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I’m honestly still in disbelief at how many very smart people fell for the NFT trap. If you’ve spent even a single bull cycle in the crypto community you could

I’m honestly still in disbelief at how many very smart people fell for the NFT trap. If you’ve spent even a single bull cycle in the crypto community you could tell right away NFTs we’re ICO level scams. The mental gymnastics very smart and technical people performed to rationalize paying for a jpeg still makes me question reality. I participate in crypto because I take a calculated risk, and I’m comfortable gambling. People who actually think something like an NFT has any real value still messes with my head. I really can’t grasp how they actually believe this. And yes, I understand technically how NFTs work.

MattGaiser 4y ago
Did they fall for it or did they think they were in on it and applying greater fool theory?
- ryanSrich 4y ago
  If they truly understood the scam they’d know it doesn’t end where they win. So yes, they actually fell for it because they publicly participated in it.
  - oblio 4y ago
    > If they truly understood the scam they’d know it doesn’t end where they win. Why?
    - ryanSrich 4y ago
      Because you don’t make money by selling access to NFTs. You make money by accumulating over hyped projects and then dumping them on bullish retail, knowing full well that in another 12-18 months that same jpeg will be worth nothing in the resale market. Transactions on a few thousand NFTs per day is meaningless (yes volumes that low). So there’s no other option than Shopify actually believing NFTs were a real viable, long term business.
      - MattGaiser 4y ago
        Ah fair. Yes, I think the marketplace builders were truly in on it if they invested a lot of their own money.
  - MattGaiser 4y ago
    Why? The middle people in a pyramid scheme are still winners.
    - ryanbrunner 4y ago
      You can be a winner if you're selling pickaxes during a gold rush, but less so if you're building a pickaxe factory. Shopify's NFT stuff was closer to the latter.
    - WalterSear 4y ago
      NFTs aren't a pyramid scheme. They are a pump-and-dump scheme and involved lots of wash trading.
- rchaud 4y ago
  Exactly. Plenty of smart people signal their acceptance of NFT nonsense because they see the gravy train and want a piece.
Semaphor 4y ago
> And yes, I understand technically how NFTs work. That follows from what you said before. I have yet to see anyone not a scammer who understands them but still thinks they are great. And I say that as someone who’s vastly more into crypto than the extremely anti-crypto HN.
- xtracto 4y ago
  Just the other day I was reading the EIPs for NFTs and other stuff, because at my work we were investigating the idea of using them. I was surprised by what NFTs really are... it is so simple it is stupid. It is just some "standard" Solidity/EVM functions that you have to follow when writing your Smart Contract, and then it's an NFT. I don't know why I thought it was going to be something more complicated. At the end we just made our custom Solidity contract tailored to what we needed. We didn't need the whole NFT functionality (we just needed to store a bunch of hashes in an IFPS file and "imprint" the hash of the file in a Smart Contract Key/Value map. Adding some authentication to operate the smart contract.
kypro 4y ago
Do you think they all fell for it or do you think some were just exploiting it? I agree by the way, it's just I hesitate a bit because a lot of people speaking positively of NFTs were too smart to be mindlessly bullish. I suspect some of them thought it would make for positive press and drive some hype. Like with Elon and Bitcoin/Dogecoin. I'm convinced 90% of the stuff he says and does is to keep Tesla and himself in the news.
- JacobThreeThree 4y ago
  A lot of people were exploiting it, with one of the most egregious examples being Long Island Ice Tea, who apparently have been in trouble with the SEC recently too. https://en.wikipedia.org/wiki/Long_Blockchain_Corp https://en.wikipedia.org/wiki/Long_Blockchain_Corp
- dylan604 4y ago
  >I'm convinced 90% of the stuff he says and does is to keep Tesla and himself in the news. The connotation that no news is bad news is just such a sad statement on the human condition. If you're in the news for wrong reasons with negative connotations && still maintaining an overall positive image, then WTF is wrong with people? When a particular individual continues to be theirself in public like this, each instance makes me think less and less of them. It then starts to reflect on the compan[y|ies] they represent. I used to regard Tesla very highly, but no longer. The more they focus on FSD and stop progressing EV cars more in general, the less I care about Tesla. To the point now, I no longer consider them as a car I'd like to buy. I'm still holding onto liking SpaceX notwithstanding the CEO.
dorkwood 4y ago
I don't think they fell for anything. I think it's more likely that they saw an opportunity to make some money and had a loose enough moral compass to go through with it. I kind of wish I kept note of everyone who took part in the scam. It will be easy to forget once everyone scrubs their profiles clean.
- robin_reala 4y ago
  Shades of Inglourious Basterds.
- ryanSrich 4y ago
  > I don't think they fell for anything. I think it's more likely that they saw an opportunity to make some money and had a loose enough moral compass to go through with it. But even this means they fell for it. There’s very little money in providing access to NFTs in the short term. The money is made by dumping over hyped projects (ex: anything BAYC puts out). What Shopify probably saw were the transaction amounts that OpenSea was doing, and thought they could jump on that business thinking it was any sort of long term model. They “fell” for it because they thought building a branch of their business out for NFTs was a good idea. Anyone could have seen this was a bad idea, and not a great way to make money, and also something that would die and fall apart in a few months.
  - and0 4y ago
    I think Shopify did an ICO (or the NFT equivalent) for their own little cheap blobby avatar art. They sold thousands, starting bids at around 20k. So that was the play.
  - jxf 4y ago
    > There’s very little money in providing access to NFTs in the short term. This isn't strictly true -- marketplaces take a cut of the fees, and there was a lot of ETH sloshing around at one point.
- rob74 4y ago
  I think OP didn't mean the NFT sellers (the ones who saw an opportunity to make some money) but the NFT buyers.
PuppyTailWags 4y ago
Associating falling for scammers with stupidity leaves yourself vulnerable through arrogance. Scamming happens to everyone. The faster we collectively understand the above, the faster we can actually implement in solutions to do what we can to prevent scammers and also lift the shame from people who are victims.
amluto 4y ago
Worse than ICO. An ICO got you something vaguely resembling either equity or a Kickstarter-style prepurchase. Either way, an ICO had some plausible value. (None of that value had anything to do with blockchains, and the whole thing was probably fraudulent to some extent, but at least the potential value existed.) An NFT is just an NFT and has no plausible way to be worth anything.
hn_throwaway_99 4y ago
While I generally share your view of NFTs, I don't think your dismissal of them is really fair. I think what it really boils down to is that, in the "real world", consumers are willing to pay many, many millions of dollars solely based on provenance. That is, one mediocre painting may be worth a couple hundred dollars, but if it can be validated that the painting was actually painted by some famous (dead) grand master, that painting is now suddenly worth millions of dollars, even though nothing about that painting has changed. So, what NFT boosters were arguing was that, if people are willing to pay millions of dollars for provenance in the physical world, why not the digital world? In my belief it's that humans have evolved to view 2 distinct physical object, even if they are exactly the same, as separate - an exact copy of a painting so that it is indistinguishable from the original to the human eye would still be a different painting and not have the provenance of the original. For digital jpegs, we don't view them that way - the same image on two different monitors is "the same image". For physicists out there it's kinda like the difference between fermi dirac statistics and bose einstein statistics. Thus, while I agree that NFTs are all scams, I think we should also be asking the question of why we are willing to assign so much value to provenance in the physical world - that seems crazy to me, too.
- ceejayoz 4y ago
  I think the dismissal is fair. For physical objects, scarcity is an unescapable fact. It would be great if we could right-click on some Michelin starred chef's food and have another copy of it, but we can't. NFTs unnecessarily add artificial scarcity to something that didn't really need it.
  - bparsons 4y ago
    And they didn't even do that. You could still view and reproduce a jpeg without paying for it. It was a classic ponzi scheme.
  - com2kid 4y ago
    Paintings are one of those goods where we are able to make almost exact reproductions that, unless you get up close with a magnifying glass, are visually identical to the original. The scarcity is not in the image itself, it is in a combination of image + canvas.
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ig1 4y ago
Do you think the markets for art prints or sports cards are also scams? Collectable markets behave fundamentally differently from utility good markets so it's often hard to reason about them when you try to apply logic from one type of market to another.
dkrich 4y ago
Because people typically believe any narrative associated with a rising asset price. “This person was early and bullish and has made money so they must understand it.” The ill-informed association of wealth and genius are age-old and in many ways a necessary ingredient for a bubble to form in the first place. The same is true on the way down by the way. People nobody listened to because they were incorrectly bearish in a bull market are suddenly entrusted. People who were bullish are disregarded. People believe any scary narrative associated with declining asset prices. This process plays out in a fraction of the time.
Tiktaalik 4y ago
The conclusion must be that they're not actually very smart people. Likely that a lot of these "smart" ceos are people that were in the right place at the right time that fortunately had hired the right people that drove their success. To them the internet was a golden goose. Maybe NFTs are the next golden goose? They're running on pure hopium trying to cargo cult their way into their next billion and not really understanding anything about how they got there.
- Invictus0 4y ago
  In your opinion, is Warren Buffet not smart because he doesn't know how to check his email?
  - NhanH 4y ago
    Warren Buffet is smart and he would also be telling everyone to not touch any cryptocurrency related project with a ten thousand foot pole
- unicornmama 4y ago
  No one is categorically smart. It’s domain specific. Know your weaknesses, protect yourself from yourself.
philistine 4y ago
Be precise: paying for a link to a JPEG.
time_to_smile 4y ago
I had an acquaintance who spent a week or so learning about ethereum and NFTs, threw together a quick NFT site, generated some images and make nearly 500k in a weekend selling these to suckers. I think he did believe in it, but that's independent of the fact that acting quick on this made him a good chunk of cash with very little effort. Is that sustainable? of course not. It's also not my particular cup of tea as far as making money goes, but I would hardly say he's "not smart" for getting involved when he did and turning a quick buck.
Kiro 4y ago
I like non-fungible tokens. The jpeg stuff made no sense but the composability/interoperability is awesome, making items in one application that anyone can integrate into their own applications without restrictions. One developer can make a game where you can destroy your items from other games without the origin game having any say in it. An open API that no-one controls. Remember CryptoKitties? The first NFT game before it was called NFTs. Someone made a game where you bred dragons, but in order to do so you had to feed them CryptoKitties. That's the type of stuff I like, not the play-to-earn crap.

MattGaiser 4y ago

Did they fall for it or did they think they were in on it and applying greater fool theory?

ryanSrich 4y ago
If they truly understood the scam they’d know it doesn’t end where they win. So yes, they actually fell for it because they publicly participated in it.
- oblio 4y ago
  > If they truly understood the scam they’d know it doesn’t end where they win. Why?
  - ryanSrich 4y ago
    Because you don’t make money by selling access to NFTs. You make money by accumulating over hyped projects and then dumping them on bullish retail, knowing full well that in another 12-18 months that same jpeg will be worth nothing in the resale market. Transactions on a few thousand NFTs per day is meaningless (yes volumes that low). So there’s no other option than Shopify actually believing NFTs were a real viable, long term business.
    - MattGaiser 4y ago
      Ah fair. Yes, I think the marketplace builders were truly in on it if they invested a lot of their own money.
- MattGaiser 4y ago
  Why? The middle people in a pyramid scheme are still winners.
  - ryanbrunner 4y ago
    You can be a winner if you're selling pickaxes during a gold rush, but less so if you're building a pickaxe factory. Shopify's NFT stuff was closer to the latter.
  - WalterSear 4y ago
    NFTs aren't a pyramid scheme. They are a pump-and-dump scheme and involved lots of wash trading.
rchaud 4y ago
Exactly. Plenty of smart people signal their acceptance of NFT nonsense because they see the gravy train and want a piece.

Semaphor 4y ago

> And yes, I understand technically how NFTs work. That follows from what you said before. I have yet to see anyone not a scammer who understands them but still thinks they are great. And I say that as someone who’s vastly more into crypto than the extremely anti-crypto HN.

xtracto 4y ago
Just the other day I was reading the EIPs for NFTs and other stuff, because at my work we were investigating the idea of using them. I was surprised by what NFTs really are... it is so simple it is stupid. It is just some "standard" Solidity/EVM functions that you have to follow when writing your Smart Contract, and then it's an NFT. I don't know why I thought it was going to be something more complicated. At the end we just made our custom Solidity contract tailored to what we needed. We didn't need the whole NFT functionality (we just needed to store a bunch of hashes in an IFPS file and "imprint" the hash of the file in a Smart Contract Key/Value map. Adding some authentication to operate the smart contract.

kypro 4y ago

Do you think they all fell for it or do you think some were just exploiting it? I agree by the way, it's just I hesitate a bit because a lot of people speaking positively of NFTs were too smart to be mindlessly bullish. I suspect some of them thought it would make for positive press and drive some hype. Like with Elon and Bitcoin/Dogecoin. I'm convinced 90% of the stuff he says and does is to keep Tesla and himself in the news.

JacobThreeThree 4y ago
A lot of people were exploiting it, with one of the most egregious examples being Long Island Ice Tea, who apparently have been in trouble with the SEC recently too. https://en.wikipedia.org/wiki/Long_Blockchain_Corp https://en.wikipedia.org/wiki/Long_Blockchain_Corp
dylan604 4y ago
>I'm convinced 90% of the stuff he says and does is to keep Tesla and himself in the news. The connotation that no news is bad news is just such a sad statement on the human condition. If you're in the news for wrong reasons with negative connotations && still maintaining an overall positive image, then WTF is wrong with people? When a particular individual continues to be theirself in public like this, each instance makes me think less and less of them. It then starts to reflect on the compan[y|ies] they represent. I used to regard Tesla very highly, but no longer. The more they focus on FSD and stop progressing EV cars more in general, the less I care about Tesla. To the point now, I no longer consider them as a car I'd like to buy. I'm still holding onto liking SpaceX notwithstanding the CEO.

dorkwood 4y ago

I don't think they fell for anything. I think it's more likely that they saw an opportunity to make some money and had a loose enough moral compass to go through with it. I kind of wish I kept note of everyone who took part in the scam. It will be easy to forget once everyone scrubs their profiles clean.

robin_reala 4y ago
Shades of Inglourious Basterds.
ryanSrich 4y ago
> I don't think they fell for anything. I think it's more likely that they saw an opportunity to make some money and had a loose enough moral compass to go through with it. But even this means they fell for it. There’s very little money in providing access to NFTs in the short term. The money is made by dumping over hyped projects (ex: anything BAYC puts out). What Shopify probably saw were the transaction amounts that OpenSea was doing, and thought they could jump on that business thinking it was any sort of long term model. They “fell” for it because they thought building a branch of their business out for NFTs was a good idea. Anyone could have seen this was a bad idea, and not a great way to make money, and also something that would die and fall apart in a few months.
- and0 4y ago
  I think Shopify did an ICO (or the NFT equivalent) for their own little cheap blobby avatar art. They sold thousands, starting bids at around 20k. So that was the play.
- jxf 4y ago
  > There’s very little money in providing access to NFTs in the short term. This isn't strictly true -- marketplaces take a cut of the fees, and there was a lot of ETH sloshing around at one point.
rob74 4y ago
I think OP didn't mean the NFT sellers (the ones who saw an opportunity to make some money) but the NFT buyers.

PuppyTailWags 4y ago

Associating falling for scammers with stupidity leaves yourself vulnerable through arrogance. Scamming happens to everyone. The faster we collectively understand the above, the faster we can actually implement in solutions to do what we can to prevent scammers and also lift the shame from people who are victims.

amluto 4y ago

Worse than ICO. An ICO got you something vaguely resembling either equity or a Kickstarter-style prepurchase. Either way, an ICO had some plausible value. (None of that value had anything to do with blockchains, and the whole thing was probably fraudulent to some extent, but at least the potential value existed.) An NFT is just an NFT and has no plausible way to be worth anything.

hn_throwaway_99 4y ago

While I generally share your view of NFTs, I don't think your dismissal of them is really fair. I think what it really boils down to is that, in the "real world", consumers are willing to pay many, many millions of dollars solely based on provenance. That is, one mediocre painting may be worth a couple hundred dollars, but if it can be validated that the painting was actually painted by some famous (dead) grand master, that painting is now suddenly worth millions of dollars, even though nothing about that painting has changed. So, what NFT boosters were arguing was that, if people are willing to pay millions of dollars for provenance in the physical world, why not the digital world? In my belief it's that humans have evolved to view 2 distinct physical object, even if they are exactly the same, as separate - an exact copy of a painting so that it is indistinguishable from the original to the human eye would still be a different painting and not have the provenance of the original. For digital jpegs, we don't view them that way - the same image on two different monitors is "the same image". For physicists out there it's kinda like the difference between fermi dirac statistics and bose einstein statistics. Thus, while I agree that NFTs are all scams, I think we should also be asking the question of why we are willing to assign so much value to provenance in the physical world - that seems crazy to me, too.

ceejayoz 4y ago
I think the dismissal is fair. For physical objects, scarcity is an unescapable fact. It would be great if we could right-click on some Michelin starred chef's food and have another copy of it, but we can't. NFTs unnecessarily add artificial scarcity to something that didn't really need it.
- bparsons 4y ago
  And they didn't even do that. You could still view and reproduce a jpeg without paying for it. It was a classic ponzi scheme.
- com2kid 4y ago
  Paintings are one of those goods where we are able to make almost exact reproductions that, unless you get up close with a magnifying glass, are visually identical to the original. The scarcity is not in the image itself, it is in a combination of image + canvas.

deleted 4y ago

[deleted]

deleted 4y ago
[deleted]
- deleted 4y ago
  [deleted]

ig1 4y ago

Do you think the markets for art prints or sports cards are also scams? Collectable markets behave fundamentally differently from utility good markets so it's often hard to reason about them when you try to apply logic from one type of market to another.

dkrich 4y ago

Because people typically believe any narrative associated with a rising asset price. “This person was early and bullish and has made money so they must understand it.” The ill-informed association of wealth and genius are age-old and in many ways a necessary ingredient for a bubble to form in the first place. The same is true on the way down by the way. People nobody listened to because they were incorrectly bearish in a bull market are suddenly entrusted. People who were bullish are disregarded. People believe any scary narrative associated with declining asset prices. This process plays out in a fraction of the time.

Tiktaalik 4y ago

The conclusion must be that they're not actually very smart people. Likely that a lot of these "smart" ceos are people that were in the right place at the right time that fortunately had hired the right people that drove their success. To them the internet was a golden goose. Maybe NFTs are the next golden goose? They're running on pure hopium trying to cargo cult their way into their next billion and not really understanding anything about how they got there.

Invictus0 4y ago
In your opinion, is Warren Buffet not smart because he doesn't know how to check his email?
- NhanH 4y ago
  Warren Buffet is smart and he would also be telling everyone to not touch any cryptocurrency related project with a ten thousand foot pole
unicornmama 4y ago
No one is categorically smart. It’s domain specific. Know your weaknesses, protect yourself from yourself.

philistine 4y ago

Be precise: paying for a link to a JPEG.

time_to_smile 4y ago

I had an acquaintance who spent a week or so learning about ethereum and NFTs, threw together a quick NFT site, generated some images and make nearly 500k in a weekend selling these to suckers. I think he did believe in it, but that's independent of the fact that acting quick on this made him a good chunk of cash with very little effort. Is that sustainable? of course not. It's also not my particular cup of tea as far as making money goes, but I would hardly say he's "not smart" for getting involved when he did and turning a quick buck.

Kiro 4y ago

I like non-fungible tokens. The jpeg stuff made no sense but the composability/interoperability is awesome, making items in one application that anyone can integrate into their own applications without restrictions. One developer can make a game where you can destroy your items from other games without the origin game having any say in it. An open API that no-one controls. Remember CryptoKitties? The first NFT game before it was called NFTs. Someone made a game where you bred dragons, but in order to do so you had to feed them CryptoKitties. That's the type of stuff I like, not the play-to-earn crap.