What, exactly is a NFT?

[Mr-B]

Has a similar feel to web domain flipping in the late 90's. Loads of news stories at the time about someone selling a $10 domain for $1m, not so many of those stories recently and by recently I mean the last 15+ years. Same lies ahead for NFT's?

[Zumbruk]

What's an NFT? A scam wrapped in a con inside a fraud. A photocopy of the receipt for someone else's shopping. A whirlwind of buzzwords from a bunch of poorly socialised geeks whom would be better off working on their personal hygiene than trying to pretend they can fix all the world's ills with code. A poor solution to a non-existent problem, based on technology patented in 1979.

Edited by Zumbruk on Tuesday 15th February 15:04

[Bikerjon]

Mr-B said:

Has a similar feel to web domain flipping in the late 90's. Loads of news stories at the time about someone selling a $10 domain for $1m, not so many of those stories recently and by recently I mean the last 15+ years. Same lies ahead for NFT's?

At least with domain flipping it was a bit more tangible and the desire/need for a certain name was obvious. I can't get my head round where that same type of demand exists with NFT's? I am getting a bit old for all this now though, so I expect I'm missing a trick...!

[Gweeds]

https://www.stephendiehl.com/blog/nothing-burger.h...

The Handwavy Technobabble Nothingburger

At this point pretty much every economist worth their weight in salt has given the public fair warning about the financial absurdity of crypto assets using the well-known basic economic arguments against the faux currencies. However economic crypto scepticism has to go hand in hand with a deeper understanding of why the technology doesn’t work as its advocates claim, in addition to the legal and regulatory arguments against its existence.

There’s a simple inescapable truth at the heart of technical crypto scepticism that almost all software engineers intuit at some level:

Any application that could be done on a blockchain could be better done on a centralized database. Except crime.

[Zumbruk]

Bikerjon said:

At least with domain flipping it was a bit more tangible and the desire/need for a certain name was obvious. I can't get my head round where that same type of demand exists with NFT's? I am getting a bit old for all this now though, so I expect I'm missing a trick...!

I don't think you are.

[Zumbruk]

Gweeds said:

https://www.stephendiehl.com/blog/nothing-burger.h...

The Handwavy Technobabble Nothingburger

At this point pretty much every economist worth their weight in salt has given the public fair warning about the financial absurdity of crypto assets using the well-known basic economic arguments against the faux currencies. However economic crypto scepticism has to go hand in hand with a deeper understanding of why the technology doesn’t work as its advocates claim, in addition to the legal and regulatory arguments against its existence.

There’s a simple inescapable truth at the heart of technical crypto scepticism that almost all software engineers intuit at some level:

Any application that could be done on a blockchain could be better done on a centralized database. Except crime.

That's a rather good blog. Thanks for bringing it to my attention!

[Zumbruk]

Just seen on Twitter;

NFT = "Non fkable Techbro"

[Durzel]

Zumbruk said:

Bikerjon said:

At least with domain flipping it was a bit more tangible and the desire/need for a certain name was obvious. I can't get my head round where that same type of demand exists with NFT's? I am getting a bit old for all this now though, so I expect I'm missing a trick...!

I don't think you are.

[Zumbruk]

Durzel said:

Zumbruk said:

Bikerjon said:

At least with domain flipping it was a bit more tangible and the desire/need for a certain name was obvious. I can't get my head round where that same type of demand exists with NFT's? I am getting a bit old for all this now though, so I expect I'm missing a trick...!

I don't think you are.

Spot on.

[FrankAbagnale]

It's not often on PH you get a thread with an overwhelming consensus.

[Zumbruk]

FrankAbagnale said:

It's not often on PH you get a thread with an overwhelming consensus.

For the contrary view, you need to find the Crypto thread in the Finance board. Apparently, if you're a powerfully built "Whale" investor prepared to "HODL" then "Lambo Wealth" beckons.

It's significant that they've mostly moved to Telegram where the "Loons Do Live."

Edited by Zumbruk on Wednesday 16th February 11:29

[Durzel]

People do make money with crypto, and people make money with NFTs.

But - a far greater number of people are the exit liquidity for those people. Since none of it is regulated then pump and dumps, wash trading, rug pulls with zero consequence, etc are rife.

it is pretty much the Wild West at the moment. There are opportunities to make money, at a far greater percentage return than stocks & shares, but there is equally a chance of losing everything in a far shorter space of time, even just to regular market moves and not the aforementioned scams.

[FrankAbagnale]

Durzel said:

People do make money with crypto, and people make money with NFTs.

But - a far greater number of people are the exit liquidity for those people. Since none of it is regulated then pump and dumps, wash trading, rug pulls with zero consequence, etc are rife.

it is pretty much the Wild West at the moment. There are opportunities to make money, at a far greater percentage return than stocks & shares, but there is equally a chance of losing everything in a far shorter space of time, even just to regular market moves and not the aforementioned scams.

The"rugs" have become more prevalent in the last couple of months, and I think it is most likely new entrants who get caught out unfortunately. The more experienced NFT enthusiast can smell them a mile off. I have never been close to being "rugged". But, where there are exceptional gains there are always people trying to exploit it. In the low value poor project space there is lots of volatility, it is gambling, but in the more established projects volatility is less of a problem. Penny stocks vs FTSE.

I haven't minted a new project since October as the space has become less interesting to me due to the quality of projects being launched. That said, I am going to mint a new project tonight and another next week. I feel relatively comfortable with both that I won't lose money.

From what I understand, wash trading while a problem is not as widespread as the noise that is being made of it and a majority of the wallets trying to wash trade are unsuccessful and lose money.

I cashed out some money this morning that I earned through staking a coin and could only stake because I own a specific NFT. That felt like good utility.

[FrankAbagnale]

Zumbruk said:

FrankAbagnale said:

It's not often on PH you get a thread with an overwhelming consensus.

For the contrary view, you need to find the Crypto thread in the Finance board. Apparently, if you're a powerfully built "Whale" investor prepared to "HODL" then "Lambo Wealth" beckons.

It's significant that they've mostly moved to Telegram where the "Loons Do Live."

Edited by Zumbruk on Wednesday 16th February 11:29

I've not got as far as Telegram yet, but do have Discord. It's a big step from plate to bucket, but a small one from bucket to trough.

[Durzel]

FrankAbagnale said:

I cashed out some money this morning that I earned through staking a coin and could only stake because I own a specific NFT. That felt like good utility.

With respect that just sounds like circular logic rather than utility. Being allowed to stake X because you own Y makes Y and X feel more valuable to participants, but what is the intrinsic value of either?

Whilst I have some money in crypto I'm not under any illusions as to the actual utility (particularly as a currency) of them. They are speculative assets, and even the noise around the NFT space is all about making money rather than any meaningful utility.

I don't consider one crypto asset being connected or limited to owners of another as being any practical measure of utility, although I can see there is a lot of hype around how staking one token yields another which will be used for XYZ in the future, etc so you better get in while you can, etc.

Likewise getting "airdrops" of coins or whatever, to seed the market, is seen by some as some incredible scheme when it is simply what it is - creating the market and seeding initial demand (so the ICO launchpad lottery winners can make X% leaving the bag holders waiting for it to go back up again).

I'm not convinced that it won't all come crashing down at some point, although given the amount of money involved its more likely I would think that it'll simply get taxed and monitored more actively by authorities, rather than outlawed or disappearing of its own accord.

Edited by Durzel on Wednesday 16th February 15:52

[FrankAbagnale]

The intrinsic value is that the staking rewards were a share of the royalties earned by a marketplace. As an early adopter, I was given the opportunity to support the marketplace (staking) and yield a return on my stake and also accumulate ETH (community royalties - 85% of all commissions).

I think if we only supported markets where the objects of trade held "intrinsic value" we'd lose a lot of things we enjoy to own.

Also, I don't believe all airdrops hold no value. Some dont, just "scammers" trying to create value by hyping a coin people speculatively gamble on these and very few think that have any utility or long term viability. But then you have airdrops like ENS domains - again awarded to early adopters $ens allows you as part of a DAO to govern the future direction of ENS.

I have no certainty that the whole thing wont come crashing down, I am learning every day to try and understand more. But, I have an open mind and am trying to understand the real applications of NFTs than be closed minded to a new technology.

[FrankAbagnale]

Taxes is a minefield in itself. I don't think there is any published advice on taxes on NFTs yet, but some will have to be paid. Tracking it is another thing entirely.

My holding is enough (at the moment!) that i definitely do not want to get caught up in not setting some aside for tax.

[Zumbruk]

FrankAbagnale said:

The intrinsic value is that the staking rewards were a share of the royalties earned by a marketplace.

That's not an intrinsic value.

FrankAbagnale said:

But, I have an open mind and am trying to understand the real applications of NFTs than be closed minded to a new technology.

I too have an open mind, and over 20 years experience in financial IT, and I think the whole "crypto" arena stinks. I can think of no use for the whole enterprise other than crime.

Blockchain is not a "new technology"; Merkle Trees (of which blockchains are an example) were patented in 1979.

[FrankAbagnale]

Zumbruk said:

FrankAbagnale said:

The intrinsic value is that the staking rewards were a share of the royalties earned by a marketplace.

That's not an intrinsic value.

FrankAbagnale said:

But, I have an open mind and am trying to understand the real applications of NFTs than be closed minded to a new technology.

I too have an open mind, and over 20 years experience in financial IT, and I think the whole "crypto" arena stinks. I can think of no use for the whole enterprise other than crime.

Blockchain is not a "new technology"; Merkle Trees (of which blockchains are an example) were patented in 1979.

What is your defenition of intrinsic value? I would say that holding a coin/share that has a value based on the performance of a marketplace, and gaining returns based on performance of the central asset is intrinsic value.

You have a lot more experience in IT than I do, but form my basic understanding suggesting that "Merkle Trees" and "Blockchain" are wholly the same thing is misleading. The first decentralised blockchain was created in 2008?

[FrankAbagnale]

Zumbruk said:

I can think of no use for the whole enterprise other than crime.

Here is an article backed on research by Chainalysis about how prevelant criminal transactions are as a total of all transactions.

https://fortune.com/2022/01/06/crypto-crime-all-ti...

"The rate of crypto-related crimes fell from 0.62% of all crypto transactions in 2020 to 0.15% in 2021, according to a report on Thursday by blockchain research firm Chainalysis. The authors said the growth of legitimate cryptocurrency use is “far outpacing the growth of criminal usage” and that “illicit activity’s share of cryptocurrency transaction volume has never been lower."

And an interesting article from Forbes concluding that crime is less prevelant in crypto than fiat.

https://www.forbes.com/sites/haileylennon/2021/01/...

It's an area i'd not looked at much but quite interesting.