the same monkey, anyway).
It’s like if we had matter replicators from the Star Trek universe and anyone could print a van goh copy down to the same molecular structure and hang it on their wall, but you bought an impractical-to-forge piece of paper that says yours is the original.
It only matters to people that it matters to. Anyone unconnected to the blockchain that stores this information doesn't give a monkey's about it.
Imagine that I and the monkey-picture-owner use the monkey picture as an avatar. They say "you can't use that, I bought it - look at this blockchain". I say "no I bought it - look at this piece of paper in the drawer". In general in society we would then have a court case and a judge would decide, and the police would enforce it. In this case - nothing. There's literally nothing the "owner" can do. If you can't enforce your ownership, in what sense do you own anything?
The reality is that money, on the whole, is becoming more and more meaningless.
The world still needs something that fulfills the promise of cryptocurrency, even if it's a little distracted right now.
Probably because of low interest rates, huge QE and now the public knows the system is rigged against them.
You are not even trying. Lets change crypto to apples and NFTs to thieving.
"Thieves were caught eating apples ==> All apple eater are behind thievery."
Of course scarcity can (rightly) influence value, on the other hand, think of tulip bulbs and the year 1637.
E.g. oxygen has value, even if not scarce.
I wish economists refrained from using the word "value" for concepts that are not that.
Q: How much did you pay for the oxygen you personally used in the last 24h?
Unless you are poorly and/or in hospital, there is no price for (breathing) oxygen? If there's zero price how would one propose to determine the value?
You can live in an over-priced house that you've bought.
I'm struggling to think of uses for an over-priced tulip bulb, other than one Spring's worth of flowering (maybe)...
The US dollar is artificially scarce. What inherent value does it have?
I agree that people can value movies and tv shows, which in some sense therefore actually has more inherent value than the dollar.
The technology was championed through artistic channels and we're still very early which is why it is the majority of the attention.
Some of these NFTs have intrinsic value simply for being the firsts/help create upon a technology that will continue to permeate through our culture and livelihood.
Now imagine we transfer ownership of the house to a DAO tied to an NFT. American law allows corporations to be governed by software. So the house is nominally owned by a Wyoming DAO LLC, which gives management rights to whoever holds an NFT on the blockchain.
We’ve legally tied control of the property to an NFT. If you want to sell me the house, we no longer need to transfer control of the property, we just exchange the NFT. Instead of using an escrow company, we can use an off the shelf smart contract which holds the escrow and automatically governs most common cases.
The escrow smart contract can defer any out-of-band disputes to a mutually agreed upon private arbitration entity. We’re not confined to local law, and can choose whatever private legal system we want from anywhere in the world. Simply point the smart contract at the arbitrator’s public address. Imagine being able to use Delaware Chancery Courts instead of a corrupt Louisiana rural parish.
When the property is an NFT, we can now borrow against it by directly accessing a global market of DeFi capital. No more paying the bank and mortgage services 1%+ of spread. Simply construct the mortgage as a smart contract, which controls ownership over the NFT. No more worrying about local judges interfering with foreclosures. Default on the mortgage is now a much simpler and faster eviction process since the homeowner is legally just a tenant of the DAO.
Those individual mortgage smart contracts can now be packaged and pooled, with the risk tranches in such a way to maximize capital efficiency. Again none of the massive frictions that existed n 2008, where foreclosures went slow as molasses because formal title and liens got lost in byzantine county clerks across the country. No fraud where banks and mortgage brokers stuff structured credit pools with crap. Every mortgage pool is instantly auditable but anyone using on-chain data. Foreclosures can be executed in real time and capital rebalanced instantly. That drastically reduces the risk of a cascading series of failures from a hidden pool of risk that we saw in 2008. It also allows for much higher leverage in the financial system, as margin calls can be made much faster and 24/7.
What stops the judge from just saying "this smart contract is unenforceable, the NFT doesn't decide who owns the house"?
Could some two bit local judge try it? Sure, but it would ultimately get taken to the Supreme Court. And given the current composition of SCOTUS it’s very unlikely they’d vote to weaken corporate property rights.
If you’re worried about legally recognized LLC DAOs losing their rights to residential property, than you should also be worried about private equity firms who are buying residential SFHs also having their property appropriated. Seems like a pretty big long shot to me. This is America, property rights are pretty sacrosanct.
I can't find a single instance in American history of real property being outright appropriated by a court outside eminent domain.
(Of course the smart contract can be coded with the option to defer to a human arbitrator in the case of dispute, but that doesn't even have to be a duly appointed judge. It's just an address on the blockchain that we point to. Almost certainly we'd pick an arbitrator that respects crypto title.)
The only way for the fiat legal system to pierce this scheme is to either invalidate the LLC in the Wyoming court system or to directly appropriate title to the real property from the LLC in the local county. Both are pretty unlikely.
If the SCOTUS takes your case. Which it doesn't do often.
Frankly, I don't know why less regulation on most people's largest purchase is considered a good thing.
You also don't really understand the cost drivers. The escrow company should have cost maybe 1%. You didn't have to do that at all. You could have offered to skip escrow, given cash directly to the seller and recover from them if the contract goes sideways.
You also don't understand real estate law. >Default on the mortgage is now a much simpler and faster eviction process since the homeowner is legally just a tenant of the DAO.
It is easier to evict a foreclosee than a tenant in most jurisdictions.
> one of the massive frictions that existed n 2008, where foreclosures went slow as molasses because formal title and liens got lost in byzantine county clerks across the country.
2008 moved slowly for two main reasons. 1, politically, no one wanted to move fast. 2, the mortguages were all chopped up, sub contracted, etc, and it was unclear who had rights to forclose on the house because of teh mounds of subsequent obligations.
https://twitter.com/darrenrovell/status/1435967697913880580
Never before have artists had this much control of their ip.
This doesn't seem like artists controlling their IP, to me it seems like another method of sales that lets them tap into essentially a pineapple fund. Those who made money in crypto, sloshing around the excess, making it look bigger and bigger.
I bet they wish they had bought/mined bitcoin!
Say what you will about crypto more broadly, but this is a wonderful perspective on these sort of flash-in-the-pan financial manias.
Literally industrialized and scaled Ponzi.
Understanding that is important, especially now. And it's a bad thing because there's serious undesirable consequences to it, but understanding the reality of it is still important. Just because it's a hallucination doesn't mean those in the physical world aren't affected. Crypto just makes it more explicitly a hallucination.
Please explain; it's not my experience of finance.
The biggest ships cost thousands of dollars' worth of in-game currency. Currency aside, they also took massive amounts of effort and coordination from many players to even build them. Trading or buying one was its own metagame, with its own power players and politics.
Large battles could easily destroy five figures' worth of USD, and kill leaderboards would track the dollar values for destroyed ships. Ridiculous amounts of money, really, for a space spreadsheet game - but hey, it's all in-game currency so it's not real, right? With some hustling, some scamming, and some influx of real USD you could always get more and keep the drama going. The investment of time and real money was really to participate in the story and events unfolding.
Anyway, the only way I can make sense of crypto is it's basically the biggest live-action MMO the world has ever seen (and I'd throw NFTs and GME in that category too).
"Welcome to Whose Line Is It Anyway, where everything is made up and the points don't matter!"
> Owner/securitizer: I bought this unique pointer to an image of a dog for $4 million.
> The public: Ahahaha good one, congrats, money well spent.
> Owner/securitizer: Also I will sell fractional ownership interests in it for like $225 million.
> The public: Ahahaha another good one, that joke is worth $225 million to us, here you go.
>It’s two jokes so it’s worth 55 times as much. I don’t know!
>Also it doubled the next day?
Can someone give me the scenario that this ISN'T some derivation or form of money laundering? Honestly asking, because I just don't see it. It's too ridiculous.
Could it really be "just" out of control speculation and "jokes"? It seems to me the money behind these things isn't as "funny" as it would have to be for speculation. These are pretty serious amounts.
But I'm skeptical there are so many people betting on something so ridiculous with so much money.
Don't try this at home. I'm sure there are probably some gotchas in the above scheme.
* Actually if you just find a legitimate rich person with low morals, they probably wouldn't mind participating for the usual launderer's fee.
Sales for NFTs > 100k seem absurd to me & fractionalization really breaks it for me.
I understand why someone would want to buy an NFT to support an artist and I support that behavior.
I understand why someone would want to buy an NFT to sell it for more later and I'm ambivalent about that behavior.
I understand why someone would fractionalize an NFT as a scheme to extract more money from suckers, but I don't get why someone would pay $ for owning a small portion of an NFT.
It seems like selling spoons labeled as small shovels during a gold rush.
If you want to give money to an artist, then... give money to that artist. Cut out the massive extra fees to crypto middlemen and staggering environmental damage, and just send them some money.
Neither of these are necessary for NFTs; it's perfectly possible for artists to mint the NFTs themselves (thus cutting out middlemen entirely) using blockchains that don't rely on mining at all (namely, anything built on proof-of-stake).
Do you regularly just send $ to artists you like?
Maybe these "suckers" do not understand what they are doing:
1) they heard that blockchain and NFT is the future,
2) they do not understand why, but they trust these who understand and evangelize,
3) they want to try riding their luck, just in case this miraculously works.
Imagine people purchasing lottery tickets, just in case they miraculously win.
Further in the article there's also a bit about ESGs:
> If you hire a few extra white men this quarter, that makes it less likely that you will hit your ESG targets, which makes it more likely you’ll pay more interest in the future, which increases the value of your liability (the amount you owe), which reduces your earnings for this quarter.
Is this a real thing?
As with all gambling, the house will always win. The cash pile can lose value without anyone ever cashing out, and the house probably gave themselves a huge percentage before the game started.
But then I read this paragraph and it's so incorrect that I can't trust the rest of the article:
> ... One thing that I like to think about short selling is that it creates new shares of a company, and to some extent those shares compete with the shares issued by the company. If you short a bunch of oil-company stock, someone who wants to buy oil-company stock might buy it from you instead of from the company. In the limit, if enough people embrace the idea of shorting oil stocks, they will crowd out the oil companies; it will be impossible to finance oil drilling because any money you put into oil stocks will go to short sellers, not drilling.
Imagine this situation. You are super bullish. I am super bearish. So I short 50% of the company directly to you. Okay, $$$ has changed hands, but you have the same number of shares and I have the same number of shares. You just also have a promise that I will deliver more shares to you in the future. I might make or lose a fortune delivering them, but I haven't altered the total amount of shares in the world.
Something to essentially say, I like this artists' work and want to support, possibly with the potential for profit. I remember seeing Eminem when he was merely the opener for other artists and was wearing all black and a hat (i.e. somewhat obscuring that he was white) . And I kind of saw it, and offhandedly thought, "he's gonna be big, I wish I could buy stock in him or something."
If you don't trust Eminem, this use case kind of falls apart.
It's ALL weird, I was just kind of throwing something out there.
What happens if Eminem loses your record?
Then you've answered your own question re: why you might need/want "blockchain-y stuff": that "blockchain-y stuff" makes it so that you don't have to trust him.
Why? It's the same thing as buying art, or baseball cards, or anything that relies on scarcity except instead of having a real-world thing you just have an abstract token. We already do that with money, why not do it with the rest?
You either become or hire an expert art imitator to imperfectly recreate that same piece of art or you can't have it. vs - I have an NFT for a png - I also want that PNG
You download that PNG
Ownership is just a social construct. Society now recognizes cryoto keys on the blockchain as a form of ownership. The attitude of “just copy the JPEG” is a little bit like the Native Americans who were happy to trade Manhattan for beads because they thought it was ridiculous that anyone could “own” land.
The world has fundamentally changed. You might not like it. You might think it’s stupid. You might even think that it will snap to its senses sooner or later. But the reality is this is the world we live in now, and scoffing at the new reality doesn’t change the facts that JPEGs of monkeys on the blockchain are now worth more than Picassos.
It really doesn't.
> The world has fundamentally changed
It really hasn't.
If I was the first person to record that I knew this information, that's a pretty good proxy to proof that I created it. That makes me the author, artist, or inventor of this information.
If other people find this information valuable, then they might want to pay me because I released this information. Because I was the first person to sign the information on the blockchain, they know the right person to pay.
So the blockchain provides a way of tracking the author of information, which is not controlled by any company or government.
Most NFTs that I've seen are incredibly flimsy-looking digital 'pieces', if I can even call them that. Their value itself is just as questionable, considering the artsts are unknown, the art is not a limited edition, and the cost to reproduce it is zero.
Maybe the market for NFTs is purely the '1000 true fans' types, the followers who will always pay for what you put out. But the majority of people are unlikely to have that relationship with the artist, even if they like what they saw on a transient Twitter post one day.
Sure, if you want to have that T-shirt, or support the artist, or something. But the goal of NFTs is to guarantee the uniqueness of what you bought, usually (probably 99% of the time) because people want to invest in them. So a T-shirt won't do.
I see NFTs as the "ultimate abstraction" of all speculation. It's not anymore about the value of the thing itself, it's just that you can buy it, prove that you have it and resell it.
> Most NFTs that I've seen are incredibly flimsy-looking digital 'pieces', if I can even call them that. Their value itself is just as questionable, considering the artsts are unknown, the art is not a limited edition, and the cost to reproduce it is zero.
I agree with that, but still, you can speculate on the NFT so some people will do that. Again, I don't think the cost to reproduce being zero is a problem for NFTs. If you could make a copy of any Picasso painting for free, people would still buy and sell the original for millions.
> Maybe the market for NFTs is purely the '1000 true fans' types, the followers who will always pay for what you put out. But the majority of people are unlikely to have that relationship with the artist, even if they like what they saw on a transient Twitter post one day.
I think the artist doesn't even matter. NFTs today are a bit like shitcoins, some people just want to speculate/gamble.
I'm really crypto-skeptic in general, mostly because I can't see a use for any of those things. But I can see why the concept of NFTs is useful.
And then NFT's just add a whole new special layer. Again, what I suggested above was perhaps a way to parlay this very stupid thing into something perhaps less stupid (the ultimate goal being to find a way to support artists, but one that "relies on scarcity" in a way at least might get more people other than "obviously stupidly rich people with money to burn" involved.)
I think majority of the NFTs are b, but people pretend it's a for complex reasons. The rest of NFTs are jokes/memes.
d. Capital flight.
If you can define it as a concept, you can sell crypto 'of it'. Doesn't matter if it was your tree idea metaphor: I can sell crypto of your idea of a tree of a metaphor, if and only if I can get people to do such a silly thing along with me for the purpose of manipulating the IDEA of the idea of a tree of a metaphor, as money.
Makes perfect sense that the sillier it is, the more it works.
c.f. https://en.wikipedia.org/wiki/The_Million_Dollar_Homepage
People who have a lot of ETH buy weird fake stuff with it because they can't just liquidate it into fiat money to buy real things. If they do, the value of ETH will crash. So instead, they engage in speculative pump and dumps while waiting for a chance to cash out.
The cookie banner pops up and is half the screen.
Then an offer pops up and takes 30% of the screen.
Before I can even figure out where the X button is - probably behind the inexplicable "copy link" button - a newsletter subscription modal pops up.
Clicking the X wasn't responding.
Then the tab froze.
> Please don't complain about website formatting, back-button breakage, and similar annoyances. They're too common to be interesting.
Normally don't even bother with these but it was an exceptionally bad instance.
This alone feels like a good reason why people should vocally object to such annoyances. "They're common and therefore we shouldn't bother talking about them" only lets the problem continue to fester.
I'm assuming that's the entirety of the article because it's fucking 2021 and I therefore really can't be assed to put up with Reader-Mode-incompatible web design.
I think it's a sort of performance art. It's also just a fun way to donate to charity in many cases.
EDIT: not saying I support it, just that ponzi schemes work for the people on top
This paragraph is absurd. Charging phones and laptops is a few orders of magnitude less energy than keeping your house warm/cool or cooking and storing food.