3 ms·

NFT is like the pet rock idea.

Animats 5y ago
EtherRocks[1] are exactly like the pet rock idea. The real reason NFTs exist is simple. ICOs were shut down by the SEC. The SEC prosecuted a few of the total scam ICOs (the one supposedly backed by diamonds and real estate was the first). Then they sent letters to every ICO issuer in sight: "Please explain why your product is not a security offering which requires SEC registration". Most of the ICOs shut down immediately. Operating from outside the US doesn't help. If you sell into the US (or the EU, or China, or most of the developed world) some regulatory authority wants to have a word with you. Now, part of the idea behind NFTs was to escape SEC and CFTC regulation. Because each one is different, it's not a commodity, by definition. Is it a security? The Howey test applies, as usual. An NFT which represents something that already exists is probably not a security. That's a collectable. However, there are people selling NFTs that represent land in virtual worlds that haven't been built yet. That's a security; you're funding a startup. Also, "fractional NFTs" are almost certainly a security. So the legit use of NFTs is to monetize fame. Which is why basketball team owners and musicians are into this. If you're famous enough to sell merch, you may be able to add an NFT to your product line. People will buy, hold, and cherish your thing. Initial offers of unknown NFTs intended to be resold at a profit are doomed to failure, for the usual pyramid-scheme reasons. As I point out occasionally, go look at Beanie Babies on eBay. Offering prices around $5000, no bids. Then search for completed sales. Prices around $10-$50. NFT prices are like that. Mostly, you're looking at asking prices and wash sales. NFT markets, like Beanie Babies, don't crash. They stall. There's no liquidity. No market. You may have to advertise to find a buyer. Just like the leggings suckers. [1] https://cryptopotato.com/what-are-ether-rocks/ https://cryptopotato.com/what-are-ether-rocks/

EtherRocks[1] are exactly like the pet rock idea. The real reason NFTs exist is simple. ICOs were shut down by the SEC. The SEC prosecuted a few of the total scam ICOs (the one supposedly backed by diamonds and real estate was the first). Then they sent letters to every ICO issuer in sight: "Please explain why your product is not a security offering which requires SEC registration". Most of the ICOs shut down immediately. Operating from outside the US doesn't help. If you sell into the US (or the EU, or China, or most of the developed world) some regulatory authority wants to have a word with you. Now, part of the idea behind NFTs was to escape SEC and CFTC regulation. Because each one is different, it's not a commodity, by definition. Is it a security? The Howey test applies, as usual. An NFT which represents something that already exists is probably not a security. That's a collectable. However, there are people selling NFTs that represent land in virtual worlds that haven't been built yet. That's a security; you're funding a startup. Also, "fractional NFTs" are almost certainly a security. So the legit use of NFTs is to monetize fame. Which is why basketball team owners and musicians are into this. If you're famous enough to sell merch, you may be able to add an NFT to your product line. People will buy, hold, and cherish your thing. Initial offers of unknown NFTs intended to be resold at a profit are doomed to failure, for the usual pyramid-scheme reasons. As I point out occasionally, go look at Beanie Babies on eBay. Offering prices around $5000, no bids. Then search for completed sales. Prices around $10-$50. NFT prices are like that. Mostly, you're looking at asking prices and wash sales. NFT markets, like Beanie Babies, don't crash. They stall. There's no liquidity. No market. You may have to advertise to find a buyer. Just like the leggings suckers. [1] https://cryptopotato.com/what-are-ether-rocks/ https://cryptopotato.com/what-are-ether-rocks/