The claim is that there is no traditional valuation model that assigns any value to cryptocurrencies. The only way to refute it is to show that yes, such a valuation model exists.
Until then, it's Goop but for tech.
Yes… It also happens that there’s a ton of money being ploughed into weird, niche, expensive digital art. But this has now created an economic market in a space where previously one was not possible, by virtue of the fact you could never prove something was original, unique, or “yours”.
The lack of provable provenance means that a good chunk of NFT "art" is actually stolen from the artists who do the work.
Bored Ape demonstrated that the theft of NFT art is easy, and the supposed ironclad ownership can easily be changed by the sites listing the art work - because they can just decide that those ironclad bits you hold aren't really yours. At which point you have a central authority arbitrating ownership, which is even worse than what the art world has right now.
It's certainly a lovely place for all sorts of cons, but as economic asset or cryptographic representation of ownership it is an utter and complete failure. You still can't prove something's original, unique, or yours. It just has a thin veneer of technobabble to hide that fact.
Ah, a rational person. Yes, I thought that argument would be unbeatable, but the counter-argument goes like this:
"Valuation models are worthless because all money is imaginary anyway."
It's really hard to refute someone who says that, like it's hard to refute someone who believes the world is entirely imaginary.
I’ll swap you 5 bags of corn for 3 pairs of socks.
Do we have a deal?
>> The only way to refute it is to show that yes, such a valuation model exists.
It’s complex and inconvenient to barter all day long. So, “we” (society) created a “token” (e.g. USD) to represent the value of our economic goods.
I believe 5 bags of corn is worth about $10. You believe 3 pairs of socks is also worth about $10. Now we have a deal, unambiguously, because we have a mutually-agreed asset from which we can both continue to derive value in other markets.
So, both statements are true: “all money is imaginary” — because it has no inherent value (OK… I guess I can wipe my ass with it, or light a fire… but I can’t feed or clothe myself with a $10 bill).
But, at the same time, it’s not worthless — as we mutually agree to assign it worth, on the basis that others are willing to do so too.
> It's really hard to refute someone who says that
There’s a good reason it’s hard to refute this… because it’s a fundamental economic principle! As more and more people “agree” that Bitcoin has value, its value grows.
A mutually-agreed representation of value (i.e. a “valuation model”), therefore, exists.