I spent 300$ on an NFT and I regret it | Hacker News Reader

I spent 300$ on an NFT and I regret it

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Summary: “I was pretty sure NFTs were pointless, but they’re so hyped that I thought I must be missing something. So I bought one and sure enough, they are pointless.”

We live in a hype-based culture, very often devoid of any rational thinking.

Are NFTs the new diamond? Are these things that people haven't tried to sell in large enough quantities that people can't see that the purchase price is completely ridiculous?

Or are there various cabals manipulating the price and hype? I've heard there are money laundering schemes underlying a lot of it, but there can't be that much criminal money out there.

> There can't be that much criminal money out there.

There can be and there is, especially in cryptocurrency. The only economic use for Bitcoin back in its early days was in black market transactions. The holders of early extremely large positions in crypto are techie early adopters who liked messing around with the technology (significant, but only gets you so far), and criminal groups. The former are probably more interested in the crypto ecosystem, the latter are highly motivated to find ways to turn their massive positions into cash.

That isn't to say that every high-priced or weird NFT purchase/crypto transaction/whatever is part of a nefarious money laundering scheme, just that if there are spaces that make money laundering easier, you can bet that people with money to launder are trying to take advantage of them in general.

Also criminal might not be as "dark web" lurid-sounding as it might sound- it might just be otherwise law-abiding citizens from certain countries trying to move capital out.

> There can be and there is, especially in cryptocurrency.

Consider ransomware, for example. When a company pays up, the ransomware vendor ends up with a huge chunk of cryptocurrency they need to launder before converting it into cash -- and shuffling it through both real and fake sales of NFTs could be a highly effective way of doing that.

I bought a JPEG

If you bought an NFT, it's more likely you bought an address that points to a JPEG, not the JPEG itself. Of course you can save the JPEG locally just like any other JPEG unrelated to NFTs.

How did they buy the address? In what sense do they own the address? They don't own the domain, do they? And can't I just copy & paste the address myself, so I own it to?

> - NFTs are not a good investment

Why would anyone think a silly picture of an ape would ever be a good investment?

I fully understand that something is "worth 300 bucks" if everyone agrees it's worth 300 bucks. I also understand that Apple stock is also overpriced but in the end there is a big gap between an overpriced stock and a silly picture of an ape...

Apples stock actually has a low PE ratio of 30ish, suggesting it's well priced (a tad over twenty but in a market where everything is 30ish PE or worse).

PE ratio is probably the best metric for what is or isn't overpriced.

With huge amount of cash, well positioned in market and so on.

Tesla should really be the example of overpriced tech stock...

> Why would anyone think a silly picture of an ape would ever be a good investment?

Well, it depends on the investment horizon you are looking for.

Long-term? Fully agreed, betting on a random picture of an ape as a long-term investment is rather silly, unless you either treating it as a lottery ticket or know something others don’t.

Short-term? I can easily see why someone would think it is a good investment. There is a hype going around NFTs right now, they routinely go up in price significantly, and if you want to have your chance at a risky short-term play, then why not. As long as you recognize that it is very high risk (with a high chance of your investment not panning out), and you are willing to drop some spare money on it (and being fully ok with losing them), then I don’t see any harm in it.

Note: I primarily defend it from a risky short-term investment point of view. Because while I own no NFTs and have zero desire to do so, I regularly do small short-term risky investments by playing weekly OTM stock options. No, i am not hoping to become rich off of that. But it is a fun way to break up the routine, learn more about technical fundamentals, and I am still net positive on those risky plays. Though to underline, this is a tiny portion of my portfolio, and one should not treat very high risk plays (regardless of whether it is NFTs or OTM weeklies) as a basis for one’s portfolio. Moderation and not building up illusions of the high likelihood of success with those types of high-risk investments are the key.

> they routinely go up in price significantly

Since NFTs are so easy to mint, I'm not convinced these aren't almost all fake sales that drum-up interest in NFTs in order to sell the cheaper ones.

The simple fact is that some people have a lot of ETH that they did not get at the current market price.

Those people will pay a lot of ETH for something that when you convert it to $ seems to make no sense but if you look through the lens of "I have done extremely well already and this whole thing is an experimental platform" then it starts to justify why some people pay seemingly absurd amounts of "money" for what everyone who's "in on it" knows is basically just a cool digital trinket.

ie. If you bought 100 pebbles for $1 you'd probably trade me one of your pebbles for a nice drawing I made. The fact that pebbles are now $100 ea. is irrelevant because you're happy enough to just sell a single pebble and get $100 back and then do fun stuff with the 99 remaining pebbles.

I've never thought of it from this angle at all, but suddenly everything starts making even more sense now. Thanks for posting this, because in countless threads and discussions on the topic, I haven't seen anyone mentioning it.

Pretty cheap lesson in FOMO and bagholding though.

Why play with greater fool theory when there are so many other safer alternatives to invest in.

300$ is a bargain as learning material. Specially when it comes to investing. In future that can save lot of money by making him think more deeply about investing in general.

A thing I've been wondering for a while now is how many NFT advocates have ever bought, like, a physical painting from an artist? I think that data would be good at identifying whether people are in it because it's an arbitrary hyped investment or whether they're in it because it's a "better" way to buy art or support artists.

Something that wasn't mentionned: that monkey jpg is ugly as sin. Github auto-generates icons and makes something that looks nice. Some people have worked on AI-generated art and made beautiful things. You could also take a camera, point it at the sky, take a picture every minute and get a better result than this. I don't get why when you get a NFT, it has to be an ugly monkey/ape/lion. Is there something attractice in their ugliness? I think the vast majority of people see them as ugly, at least from what I've seen online. What am I missing here?

> NFTs are swapped frequently to generate fake demand. Look at the transaction logs before buying

Sounds like an opportunity for a business. Get data on this, write a few articles on obvious scams, introduce a metric for how "scammy" and inflated the value of a specific NFT is, sell that notation.

Beauty is in the eye of the beholder.

I like the actual Bored Apes. I think they're well done and carry a lot of cool factor. Not as big a fan of the derivatives (dogs, mutant apes) from the same team. And I don't like the lazy knockoffs like the linked thread purchased at all.

But it's all down to taste, which definitely varies from person to person and group to group.

I agree that the initial Bored Apes are better.

Taste varying from person to person doesn't mean that everything is equally appealing to the same amount of people. From my observations, most people find them ugly, or at least far from beautiful or cool. Maybe most people in the NFT niche find them beautiful or cool, in which case the explanation is just a difference of tastes. But if that's not the case, my question about why people decided to do something ugly still stands.

I think there's some nuance here, as there often is with art. Sure, you can look at the Bored Apes and say they're ugly. There is an element of that in them, and yes, I'm sure it's intentional from the team.

But they didn't have "do something ugly" as the primary goal, they had "do something cool" as the primary goal, and the "ugly" was an aspect of the approach they took to achieve that goal. Specifically, I think they were going for a street art vibe that often uses an approach like this.

It's not going to appeal to everyone, and to be honest, that's part of the point. It wouldn't be cool if it appealed to everyone. That's an easy dynamic to mock, but it's still a real dynamic in the real world.

"Building schools" always sounds dumb or even scammy to me. What is a school building, really? Surely running a school is the hard part (assuming the students can afford to go to school to begin with).

Am I wrong about this? Are there any success stories from these schools built by foreign help?

More ape hype -- people stealing Bored Ape NFTs? Insane. Hope he keeps them in a hard/cold wallet.

https://cointelegraph.com/news/opensea-freezes-2-2m-of-stole...

Over the holidays I learned a friend of a friend who has been playing with AI-generated art earned ~$400k selling some of this stuff as NFTs.

I'm wondering what are the odds my friend's friend just needed to launder some illicit crypto gains, and NFTs are a perfect zero-cost substrate...

How would that work.

Whether you take money out of the market or make a sale of an NFT, both are taxed income, no?

The whole point of money laundering is legitimizing ill-gotten income so you can both claim and pay taxes on it, with a plausible source story should anyone come asking.

It's got nothing to do with tax evasion, quite the opposite actually, AIUI.

Now I wonder. Area NFT sales taxed as capital gains or income? If later, then it really makes no sense to wash via it.

    > “130$” GAS FEES!
    >  NFTs are swapped frequently to generate fake demand.

Why don't wash trades cause the scammer to rack up thousands of dollars in gas fees before they sell it?

Gas fees do not rise with the amount of the transaction. So if you're selling for a really high price, gas fees are negligible.

> 1. You can bid on one and when the bidding duration is over the NFT goes to the highest bidder

Does anyone know if the bids are binding and use an escrow? I see crazy bids out there, but I always thought those could be bs. But if they are binding and get held in escrow (with gas fees and all), then they're legit.

> - NFTs are swapped frequently to generate fake demand. Look at the transaction logs before buying

High gas is a feature not a bug in that case. If you're spending hundreds of dollars in gas to create a phony transaction, then its pretty expensive.

Bid require you to use WETH (Wrapped ETH)

> WETH (Wrapped ETH) is a currency that allows users to make pre-authorized bids that can be fulfilled at a later date without any further action from the bidder. WETH is used to buy and sell with auctions on OpenSea. ETH and WETH are worth exactly the same amount and can be exchanged directly on your OpenSea profile.

https://support.opensea.io/hc/en-us/articles/360063498293-Wh...

Also, gas fees do not rise with the amount of the transaction. So if you're selling for a really high price, gas fees are negligible.

>NFTs are a great way to directly fund artists and creators in general

This feels like a weird conclusion given the issues encountered.

What it weird about it?

Minting NFTs and being paid directly for editions sold seems like a good model to directly fund artists. Plus the creator will receive a royalty percentage on subsequent sales, so they will be paid even if the price goes down as long as transactions are still happening.

Most NFTs are procedurally generated. Artists are not involved anywhere in the process. Infact a lot of art communities are openly hostile to NFTs

It sounds like gas fees will syphon a significant portion of sale income (both in the form of gas for minting and gas fees paid by the purchaser) for all but the highest-paid artists, and legitimate artists will have to compete with scam NFTs pumped up by fake bids and wash trading.

If you want to support an artist or a cause, it seems easier to just give them money.

I think the reality is there is a lot of uninteresting art and nonsense hype and speculation out there. But I also think there are real artists whose NFTs are actually .. artistic and interesting and their sales help them get by.

Look into Algorand if the gas fees are an issue. Transaction fees in ALGO are less than a penny.

OT: I considered it uniquely my error to put dollar sign after number (1$). Glad to see others copying this.

It makes sense to put it after to me, but also, that's how it's done in French.

And Finland... Also I love to use comma as decimal separator...

Good lord, maybe Jeff Bezos does deserve to have everyones money.

You could have just given me the 300 dollars and I could have called you a moron.

Completely same effect.

You do not have your money and you feel bad.

There was a charity angle though:

> A mission to build 2 schools in a country in need

Are they raising funds to sell bridges too?

P.T Barnum was right:

"There's a new sucker born every minute."

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