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I largely agree with the author; with that said, > where the only investment opportunity is as an economically corrosive synthetic hedge against all productive

I largely agree with the author; with that said, > where the only investment opportunity is as an economically corrosive synthetic hedge against all productive assets Elementary finance theory (quoting Tobin's Separation Theorem here) argues that portfolios should be comprised of some weight of nearly all if not all of the available securities, as even assets with poor expected returns can be useful elements of a portfolio in order to improve diversification within the portfolio and reduce the portfolio's risk. Dumb money should be hedged against productive assets. Is crypto a productive asset? The author's argument rests on the presumption of no. People who use cryptocurrency to cheapen and hurry the process of transferring capital across borders, compared to wire transfers, would say yes. Leave aside that international wire transfers could be sped up and made cheaper with a centralized authority in theory, the fact remains that in reality the fees are what they are. There's additional early work in using NFTs to deliver real-world benefits, where the issuer of the NFT derives value in outsourcing the tracking of who holds the rights to the real-world benefits to the miners propping up the backing blockchain rather than running their own centralized system. Is that enough value to justify the costs? Maybe. Hard to say. Too early to tell.

pxue 5y ago
Too early to tell is exactly correct. Author pointed to the 13 year time line and pretended the "internet" didn't also take 20 years for it to go from lab to actual wide spread public use. NFTs in theory, are no less productive than fine art. And fine art (or IRL collectibles) are a well accepted form of diversified asset. I'm not bought into the overall hype though. Some toots web3 will change human nature, as if "decentralized" decision making would magically make people less lazy and less selfish. I doubt that. too early to tell is the best we can do right now.
- alex504 5y ago
  Fine art and NFTs are not theoretically the same. With fine art there is only one object, which can only be picked up, looked at, and so forth, in one spot. People go to museums or private collections to go see these pieces because looking at them on a computer or in a print doesn't have nearly the level of detail needed to appreciate them. Seeing a reproduction or a computer image of fine art is like going to a movie theater VS watching a movie on an iPhone SE, or going to the opera VS listening to it on your iPhone. And only one person can own that experience. This is untrue for NFTs. There is basically no value whatsoever to an NFT as far as I can tell VS say an svg of whatever image you downloaded. NFTs don't need to be owned to appreciate them, and "owning" them is basically meaningless insomuch as someone who takes a screenshot has about the same level of ownership as the person who "bought" it.
  - ourmandave 5y ago
    NFTs aren't about ownership. They're for solving repetition problems. "I'm the Greater Fool." "No, I'm the Greater Fool." "No, I am." "No, me. Continues, ad nauseam.
- zepto 5y ago
  NFTs are not equivalent to fine art. They are equivalent to receipts documenting payments for a piece of fine art that is permanently hanging in a public gallery for anyone to see. In the case of an important work of art, it is likely that some of these receipts will be of historical interest. The rest are just lottery tickets that didn’t win.
- mattwilsonn888 5y ago
  No need to limit your analogies. NFT's are digital and their use will be of a digital nature. Anyone who has participated in a virtual item marketplace can see clearly what NFT's are good for, even if that's not quite what most are yet. The primary issue with today's NFT's are that most lack a platform - a place to show them off like in game, or in (trigger warning for buzzword-phobics) a meta-verse style environment.
alpineidyll3 5y ago
The US currently allows several forms of private currency: -airline miles -giftcards -the institution which controls the us money supply (the fed) is a private corporation. The US also tolerates several giant MLMs several of which are on major stock indices (Herbalife, Amway) There is a huge difference between the positive freedom to not buy crypto and the negative freedom to staunch the economic activity of others. Is crypto purchased for productive reasons? Largely no. Are there productive uses like bankless wire Xfers? Yes! Is it worse than MLMs, mileage programs or gambling? No On the scale of US fiscal horrors it doesn't even touch debacles like healthcare.
- yunohn 5y ago
  > Is it worse than MLMs, mileage programs or gambling? No Gambling is heavily regulated in most countries. MLMs are barely legal, and subject to rule of law. Mileage programs are actual debts and mentioned in financial reports, as we saw during COVID. Cryptocurrencies on the other hand, are unregulated mini-Ponzi schemes - while stablecoin and exchanges have often been found to be insolvent.
  - alpineidyll3 5y ago
    There are casinos in every major place I've lived. (La, Austin, Chicago) which are negative sum games (not zero like crypto) Mileage: https://youtu.be/ggUduBmvQ_4 https://youtu.be/ggUduBmvQ_4 There are, absolutely, crypto Ponzi schemes. (And stablecoins are largely such things) However there are also valid uses of crypto/Defi. I've used them myself to send funds easily. They are enabling truly symmetrically fair exchanges etc. If you don't like crypto, don't buy it, don't mine it. Following eth 2.0 the energy usage will be minimal and it won't be harming you. Preserving positive freedoms generally and avoiding negative freedoms (constraints on others) is a good thing imo.
- vanusa 5y ago
  This all sounds like "It's not as bad as tobacco or heroin, right? So why not make it part of a nutritious breakfast?"

pxue 5y ago

Too early to tell is exactly correct. Author pointed to the 13 year time line and pretended the "internet" didn't also take 20 years for it to go from lab to actual wide spread public use. NFTs in theory, are no less productive than fine art. And fine art (or IRL collectibles) are a well accepted form of diversified asset. I'm not bought into the overall hype though. Some toots web3 will change human nature, as if "decentralized" decision making would magically make people less lazy and less selfish. I doubt that. too early to tell is the best we can do right now.

alex504 5y ago
Fine art and NFTs are not theoretically the same. With fine art there is only one object, which can only be picked up, looked at, and so forth, in one spot. People go to museums or private collections to go see these pieces because looking at them on a computer or in a print doesn't have nearly the level of detail needed to appreciate them. Seeing a reproduction or a computer image of fine art is like going to a movie theater VS watching a movie on an iPhone SE, or going to the opera VS listening to it on your iPhone. And only one person can own that experience. This is untrue for NFTs. There is basically no value whatsoever to an NFT as far as I can tell VS say an svg of whatever image you downloaded. NFTs don't need to be owned to appreciate them, and "owning" them is basically meaningless insomuch as someone who takes a screenshot has about the same level of ownership as the person who "bought" it.
- ourmandave 5y ago
  NFTs aren't about ownership. They're for solving repetition problems. "I'm the Greater Fool." "No, I'm the Greater Fool." "No, I am." "No, me. Continues, ad nauseam.
zepto 5y ago
NFTs are not equivalent to fine art. They are equivalent to receipts documenting payments for a piece of fine art that is permanently hanging in a public gallery for anyone to see. In the case of an important work of art, it is likely that some of these receipts will be of historical interest. The rest are just lottery tickets that didn’t win.
mattwilsonn888 5y ago
No need to limit your analogies. NFT's are digital and their use will be of a digital nature. Anyone who has participated in a virtual item marketplace can see clearly what NFT's are good for, even if that's not quite what most are yet. The primary issue with today's NFT's are that most lack a platform - a place to show them off like in game, or in (trigger warning for buzzword-phobics) a meta-verse style environment.

alpineidyll3 5y ago

The US currently allows several forms of private currency: -airline miles -giftcards -the institution which controls the us money supply (the fed) is a private corporation. The US also tolerates several giant MLMs several of which are on major stock indices (Herbalife, Amway) There is a huge difference between the positive freedom to not buy crypto and the negative freedom to staunch the economic activity of others. Is crypto purchased for productive reasons? Largely no. Are there productive uses like bankless wire Xfers? Yes! Is it worse than MLMs, mileage programs or gambling? No On the scale of US fiscal horrors it doesn't even touch debacles like healthcare.

yunohn 5y ago
> Is it worse than MLMs, mileage programs or gambling? No Gambling is heavily regulated in most countries. MLMs are barely legal, and subject to rule of law. Mileage programs are actual debts and mentioned in financial reports, as we saw during COVID. Cryptocurrencies on the other hand, are unregulated mini-Ponzi schemes - while stablecoin and exchanges have often been found to be insolvent.
- alpineidyll3 5y ago
  There are casinos in every major place I've lived. (La, Austin, Chicago) which are negative sum games (not zero like crypto) Mileage: https://youtu.be/ggUduBmvQ_4 https://youtu.be/ggUduBmvQ_4 There are, absolutely, crypto Ponzi schemes. (And stablecoins are largely such things) However there are also valid uses of crypto/Defi. I've used them myself to send funds easily. They are enabling truly symmetrically fair exchanges etc. If you don't like crypto, don't buy it, don't mine it. Following eth 2.0 the energy usage will be minimal and it won't be harming you. Preserving positive freedoms generally and avoiding negative freedoms (constraints on others) is a good thing imo.
vanusa 5y ago
This all sounds like "It's not as bad as tobacco or heroin, right? So why not make it part of a nutritious breakfast?"