Pretty much the blueprint for any and all bubbles.
There might be a sense in which bubbles are getting more ridiculous over time (e.g., NFT) but it would be hard to prove it in any objective sense.
There might be a sense in which bubbles are getting more ridiculous over time (e.g., NFT) but it would be hard to prove it in any objective sense.
IMHO, the key driver to NFT were a bunch of early crypto whales who wanted/needed to cash out. Just dumping their coins on the open market would tank the valuation, but create a demand frenzy by contracting some high-profile influencers and now you can dump as many coins as you want and people will still buy them.
Now, a lot of people are holding very very deep bags.
In any case though, 'FOMO' is an equally good term for both phenomena.
Remember tulips? [0]
I think tulips were probably at least as ridiculous as NFTs.
The role of scarcity is something interesting to consider as input. Scarcity (perceived or actual) is more natural with tulips or anything that is a tangible, real object.
NFT's tortured way of creating "digital scarcity" sets them, imho, apart from other bubbles. Given how much of modern life revolves around digital they are probably the forerunner of much worse to come.
strange but true, scarcity comes in different sizes. Is the infinity of NFT's the same as that of paintings? How many types of infinite junk are there? Or is this infinite itself?
In contrast, while digitally reproduced crap is also fundamentally finite, it can be replicated gazillion upon gazillion times more without any effort or sacrifice.
This is the so-called zero-marginal cost of (re)production [1]. Some people think its a blessing, some people think its a curse.
With AI algorithms it gets even worse. You don't only have infinite copies of the original, you also have infinite variations of the original.
Interesting times.
[1] https://books.google.nl/books/about/The_Zero_Marginal_Cost_S...
Expecting others to enter a bubble and trading accordingly can be a perfectly rational calculation following observations of behaviors in a given market context.
[1] https://theconversation.com/tulip-mania-the-classic-story-of...
It could have been rational to spend a lot on a good one as you could then cultivate it a grow lots of that type.