Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

NFTs Are a Pyramid Scheme and People Are Already Losing Money

fstoppers.com

Post reply on HN
Print view View original

161–170 of 268 posts

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#161

Post by bsenftner »

mrleinad wrote: post #49
delaaxe wrote: post #37

Earlier quoted context omitted.

NFTs are not meant for physical items, they’re digital certificates. People literally burnt a Banksy painting before auctioning its NFT.

So they not only destroyed art, but also wasted energy on creating the NFT, adding to global warming. If there's anything that's not absolute evil in all that, I fail to see it.

I'm sorry, but respectfully, you don't understand the modern art world: the destruction of the physical object and the creation of the NFT was, in this specific instance, the work of art itself. The art world has taken "meta" to extreme dimensions Internet Culture will not realize, perhaps ever.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#162

Post by teraflop »

junon wrote: post #86

The fact not a single person can explain it in simple terms to me is a huge red flag on its own.

The technology isn't complicated, if you already know what a cryptocurrency is. An NFT is a "bespoke" currency that anyone can create, each instance of which has a single indivisible "coin" with an embedded URL that points to some kind of content. This coin can be traded, bought or sold for other kinds of currencies.

The baffling part is that people are willing to pay thousands or even millions of dollars for these things.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#163

Post by capableweb »

PragmaticPulp wrote: post #120
capableweb wrote: post #69

Earlier quoted context omitted.

Sure you can do this. But keep in mind that "wash trading" is illegal, and you still need to declare where the money comes from when you want to cash out. Yeah, any asset that can artificially propped up. Cryptocurrencies doesn't make this harder nor easier, they simply make it possible to do without a central authority. We still have laws people need to follow in their countries, and up to government to act against…

> Yeah, any asset that can artificially propped up. Cryptocurrencies doesn't make this harder nor easier Cryptocurrencies and NFTs absolutely make this easier. If I want to inflate the price of my product on eBay, I have to go through with a lot of expensive eBay transactions to register a lot of fake sales. At 10-20% cost each time (eBay fees + taxes) that gets expensive quickly, and eBay is going to catch on if I'm…

Sure, but none of those things are taking into consideration that there is only a few entry/exit points for fiat currencies, that is needed to actually buy things in the real world.

The trick with cryptocurrency (not cryptography) is that everything is always tracked. Creating addresses (not wallets) to spread out value you had in one address? That's tracked, logged and stored forever. Using a distributed exchange protocol? All those transactions are also tracked, logged and stored forever.

The only way you can avoid being tracked is by using centralized exchanges, and then you're only protected by the owner/employees of that business.

So no, cryptocurrency doesn't change anything here. In fact it makes it easier to track, as I said before. If you think it makes it harder, please look into how the technology you're talking about now actually works.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#164

Post by capableweb »

sillysaurusx wrote: post #84
capableweb wrote: post #80

Earlier quoted context omitted.

What seems to be happening is that people (including you) are guessing that it is happening. Where is the evidence at? Rest assure, the arm of the law is long and slow working, but eventually people breaking the law (especially in blockchain-land) will feel the effects of it, sooner or later. As I said before, blockchains makes it easier for law enforcement, not harder, unless you're using cryptocurrencies like zcash…

Of course we're guessing what's happening. What's wrong with that? That's pretty much the definition of empiricism. The evidence is the fact that these pixelated faces are being "sold" for a nice car's worth of money every hour.

Yeah, I don't know, I tend to want to be sure about statements I make about the state of the world, but seemingly not everyone has the same standard.

And no, that's no evidence. Just like apartments being sold for millions of dollars is not evidence of money laundering.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#165

Post by lottin »

twic wrote: post #25
capableweb wrote: post #13

Earlier quoted context omitted.

If you're thinking that the purpose of NFTs is to link real world items to tokens, you have a very weird view and would do you better to continue reading up on NFTs. In its most basic form, a NFT is simply a cryptocurrency token with the total supply of 1. Nothing more, nothing less. Anyone claiming anything else clearly don't know what they are talking about. The source of truth is the token, as it's only about the…

That belief is incorrect, but extremely common, so it's dubious to describe it as weird. Indeed, the fact that so many people hold that belief is at the root of the whole NFT situation.

Maybe it has to do with the fact that people selling NFTs are falsely claiming that NFTs "represent" physical objects or pieces of art.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#166

Post by capableweb »

SkipperCat wrote: post #103
capableweb wrote: post #66

Earlier quoted context omitted.

> The one thing we can agree is that people who want to own Bitcoin do own Bitcoin and those that don't want to spend $60k on a coin dont. Almost right. Yes, the ones that wanted to own Bitcoin badly enough have Bitcoins by now. The ones that want Bitcoin but not badly enough don't. The ones that don't want to have Bitcoins don't have Bitcoins. The error in your statement is within "those that don't want to spend $60…

The point is if you want to own one, or a fraction of a Bitcoin, you have to trade USD for it. If I want to own an image of a cat with the body of a Pop-Tart flying thru space, I can just download it and have it on my desktop. I don't care if the blockchain says I own it or not. I just want that cat. For the SaaS example you give, you're paying for the back-end service the SaaS company provides. That's real value. If…

> I don't care if the blockchain says I own it or not. I just want that cat.

Of course, neither do I. I'm trying to help you to see the perspective of others though, where "ownership on blockchain" is valuable for them. I myself don't see the value in that, but obviously there is people who do.

And yeah, you're getting real close to getting it, a bit more thinking and I think you got it :)

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#167

Post by koonsolo »

niahmiah wrote: post #3

It's stupid at face value. No pyramid required. You cannot intrinsically link real world items to tokens. The source of truth is the real world, not the token. Add an unlimited supply of unique things, and how could anyone expect to make money from this?

Real world item (person): Honus Wagner

Link item: 1909 T206 baseball card

Value: $2 million

Why don't you start printing these baseball cards and sell them?

Ha, but you say the baseball card is a real physical item, and a NFT is not. Well, an NFT is as real as the movie I watch on YouTube, the song I listen to on Spotify, and the numbers my bank shows.

But now you say the baseball card was part of a game, and so it's value is not from the person but from the collection game itself. Well, a lot of NFT's are also part of a collectible game.

Would love to hear the difference between a "physical" item and a "digital" item, or a "physical link to a physical item" or a "digital link to a physical (or digital) item".

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#168

Post by arebop »

rory wrote: post #138
niahmiah wrote: post #3

It's stupid at face value. No pyramid required. You cannot intrinsically link real world items to tokens. The source of truth is the real world, not the token. Add an unlimited supply of unique things, and how could anyone expect to make money from this?

It does seem really stupid, but I don't see how it's substantively different than (also stupid-seeming) physical collectibles like baseball cards or Bearbricks. The supply of the "special" versions of those two collectibles is also constrained in a totally artificial manner.

You can teleport it around the world and you can prove its authenticity mathematically. But it lacks the romance of tangible artifacts.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#169

Post by Bjartr »

ddeyar wrote: post #107
PragmaticPulp wrote: post #34

Earlier quoted context omitted.

NFTs don’t sell ownership. They sell NFTs. It’s like creating a contract that sells the contract itself. Then maybe you stamp a photo of Michael Jordan on the cover and call it a Michael Jordan contract, even though the contract doesn’t give the buyer any rights to anything Michael Jordan related, except the contract itself. Then you can go out and make more Michael Jordan contracts, because there’s nothing in the fi…

The contract would give the buyer rights to use the content. When I'm the owner of a physical Picasso then I have the right to sell t-shirts with the motive on it. If someone else would do that, I could sue him. The same idea is behind this NFT hype, you buy the right to use the content. As far as I understand it.

I think the picasso analogy is flawed. Works by picasso prior to about 1926 are in the public domain, works afterwards are still under copyright. There's nothing about the sale of an original piece that inherently transfers copyright, it depends on the terms of the transfer.

You can buy original animation cells from Disney movies, but try to resell that image commercially and you're probably gonna have a bad time.

AFAICT, NFTs are orthagonal to copyright. But it gets confusing because at least some sellers of NFTs are purposely trying to mislead, by omission if nothing else.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#170

Post by EMM_386 »

junon wrote: post #86

The fact not a single person can explain it in simple terms to me is a huge red flag on its own.

Beeple was just on a US Sunday morning political talk show "explaining" it.

One of his examples was that you can now go to an electronic dance festival, record it, and sell that as an NFT.

The fact that his NFT was sold to a business partner, this seems like a classic pump and dump. Hyping anything and everything NFT to pump blockchain tokens.

Post reply on HN