The Internet of Grift (Non-Fungible Tokens Edition)

“The moment that something has bubbled up to the surface long enough for it to establish real value is the exact moment at which those engineering the system for their profit are planning to exit or have already left. All of the flashy press has likely died down due to the market cap crashing from $1.1 billion to today’s cap of $726 million and $1 million in volume – with a few days this week below $350,000. For context, the top cryptocurrencies have daily volume in the billions or hundreds of millions of dollars. Now the market is flooded with cheaper cards that people can’t recoup value from, with no real market to sell them into. But the guys who got in early got rich, as they always do…

…When you remove the idea that an NFT could forseeably be sold for more money than you paid, what value does it have? What beauty? What does it symbolize? What meaning does it have? And what’s the point of it being unique? It’s not a Rolex, that actually has a quality and heft and look to it, nor is it something you can admire outside of the computer, and even if you don’t care about that, it’s a status symbol of wealth and taste (if you feel that way about expensive watches).”

-Ed Zitron, “The Internet of Grift.” October 1, 2021.

It’s interesting because there are people that make this same argument about cryptocurrencies, “They are a solution looking for a problem.” I’d argue that programmable money does have obvious utility in ways that a non-fungible token of art doesn’t. But, it’s a point where reasonable people can disagree.

5 thoughts on “The Internet of Grift (Non-Fungible Tokens Edition)

  1. You must have seen by now the newest Ponzi: Squid Coin. The laughable aspect is that, just like the fictional TV world it’s based on, there is essentially no way out (despite appearances) once one commits. It’s a doorless room, in effect. And to capitalize on the Hunger Games aspect of the show, an online version of the game with no limit to the number of players (scaled to fit the Internet, which if not infinite at least has boundaries beyond anything our imaginations can conjure) and carries (at present valuation) a roughly $81K fee to level up. Dunno whether that’s each round or just the final one, which unlike like the TV show is expected to lead only to financial annihilation rather than death. Yet the irrational demand for this thing will likely be immense, as the opportunity to participate in a survivalist battle of all-against-all is just too delicious for maniacs and fools to resist. Just wait for the follow-on suicides, entirely predictable. Quite a different (and cruel) scenario from forking over a measly $2 to one of the lotteries for a minuscule, nay, astronomically remote, chance of getting something for nearly nothing.

  2. Case in point for crypto naysayers like me is the reported inactive “investor” in SHIBA INU, a joke altcoin (or shitcoin, depending on your reliance on memes) that parlayed an investment of about $8K into $5.8 billion — a 95 million percent increase over 400 days — but is unable to to redeem much of it because of redemption limits at crypto exchanges. It’s like having $5.8 billion in the bank but only being allowed to withdraw the daily ATM limit;

    1. Most of us don’t have a lot of experience with illiquid markets, probably the closest we get is home ownership, where it is typical to pay 6% of total value of the asset to real estate agents to help find a buyer/seller. Even if you bought into a gentrified neighborhood in a place such as Chicago, you’re likely only looking at a doubling of the price of the asset in 20 years. So, the only thing we can think of with that kind of upside is the lottery or maybe an old movie about inheritance like “Brewster’s Millions”. The good news is that market is less illiquid than I thought. On the exchange I typically use, you could sell 10 billion SHIB right now for 0.0007 or $700,000, based on open orders on the system and 24 hour volume is around $150 million. This strikes me as a solvable problem, particularly if you automated it with a trading bot that sold SHIB for USDT and then bought Bitcoin or whatever. But, yeah, that kind of money coming out of a joke coin definitely points to some tulip-like dynamics going on in the cryptocurrency markets right now.

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