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Comment by mosselman | Hacker News Reader

So these people who lost 100k. Did they really lose 100k or did they lose crypto currency worth 100k, but which they purchased for a lot less?

What is 'minting' anyway?

Edit: I do understand that if you have something worth x you in essence lose x, but there is a big difference between these people buying this stuff for $2 2 years ago or investing $100k right now.

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Minting is just essentially purchasing something with a couple of extra steps behind the scene.

What pretty much happens when you are minting an NFT is:

1. The owner of the collection uses a program that controls everything around the NFT sales, like the start date, the price, the order of art that is distributed, the owners of the collection where the funds get transferred, and other settings.

This happens before users can mint.

2. User wants to buy art, they launch a webpage that interacts with the above program. They pay the amount of money that the art is configured to sale for, and the program will process these payments in the order they are received and distribute art based off of the order the art is to be distributed. The above program also has safeguards that prevent users from being charged in the case that the art is out of stock at the time the user attempts to pay for it.

3. The 'minting' process is taking the art that was configured from this program, creating (minting) a token for it, and creating any underlying token accounts that are needed to store the art in the user's wallet, and transferring ownership.

NOTE - there are definitely other ways to distribute NFTs, such as generative art that is created at the time of the transaction based off of the block hash. The above example is how this particular NFT collection was to be distributed, it's a common model used by probably the majority of NFT projects. The actual 'minting' step (#3) is pretty much the same though, the process of creating the token and associating the metadata and transferring ownership.

what does it matter, you buy a house for $500k and sell it for $900k a couple years later, same difference?

Yes, or if you bought it for 40K but it burns down when valued at 800K, that loss is still effectively an 800K loss to you. Replacing it will cost the same.

This is not how things work at all. The wood and plaster and glass your house is made of doesn't go up in value, your land (aka deed) does. So if your house burns down, you did not, in fact, lose $800k.

The materials already used in your house may not go up in value, but the value of the raw materials themselves certainly have gone up in value due to 30% inflation or whatever over the past year. Take a look at lumber prices.

In this example I'm sure it wouldn't cost $800k to rebuild the house, but it'd certainly be more than $40k, so it would definitely be a loss.

The cost to rebuild is often less than the cost of the house to buy these days.

Normally speaking people would have their houses insured against fires.

A loss is a loss but it matters in terms of exposure for the individual.

If they took a loan or put all of their life savings into it then it feels a bit different than turning $50 into $500000.

Sounds like the difference is about $499,998

It matters for context:

Lets say I bought a lottery ticket for $10 and my ticket wins and I can go pick up $200 million. On my way to the office of the lottery place I lose the ticket somehow, then I am not out $200 million, I just don't have it anymore, but it isn't as if suddenly I can't lead the same life as before I bought the ticket.

Lets now say that I just bought a huge number of toys for all of my life savings to sell in the holidays and then the uninsured warehouse where I stored them burned down, I actually lose all of my life savings and I have to sell the house, my car, lose the kids, etc.

I am not saying it doesn't suck, I am just trying to discover the context.

Solana is highly liquid, so it makes absolutely no difference.

> there is a big difference between these people buying this stuff for $2 2 years ago or investing $100k right now.

Rationally, there is not (assuming a liquid market). Emotionally, maybe.

Ah, except for capital gains taxes and other transaction costs.

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