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This would have been more interesting if the author had traced where all the money being plowed into NFTs is coming from. I suspect that most of it does not co

This would have been more interesting if the author had traced where all the money being plowed into NFTs is coming from. I suspect that most of it does not come from outside of the current ETH (or whatever) ecosystem. I'd bet that most of the volume comes from people who are either treating it as play money, or trying to pump the NFT scam for their own benefit (real or imagined).

PragmaticPulp 5y ago
> This would have been more interesting if the author had traced where all the money being plowed into NFTs is coming from. Not possible to trace where the money is coming from. In fact, someone can "sell" an NFT to themself in a wash trade between two wallets they control. The last trade price of the NFT is now recorded as the transaction price, but it's possible that money never actually changed hands. Want to have an expensive NFT? Just trade it to yourself for as much money as you have in your crypto wallet. You keep the money, you keep the NFT, but now everyone can see that someone "paid" a certain amount for it.
- teej 5y ago
  > In fact, someone can "sell" an NFT to themself in a wash trade between two wallets they control. The last trade price of the NFT is now recorded as the transaction price, but it's possible that money never actually changed hands. I heard rumors this is what happened with the Beeple nft
  - square_usual 5y ago
    Beeple actually got paid, though, and (smartly) cashed it all out into fiat.
    - sneak 5y ago
      ...and then returned it quietly to the person who had loaned it to him temporarily to elevate his brand?
      - vintermann 5y ago
        That's at least riskier to do with "fiat" (not that it would be legal with blockchain money either).
        sneak 5y ago
        Why would it be illegal? Wash sales of NFTs aren’t illegal, as far as I understand. It could be a legitimate marketing procedure.
      - square_usual 5y ago
        Huh, I didn't know that. Geez, this is scammier than I thought, and it was already pretty scammy. E: I looked around a bit and can't find any source for this, so I guess it's just a rumor?
        sneak 5y ago
        Hence the question mark. I imagine most high profile NFT sales are simply wash sales for the publicity.
- ohdannyboy 5y ago
  Can't you do that at normal auctions using (for lack of a better word) a shill bidder?
  - stickfigure 5y ago
    Yes, but the auction house takes a cut and the taxman might notice so it's not without risk. Usually a shill bidder doesn't want to win the actual bid.
  - PragmaticPulp 5y ago
    You could, and it likely happens in some cases. However, an auction house is going to take significant fees as a percentage of the sale price and your shill bidder will want a cut as well. You’re also going to get a large tax bill because you technically had a realized capital gain and the auction house will report it. With NFTs you can do a blockchain transaction for a relatively small fee by yourself from your computer. No taxes owed because you didn’t actually sell anything.
    - vokep 5y ago
      There are taxes as mining fees
      - int_19h 5y ago
        Isn't it basically a flat tax, not dependent on the value "claimed" by the transaction, that is easily drowned for any transaction that would make such a scam worthwhile anyway?
    - TedDoesntTalk 5y ago
      What about gas? ( honest question)
  - somedude895 5y ago
    I thought that‘s what often happened in the traditional art market as well. I know it happens in the retro video game market.
- baby 5y ago
  This is what happens whenever you see a large amount associated with an NFT. I bet that the art market started like that.
  - meheleventyone 5y ago
    Wash trading was a pretty common scam in loads of markets until it was regulated.
  - rvba 5y ago
    Art market started because people appreciate art. In fact rich people even commissioned art for hundreds, if not thousands of years. It can be used for various scams and as an investment, but the whole premise is ridicolous: people pay for art since they like it and want to own it. (And in this NFT scam they dont own anything useful)
    - baby 5y ago
      I disagree. Art was never expensive, and artists are known to make little money until their death. Price of selective art really went through the roof for no reason other than creating a market to make money.
      - deleted 5y ago
        [deleted]
    - jazzyjackson 5y ago
      patrons pay for art because they want the art to be made, owning it is a side effect (indeed much art is loaned right back out to galleries, the possession is not the point, the creation is)
- X6S1x6Okd1st 5y ago
  > Not possible to trace where the money is coming from. Chain analysis is certainly something you can do.
  - Aunche 5y ago
    Can't you just wash your transactions with Monero?
    - X6S1x6Okd1st 5y ago
      I don't know of a great bridge between Ethereum & Monero. You can use TornadoCash on Ethereum & this was used in a recent scandal involving NFTs by the ex-head of product of openseas.
- devoutsalsa 5y ago
  Are there mining fees to pay when you do that? I'm not up to speed on selling NFTs.
  - marvinkennis 5y ago
    Yes, if you trade it on a marketplace such as OpenSea. You could argue that the benefits and upside of wash trading outweigh the cost (about $10 per tx).
chaostheory 5y ago
I suspect that selling NFTs will be popular for anyone who needs money laundered.
dehrmann 5y ago
Youtube suggested a video to me about what's going on in the collectable video game market. The claim was that there's some collusion between a major auction site and a grader, and some of those players were running a pump and dump. Unless you know who the buyers and sellers are or transaction fees are high (like an auction at Christie's), you have no idea if the sales are real, so it's pretty easy to make it look like the asset is appreciating when it's really just manufactured hype.
- vintermann 5y ago
  Yup, Karl Jobst's expose I bet. It was a really good piece of journalism, maybe not something you'd expect from a YouTuber who mostly vlogs about speedrunners.
  - dehrmann 5y ago
    I was trying to find it, but couldn't until you said his name. https://www.youtube.com/watch?v=rvLFEh7V18A https://www.youtube.com/watch?v=rvLFEh7V18A
denton-scratch 5y ago
> ETH (or whatever) ecosystem "Ecosystem" is a word that I believe sprung to life in the 70s, referring to the entire collection of organisms inhabiting a 'place', along with the weather conditions etc. in that place. The term was coined because without it, you need (or rather, I needed) 16 words to express it. So it bothers me when people use the term to refer to collections of stuff that's never been alive: the Java ecosystem, the cryptocurrency ecosystem. These are not "ecosystems" - they're called "systems". See also "epicentre". Upvoted - I appreciate the observation about where the NFT volume comes from.
- int_19h 5y ago
  A metaphorical "ecosystem" is not just any system, but one that is open, and furthermore capable of organic growth and evolution.
- Sargos 5y ago
  "system" denotes something which was designed to work as a whole. Pieces are connected together by a manufacturer to build a system. The operating system is a kernel, UI, tools, etc taken by a creator and put together into a packaged tool that people can use on their computers. "ecosystem" denotes an environment created by some kind of vessel e.g. Earth, the ocean, Ethereum, etc where independent entities can be created, develop, and compete for resources, attention, space, etc provided by that environment. The entities have no real connection to their environment besides just living within it and interacting with the other entities. Ethereum is just as much of an environment as the Earth is. It provides the foundation which the entities live on top of (security), the resources the entity needs to exist (data availability), and the gathering point where complex interactions can happen (smart contracts and end users). Ethereum doesn't build any of the ecosystem, it simply provides the marketplace where life happens.
  - denton-scratch 5y ago
    > "system" denotes something which was designed to work as a whole. I don't agree that systems have to be designed. I mean, it depends on what you mean by "system" - was The Capitalist System designed? Who designed it? The atmosphere is a system, by most standards; it wasn't designed (or if it was, I'll shoot the designer). The human brain has most of the properties I'd expect a "system" to have; but hopefully you share my view that it wasn't designed. But I'm not really bothered what a "system" is. I was just having a rant about words that used to mean something specific, until they were borged by lazy opinion-formers and made into cliches, rendering them useless for their original specific denotation. C.f. "epicenter". (This seems to be a thing I care about more than other people; discount my remarks accordingly)
fortuna86 5y ago
> This would have been more interesting if the author had traced where all the money being plowed into NFTs is coming from. Probably 1/2 money laundering and 1/2 rich people that have too much cash and ran out of ideas.

PragmaticPulp 5y ago

> This would have been more interesting if the author had traced where all the money being plowed into NFTs is coming from. Not possible to trace where the money is coming from. In fact, someone can "sell" an NFT to themself in a wash trade between two wallets they control. The last trade price of the NFT is now recorded as the transaction price, but it's possible that money never actually changed hands. Want to have an expensive NFT? Just trade it to yourself for as much money as you have in your crypto wallet. You keep the money, you keep the NFT, but now everyone can see that someone "paid" a certain amount for it.

teej 5y ago
> In fact, someone can "sell" an NFT to themself in a wash trade between two wallets they control. The last trade price of the NFT is now recorded as the transaction price, but it's possible that money never actually changed hands. I heard rumors this is what happened with the Beeple nft
- square_usual 5y ago
  Beeple actually got paid, though, and (smartly) cashed it all out into fiat.
  - sneak 5y ago
    ...and then returned it quietly to the person who had loaned it to him temporarily to elevate his brand?
    - vintermann 5y ago
      That's at least riskier to do with "fiat" (not that it would be legal with blockchain money either).
      - sneak 5y ago
        Why would it be illegal? Wash sales of NFTs aren’t illegal, as far as I understand. It could be a legitimate marketing procedure.
    - square_usual 5y ago
      Huh, I didn't know that. Geez, this is scammier than I thought, and it was already pretty scammy. E: I looked around a bit and can't find any source for this, so I guess it's just a rumor?
      - sneak 5y ago
        Hence the question mark. I imagine most high profile NFT sales are simply wash sales for the publicity.
ohdannyboy 5y ago
Can't you do that at normal auctions using (for lack of a better word) a shill bidder?
- stickfigure 5y ago
  Yes, but the auction house takes a cut and the taxman might notice so it's not without risk. Usually a shill bidder doesn't want to win the actual bid.
- PragmaticPulp 5y ago
  You could, and it likely happens in some cases. However, an auction house is going to take significant fees as a percentage of the sale price and your shill bidder will want a cut as well. You’re also going to get a large tax bill because you technically had a realized capital gain and the auction house will report it. With NFTs you can do a blockchain transaction for a relatively small fee by yourself from your computer. No taxes owed because you didn’t actually sell anything.
  - vokep 5y ago
    There are taxes as mining fees
    - int_19h 5y ago
      Isn't it basically a flat tax, not dependent on the value "claimed" by the transaction, that is easily drowned for any transaction that would make such a scam worthwhile anyway?
  - TedDoesntTalk 5y ago
    What about gas? ( honest question)
- somedude895 5y ago
  I thought that‘s what often happened in the traditional art market as well. I know it happens in the retro video game market.
baby 5y ago
This is what happens whenever you see a large amount associated with an NFT. I bet that the art market started like that.
- meheleventyone 5y ago
  Wash trading was a pretty common scam in loads of markets until it was regulated.
- rvba 5y ago
  Art market started because people appreciate art. In fact rich people even commissioned art for hundreds, if not thousands of years. It can be used for various scams and as an investment, but the whole premise is ridicolous: people pay for art since they like it and want to own it. (And in this NFT scam they dont own anything useful)
  - baby 5y ago
    I disagree. Art was never expensive, and artists are known to make little money until their death. Price of selective art really went through the roof for no reason other than creating a market to make money.
    - deleted 5y ago
      [deleted]
  - jazzyjackson 5y ago
    patrons pay for art because they want the art to be made, owning it is a side effect (indeed much art is loaned right back out to galleries, the possession is not the point, the creation is)
X6S1x6Okd1st 5y ago
> Not possible to trace where the money is coming from. Chain analysis is certainly something you can do.
- Aunche 5y ago
  Can't you just wash your transactions with Monero?
  - X6S1x6Okd1st 5y ago
    I don't know of a great bridge between Ethereum & Monero. You can use TornadoCash on Ethereum & this was used in a recent scandal involving NFTs by the ex-head of product of openseas.
devoutsalsa 5y ago
Are there mining fees to pay when you do that? I'm not up to speed on selling NFTs.
- marvinkennis 5y ago
  Yes, if you trade it on a marketplace such as OpenSea. You could argue that the benefits and upside of wash trading outweigh the cost (about $10 per tx).

chaostheory 5y ago

I suspect that selling NFTs will be popular for anyone who needs money laundered.

dehrmann 5y ago

Youtube suggested a video to me about what's going on in the collectable video game market. The claim was that there's some collusion between a major auction site and a grader, and some of those players were running a pump and dump. Unless you know who the buyers and sellers are or transaction fees are high (like an auction at Christie's), you have no idea if the sales are real, so it's pretty easy to make it look like the asset is appreciating when it's really just manufactured hype.

vintermann 5y ago
Yup, Karl Jobst's expose I bet. It was a really good piece of journalism, maybe not something you'd expect from a YouTuber who mostly vlogs about speedrunners.
- dehrmann 5y ago
  I was trying to find it, but couldn't until you said his name. https://www.youtube.com/watch?v=rvLFEh7V18A https://www.youtube.com/watch?v=rvLFEh7V18A

denton-scratch 5y ago

> ETH (or whatever) ecosystem "Ecosystem" is a word that I believe sprung to life in the 70s, referring to the entire collection of organisms inhabiting a 'place', along with the weather conditions etc. in that place. The term was coined because without it, you need (or rather, I needed) 16 words to express it. So it bothers me when people use the term to refer to collections of stuff that's never been alive: the Java ecosystem, the cryptocurrency ecosystem. These are not "ecosystems" - they're called "systems". See also "epicentre". Upvoted - I appreciate the observation about where the NFT volume comes from.

int_19h 5y ago
A metaphorical "ecosystem" is not just any system, but one that is open, and furthermore capable of organic growth and evolution.
Sargos 5y ago
"system" denotes something which was designed to work as a whole. Pieces are connected together by a manufacturer to build a system. The operating system is a kernel, UI, tools, etc taken by a creator and put together into a packaged tool that people can use on their computers. "ecosystem" denotes an environment created by some kind of vessel e.g. Earth, the ocean, Ethereum, etc where independent entities can be created, develop, and compete for resources, attention, space, etc provided by that environment. The entities have no real connection to their environment besides just living within it and interacting with the other entities. Ethereum is just as much of an environment as the Earth is. It provides the foundation which the entities live on top of (security), the resources the entity needs to exist (data availability), and the gathering point where complex interactions can happen (smart contracts and end users). Ethereum doesn't build any of the ecosystem, it simply provides the marketplace where life happens.
- denton-scratch 5y ago
  > "system" denotes something which was designed to work as a whole. I don't agree that systems have to be designed. I mean, it depends on what you mean by "system" - was The Capitalist System designed? Who designed it? The atmosphere is a system, by most standards; it wasn't designed (or if it was, I'll shoot the designer). The human brain has most of the properties I'd expect a "system" to have; but hopefully you share my view that it wasn't designed. But I'm not really bothered what a "system" is. I was just having a rant about words that used to mean something specific, until they were borged by lazy opinion-formers and made into cliches, rendering them useless for their original specific denotation. C.f. "epicenter". (This seems to be a thing I care about more than other people; discount my remarks accordingly)

fortuna86 5y ago

> This would have been more interesting if the author had traced where all the money being plowed into NFTs is coming from. Probably 1/2 money laundering and 1/2 rich people that have too much cash and ran out of ideas.