Work in progress - Version 1.1
My original article comparing NFT to South Africas Kubus Koning was not well thought out. But the truth is that more and better articles appear saying that NFT's are nothing more than a scam. This is version 1.1.
Photographers, filmmakers, and digital artists are falling over themselves to mint NFTs in a get-rich-quick scheme that will do little beyond transferring wealth from artists to tech billionaires. Why are so many people buying into the idea that something is rare because everyone says it is?
If you’ve yet not minted your first NFT and you’re wondering how it works, here’s a quick summary of the process: you create a wallet, buy some Ethereum, and choose a platform. You then pick one of your digital creations and pay around $70-100 to “mint” this artwork into a Non-Fungible Token. You choose a starting price and wait for the bids to come rolling in. You may even like to build up to a “drop” to create some hype.
And this discussion thread really goes into more detail.
Let's say I'm the owner of the nyan cat NFT (I'm not). Is there anything that prevents someone from duplicating the nyan cat and putting it on another blockchain? If not, does the uniqueness of my nyan cat (which is on Ethereum, I believe), rest on the assumption that one blockchain will be the defacto NFT implementation, and the rest won't be taken seriously?
How important will NFT's be in the near future? Is NFT's not the same as the Kubus koning's rotten milk scheme? Did the world just become a little more crazy?
My answers to these questions are just that, my answers and my opinion. Similarly NFT's are a highly subjective thing. The value of it that is.
I am aware and you should be aware too, that as you continue reading you will notice that I am grappling here. Think, trying to hit a target from a grassy knoll.
NFT's are complete bogus and at the same time it will change our world. Are there any gaps in logic behind this statement?
Who decide which Koi fish is valuable? The thing could be a Koi fish, a broodboom (cycad), a stamp, a baseball card or any other thing that can be collected. Things that are difficult to find or rare has value. How do you create a rarity in the virtual world? And keep track of the thing in a virtual world. This is where it gets tricky with block-chain and tokens.
If you believe my answers here are correct, by all means spread the word (read share on 'social media') and then I will become the next 'Siener van Rensburg'. I can become trendy like the NFT trend. This is crucial to the whole NFT thing. How does this process work whereby Siener van Rensburg or Nostradamus's opinion became valuable? Is viral therefore valuable?
If you are not South African and cannot understand Afrikaans skip this part. Ek wil sê "in die goeie ou Suid Afrika" maar ek kannie want dit sal verkeerd opgeneem word. Wanneer was Suid Afrika nou eintlik laas goed? In ieder geval, lang lang gelede was daar Siener van Rensburg - English Siener in Afrikaans. Die ou het baie voorspellings gehad oor die welvaart van die boere. Die boodskap hier is as jy dinge wil voorspel of uitklaar kies versigtig. Wat is die waarde van die voorspelling? Elke boer bepaal tog sy eie toekoms?
NFT's are a bet on the subjective value of a thing. Any thing! The thing is if I can get my subjective value proposal accepted by many, the value rise. A self-fulfilling prophecy.
What is the value of Nostradamus predictions? Nostradamus wrote a whole book of his visions. Isn't that the same thing. Make a statement publish it in a book so that it can be monetized. He was clever though in predicting the distant future which could not be verified at the time. Back then it was completely irrelevant and devoid of value I think.
Isaac Asmimov wrote 500 plus books and a lot of that is coming true now. If he made an investment against his predictions he could actually profited from it in his old age.
Side note: Are we not in Nostradamius times now? Can it be verified now?
But the master in this game is Elon Musk. Elon Musk doesn't predict, he predicates the stock price. Elon does this in 140 characters on Twitter and it will be true tomorrow. Can he double up, by making NFT's and open the bidding on what he should tweet the next day.
Circling vulture style back to NFT's
Creating a market and keeping a register (A modern day bookie)
Now instead of making predictions in an existing market why not create a market? The Kubus Koning was a guy in South Africa that coerced many South Africans in a scheme to send him some rotten milk in an envelope in exchange for money.
He just kept record, a track of exchanges of rotten milk. Obviously it is a scam but he made enough people believe in it. He had a record of all transactions and the people also kept track of all their profits. Similarly NFT's are stored in traceable block-chains. How is that different than the registered and verified genealogy of a race horse, or a records of all transfers of Messi (Messi Transfer history).
People will believe anything. I remember my best friend telling me how much his parents lost in the Kubus scheme and my dad buying apartments in Hillbrow as an investment when everyone else was fleeing the JHB city centre.
Why can we not create valuable things that will create a market on its own. Why do we have to create a market first and then load it with pumped up value?
Next I will try to follow up on legit NFT use cases.