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NFT's are a scam.

by adoxyz 4y ago

NFT's are a scam.

deleted 4y ago
[deleted]
throwaway42000 4y ago
Absolutely agree. Nothing more to add than I tell everyone I know who mentions NFTs this so they do not get scammed.
medymed 4y ago
As has been said, NFT stands for Non-Fungible Token Scam. The S is silent.
citrusybread 4y ago
No Fuckin' Thanks!
- djbusby 4y ago
  Nice Financial-literacy Test
akomtu 4y ago
Sure. But bundle them into CDOs, give them the AAA rating, start selling options on them and suddenly that's a legit business. NFTs are missing this thick layer of complexity that obfuscates the nature of the core financial "product".
- elil17 4y ago
  CDOs are groups of bonds. Bonds are debts, so they produce real value in the form of interest. If the debtors stop paying, the CDO can recover value in bankruptcy court. CDOs may misrepresent the risk of the underlying assets, but those assets are still there. An NFT is more akin to a baseball card - it’s value might go up, but that would just be because someone wants to buy it. It’s not producing any income on its own and the owner is no right to recoup the money they paid for it.
  - throwmeariver1 4y ago
    It was a tongue cheek quote from The Big Short… can’t wait for synthetic NFTs.
    - Ekaros 4y ago
      Hmm can I buy derivatives of NFTs? Like credit default swaps?
  - akomtu 4y ago
    Then sell payment plans for NFTs, so every NFT would have a debt associated with it, and a payer. There is a risk the payer will default, but all debts have this risk. Now that we have these NFT bonds, we can bundle them into CDOs...
  - TigeriusKirk 4y ago
    Not surprisingly given the nature of crypto markets in general, NFTs have been financialized to various degrees. You can, for example, put a popular NFT into a pool where individual NFTs are traded back and forth and you receive a slice of the trading fees. See https://nftx.io/ https://nftx.io/
ralusek 4y ago
They're a scam in the way that anything for which its value is mostly a function of its scarcity; the scarcity is still always just a modifier on the demand for it. I would be more inclined to call it a scam if the technology was a failure or the purported scarcity of the asset being sold was being misrepresented. Neither of those are true. Instead, what is being traded are extremely scarce assets for which the demand is unimaginably overestimated. In 10 years will anybody actually care that there's a signed entry in a particular blockchain saying that this asset belongs to you? Probably not. I think if technologies like video games hook into a blockchain and let the owners of an NFT artwork for example use it as a character skin or put it up in their virtual house as a painting, maybe they'll have some value amongst people...but the demand is still probably extremely overrated. I'm guessing the value of something like that would be more on the order of <$100. TL;DR I don't think scam is the right word. I don't think Beanie Babies or IPOs are scams just because people severely overestimated the future demand for the thing that they're buying.
- elil17 4y ago
  Nothing inherently scammy about posting a JPEG and auctioning of some cryptographic link to it. The part that feels scammy is people trying to convince others (often people who are financially illiterate) that NFTs will gain value.
  - eric_cc 4y ago
    NFT bag holders may actually believe what they’re saying in which case they aren’t scamming. I think to scam you must be operating under nefarious intentions.
jug 4y ago
I think their best use I’ve seen yet is for money laundering.
cupofpython 4y ago
There are a lot of prolific scam's in the NFT medium* and not a lot of other current uses for NFT* NFT's themselves are actually a really neat piece of technology imo. I can imagine some uses for them. My imagination hasn't stumbled onto how those uses produce appreciating assets, though.
simpsond 4y ago
Just like baseball cards. That said, there are some interesting use cases where the NFT is paired with off-chain cash flow. See royal.io, where IP rights for music are represented by NFTs and the owner of the NFT receives royalties. I think having a liquid market for that kind of investment is more tractable than a jpeg without real IP rights.
- boopboopbadoop 4y ago
  In regards to the music royalties example, what’s the benefit of using NFTs over whatever systems already exist?
  - simpsond 4y ago
    I would say the NFT market places make it easy to buy/sell (liquid). Since contracts are composable it could be sold to a contract with distribution properties so there can be fractional ownership. Programmable money flows.
- throw_m239339 4y ago
  > Just like baseball cards. You can certainly see baseball cards (or stamps, Magics cards, whatever) as worthless. The difference being that when you buy a baseball card, (yes a reproducible good, so its value is anybody's guess), you're not buying a link to a baseball card powered by Ethereum, you're buying a tangible product at the very least. To me the NFT is so intangible as a product that clearly its market is already set to die, the question is who will be holding the bag and who will make millions.
  - charcircuit 4y ago
    Who cares if an asset is tangible? There's really not that much difference between being able to own and show off a CSGO skin vs a baseball card. For stocks most people prefer owning an intangible version of it. Very few people want an actual certificate saying they own it.
    - 4y ago
babyshake 4y ago
Not exactly. They are indeed non-fungible tokens. But that doesn't mean they are worth anything.
jdrc 4y ago
There might be some use of the mechanism one day, but almost everything that is being 'traded' now is Monopoly properies for people who use monopoly money
eric_cc 4y ago
NFT art pointers are a scam. There are use cases for unique tokens that aren’t scams. However, such use cases have nothing to do with investing or attempting to get rich.
BitwiseFool 4y ago
I believe NFT's primary utility is that of tax avoidance and/or money laundering. It is very similar to how multi-millionaires and billionaires buy art pieces for tens of millions of dollars.
anm89 4y ago
I feel like a scam would imply that an effort to conceal the nature of NFTs is occurring when in reality they are just throwing it out pretty transparently and saying buy it anyway, it's cool and there will be a greater fool, and then people just buy them. That's just stupidity on the part of the buyer IMO, not really a scam.

NFT's are a scam.

by adoxyz 4y ago

NFT's are a scam.

deleted 4y ago

[deleted]

throwaway42000 4y ago

Absolutely agree. Nothing more to add than I tell everyone I know who mentions NFTs this so they do not get scammed.

medymed 4y ago

As has been said, NFT stands for Non-Fungible Token Scam. The S is silent.

citrusybread 4y ago

No Fuckin' Thanks!

djbusby 4y ago
Nice Financial-literacy Test

akomtu 4y ago

Sure. But bundle them into CDOs, give them the AAA rating, start selling options on them and suddenly that's a legit business. NFTs are missing this thick layer of complexity that obfuscates the nature of the core financial "product".

elil17 4y ago
CDOs are groups of bonds. Bonds are debts, so they produce real value in the form of interest. If the debtors stop paying, the CDO can recover value in bankruptcy court. CDOs may misrepresent the risk of the underlying assets, but those assets are still there. An NFT is more akin to a baseball card - it’s value might go up, but that would just be because someone wants to buy it. It’s not producing any income on its own and the owner is no right to recoup the money they paid for it.
- throwmeariver1 4y ago
  It was a tongue cheek quote from The Big Short… can’t wait for synthetic NFTs.
  - Ekaros 4y ago
    Hmm can I buy derivatives of NFTs? Like credit default swaps?
- akomtu 4y ago
  Then sell payment plans for NFTs, so every NFT would have a debt associated with it, and a payer. There is a risk the payer will default, but all debts have this risk. Now that we have these NFT bonds, we can bundle them into CDOs...
- TigeriusKirk 4y ago
  Not surprisingly given the nature of crypto markets in general, NFTs have been financialized to various degrees. You can, for example, put a popular NFT into a pool where individual NFTs are traded back and forth and you receive a slice of the trading fees. See https://nftx.io/ https://nftx.io/

ralusek 4y ago

They're a scam in the way that anything for which its value is mostly a function of its scarcity; the scarcity is still always just a modifier on the demand for it. I would be more inclined to call it a scam if the technology was a failure or the purported scarcity of the asset being sold was being misrepresented. Neither of those are true. Instead, what is being traded are extremely scarce assets for which the demand is unimaginably overestimated. In 10 years will anybody actually care that there's a signed entry in a particular blockchain saying that this asset belongs to you? Probably not. I think if technologies like video games hook into a blockchain and let the owners of an NFT artwork for example use it as a character skin or put it up in their virtual house as a painting, maybe they'll have some value amongst people...but the demand is still probably extremely overrated. I'm guessing the value of something like that would be more on the order of <$100. TL;DR I don't think scam is the right word. I don't think Beanie Babies or IPOs are scams just because people severely overestimated the future demand for the thing that they're buying.

elil17 4y ago
Nothing inherently scammy about posting a JPEG and auctioning of some cryptographic link to it. The part that feels scammy is people trying to convince others (often people who are financially illiterate) that NFTs will gain value.
- eric_cc 4y ago
  NFT bag holders may actually believe what they’re saying in which case they aren’t scamming. I think to scam you must be operating under nefarious intentions.

jug 4y ago

I think their best use I’ve seen yet is for money laundering.

cupofpython 4y ago

There are a lot of prolific scam's in the NFT medium* and not a lot of other current uses for NFT* NFT's themselves are actually a really neat piece of technology imo. I can imagine some uses for them. My imagination hasn't stumbled onto how those uses produce appreciating assets, though.

simpsond 4y ago

Just like baseball cards. That said, there are some interesting use cases where the NFT is paired with off-chain cash flow. See royal.io, where IP rights for music are represented by NFTs and the owner of the NFT receives royalties. I think having a liquid market for that kind of investment is more tractable than a jpeg without real IP rights.

boopboopbadoop 4y ago
In regards to the music royalties example, what’s the benefit of using NFTs over whatever systems already exist?
- simpsond 4y ago
  I would say the NFT market places make it easy to buy/sell (liquid). Since contracts are composable it could be sold to a contract with distribution properties so there can be fractional ownership. Programmable money flows.
throw_m239339 4y ago
> Just like baseball cards. You can certainly see baseball cards (or stamps, Magics cards, whatever) as worthless. The difference being that when you buy a baseball card, (yes a reproducible good, so its value is anybody's guess), you're not buying a link to a baseball card powered by Ethereum, you're buying a tangible product at the very least. To me the NFT is so intangible as a product that clearly its market is already set to die, the question is who will be holding the bag and who will make millions.
- charcircuit 4y ago
  Who cares if an asset is tangible? There's really not that much difference between being able to own and show off a CSGO skin vs a baseball card. For stocks most people prefer owning an intangible version of it. Very few people want an actual certificate saying they own it.
  - 4y ago

babyshake 4y ago

Not exactly. They are indeed non-fungible tokens. But that doesn't mean they are worth anything.

jdrc 4y ago

There might be some use of the mechanism one day, but almost everything that is being 'traded' now is Monopoly properies for people who use monopoly money

eric_cc 4y ago

NFT art pointers are a scam. There are use cases for unique tokens that aren’t scams. However, such use cases have nothing to do with investing or attempting to get rich.

BitwiseFool 4y ago

I believe NFT's primary utility is that of tax avoidance and/or money laundering. It is very similar to how multi-millionaires and billionaires buy art pieces for tens of millions of dollars.

anm89 4y ago

I feel like a scam would imply that an effort to conceal the nature of NFTs is occurring when in reality they are just throwing it out pretty transparently and saying buy it anyway, it's cool and there will be a greater fool, and then people just buy them. That's just stupidity on the part of the buyer IMO, not really a scam.