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Twenty percent of a picture of a dog
- akadruid1 5y agohttps://archive.is/dXBD1 https://archive.is/dXBD1
- 0x456 5y agoThis article is about NFTs.
- jscottmiller 5y ago> You don’t own the picture of the dog, you don’t own 20% of the picture of the dog, it is just, like, you come in every day and someone is playing a new weird game and you try to get the high score in today’s game and tomorrow will be a different game. Say what you will about crypto more broadly, but this is a wonderful perspective on these sort of flash-in-the-pan financial manias.
- Applejinx 5y agoThis is finance, writ large. Understanding that is important, especially now. And it's a bad thing because there's serious undesirable consequences to it, but understanding the reality of it is still important. Just because it's a hallucination doesn't mean those in the physical world aren't affected. Crypto just makes it more explicitly a hallucination.
- NovemberWhiskey 5y ago>This is finance, writ large. Please explain; it's not my experience of finance.
- tomp 5y agoIt's funny... I listened to a "crypto podcast" the other day... They were chatting about some new, emerging currencies, and how they try to "incentivise" people to hold/trade/use them (e.g. by providing high, double-, even triple-digit yields), I guess that's the only way to achieve any kind of adoption these days. Literally industrialized and scaled Ponzi.
- jslaby 5y agoYeah, this whole thing is absurd. Using your millions to start a new business? meh
- TrainedMonkey 5y agoThere are two alternatives here: a. This is art, in which case this is maybe ok? b. This is not art and people buy NFTs only with expectation that it will go up... In other words pure speculation. I think majority of the NFTs are b, but people pretend it's a for complex reasons. The rest of NFTs are jokes/memes.
- donmcronald 5y agoc. Money laundering. d. Capital flight.
- snarf21 5y agoe. ponzi scheme (there can't be speculation because there is no scarcity from which to create a true market. It isn't like Babe Ruth's jersey, this is a picture of a tree that Babe Ruth looked at once.)
- Applejinx 5y agoIt's the idea of a picture of a tree that a Hacker News poster used as a metaphor one day. If you can define it as a concept, you can sell crypto 'of it'. Doesn't matter if it was your tree idea metaphor: I can sell crypto of your idea of a tree of a metaphor, if and only if I can get people to do such a silly thing along with me for the purpose of manipulating the IDEA of the idea of a tree of a metaphor, as money. Makes perfect sense that the sillier it is, the more it works.
- qbin 5y agoNFTs might not seem so glamorous in the real world, but in a virtual world in VR they could be so much more, they can be a proof of a tournament win that you could decorate your home with. It could be an exclusive sword/clothing. Since VR puts your in the digital world, it puts you in a world with the item such that you can interact with it. In the real world... you can watch it on a flat screen.
- SV_BubbleTime 5y ago>In a fractionalized NFT you have a slightly richer context: > Owner/securitizer: I bought this unique pointer to an image of a dog for $4 million. > The public: Ahahaha good one, congrats, money well spent. > Owner/securitizer: Also I will sell fractional ownership interests in it for like $225 million. > The public: Ahahaha another good one, that joke is worth $225 million to us, here you go. >It’s two jokes so it’s worth 55 times as much. I don’t know! >Also it doubled the next day? Can someone give me the scenario that this ISN'T some derivation or form of money laundering? Honestly asking, because I just don't see it. It's too ridiculous. Could it really be "just" out of control speculation and "jokes"? It seems to me the money behind these things isn't as "funny" as it would have to be for speculation. These are pretty serious amounts.
- paulpauper 5y agoIts called early investors having tons of cash to burn
- SV_BubbleTime 5y agoI suppose this could be some cunning types betting on a pump and dump. That wouldn't be money laundering but just as scummy. But I'm skeptical there are so many people betting on something so ridiculous with so much money.
- sabellito 5y agoHow would NFTs enable money laundering?
- aaroninsf 5y agoThey are a trivially transferable value store with no overhead, little over site, and no verifiable value; they are merely a vehicle for hard-to-scrutinize, unreported movement of [large amounts of] money.
- drdec 5y agoLet's say you are a criminal with $1M to launder. You create an NFT and sell it to you buddy for $1M. Hopefully your buddy is also a criminal mastermind* that already did some laundering, so it's not inconceivable that s/he has a legit looking $1M to spend. Now your buddy doesn't actually send you the cash, instead you deposit the $1M in ill-gotten goods you had laying around. Now you have a legitimate $1M in income to cover the illegal gains. Don't try this at home. I'm sure there are probably some gotchas in the above scheme. * Actually if you just find a legitimate rich person with low morals, they probably wouldn't mind participating for the usual launderer's fee.
- paulpauper 5y agoA share is a fractional ownership of a company. So what. Fractional ownership of planes and houses already exists.
- gowld 5y agoETH is not fungible to $ in large amounts. People who have a lot of ETH buy weird fake stuff with it because they can't just liquidate it into fiat money to buy real things. If they do, the value of ETH will crash. So instead, they engage in speculative pump and dumps while waiting for a chance to cash out.
- hairofadog 5y agoI only recently discovered Matt Levine's writing, and I love it. He makes complex topics understandable and (to my mind, anyway) has an excellent sense of humor to boot.
- dreyfan 5y agoLarge NFT purchases are between shills [1]. If you ever find yourself thinking "wow I could make some money" then you are the mark. [1] https://en.wikipedia.org/wiki/Three-card_Monte https://en.wikipedia.org/wiki/Three-card_Monte
- sgarman 5y agoI know this isn't a new concept but this is also happening heavily in the retro video game industry as well. https://www.youtube.com/watch?v=rvLFEh7V18A https://www.youtube.com/watch?v=rvLFEh7V18A
- kurthr 5y agoThat is a pretty eye opening video, and it certainly looks like major media are complicit in pumping the retro-videogame market, while fraud (lying about directors rating and selling games, auction shilling by the house & sellers, and previous $1M FTC fines for pump-dump of the auction house owners) is committed by a highly connected group of insiders. I bet they wish they had bought/mined bitcoin!
- pphysch 5y agoThe price I paid for learning this lesson was thousands of RuneScape gold pieces. I am sad for the current generations that have to learn this lesson much more expensively via crypto scams...
- apples_oranges 5y agoIf you feel the urge to buy or sell NFTs I feel bad for you son, I got ninety-nine problems, but this nonsense is none.
- m_ke 5y agoOne of my friends is part of PleasrDAO, dodge NFT is working out really well for him... EDIT: not saying I support it, just that ponzi schemes work for the people on top
- snarf21 5y agoThe first people into a ponzi scheme always do well. Is he going to HODL until retirement? I doubt that will work out so well.
- m_ke 5y agoYeah I agree with you, all of crypto is 100% a ponzi scheme and it's weird seeing him promote this stuff. I was just saying for the people pushing these coins it's still a very profitable venture. They got the dodge NFT for like 4mil and sold off 20% at like a 400mil valuation...
- chrisseaton 5y ago> If you feel the urge to buy or sell NFTs I think it's a sort of performance art. It's also just a fun way to donate to charity in many cases.
- slg 5y agoAm I the only one who sees the interest in NFTs as an indictment of the whole crypo scene? NFTs abandon all the arguments that crypto people have usually used to argue why cryptocurrencies have value. People are dropping all pretext and openly admitting that these things only have value because they are artificially scarce and therefore maybe someone else will pay you more for it in the future. There is no other value. And now that we see that alone is enough to drive up prices, I start to wonder if anyone really believed all those arguments for cryptocurrencies or they were just too scared to admit that this was always all about trying to ride the artificial bubble for as long as possible.
- Applejinx 5y agoI'm pretty sure the end game is either exerting social or even legal pressure to KEEP the value going up, simply because so much money is involved. It's like 'because this is ridiculous, it is therefore obvious that it's only about the money invested in it, not in any sense what it's 'about'. Therefore, the money has to keep getting more valuable. Because money, that's why. If that argument holds, then it is money, full stop. No matter what else it is or isn't. The entire difference between it being a weird speculative prank, and it being money in the weightiest possible sense of the word, is how it's treated by society and any governments that have jurisdiction.
- nradov 5y agoHow would that pressure work exactly? Markets can remain irrational for a long time, but over a sufficiently long period they eventually revert to fundamental value. There is a limited supply of "greater fools" and they don't have infinite cash. Market values for other types of collectibles like ceramic figurines or stuffed animals have dropped significantly in recent years; sometimes there are no buyers at any price.
- Applejinx 5y agoMy hope, personally, is that the pressure would NOT work. Market dynamics are fine in their place, even useful, but nothing about them is inherently free from exploit. Crypto and finance operate in a context that's set by law and custom. We agree 'if your crypto fails, hard luck, you lost money'. If it was beneficial to literally threaten government until they changed the rule to 'if your crypto fails, but you are entity X, Y or Z, then you are to apply to the government and they will make you whole, printing 'money' if necessary'. This would be pitched in the name of 'stability' but it'd be a straight power play. The benefit to X, Y, and Z is obvious. Doesn't matter much what kind of pressure they would impose, only the end result matters. It could be negotiation, blackmail, threat of physical harm: view this pressure as stepping outside the rules of the system to rig the rules of the system, secretly or explicitly. The idea is to legislate that markets can't be irrational, because (if you're X, Y, or Z) markets will be guaranteed to do what you want. No risk. Therefore, rational.
- junon 5y agoThis site is f*cking unusable on mobile. The cookie banner pops up and is half the screen. Then an offer pops up and takes 30% of the screen. Before I can even figure out where the X button is - probably behind the inexplicable "copy link" button - a newsletter subscription modal pops up. Clicking the X wasn't responding. Then the tab froze. https://i.imgur.com/wMEcI93.jpg https://i.imgur.com/wMEcI93.jpg
- ectopod 5y agoAnd if you don't enable javascript you only get two paragraphs of text. Yet the article's complete HTML is hidden in the page as a quoted string in a javascript object. Brilliant!
- teach 5y agoI didn't downvote you, but I suspect others are doing so because your comment goes against one of HN's guidelines: > Please don't complain about website formatting, back-button breakage, and similar annoyances. They're too common to be interesting.
- junon 5y agoYou're right, thanks for pointing it out. Normally don't even bother with these but it was an exceptionally bad instance.
- yellowapple 5y ago> They're too common to be interesting. This alone feels like a good reason why people should vocally object to such annoyances. "They're common and therefore we shouldn't bother talking about them" only lets the problem continue to fester.
- dpbriggs 5y agoFirefox's reader mode makes it readable.
- yellowapple 5y ago
- leftreartop 5y ago>But most of the electricity that you use, most of the time, is free, or at least “free.” This paragraph is absurd. Charging phones and laptops is a few orders of magnitude less energy than keeping your house warm/cool or cooking and storing food.
- jrm4 5y agoNFT's sound royally stupid as is; but I feel like I saw a bit of leaning toward an idea I liked which would be something a bit more "divisible" and maybe fungible? Lol? The idea I'm thinking is something like "shares in a work", or better yet "shares in an artist." Something to essentially say, I like this artists' work and want to support, possibly with the potential for profit. I remember seeing Eminem when he was merely the opener for other artists and was wearing all black and a hat (i.e. somewhat obscuring that he was white) . And I kind of saw it, and offhandedly thought, "he's gonna be big, I wish I could buy stock in him or something."
- recursive 5y agoBut why do you need blockchain-y stuff for that? In that scenario, you have a central trustworthy authority, namely Eminem. You can just buy a share direct from Eminem, who will record that fact in his authoritative database. If you don't trust Eminem, this use case kind of falls apart.
- dboreham 5y agoBecause SEC?
- recursive 5y agoThat may well be a reasonable explanation, but I don't know enough about it to be able to tell.
- jrm4 5y agoYou don't; but also, as I've seen it -- it appears to be difficult for our present creative culture to strip itself of this idea of "it's perfectly reasonable, even the default, that when an artist is big and famous, it makes sense that the actual OWNER of all they do is a company that they may not even like." It's ALL weird, I was just kind of throwing something out there.
- sumedh 5y ago> who will record that fact in his authoritative database. What happens if Eminem loses your record?
- strathmeyer 5y agoSales of fractional shares can be padded by using all the "money" you receive from them to buy more.
- deleted 5y ago[deleted]
- NovemberWhiskey 5y agoMy takeaway from this is that (with the right hook and the right news coverage) it's easy to get a relatively large number of people to contribute a relatively small amount of money to be part of a phenomenon. c.f. https://en.wikipedia.org/wiki/The_Million_Dollar_Homepage https://en.wikipedia.org/wiki/The_Million_Dollar_Homepage
- logifail 5y agoQ: Was there a second (and a third, and a fourth, and an Nth) "Million Dollar Homepage"?
- X6S1x6Okd1st 5y agoI am actually supportive of NFTs although the majority of the traffic (especially now with low cost minting exploding the ETH gas cost on a daily basis) I don't care about. Sales for NFTs > 100k seem absurd to me & fractionalization really breaks it for me. I understand why someone would want to buy an NFT to support an artist and I support that behavior. I understand why someone would want to buy an NFT to sell it for more later and I'm ambivalent about that behavior. I understand why someone would fractionalize an NFT as a scheme to extract more money from suckers, but I don't get why someone would pay $ for owning a small portion of an NFT. It seems like selling spoons labeled as small shovels during a gold rush.
- woko 5y ago> I understand why someone would fractionalize an NFT as a scheme to extract more money from suckers, but I don't get why someone would pay $ for owning a small portion of an NFT. Maybe these "suckers" do not understand what they are doing: 1) they heard that blockchain and NFT is the future, 2) they do not understand why, but they trust these who understand and evangelize, 3) they want to try riding their luck, just in case this miraculously works. Imagine people purchasing lottery tickets, just in case they miraculously win.
- user-the-name 5y ago> I understand why someone would want to buy an NFT to support an artist and I support that behavior. If you want to give money to an artist, then... give money to that artist. Cut out the massive extra fees to crypto middlemen and staggering environmental damage, and just send them some money.
- X6S1x6Okd1st 5y agoI use patreon as well. Do you regularly just send $ to artists you like?
- yellowapple 5y ago> Cut out the massive extra fees to crypto middlemen and staggering environmental damage Neither of these are necessary for NFTs; it's perfectly possible for artists to mint the NFTs themselves (thus cutting out middlemen entirely) using blockchains that don't rely on mining at all (namely, anything built on proof-of-stake).
- dpbriggs 5y agoWho's actually buying fractions of an NFT? It feels like an effective way to pump and dump. Make a large initial "investment" by generating headlines off the price, get some buddies to buy some shares to legitimize it, and then wait for articles like this one to publicize it. Further in the article there's also a bit about ESGs: > If you hire a few extra white men this quarter, that makes it less likely that you will hit your ESG targets, which makes it more likely you’ll pay more interest in the future, which increases the value of your liability (the amount you owe), which reduces your earnings for this quarter. Is this a real thing?
- alex_c 5y agoI used to play Eve Online. I wasn't anyone important, but all the drama, intrigue, constant conflict was fascinating - it was fun just to participate and watch. Just to "be there", so to speak. The biggest ships cost thousands of dollars' worth of in-game currency. Currency aside, they also took massive amounts of effort and coordination from many players to even build them. Trading or buying one was its own metagame, with its own power players and politics. Large battles could easily destroy five figures' worth of USD, and kill leaderboards would track the dollar values for destroyed ships. Ridiculous amounts of money, really, for a space spreadsheet game - but hey, it's all in-game currency so it's not real, right? With some hustling, some scamming, and some influx of real USD you could always get more and keep the drama going. The investment of time and real money was really to participate in the story and events unfolding. Anyway, the only way I can make sense of crypto is it's basically the biggest live-action MMO the world has ever seen (and I'd throw NFTs and GME in that category too). "Welcome to Whose Line Is It Anyway, where everything is made up and the points don't matter!"
- deleted 5y ago[deleted]
- rchaud 5y agoI had not thought of it in this way. Crypto culture exists almost entirely online, so it is reasonable to think that NFT mania is a situation that couldn't have occurred in meatspace . Doubly so because no real money is changing hands.
- deleted 5y ago[deleted]
- m3kw9 5y agoAre these the type of products and instrument wall st would come up with if it weren’t regulated?
- JoeyBananas 5y agoThe dog picture NFT falls into the category of gambling rather than finance. It's a form of gambling on the blockchain where everyone throws their money into a pile for the right to own X% of the pile, and they hope that the size of the cash pile will increase so they can cash out at the optimal time. As with all gambling, the house will always win. The cash pile can lose value without anyone ever cashing out, and the house probably gave themselves a huge percentage before the game started.
- dta5003 5y agoI really like this and how it explained current events re: NFTs. But then I read this paragraph and it's so incorrect that I can't trust the rest of the article: > ... One thing that I like to think about short selling is that it creates new shares of a company, and to some extent those shares compete with the shares issued by the company. If you short a bunch of oil-company stock, someone who wants to buy oil-company stock might buy it from you instead of from the company. In the limit, if enough people embrace the idea of shorting oil stocks, they will crowd out the oil companies; it will be impossible to finance oil drilling because any money you put into oil stocks will go to short sellers, not drilling.
- unmole 5y agoThat seems broadly correct to me. What do you find wrong about it?
- HWR_14 5y agoThe share the short sellers are selling are borrowed from the available share. That is, if I want to short GME, I am borrowing someone else's GME shares to do it (and will repay them in GME shares). So the total demand should also be going up. Imagine this situation. You are super bullish. I am super bearish. So I short 50% of the company directly to you. Okay, $$$ has changed hands, but you have the same number of shares and I have the same number of shares. You just also have a promise that I will deliver more shares to you in the future. I might make or lose a fortune delivering them, but I haven't altered the total amount of shares in the world.
- rednerrus 5y ago20% of a Tulip
- ackbar03 5y agoThe best explanation I've come across so far on the existence and likely persistence of the NFT market is that its effectively a way to move money laundering through artworks online. The current offline art market essentially has the same characteristics (artificial value and scarcity and so on) but continues to exist through a mixture of rich people truly wanting to own the work for whatever reason and money laundering / tax-evasion needs.
- sprkwd 5y agoIs it possible to use NFTs to confirm identity of FOSS projects?