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Don’t forget the wash trading aspect: Since this occurs on the blockchain, it’s trivially easy for someone to create two wallets and then “sell” an NFT to the

Don’t forget the wash trading aspect: Since this occurs on the blockchain, it’s trivially easy for someone to create two wallets and then “sell” an NFT to themself for whatever amount of money they have. If you have $10K in ETH, you can buy a $1 NFT and then trade it among your own wallets for increasing amounts of ETH up to $10K. Now your $1 NFT is “worth” $10K and you only spent as much money as the gas costs at the time. Use that momentum to flip the NFT to an unsuspecting buyer who sees the value skyrocketing, and you’ve made a huge return by selling nothing at all. Or simply show your friends that you have an expensive NFT as a way to flex. Or talk to a reporter who wants to write a story on how people are getting rich with NFTs. Amazing. Contrast this with something like eBay where the buyer would lose 10-20% on each sham transaction, limiting the profits. With NFTs, the transaction costs (gas) are fixed so the more money you wash trade, the lower percentage you lose. Some NFTs are designed to kick money back to the artist with each transaction, but curiously those aren’t trading at exorbitant prices in most cases. Of course, there’s nothing stopping the artist themself from using this scheme to pump up the price of their own artwork.

capableweb 6y ago
Sure you can do this. But keep in mind that "wash trading" is illegal, and you still need to declare where the money comes from when you want to cash out. Yeah, any asset that can artificially propped up. Cryptocurrencies doesn't make this harder nor easier, they simply make it possible to do without a central authority. We still have laws people need to follow in their countries, and up to government to act against people who break the law. If anything, blockchains makes it easier for local governments to spot things like this, because the centralized exchanges need to corporate, and all the transactions are stored forever. So if you have a IT department with even a small amount of IT knowledge, it'll be easy to setup a system to spot things like this and tie the data to actual individuals via the exchanges.
- sillysaurusx 6y ago
  Illegal or not, it seems to be happening: https://news.ycombinator.com/item?id=26530373 https://news.ycombinator.com/item?id=26530373
  - capableweb 6y ago
    What seems to be happening is that people (including you) are guessing that it is happening. Where is the evidence at? Rest assure, the arm of the law is long and slow working, but eventually people breaking the law (especially in blockchain-land) will feel the effects of it, sooner or later. As I said before, blockchains makes it easier for law enforcement, not harder, unless you're using cryptocurrencies like zcash, but they are not widely used currently. Disclaimer: I'm myself not into NFTs because it mostly seems like hype at this point, I own zero NFTs myself and have no interest in buying. But I also care about accuracy.
    - sillysaurusx 6y ago
      Of course we're guessing what's happening. What's wrong with that? That's pretty much the definition of empiricism. The evidence is the fact that these pixelated faces are being "sold" for a nice car's worth of money every hour.
      - capableweb 6y ago
        Yeah, I don't know, I tend to want to be sure about statements I make about the state of the world, but seemingly not everyone has the same standard. And no, that's no evidence. Just like apartments being sold for millions of dollars is not evidence of money laundering.
- PragmaticPulp 6y ago
  > Yeah, any asset that can artificially propped up. Cryptocurrencies doesn't make this harder nor easier Cryptocurrencies and NFTs absolutely make this easier. If I want to inflate the price of my product on eBay, I have to go through with a lot of expensive eBay transactions to register a lot of fake sales. At 10-20% cost each time (eBay fees + taxes) that gets expensive quickly, and eBay is going to catch on if I'm buying and selling from the same shipping addresses. With crypto, none of that applies. I can create as many crypto wallets as I want from home. I can move funds around for the price of gas. I can buy my own stuff from my own wallets and shuffle the money around through exchanges so that no one can tell. > If anything, blockchains makes it easier for local governments to spot things like this, because the centralized exchanges need to corporate Obviously the scammers aren't going to prefer their local exchanges for criminal activity. They're going to use a foreign exchange or just use a distributed exchange protocol.
  - capableweb 6y ago
    Sure, but none of those things are taking into consideration that there is only a few entry/exit points for fiat currencies, that is needed to actually buy things in the real world. The trick with cryptocurrency (not cryptography) is that everything is always tracked. Creating addresses (not wallets) to spread out value you had in one address? That's tracked, logged and stored forever. Using a distributed exchange protocol? All those transactions are also tracked, logged and stored forever. The only way you can avoid being tracked is by using centralized exchanges, and then you're only protected by the owner/employees of that business. So no, cryptocurrency doesn't change anything here. In fact it makes it easier to track, as I said before. If you think it makes it harder, please look into how the technology you're talking about now actually works.

capableweb 6y ago

Sure you can do this. But keep in mind that "wash trading" is illegal, and you still need to declare where the money comes from when you want to cash out. Yeah, any asset that can artificially propped up. Cryptocurrencies doesn't make this harder nor easier, they simply make it possible to do without a central authority. We still have laws people need to follow in their countries, and up to government to act against people who break the law. If anything, blockchains makes it easier for local governments to spot things like this, because the centralized exchanges need to corporate, and all the transactions are stored forever. So if you have a IT department with even a small amount of IT knowledge, it'll be easy to setup a system to spot things like this and tie the data to actual individuals via the exchanges.

sillysaurusx 6y ago
Illegal or not, it seems to be happening: https://news.ycombinator.com/item?id=26530373 https://news.ycombinator.com/item?id=26530373
- capableweb 6y ago
  What seems to be happening is that people (including you) are guessing that it is happening. Where is the evidence at? Rest assure, the arm of the law is long and slow working, but eventually people breaking the law (especially in blockchain-land) will feel the effects of it, sooner or later. As I said before, blockchains makes it easier for law enforcement, not harder, unless you're using cryptocurrencies like zcash, but they are not widely used currently. Disclaimer: I'm myself not into NFTs because it mostly seems like hype at this point, I own zero NFTs myself and have no interest in buying. But I also care about accuracy.
  - sillysaurusx 6y ago
    Of course we're guessing what's happening. What's wrong with that? That's pretty much the definition of empiricism. The evidence is the fact that these pixelated faces are being "sold" for a nice car's worth of money every hour.
    - capableweb 6y ago
      Yeah, I don't know, I tend to want to be sure about statements I make about the state of the world, but seemingly not everyone has the same standard. And no, that's no evidence. Just like apartments being sold for millions of dollars is not evidence of money laundering.
PragmaticPulp 6y ago
> Yeah, any asset that can artificially propped up. Cryptocurrencies doesn't make this harder nor easier Cryptocurrencies and NFTs absolutely make this easier. If I want to inflate the price of my product on eBay, I have to go through with a lot of expensive eBay transactions to register a lot of fake sales. At 10-20% cost each time (eBay fees + taxes) that gets expensive quickly, and eBay is going to catch on if I'm buying and selling from the same shipping addresses. With crypto, none of that applies. I can create as many crypto wallets as I want from home. I can move funds around for the price of gas. I can buy my own stuff from my own wallets and shuffle the money around through exchanges so that no one can tell. > If anything, blockchains makes it easier for local governments to spot things like this, because the centralized exchanges need to corporate Obviously the scammers aren't going to prefer their local exchanges for criminal activity. They're going to use a foreign exchange or just use a distributed exchange protocol.
- capableweb 6y ago
  Sure, but none of those things are taking into consideration that there is only a few entry/exit points for fiat currencies, that is needed to actually buy things in the real world. The trick with cryptocurrency (not cryptography) is that everything is always tracked. Creating addresses (not wallets) to spread out value you had in one address? That's tracked, logged and stored forever. Using a distributed exchange protocol? All those transactions are also tracked, logged and stored forever. The only way you can avoid being tracked is by using centralized exchanges, and then you're only protected by the owner/employees of that business. So no, cryptocurrency doesn't change anything here. In fact it makes it easier to track, as I said before. If you think it makes it harder, please look into how the technology you're talking about now actually works.