Non-fungible tokens (NFTs): anyone investing in those?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
nisiprius
Advisory Board
Posts: 43362
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by nisiprius »

Gadget wrote: Fri Mar 19, 2021 7:41 pm...It appears you can quickly turn around and sell them, but I wonder how many people actually are. Likely some of the really popular and "first of a kind" NFTs are resold, but surely not most?

NFTs are truly our generation's version of the tulip bubble if people are just buying NFTs and reselling them for more money consistently...
And as to whether they can be sold, they certainly are being offered for sale:
Image

I believe the crunch will come when the NFT bubble stops inflating rapidly and people who have bought NFTs for whatever they consider serious money try to sell them. And that's when "non-fungibility" will really start to bite, because what matters will not be "the market price of NFTs" but "what particular person is interested in buying this particular NBA Top Shot?"

The number of people who want to buy "a litecoin" is probably a lot larger than the number that want to buy "Gordon Hayward Jump Shot Dec. 27, 2020."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

nisiprius wrote: Fri Mar 19, 2021 8:07 pm
Gadget wrote: Fri Mar 19, 2021 7:41 pm...It appears you can quickly turn around and sell them, but I wonder how many people actually are. Likely some of the really popular and "first of a kind" NFTs are resold, but surely not most?

NFTs are truly our generation's version of the tulip bubble if people are just buying NFTs and reselling them for more money consistently...
And as to whether they can be sold, they certainly are being offered for sale:
Image

I believe the crunch will come when the NFT bubble stops inflating rapidly and people who have bought NFTs for whatever they consider serious money try to sell them. And that's when "non-fungibility" will really start to bite, because what matters will not be "the market price of NFTs" but "what particular person is interested in buying this particular NBA Top Shot?"

The number of people who want to buy "a litecoin" is probably a lot larger than the number that want to buy "Gordon Hayward Jump Shot Dec. 27, 2020."
They definitely sell, at least for cards that are relatively high in number will sell pretty quickly if you go a little bit lower than the lowest ask. For the upper end stuff, it's not quite as liquid. You can actually see all sales here:

https://www.cryptoslam.io/nba-top-shot/sales

Usually most stuff less than $2k or so is fairly liquid I think and probably sells fairly close to lowest ask. There are people who actually set up bots to snipe cards when you set them too low relative to the lowest ask. But yes, for the really high end things, or if you are selling something like a #1 serial where you want a premium over the floor price, it is harder to gauge what the true value is.
jpmorganfunds wrote: Fri Mar 19, 2021 7:38 pm
Gadget wrote: Fri Mar 19, 2021 7:27 pm I'm confused. Are the same NFTs being sold and resold like crypto/stocks?

I was under the impression they were just being auctioned and bought once or so and held as a collectible. It is truly madness if they are just repeatedly bought and sold for the same NFTs.
You cannot buy NFTs with US dollars. You can only buy them with the crypto they were created with. So you are buying a fictional product using fictional money. That's where the true madness is.
Top shot and Nifty Gateway runs mostly in USD, but yes for other places USD is harder to use and it is largely (though not completely) dominated by Ether.
drk
Posts: 2320
Joined: Mon Jul 24, 2017 10:33 pm
Location: Overlooking Elliott Bay

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by drk »

nisiprius wrote: Fri Mar 19, 2021 8:07 pm And that's when "non-fungibility" will really start to bite, because what matters will not be "the market price of NFTs" but "what particular person is interested in buying this particular NBA Top Shot?"
In fairness, when has illiquidity ever caused problems in the past? :twisted:
User avatar
nisiprius
Advisory Board
Posts: 43362
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by nisiprius »

decapod10 wrote: Fri Mar 19, 2021 8:46 pm...They definitely sell, at least for cards that are relatively high in number will sell pretty quickly if you go a little bit lower than the lowest ask...
Do you own any? If so, if you wouldn't mind: what is your personal motivation for buying them?

a) To make money... and you have confidence that even if it is a bubble, it is at a stage where your instincts and timing are good enough to insure that you will be one of the people who ends up ahead?

b) Pride of having your name displayed on the NBA Top Shot website, as the owner of a well-curated collection of wonderful, rare "moments?"

If not, do you have any insight as to the motivations of the people who have bought them?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

nisiprius wrote: Sat Mar 20, 2021 6:43 am
decapod10 wrote: Fri Mar 19, 2021 8:46 pm...They definitely sell, at least for cards that are relatively high in number will sell pretty quickly if you go a little bit lower than the lowest ask...
Do you own any? If so, if you wouldn't mind: what is your personal motivation for buying them?

a) To make money... and you have confidence that even if it is a bubble, it is at a stage where your instincts and timing are good enough to insure that you will be one of the people who ends up ahead?

b) Pride of having your name displayed on the NBA Top Shot website, as the owner of a well-curated collection of wonderful, rare "moments?"

If not, do you have any insight as to the motivations of the people who have bought them?
That's a good question. I think there is some combination of everything, and the motiviations of "collecting" and "hoping to make money" are very intertwined I think. For me personally, I am a bit of a physical card collector too (I collect Magic the Gathering cards). I like MTG cards for what they are, and I don't buy them in order to make money or sell necessarily. On the other hand, if I thought that they were worthless, I probably wouldn't collect them either. Collectibles need both aspects for most people. Part of owning a collectible is about the item itself, part of owning a collectible is that feeling that you own something valuable. The fact that other people are willing to pay me money for that collectible is a more tangible way of knowing that I have something that people want, whether or not I actually intend to sell it. I own a few valuable MTG cards and I like looking up the price and seeing the value go up. On the other hand, I really have no intention of ever selling some of them (though willing to sell others).

For NFTs, I think it is largely the same. It's some combination of
1) liking the art/collectible
2) hoping that they will make you money/increase in value
3) showing off to people that you have something rare/valuable - what we call "flexing" your rare items on the interwebz

For NFTs specifically over physical collectibles, I think #3 becomes particularly relevant because of the dominance of online presence/social media. I think like 3 people have ever seen my expensive MTG cards, but thousand/millions could see my cryptopunk (well not me specifically, but someone who cares about that kind of thing). You can see more and more people bragging about their Top Shot collections on Twitter, or changing their Avatar on the twitter account to a cryptopunk. Well, couldn't someone just copy and paste any random picture of a cryptopunk that they don't own? Yes, they could, but for someone who cares about their online reputation or clout, this would be suicide. It is relatively easy to prove who owns that cryptopunk. This sounds ridiculous that people care about "online clout", and it is ridiculous to a large extent, but there doesn't seem to be any indication that this will disappear. It's much easier to fake going on fancy vacations or pretend owning a Ferrari than owning a "fake" cryptopunk.

The trick is that you really want to get into NFTs that are mostly #1 (and by extension #3) than #2. There are certainly tons of projects that are deemed "hot potatoes" by the NFT community. They buy them purely to try to pawn them off on someone else for a higher price than they bought them. People buy them for cheap, hype them up massively and try to dump them off on other people for gain. Or "cash grabs", which are low effort NFTs from Lindsey Lohan or whatever just trying to make a quick buck. If you are a collector, you probably want to try to avoid things like this.

Other projects are seen as more "legit", where people are buying more because they like the project rather than trying to flip them for money. The general view is Cryptopunks would fall in this category. Artists like Beeple, Hacaktao, Fewocious, Mad Dog Jones, etc. who tend to have more "street cred" in the cryptoart world.

Of course, the people/community can end up being wrong on projects, and people will have differing opinions. Some "cash grabs" end up becoming "good". Some "legit" projects end up doing poorly. And of course, there is a non-zero chance that the entire NFT industry could go down in flames. So it's extremely high risk speculation, and I think people are thinking about jumping in should have alternative reasons for doing so. Like if they genuinely enjoy the NFTs, or enjoy learning about/navigating the Ethereum ecosystem, etc.

I hope that makes sense, feel free to ask if you need any clarifications

Edit to add: Another thing I thought of is that people tend to cluster around certain NFT projects, and if you own one then you gain entrance into their community. Again using Cryptopunks for an example, people who own cryptopunks tend to lend more credence to what other cryptopunk owners are saying (or even non-cryptopunk owners tend to value cryptopunk owner input). Sometimes people run projects only for Cryptopunk owners. On the Discord chat room, if you own a cryptopunk, your name turns green and you become a "green name", which tends to hold some status with it. Owning one is almost like buying a membership to a country club or a fraternity. There are not many projects that have this elite status, but as of today, cryptopunks are one of them.
bberris
Posts: 1682
Joined: Sun Feb 20, 2011 9:44 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by bberris »

Since these are the most vaporous of vapor, I have a feeling that at least some of these transactions are shams or shills.
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

bberris wrote: Sun Mar 21, 2021 1:39 pm Since these are the most vaporous of vapor, I have a feeling that at least some of these transactions are shams or shills.
Yes for sure, I have seen some pretty provable wash trades. Though this happens on eBay as well.

On a side note, there is another Beeple piece on auction at Nifty Gateway. Interestingly, Cathie Wood (of ARK) allegedly has placed some bids on the piece. Some people on Twitter claim that is indeed her, but I cannot verify this personally.
SlowMovingInvestor
Posts: 2735
Joined: Sun Sep 11, 2016 11:27 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SlowMovingInvestor »

decapod10 wrote: Sun Mar 21, 2021 1:55 pm
On a side note, there is another Beeple piece on auction at Nifty Gateway. Interestingly, Cathie Wood (of ARK) allegedly has placed some bids on the piece. Some people on Twitter claim that is indeed her, but I cannot verify this personally.
For her personal account or for one of the ARK ETFs ? [ If they're allowed to invest in such items]

While I don't follow Ebay closely, I can sometimes see what look like out of whack prices for mid range comics (< $300). At local cons, you could often see the same comics priced much lower (in the same grade and slabbed).

But I think there may be less incentive for manipulation in comics than in NFTs, because the comic book collectible market has a long history, it doesn't need legitimization. And people aren't paying for it with money that seems equally transient, like crypto money.
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

SlowMovingInvestor wrote: Sun Mar 21, 2021 6:10 pm
decapod10 wrote: Sun Mar 21, 2021 1:55 pm
On a side note, there is another Beeple piece on auction at Nifty Gateway. Interestingly, Cathie Wood (of ARK) allegedly has placed some bids on the piece. Some people on Twitter claim that is indeed her, but I cannot verify this personally.
For her personal account or for one of the ARK ETFs ? [ If they're allowed to invest in such items]

While I don't follow Ebay closely, I can sometimes see what look like out of whack prices for mid range comics (< $300). At local cons, you could often see the same comics priced much lower (in the same grade and slabbed).

But I think there may be less incentive for manipulation in comics than in NFTs, because the comic book collectible market has a long history, it doesn't need legitimization. And people aren't paying for it with money that seems equally transient, like crypto money.
Her personal collection, not for a fund. Again, I have not confirmed this. There is a user with her name bidding, and people on Twitter have claimed it is her. She also has voiced support for NFTs earlier this month. She currently massively outbid though, so I don't know if she was ever seriously in the running (though still a day left).

Link to auction which currently stands at $1.55M

https://niftygateway.com/itemdetail/pri ... 9bb4d1e0/7

You could be right about the wash trading, but I'm not sure if I would call Ether transient at this point in time, since it is liquid enough where you can convert to cash without too much difficulty. And buying something with Ether has the same tax consequences as selling it to USD, so it for all intents and purposes is no longer Ether when you buy an NFT.
Silence Dogood
Posts: 1469
Joined: Tue Feb 01, 2011 9:22 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by Silence Dogood »

SlowMovingInvestor wrote: Sat Mar 13, 2021 7:30 pm Well, if virtual land in Oceania can be worth big $, no reason NFTs tied to Florida swampland or towers in Paris or bridges in Brooklyn can't be worth $.
I guess you're right. :D
bberris
Posts: 1682
Joined: Sun Feb 20, 2011 9:44 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by bberris »

I'm mystified. What am I buying here? I can already enjoy the profundity of Dorsey's tweet, especially the way he left out the "e" in "twittr" as if my teenage nephew had done it. It's free to read and enjoyable by everyone. The owner can't stop my joy at reading this again and again. Same with the greatest moments in the NBA; free to watch on Youtube. Buying the NFT does not give you a copyright.
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

bberris wrote: Tue Mar 23, 2021 6:58 am I'm mystified. What am I buying here? I can already enjoy the profundity of Dorsey's tweet, especially the way he left out the "e" in "twittr" as if my teenage nephew had done it. It's free to read and enjoyable by everyone. The owner can't stop my joy at reading this again and again. Same with the greatest moments in the NBA; free to watch on Youtube. Buying the NFT does not give you a copyright.
Yeah, it takes a certain mindset to find value in something like an NFT which doesn't completely make sense (though I am degenerate enough to understand, lol). Nevertheless people are buying them, but it's hard to say how long that will last.

If you feel like the NFT must have a specific utility to be valuable, then it is unlikely you will ever see any value in them (with maybe the exception of in-game NFTs). Probably the only true utility of an expensive NFT is showing off to other people, and again maybe a sort of community effect.

Outside of that, if you don't really see value in the "ownership" aspect of NFTs which is admittedly somewhat tenuous, then it's probably not something worth exploring further.
WhyNotUs
Posts: 1945
Joined: Sun Apr 14, 2013 11:38 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by WhyNotUs »

decapod10 wrote: Tue Mar 23, 2021 2:24 pm
If you feel like the NFT must have a specific utility to be valuable, then it is unlikely you will ever see any value in them (with maybe the exception of in-game NFTs). Probably the only true utility of an expensive NFT is showing off to other people, and again maybe a sort of community effect.
The "showing off" value of a certificate of authenticity for an image that I can use as wallpaper on my phone would be very low to negative in my circle, YMMV. Maybe at a Silicon Valley Men's Group it would be higher?
I own the next hot stock- VTSAX
bberris
Posts: 1682
Joined: Sun Feb 20, 2011 9:44 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by bberris »

Yes I can see the conspicuous consumption aspect. I think I could find a way to throw money away that would make a bigger splash.
SlowMovingInvestor
Posts: 2735
Joined: Sun Sep 11, 2016 11:27 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SlowMovingInvestor »

Silence Dogood wrote: Mon Mar 22, 2021 11:28 am
SlowMovingInvestor wrote: Sat Mar 13, 2021 7:30 pm Well, if virtual land in Oceania can be worth big $, no reason NFTs tied to Florida swampland or towers in Paris or bridges in Brooklyn can't be worth $.
I guess you're right. :D
The Holy Grail of NFT's !
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
SlowMovingInvestor
Posts: 2735
Joined: Sun Sep 11, 2016 11:27 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SlowMovingInvestor »

I'm not a hard core collector, but one aspect of collecting has always seemed to me the ability to come across some hidden gems -- say at an estate sale, a flea market, a store shutdown (unfortunately), a local expo etc. Admittedly that's probably not so easy these days when everyone is convinced that their early 90s copy of X-Men #1 (which sold 7M copies) is worth megabucks.

Or for some items such as furniture, art or books, establishing provenance or checking condition.

I don't think that exists with NFTs because their condition doesn't really vary, provenance is generally not an issue (indeed, that's the point). Is there any thrill of collecting then other than to show off your wealth ?
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

WhyNotUs wrote: Tue Mar 23, 2021 2:39 pm
decapod10 wrote: Tue Mar 23, 2021 2:24 pm
If you feel like the NFT must have a specific utility to be valuable, then it is unlikely you will ever see any value in them (with maybe the exception of in-game NFTs). Probably the only true utility of an expensive NFT is showing off to other people, and again maybe a sort of community effect.
The "showing off" value of a certificate of authenticity for an image that I can use as wallpaper on my phone would be very low to negative in my circle, YMMV. Maybe at a Silicon Valley Men's Group it would be higher?
Yes, currently the main groups that care are very heavily tech/crypto based and also the sports community actually (probably due to exposure from Top Shot). Specifically has had relatively high uptake in Fantasy Football / DFS circles . For example, for people who are familiar the DFS world, Peter Jennings (CSURAM88) is a well known person in the circle. He is quite involved in NFTs. His Twitter avatar is currently a cryptopunk.
It's possible they will not care a year from now, also possible more groups will care. social media influencers/YouTubers, etc would be the most likely next group adoption. For example, Logan Paul owns a few cryptopunks.
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

SlowMovingInvestor wrote: Tue Mar 23, 2021 2:59 pm I'm not a hard core collector, but one aspect of collecting has always seemed to me the ability to come across some hidden gems -- say at an estate sale, a flea market, a store shutdown (unfortunately), a local expo etc. Admittedly that's probably not so easy these days when everyone is convinced that their early 90s copy of X-Men #1 (which sold 7M copies) is worth megabucks.

Or for some items such as furniture, art or books, establishing provenance or checking condition.

I don't think that exists with NFTs because their condition doesn't really vary, provenance is generally not an issue (indeed, that's the point). Is there any thrill of collecting then other than to show off your wealth ?
I don't really consider thrill of collecting a true utility, but if so then yes people who collect NFTs have that too. FWIW I've never found any desire to go hunting for Magic the Gathering cards at garage sales. I will admit that I personally would rather have a physical collectible than an NFT, but Im only one person.
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

Another interesting perspective on the utility of NFTs. I don't know enough about the art world to say whether this is a good argument or not, but I thought it was an interesting thought.


Image


Can't get image to work so:

"Like the best works of art, and the best crypto projects, Cryptopunks are significant for many
reasons and for different reasons to different people. They are simultaneously Ethereum's
'digital gold', stand alone works of art, a fun and challenging speculative game, but I think most
significantly they are a new form of social Proof of Stake. With 4156 provably linked to my
Twitter account, everything I do has the credibility and sincerity of my $1.2+ million bond (the
value of the ape) behind it. For example, I can make large private art deals and people know I
won't bail on them because I have staked so much capital on my reputation. Owning a punk and
using it as an avatar is a life hack with an ROI much greater than the $40k (entry-level) price
tag. As more people realize this, the price of punks will increase, and their utility as social Proof
of Stake will increase too. This is a virtuous cycle that will cause punks to become incredibly
valuable, and will open the door for other avatar projects to become very valuable as well."

https://twitter.com/punk4156/status/137 ... 05542?s=19
User avatar
HomerJ
Posts: 16418
Joined: Fri Jun 06, 2008 12:50 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by HomerJ »

Interesting article

https://www.theverge.com/2021/3/25/2234 ... links-ipfs
The system usually relies on the Ethereum blockchain, which ensures a few things: it keeps an unalterable record of everyone who has owned the NFT, and it keeps the NFT from ever changing. That means someone who buys an NFT and then resells it can’t misrepresent what they own. It’s all there in the NFT, just how it was when they bought it. You can think of it like the papers that authenticate a thoroughbred: they’re not the horse, but they certify the provenance and history of one.

Very little data is stored directly inside an NFT, though. The NFT includes information on where you can find a description of the artist’s name and the title of the work, but that information is not typically on the blockchain itself. NFTs include information on where you can find the artwork they represent, but the actual artwork is still a link away.

Traditional URLs pose real problems for NFTs. The owner of the domain could redirect the URL to point to something else (leaving you with, perhaps, a million-dollar Rickroll), or the owner of the domain could just forget to pay their hosting bill, and the whole thing disappears.
I laughed at the idea of a million dollar Rickroll... :)
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
SlowMovingInvestor
Posts: 2735
Joined: Sun Sep 11, 2016 11:27 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SlowMovingInvestor »

Is Ebay involved in the NFT market at all ? I know they sell physical objects such as minted coins related to blockchain tokens, but actual NFT tokens ?
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

SlowMovingInvestor wrote: Thu Mar 25, 2021 5:47 pm Is Ebay involved in the NFT market at all ? I know they sell physical objects such as minted coins related to blockchain tokens, but actual NFT tokens ?
Not to my knowledge, unless they have a stake in one of these other NFT marketplaces.
SlowMovingInvestor
Posts: 2735
Joined: Sun Sep 11, 2016 11:27 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SlowMovingInvestor »

decapod10 wrote: Thu Mar 25, 2021 6:37 pm
SlowMovingInvestor wrote: Thu Mar 25, 2021 5:47 pm Is Ebay involved in the NFT market at all ? I know they sell physical objects such as minted coins related to blockchain tokens, but actual NFT tokens ?
Not to my knowledge, unless they have a stake in one of these other NFT marketplaces.
I wonder if it makes sense to buy a little Ebay stock, then wait for it to announce that it'll move into NFTs, and sell when it pops because of that. If that doesn't happen, no biggie, Ebay is a decent hold.
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
bberris
Posts: 1682
Joined: Sun Feb 20, 2011 9:44 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by bberris »

HomerJ wrote: Thu Mar 25, 2021 2:42 pm Interesting article

https://www.theverge.com/2021/3/25/2234 ... links-ipfs
The system usually relies on the Ethereum blockchain, which ensures a few things: it keeps an unalterable record of everyone who has owned the NFT, and it keeps the NFT from ever changing. That means someone who buys an NFT and then resells it can’t misrepresent what they own. It’s all there in the NFT, just how it was when they bought it. You can think of it like the papers that authenticate a thoroughbred: they’re not the horse, but they certify the provenance and history of one.

Very little data is stored directly inside an NFT, though. The NFT includes information on where you can find a description of the artist’s name and the title of the work, but that information is not typically on the blockchain itself. NFTs include information on where you can find the artwork they represent, but the actual artwork is still a link away.

Traditional URLs pose real problems for NFTs. The owner of the domain could redirect the URL to point to something else (leaving you with, perhaps, a million-dollar Rickroll), or the owner of the domain could just forget to pay their hosting bill, and the whole thing disappears.
I laughed at the idea of a million dollar Rickroll... :)
So... the buyer gets some digits and what, a password? that gets the owner the only rights to those digits?
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

bberris wrote: Wed Mar 31, 2021 7:11 am
HomerJ wrote: Thu Mar 25, 2021 2:42 pm Interesting article

https://www.theverge.com/2021/3/25/2234 ... links-ipfs
The system usually relies on the Ethereum blockchain, which ensures a few things: it keeps an unalterable record of everyone who has owned the NFT, and it keeps the NFT from ever changing. That means someone who buys an NFT and then resells it can’t misrepresent what they own. It’s all there in the NFT, just how it was when they bought it. You can think of it like the papers that authenticate a thoroughbred: they’re not the horse, but they certify the provenance and history of one.

Very little data is stored directly inside an NFT, though. The NFT includes information on where you can find a description of the artist’s name and the title of the work, but that information is not typically on the blockchain itself. NFTs include information on where you can find the artwork they represent, but the actual artwork is still a link away.

Traditional URLs pose real problems for NFTs. The owner of the domain could redirect the URL to point to something else (leaving you with, perhaps, a million-dollar Rickroll), or the owner of the domain could just forget to pay their hosting bill, and the whole thing disappears.
I laughed at the idea of a million dollar Rickroll... :)
So... the buyer gets some digits and what, a password? that gets the owner the only rights to those digits?
The NFT is usually just a link to an image stored somewhere, often (but not always) with some fancy magic to make sure that the image is the correct one. It usually does not have the image built in to the blockchain itself.

You have the right to buy and sell your piece of code or display it. You don't own any commerical rights to the image (similar to when you buy a painting from an artist).
SlowMovingInvestor
Posts: 2735
Joined: Sun Sep 11, 2016 11:27 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SlowMovingInvestor »

decapod10 wrote: Thu Apr 01, 2021 12:45 am The NFT is usually just a link to an image stored somewhere, often (but not always) with some fancy magic to make sure that the image is the correct one. It usually does not have the image built in to the blockchain itself.
The Verge article mentions that a number of NFT IPFS hashes didn't seem to point to anything. Not very promising for IPFS.
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

SlowMovingInvestor wrote: Thu Apr 01, 2021 9:47 am
decapod10 wrote: Thu Apr 01, 2021 12:45 am The NFT is usually just a link to an image stored somewhere, often (but not always) with some fancy magic to make sure that the image is the correct one. It usually does not have the image built in to the blockchain itself.
The Verge article mentions that a number of NFT IPFS hashes didn't seem to point to anything. Not very promising for IPFS.
Yeah, there has to be someone hosting your file.

Basically, the IPFS pointer is just "IPFS://" and then the image hash. So as long as the image is somewhere in there, it will find it.

I'm not 100% clear on the finer points of IPFS, but I think you can either download the NFT images yourself if your link "dies" and host them, or you can "pin" them to someone else's node. I suppose I should learn more about IPFS.

If you buy a $10M NFT using IPFS, it's probably best to make sure you have a copy of the image in case something happens, or even better run an IPFS node with all your valuable NFT images on it.
SlowMovingInvestor
Posts: 2735
Joined: Sun Sep 11, 2016 11:27 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SlowMovingInvestor »

decapod10 wrote: Thu Apr 01, 2021 10:11 am
SlowMovingInvestor wrote: Thu Apr 01, 2021 9:47 am
decapod10 wrote: Thu Apr 01, 2021 12:45 am The NFT is usually just a link to an image stored somewhere, often (but not always) with some fancy magic to make sure that the image is the correct one. It usually does not have the image built in to the blockchain itself.
The Verge article mentions that a number of NFT IPFS hashes didn't seem to point to anything. Not very promising for IPFS.
Yeah, there has to be someone hosting your file.

Basically, the IPFS pointer is just "IPFS://" and then the image hash. So as long as the image is somewhere in there, it will find it.

I'm not 100% clear on the finer points of IPFS, but I think you can either download the NFT images yourself if your link "dies" and host them, or you can "pin" them to someone else's node. I suppose I should learn more about IPFS.

If you buy a $10M NFT using IPFS, it's probably best to make sure you have a copy of the image in case something happens, or even better run an IPFS node with all your valuable NFT images on it.
It should do a lookup by hash, and it's supposed to be distributed, censorship resistant etc., but the Verge article says they found broken links.

You can definitely download images yourself, but anyone can do that. If the blockchain contains the hash, then you presumably want that hash to point to the image. I'm not sure adding your own node makes that much difference if their hash lookups are having trouble finding the hash.
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

SlowMovingInvestor wrote: Thu Apr 01, 2021 10:31 am
decapod10 wrote: Thu Apr 01, 2021 10:11 am
SlowMovingInvestor wrote: Thu Apr 01, 2021 9:47 am
decapod10 wrote: Thu Apr 01, 2021 12:45 am The NFT is usually just a link to an image stored somewhere, often (but not always) with some fancy magic to make sure that the image is the correct one. It usually does not have the image built in to the blockchain itself.
The Verge article mentions that a number of NFT IPFS hashes didn't seem to point to anything. Not very promising for IPFS.
Yeah, there has to be someone hosting your file.

Basically, the IPFS pointer is just "IPFS://" and then the image hash. So as long as the image is somewhere in there, it will find it.

I'm not 100% clear on the finer points of IPFS, but I think you can either download the NFT images yourself if your link "dies" and host them, or you can "pin" them to someone else's node. I suppose I should learn more about IPFS.

If you buy a $10M NFT using IPFS, it's probably best to make sure you have a copy of the image in case something happens, or even better run an IPFS node with all your valuable NFT images on it.
It should do a lookup by hash, and it's supposed to be distributed, censorship resistant etc., but the Verge article says they found broken links.

You can definitely download images yourself, but anyone can do that. If the blockchain contains the hash, then you presumably want that hash to point to the image. I'm not sure adding your own node makes that much difference if their hash lookups are having trouble finding the hash.
From what I can tell, when they mean "broken links", it just means the file is not being hosted, not because there is any specific flaw with the IPFS lookup system. (Edit to add: this could also be if the image is only on 1 computer and that computer has network problems, it wasn't really clear to me what the problem was).

The specific quote is: "Still, the system has flaws. The team behind Check My NFT has been looking inside of NFTs to see if their IPFS addresses actually work, and in several cases, they’ve found files that just won’t load. The team found artworks that were temporarily missing from major artists, including Grimes, deadmau5, and Steve Aoki. The files came back online eventually, but only after the team called attention to their absence. The files have to be actively available on the network for the system to work, and unlike with a domain owner, no host has a singular responsibility to do that for files on IPFS."

Then the following paragraph:
"Like a painting, NFTs need to be maintained. If a buyer purchases an NFT that relies on IPFS, it’ll ultimately be on them to ensure the file continues to be hosted and available to the system. If the NFT relies on a traditional URL, then buyers would be in a more precarious position, having to hope that whatever third party currently hosts the file — often the auction site, like with Grimes’ NFT — stays online."

But I don't know for sure, maybe worth looking at Check My NFT directly rather than Verge.
SlowMovingInvestor
Posts: 2735
Joined: Sun Sep 11, 2016 11:27 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SlowMovingInvestor »

decapod10 wrote: Thu Apr 01, 2021 10:57 am
From what I can tell, when they mean "broken links", it just means the file is not being hosted, not because there is any specific flaw with the IPFS lookup system. (Edit to add: this could also be if the image is only on 1 computer and that computer has network problems, it wasn't really clear to me what the problem was).

The specific quote is: "Still, the system has flaws. The team behind Check My NFT has been looking inside of NFTs to see if their IPFS addresses actually work, and in several cases, they’ve found files that just won’t load. The team found artworks that were temporarily missing from major artists, including Grimes, deadmau5, and Steve Aoki. The files came back online eventually, but only after the team called attention to their absence. The files have to be actively available on the network for the system to work, and unlike with a domain owner, no host has a singular responsibility to do that for files on IPFS."

Then the following paragraph:
"Like a painting, NFTs need to be maintained. If a buyer purchases an NFT that relies on IPFS, it’ll ultimately be on them to ensure the file continues to be hosted and available to the system. If the NFT relies on a traditional URL, then buyers would be in a more precarious position, having to hope that whatever third party currently hosts the file — often the auction site, like with Grimes’ NFT — stays online."

But I don't know for sure, maybe worth looking at Check My NFT directly rather than Verge.
Replicating a file (even those that aren't worth millions) is like distributed file systems 101 (or 201 at worst). Actually calling IPFS a file system is a bit of stretch, it seems to be mostly a naming system that allows identification of a particular file, which can actually be stored anywhere.

So yes, if someone owns an NFT that has a hash that points to an IPFS file, you should make sure multiple copies are hosted. Really, you can keep it on standard storage media too. It's just a SHA256 hash. The only supposed benefit of IPFS is to make it censorship resistant, but I'm not sure there is going to be much reason to censor punks or kitties.
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

Another Christie's NFT auction coming, a lot of 9 Cryptopunks including an Alien punk. I expect this could be close to $10 million

https://www.christies.com/features/10-t ... 569-1.aspx
surfstar
Posts: 2589
Joined: Fri Sep 13, 2013 12:17 pm
Location: Santa Barbara, CA

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by surfstar »

HomerJ wrote: Thu Mar 25, 2021 2:42 pm I laughed at the idea of a million dollar Rickroll... :)
Quick - create a million dollar NFT Rickroll!!!
SemiRetire
Posts: 121
Joined: Fri Dec 20, 2019 5:44 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SemiRetire »

nisiprius wrote: Fri Mar 19, 2021 7:23 pm With the understanding that I've been wrong about just about everything... here's my expectation:

Courts will decide that NFT marketplaces are illegal lotteries. It will happen when there is enough of a crash to create a large number of disgruntled, and will turn on whether or not the courts believe that the marketplaces are misrepresenting the nature of what is being bought and sold. It will probably have to be up to states' attorney-generals to bring suit, because NBA Top Shot customers are required to sign away their right to trial.

I think some of it will turn on the question of whether there are NFT appraisers and whether NFTs can be appraised.
I want to be polite, but you are wrong here as well.

NFT is just a technology protocol. ERC721 and ERC1155 are the current ones most used.

In ten years, and likely now if I look, NFT will be used to represent ownership in stocks, homes, etc. Either that or some better protocol.. but the nuts and bolts will be very similar to the NFT standards today.

There has to be legal linkage, and precedent set. But selling an NFT in nft marketplaces is no more an "illegal lotteries" than selling baseball cards, stocks, or art, or really anything.

Now regular NFT with picture sound and art, that just are what they are is fine, they will not be outlawed, and current laws likely cover them quite well.

The real key is linkage to ownership of real world objects via NFT, that takes new laws passed, or old ones applied to NFT via court rulings, either way Nisprius, it will happen, the benefits are too great. Its analogous to bitcoin as money, no new law was passed per se, it was just decreed that bitcoin is property, and not a currency, by regulatory agencies.

Hopefully we are past the point that bitcoin is not a form of money... I took that for granted above I just noted.... Oh well. Cheers : )
SemiRetire
Posts: 121
Joined: Fri Dec 20, 2019 5:44 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SemiRetire »

decapod10 wrote: Thu Apr 08, 2021 3:40 pm Another Christie's NFT auction coming, a lot of 9 Cryptopunks including an Alien punk. I expect this could be close to $10 million

https://www.christies.com/features/10-t ... 569-1.aspx
Valuations seems crazy to me lol. But then again, high priced baseball cards, a lot of high priced modern art, all crazy as well.

"The “All-White” Painting Worth $20.6 million"

http://blairoracle.com/the-all-white-pa ... worth-20/1

Humans are very interesting right?
SlowMovingInvestor
Posts: 2735
Joined: Sun Sep 11, 2016 11:27 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SlowMovingInvestor »

SemiRetire wrote: Wed Apr 14, 2021 10:08 am
In ten years, and likely now if I look, NFT will be used to represent ownership in stocks, homes, etc. Either that or some better protocol.. but the nuts and bolts will be very similar to the NFT standards today.
Property already has a registry (title/revenue) etc. in pretty much every country. [ And stocks are digitized in almost all major countries in depositories.]

You can link NFTs to property, and sell them, but the actual ownership authority is recorded in a centralized repository and enforced by a local judicial systems/police force. The NFT by itself doesn't give you right to own the house.

Public Blockchains are useful for some applications which involve trustless consensus. But if you put information on a blockchain (which has a cost in gas and other fees) and spread it on servers from Albania to Zambia because you don't trust the centralized repository, then you can't trust them to enforce your real estate property rights either.

Not every application requires or benefits from a public blockchain. BTC does, because of the double spend problem and lack of trust. But most applications don't.

ADDED: I commented earlier in the thread about the real problems with land registries (murky titles, ancestral claimants), and how they aren't resolved at all by blockchain, which just adds additional overhead.
Last edited by SlowMovingInvestor on Wed Apr 14, 2021 10:58 am, edited 4 times in total.
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
Jeff Albertson
Posts: 904
Joined: Sat Apr 06, 2013 7:11 pm
Location: Springfield

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by Jeff Albertson »

Here's a discussion with Kevin Roose on crypto and NFTs, 34 minutes. Roose auctioned an NFT of a newspaper article he wrote, got $500k.
https://www.nytimes.com/2021/04/13/podc ... rency.html
Image
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

SemiRetire wrote: Wed Apr 14, 2021 10:13 am
decapod10 wrote: Thu Apr 08, 2021 3:40 pm Another Christie's NFT auction coming, a lot of 9 Cryptopunks including an Alien punk. I expect this could be close to $10 million

https://www.christies.com/features/10-t ... 569-1.aspx
Valuations seems crazy to me lol. But then again, high priced baseball cards, a lot of high priced modern art, all crazy as well.

"The “All-White” Painting Worth $20.6 million"

http://blairoracle.com/the-all-white-pa ... worth-20/1

Humans are very interesting right?
Collectibles are all irrational to some degree, but there's never been anything to suggest that this will ever change. More than one alien has sold for 4000+ Ether, at this point there is nothing to suggest that this alien will go for anything less than that.

I guess we will see what happens to NFTs or cryptopunks specifically. I tend to think cryptopunks will have dramatic swings in value but will hold their value over time. I think most other NFTs will crash and burn. From a collector's point of view (at least for collectors who believe in NFTs), punks just make a lot of sense. They have historical value. They are limited in number. They have a strong community.

From the first time I mentioned cryptopunks in January or Feb here on BH, the lowest punk was 4 ETH. ETH was around $1300 at that time, so $5,200.

Currently, the cheapest punk is around 20 ETH with ETH price being $2340 = $46,800, though there have been some bumps along the way. The price may drop at some point, but it doesn't feel to me like punks will ever go back down to either 4 ETH or $5200 ever again. But ultimately I'm just guessing. They are extremely high risk, just like all collectibles, and maybe doubly so because 95% of the world think that they aren't even real goods, lol.
flyfishers83
Posts: 122
Joined: Fri Jun 07, 2019 6:08 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by flyfishers83 »

Won’t the frictionless proliferation of NFTs have a tendency to erode value. Historically, collectibles have been valuable because of rarity/controlled manufacture. I would think rapid proliferation would quickly eat up available dollars. Maybe that’s not a concern yet, but would seem to be a concern at some point.
User avatar
HomerJ
Posts: 16418
Joined: Fri Jun 06, 2008 12:50 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by HomerJ »

flyfishers83 wrote: Wed Apr 14, 2021 2:13 pm Won’t the frictionless proliferation of NFTs have a tendency to erode value. Historically, collectibles have been valuable because of rarity/controlled manufacture. I would think rapid proliferation would quickly eat up available dollars. Maybe that’s not a concern yet, but would seem to be a concern at some point.
Indeed... There are only so many morons in the world with millions of dollars.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
flyfishers83
Posts: 122
Joined: Fri Jun 07, 2019 6:08 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by flyfishers83 »

I wouldn’t go that far, but there has to be a limit. If you told me that a top shot could be bought for some nominal amount of money, I would probably understand. The universe of buyers for a lot of these things can’t be that large.
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

flyfishers83 wrote: Wed Apr 14, 2021 2:13 pm Won’t the frictionless proliferation of NFTs have a tendency to erode value. Historically, collectibles have been valuable because of rarity/controlled manufacture. I would think rapid proliferation would quickly eat up available dollars. Maybe that’s not a concern yet, but would seem to be a concern at some point.
It's important to understand "NFTs" are not just one thing. It's like saying well your Mickey Mantle 1952 topps card is worthless because my kid bought a pack of 2021 Topps and it was worthless.

Most of the NFTs that come out will likely be garbage yes, but if you actually believe in what NFTs are offering (which is a big if of course), then you can't just make more cryptopunks. There are 10,000 cryptopunks, that's it. You can make fake ones, but it's very simple to check if it's "real" or ""fake". Same goes with other valuable NFTs. You can check whether a Beeple NFT is real or fake in 5 minutes if you know when it should have been created and by whom.

And for collectibles, you don't really need or expect a large % of the population to care, especially if they have a lot of expendible money. If 10% or 20% of the population are really into it, it's probably enough (more than enough), even if 80% think they are idiots.
stoptothink
Posts: 9292
Joined: Fri Dec 31, 2010 9:53 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by stoptothink »

decapod10 wrote: Wed Apr 14, 2021 3:40 pm
flyfishers83 wrote: Wed Apr 14, 2021 2:13 pm Won’t the frictionless proliferation of NFTs have a tendency to erode value. Historically, collectibles have been valuable because of rarity/controlled manufacture. I would think rapid proliferation would quickly eat up available dollars. Maybe that’s not a concern yet, but would seem to be a concern at some point.
It's important to understand "NFTs" are not just one thing. It's like saying well your Mickey Mantle 1952 topps card is worthless because my kid bought a pack of 2021 Topps and it was worthless.

Most of the NFTs that come out will likely be garbage yes, but if you actually believe in what NFTs are offering (which is a big if of course), then you can't just make more cryptopunks. There are 10,000 cryptopunks, that's it. You can make fake ones, but it's very simple to check if it's "real" or ""fake". Same goes with other valuable NFTs. You can check whether a Beeple NFT is real or fake in 5 minutes if you know when it should have been created and by whom.

And for collectibles, you don't really need or expect a large % of the population to care, especially if they have a lot of expendible money. If 10% or 20% of the population are really into it, it's probably enough, even if 80% think they are idiots.
Makes perfect logical sense. Nonetheless, I can't even begin to comprehend the desire to own one; this takes the concept of wealth signaling to an entirely new level.
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

stoptothink wrote: Wed Apr 14, 2021 3:47 pm
decapod10 wrote: Wed Apr 14, 2021 3:40 pm
flyfishers83 wrote: Wed Apr 14, 2021 2:13 pm Won’t the frictionless proliferation of NFTs have a tendency to erode value. Historically, collectibles have been valuable because of rarity/controlled manufacture. I would think rapid proliferation would quickly eat up available dollars. Maybe that’s not a concern yet, but would seem to be a concern at some point.
It's important to understand "NFTs" are not just one thing. It's like saying well your Mickey Mantle 1952 topps card is worthless because my kid bought a pack of 2021 Topps and it was worthless.

Most of the NFTs that come out will likely be garbage yes, but if you actually believe in what NFTs are offering (which is a big if of course), then you can't just make more cryptopunks. There are 10,000 cryptopunks, that's it. You can make fake ones, but it's very simple to check if it's "real" or ""fake". Same goes with other valuable NFTs. You can check whether a Beeple NFT is real or fake in 5 minutes if you know when it should have been created and by whom.

And for collectibles, you don't really need or expect a large % of the population to care, especially if they have a lot of expendible money. If 10% or 20% of the population are really into it, it's probably enough, even if 80% think they are idiots.
Makes perfect logical sense. Nonetheless, I can't even begin to comprehend the desire to own one; this takes the concept of wealth signaling to an entirely new level.
For sure the wealth signaling aspect is particularly interesting for NFTs, given the proliferation of social media, influencers, "flex" online, fake internet points, etc. For a certain slice of the population, showing off their wealth online using NFTs is more meaningful than physical goods. The question is whether this population will continue to grow and/or continue to have more money to spend or not.

Edit to add: if crypto continues to increase in value, you will have a growing number of people who care about blockchain, who tend to spend more time online, and who are about to become very, very wealthy. (Though again another big big if, lol).
SlowMovingInvestor
Posts: 2735
Joined: Sun Sep 11, 2016 11:27 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by SlowMovingInvestor »

decapod10 wrote: Wed Apr 14, 2021 4:00 pm For a certain slice of the population, showing off their wealth online using NFTs is more meaningful than physical goods.
How much of this is just because the pandemic makes it harder to show off/consume physical goods in public, whether it's watches or jewelry and also harder to travel for experiences ?
Portfolio: 50% DOGE, 10% SPACs, 10% Frozen OJ futures, 10% MOON ETF, 10% NFTs , 5% FOMO ETF, 5% New Jersey Delis with $100M market cap :)
flyfishers83
Posts: 122
Joined: Fri Jun 07, 2019 6:08 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by flyfishers83 »

decapod10 wrote: Wed Apr 14, 2021 3:40 pm
flyfishers83 wrote: Wed Apr 14, 2021 2:13 pm Won’t the frictionless proliferation of NFTs have a tendency to erode value. Historically, collectibles have been valuable because of rarity/controlled manufacture. I would think rapid proliferation would quickly eat up available dollars. Maybe that’s not a concern yet, but would seem to be a concern at some point.
It's important to understand "NFTs" are not just one thing. It's like saying well your Mickey Mantle 1952 topps card is worthless because my kid bought a pack of 2021 Topps and it was worthless.

Most of the NFTs that come out will likely be garbage yes, but if you actually believe in what NFTs are offering (which is a big if of course), then you can't just make more cryptopunks. There are 10,000 cryptopunks, that's it. You can make fake ones, but it's very simple to check if it's "real" or ""fake". Same goes with other valuable NFTs. You can check whether a Beeple NFT is real or fake in 5 minutes if you know when it should have been created and by whom.

And for collectibles, you don't really need or expect a large % of the population to care, especially if they have a lot of expendible money. If 10% or 20% of the population are really into it, it's probably enough (more than enough), even if 80% think they are idiots.
Sure. It appears the advent of NFTs has enlarged the total market of collectibles. They’re new and cool and have presumably created new collectors. My assumption is that there is some sort of natural limit for collectibles, and the ability to create more NFTs would not keep incrementally increasing the total market size. So, while Cryptopunks could maintain value, there isn’t enough room to support a massive influx of additional NFTs at what I would call high valuations.
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

SlowMovingInvestor wrote: Wed Apr 14, 2021 4:31 pm
decapod10 wrote: Wed Apr 14, 2021 4:00 pm For a certain slice of the population, showing off their wealth online using NFTs is more meaningful than physical goods.
How much of this is just because the pandemic makes it harder to show off/consume physical goods in public, whether it's watches or jewelry and also harder to travel for experiences ?
This is all just speculation on my part, but My personal opinion is very little. Digital goods have long been more and more valued by younger people, ever since people were buying expensive cosmetic hats in Team Fortress 2, and those kids buying expensive video game hats are now in their 30's.

Face to face communication is becoming less and less important as well, people are spending more time online even before the pandemic.

https://www.commonsensemedia.org/about- ... bout-teens

This poll compares communication prefers for teens in 2018 vs 2012. They found that only 32% of teens choose face to face communication as their preferred method of communication in 2018, down from 49% in 2012. 70% of 2018 teens check social media several times per day, vs 34% in 2012.

Also, I don't really think wide scale NFT flexing has happened yet, I was just hypothesizing about the future. Most of the cryptopunk adoption is among crypto-type people and financial types, like Gary Vaynerchuk, Robert Leshner, Kevin Rose, etc. As well as some artists who have started to transition into crypto space, like 3LAU. A few YouTube/influencer types like Logan Paul. Also Fantasy football/sports betting crowd like Matt Kalish (co-founder of DraftKings). You can look at their Twitter accounts, several have cryptopunks as their avatar currently, I think Leshner, Kalish, 3LAU of those. A lot of this interest happened within the last 1-2 months, which I don't think correlates well with the pandemic being the primary driver.

My guess is that this will increase over time, especially if/when social media apps have better NFT integration. If there are 10000 cryptopunks, you don't need that many rich people to drive up the price significantly.

But again, this is all just speculation. I have some bets placed but I don't recommend it to anyone I know, because the downside is essentially all the way down to zero.
decapod10
Posts: 1039
Joined: Thu Dec 28, 2017 6:46 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by decapod10 »

flyfishers83 wrote: Wed Apr 14, 2021 4:59 pm
decapod10 wrote: Wed Apr 14, 2021 3:40 pm
flyfishers83 wrote: Wed Apr 14, 2021 2:13 pm Won’t the frictionless proliferation of NFTs have a tendency to erode value. Historically, collectibles have been valuable because of rarity/controlled manufacture. I would think rapid proliferation would quickly eat up available dollars. Maybe that’s not a concern yet, but would seem to be a concern at some point.
It's important to understand "NFTs" are not just one thing. It's like saying well your Mickey Mantle 1952 topps card is worthless because my kid bought a pack of 2021 Topps and it was worthless.

Most of the NFTs that come out will likely be garbage yes, but if you actually believe in what NFTs are offering (which is a big if of course), then you can't just make more cryptopunks. There are 10,000 cryptopunks, that's it. You can make fake ones, but it's very simple to check if it's "real" or ""fake". Same goes with other valuable NFTs. You can check whether a Beeple NFT is real or fake in 5 minutes if you know when it should have been created and by whom.

And for collectibles, you don't really need or expect a large % of the population to care, especially if they have a lot of expendible money. If 10% or 20% of the population are really into it, it's probably enough (more than enough), even if 80% think they are idiots.
Sure. It appears the advent of NFTs has enlarged the total market of collectibles. They’re new and cool and have presumably created new collectors. My assumption is that there is some sort of natural limit for collectibles, and the ability to create more NFTs would not keep incrementally increasing the total market size. So, while Cryptopunks could maintain value, there isn’t enough room to support a massive influx of additional NFTs at what I would call high valuations.
For sure, there will be a limit (or at least a limit to the growth rate) of the total NFT market. People who don't understand it well will get burned buying random Tom Brady and Lindsey Lohan NFTs or whatever Nifty Gateway is dropping today, thinking NFTs are like stocks or something. But I think as of now, there's still potential for a lot of growth for the NFT total market as evidenced by the lack of belief in it (which of course also gives it huge downside risk as well).

I would add though that not all NFTs need to be about profit. Some people just buy Tom Brady NFTs because they like Tom Brady, not expecting to get any profit, just like they don't expect to resell their Tom Brady poster that they bought from the stadium for 10x.
Scooter57
Posts: 1910
Joined: Thu Jan 24, 2013 9:20 am

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by Scooter57 »

Here is a question for someone who is better educated in blockchain than I am.

Our major family business is one that sells products that are highly collectible and we have an enthusiastic group of collectors, many of whom appear to be very well off younger guys in tech. So it seems obvious to me that we should be SELLING NFT jpgs while we can. (We have the ability to make very high quality .jpgs of images that would interest our collectors.)

I've read various sites that detail how to create and sell NFT artwork and looked at a couple, but I know that I don't know enough to do this properly.

Can any of you point me to a community of people who discuss the mechanics of creating and selling NFT artwork, where there would be discussion about which sites are the best places to create and auction, which are the best wallets for dealing with these sites, which are the best exchanges for cashing in cryptocurrency, etc before we test the waters.

Any tips would be appreciated. When people are getting carried away with this kind of fad you want to be on the selling side, not the buying and trading side.
HootingSloth
Posts: 210
Joined: Mon Jan 28, 2019 3:38 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by HootingSloth »

As someone who does some work in the blockchain space (e.g., advising folks on the tax treatment of cryptocurrency transactions) and has a background in cryptography, NFTs have seemed truly bizarre to me in a way that other blockchain applications never did. This discussion has brought some more clarity. It still seems to me like an odd sort of consumption to engage in (and definitely purely speculative as an "investment"), but at least I can now understand why some people would want to own something like this. Thanks everyone for the insight.
humbledinvestor
Posts: 202
Joined: Mon Jul 14, 2014 3:37 pm

Re: Non-fungible tokens (NFTs): anyone investing in those?

Post by humbledinvestor »

Can the bubble burst already?
Post Reply