4 ms·

This person clearly has zero understanding of the concept of "Supply and demand". Not only the same thing he says: "In the future, I could buy an eBook for £15

by Adrox 5y ago

This person clearly has zero understanding of the concept of "Supply and demand". Not only the same thing he says: "In the future, I could buy an eBook for £15 and then sell it for £14.99. Given enough competition, this means the price should drop to zero." Could also happen to any physical good: CD's and DVD's, collectible cards. Do they always go down in price? The truth is: it simply does not happen that the value always goes down. There is several edition CD and Vinyls that are very sought by collectors that have gone up in price because they are rare (just like art). Some people could also really want that eBook (with very few people selling it) and offer to buy it for £16, raising the prices again... It also doesn't help "explain" prices in real NFT marketplaces not going to zero, just take a look at www.nbatopshot.com (licensed by both the NBA and the players association) or any other digital collectible...

xyzzy123 5y ago
I think the author's conclusion is true if you allow for several unstated assumptions. Also this conclusion applies only to nfts with potentially infinite supply, NOT "art". The first assumption is that the transaction costs of buying and selling a copy of an album or ebook nft will be zero (including hassle and book-keeping costs). The second assumption is that there is infinite supply, forever, at some ceiling price (e.g. someone will always sell you a "new" beatles album nft for $10). The third is that there are no "sinks", e.g. the copies are never consumed or degraded by loss, incompatibility, releases of better quality, etc. Also, the argument requires the copies are more or less "fungible". But I think yeah, logically, if I can buy a new X at $10 which lasts forever and is infinitely tradeable with zero transaction costs, eventually the secondary market price of X would tend towards zero. Effectively the whole world would be purchasing floating licenses until supply > demand and eventually that condition is permanent. In practice, owners of copyrighted works have a lot of ways to avoid this situation and I expect they will act to license their works in ways that avoid this.

by Adrox 5y ago

xyzzy123 5y ago

I think the author's conclusion is true if you allow for several unstated assumptions. Also this conclusion applies only to nfts with potentially infinite supply, NOT "art". The first assumption is that the transaction costs of buying and selling a copy of an album or ebook nft will be zero (including hassle and book-keeping costs). The second assumption is that there is infinite supply, forever, at some ceiling price (e.g. someone will always sell you a "new" beatles album nft for $10). The third is that there are no "sinks", e.g. the copies are never consumed or degraded by loss, incompatibility, releases of better quality, etc. Also, the argument requires the copies are more or less "fungible". But I think yeah, logically, if I can buy a new X at $10 which lasts forever and is infinitely tradeable with zero transaction costs, eventually the secondary market price of X would tend towards zero. Effectively the whole world would be purchasing floating licenses until supply > demand and eventually that condition is permanent. In practice, owners of copyrighted works have a lot of ways to avoid this situation and I expect they will act to license their works in ways that avoid this.