• Member Since 14th Jan, 2012
  • offline last seen 7 hours ago

MrNumbers


Experience is the name we give our mistakes.

More Blog Posts304

  • 2 weeks
    Photography stuff but more

    Trying to do some impressionist stuff bare with me


    Read More

    12 comments · 184 views
  • 8 weeks
    The Mare who Once Lived on the Moon published!


    Gosh, isn't Harwick just the best?

    Read More

    25 comments · 1,245 views
  • 11 weeks
    Ponzi Schemes

    I wrote this just in time to see Reddit and Discord announce cryptocurrency integration. Hooray for me. If you want to link this to people you know, here's a non-pony option.

    Read More

    31 comments · 807 views
  • 14 weeks
    Photography stuff

    Hey! Turns out it's really hard to write while recovering from one surgery and having an even bigger one on Monday, so I've been doing more photography stuff after the break.

    Read More

    8 comments · 201 views
  • 16 weeks
    Still alive!

    First surgery went well! My face looks like it got stung by a bunch of bees from the inside, and I'm going to be out of commission for a bit, but I'm alive and safe and looking forward to the big follow up in three weeks.

    Thank you all, again.

    11 comments · 317 views
Nov
9th
2021

Ponzi Schemes · 4:11am Nov 9th, 2021

I wrote this just in time to see Reddit and Discord announce cryptocurrency integration. Hooray for me. If you want to link this to people you know, here's a non-pony option.

God. Okay. This is going to be a fun one. My favourite articles come from assuming something is common knowledge and being told it isn’t.

Okay so almost everyone has heard of Ponzi schemes. The label gets thrown around a lot, but I realized I don’t actually see it get explained when it’s used. It’s what George Orwell would call a dead phrase - in the same way that ‘swan song’ doesn’t actually make you think of a swan, ‘Ponzi scheme’ has just come to mean ‘scam’ in the same way.

The problem with not explaining it, though, is most people think scams are obvious. They immediately think multi-level marketing, pyramid schemes and Nigerian prince emails, something that happens to other people. Stupider people.

Ponzi schemes are the stuff of nightmares, though. Men as brilliant as Sir Isaac Newton have been bankrupted by them. Bernie Madoff conned Wall Street investors out of between $17 and $60 billion dollars - depending on how you count it - in a scam that ran from 1992 to 2009. Even when he was the subject of a federal investigation in 2000, he wasn’t caught.

If these schemes are robust enough to pass federal investigators, why should we expect better from journalists? If Enron could get on the front page of Forbes and Fortune, why should we be surprised when the Rolling Stone not only endorses, but partners with the Bored Apes NFT, what I would call a clear example of an ongoing Ponzi scheme.

More than just how they actually work, I want to explain how these scams are so effective at recruiting people and the effect it has on people inside one. The technical explanation is enough to explain why very clever people will still be tricked, but scams that rely on ongoing trust from their victims are especially vicious and destructive.

At its most basic:

I have one dollar, and one friend. I would like more dollars and no friends.

I tell my friend: I have a great idea to make money, I just need some start up. If you give me a dollar, I’ll have two dollars by the end of the month. It sounds too good to be true, but they give me the dollar anyway.

At the end of the month, I give them the two dollars - the two dollars we started with. But I say it’s just their dollar and I doubled it. Then I say; “Would you like me to do it again?”

Now they know that they know I’m good for the money, they’ll give me back their two dollars, expecting four next month. This would be a problem, but they’ve told two friends about it. Now those two friends each give me a dollar.

At the end of the month, I show the first friend the four dollars I have, and tell them I can double it again.

A year later, a hundred people have lost their savings, and I’m living in Bermuda under the name Aaron Nonymous.

They’re not always so basic:

The previous example is the most basic kind of Ponzi scheme, but it would be a mistake to think they’re all so ‘obvious’.

Usually Ponzi schemes have a clear product or promise: There is a plausible explanation on where the money is coming from, why it requires outside investment, and why only the Ponzi scheme’s architect is able to make money this way.

What I mean is, investors need to understand why they couldn’t take their own money and do what the Ponzi scheme is claiming to do. They have to understand why they couldn’t cut out the middleman. If the Ponzi scheme is claiming to beat the market, there needs to be a reason for it.

I just described an accountant, or even just your interest-earning bank account.

A family accountant who allocates your savings into safe investment portfolios matches this description perfectly. You understand why they’re not using their own money, there is a plausible reason for where the new money is coming from, and you understand they have a level of expertise you don’t. The returns are only modest, so there’s no need to justify a unique position of advantage.

Consider this: For the last fifteen years your family accountant has managed your savings and your retirement fund. Now you wake up to a phone call from the police. All your money is gone and there’s no way to get it back. Five years ago your accountant lost too much in a bad investment and, rather than explaining the loss, pretended everything was normal while they took more aggressive investment strategies to make up the loss, covering for these gambles with the money from other clients.

Those bets never paid off and now there’s nothing left.

You have just been the victim of a Ponzi scheme, but what you had bought into was a legitimate business. At no point did you fall into a scam - a scam was constructed around trust that was initially well-placed. There was never an attempt to scam you and, from your perspective, nothing had changed in a way you could have noticed.

This is the situation a family member of mine put his clients through, for which he is now in prison.

Failure:

Ponzi schemes fail when early investors cash out faster than the con artist can bring in new money. There is a constant balance between needing to offer high enough payouts to draw new clients fast enough without your old investors bankrupting you.

More enduring Ponzie schemes thrive by maximizing new investment and minimizing cashing out. An optimal scheme relies on investors who don’t bother trying to cash out - the scheme collapses the moment someone cannot be paid in full when they try.

A badly run Ponzi scheme can quickly end with the scammer giving all their money to their intended victims, while a masterful one can run for decades. However, the supply of new investors is not infinite. A Ponzi scheme can only ever fail, it’s a matter of when.

More of an inverse funnel

Ponzi schemes are distinct from pyramid and multi-level marketing schemes, because those require the active participation of their victims. Victims are encouraged to become complicit scammers themselves, either by trapping them in debt or by appealing to greed.

In a pyramid scheme, people invited into the scam are told that they get a cut of the money of everyone they, in turn, bring into the scam. In Ponzi schemes, the marks are unaware that their payout is dependant on new investors. The proselytizers and recruiters of Ponzi schemes, though, can be far more convincing because they are authentically convinced. There’s no need to lie or consciously manipulate, but these targets will still act just as fiercely as recruiters for the scheme to satisfy an emotional need.

Just, work with me here a moment;

Consider your partner’s just proposed. You’re so excited and you _need _to tell everyone, but your best friend tells you that it’s a bad idea and you can do better. There are two possibilities;

1: Your best friend is right. You have been in a bad relationship for a long time, and you should probably end it now.
2: Your best friend is wrong and, actually, kind of an asshole. You have a great fiance.

One option hurts less.

This isn’t just sunk cost fallacy, because nothing is ‘sunk’ yet. Your relationship is only bad if they’re right. You keep something good if they’re wrong. You throw something good away if you believe them and they’re wrong.

So you need reassurance. You need someone else to believe you, so you can trust your own judgement. It’s going to feel great if you can, and awful if you can’t. You’re going to be very motivated to tell people just how great your fiance is, and the more doubt you get, the harder you need to convince people.

Being caught in a Ponzi scheme is just a different kind of abusive relationship.

This is the mindset of someone in a Ponzi scheme. They’ve seen other investors get rich from this, and they want that for themselves. They have clear proof that it works. And it will! Right until it won’t.

When a scheme has made someone a lot of money, they’ll be excited to talk about it and share the good news. And, inevitably, they’ll be warned about something being too good to be true. The feedback loop is the same: Either I’m a sucker, or I’m making good money. And I need people to know I’m not a sucker.

The Ponzi scheme grows when these marks can convince people. And they can be very convincing, especially when we talk about one last piece to this that provides an objective proof of the scheme’s legitimacy, enough to sucker Sir Isaac Newton himself out of the modern equivalent of $3.5 million:

Speculation

Speculation is injecting a Ponzi scheme with rabies and letting it loose.

The South Sea company had humble origins as a financial scam intended to overthrow the Bank of England, and grew in scale from there. There’s a lot of wonderful history to this, but I’ll keep to the relevant details.

Essentially, the South Sea company was granted a monopoly on the slave trade to South America. It promised profits from the sale of African slaves to South American colonies, and from those colonies new world goods would be sold for high prices in Europe, which would then be used to purchase more slaves for the colonies.

This was a plausible venture. The “triangle trade” was devastatingly profitable in its history. However, the scam wasn’t based in trade that was happening; It was based on the profit that was going to be made.

This meant that when the company sold shares, they were entirely unmoored from reality. The price only reflected what people thought they could be worth. And the faster the share price went up, the more people thought the shares were worth.

This was vicious. People who bought in were making fortunes, and the people who cashed out were loudly regretting it - they could see they could have made so much more if they held out a little longer. This created a two pronged attack on the unconvinced. Not only were they being prosletized by shareholders, but so many who had played it safe would regret it as they lost out on fortunes for their prudence.

The price of a share went from £100 to £1000 in a year. The price of doubt was losing out on making ten times your initial investment. A year later, they were worthless.

Speculation makes a Ponzi scheme so much more vicious. If the shares are based on what everyone agrees they’re worth, then how could so many be wrong? Moreover, the promise of those earnings isn’t coming from someone trying to sell you something. It’s coming from your own head, your own fear of missing out.

Enter cryptocurrencies.

Cryptocurrencies do have one legitimate use; They are an effective stock index for organized crime. Beyond that, they are pure speculation, untethered from reality.

What makes crypto such an interesting Ponzi scheme, though, is that while the environment is full of cons and con artists, the currency itself exists as a Ponzi scheme without a conscious architect to profit from it. It has achieved decentralization in that way, at least.

NFTs are a next step to this. When the coins themselves are so abstracted, NFTs serve a role in this scam by attaching the coins to something of a tangible value, through artificial scarcity.

And it is very artificial. Victims of the NFT scheme call skeptics “right clickers”, mocking them for believing they could own a digital image by right-clicking it and hitting ‘save’. This is because the NFT suckers are idiots.

Artwork has speculative value. As a result, what buyers are purchasing isn’t what they believe the artwork is actually worth - usually it’s a truly godawful procedurally generated piece of clipart made from a character-generator worse than what you’d find on Deviantart. What they’re buying is their ability to flip it, later, when demand rises.

It’s really important to remember that you are going to be seeing a lot of people get rich from these schemes, and it’s going to be really tempting to throw your lot in. Fools and their money are not being parted soon enough, frankly.

That feeling is what is driving that demand, though. The money given to investors cashing out right now is not coming from any real value being generated or created. It is the money of new investors coming in, your money.

There are no guarantees on when the music stops on the game of musical chairs. It’s not a game worth playing.

Comments ( 31 )
Georg #1 · Nov 9th, 2021 · · ·

I have an unpopular opinion among the young. Crypto is much like tulips, only when it goes bust, you're not going to be able to plant them and enjoy the pretty colors.

Save real money for your retirement. DIVERSIFY. Most of that should be a 401k type investment in a no-load index mutual fund from a reputable company. You should not be withdrawing from that fund to pay moving expenses, or between-job expenses, or credit card expenses. You should not be withdrawing from that fund, period. You should not be moving it around until you actually get old enough to retire for real, and then you're only going to be pulling small sums out of it.

Reese #2 · Nov 9th, 2021 · · ·

I think there's an additional layer for some people, too, who know a particular scheme is a scheme, a bubble, and the purported wealth tied up in it will sooner or later be vanishing like mist -- but think that they can time that. After all, buy in early on, then cash out right at the peak, and you can still make a lot of money, right? After all, you're not a sucker; you're smart, and you know this can't last. And, hey, this sounds like a potentially good idea!
It's just that, as far as I know, pretty much everyone trying that mistimes the pop, and of course, if you're deliberately aiming for the very peak, as close to the crash as you can get, and overshoot... where does that leave you?
So, yeah: it's gambling. Even if a prospective investor thinks they're smart, thinks they've seen the game for what it is and therefore they can win it, there's still a heavy element of chance and a trail behind them of people who also thought they were smart and turned out not to be smart enough.
Don't bet what you can't afford to lose.


5605056
"I have an unpopular opinion among the young. Crypto is much like tulips, only when it goes bust, you're not going to be able to plant them and enjoy the pretty colors."
Yeeep. Worst case, excess tulips could be turned into compost and used to grow something more useful.
(And regarding NFTs, at least overinflated speculation on good art involves the preservation and potentially production of good art. I'm not sure off the top of my head who came up with the idea of NFTs, but I imagine that this point they might be laughing slightly madly at just how many people are actually falling for it...)

Great blog post. Never thought to look into what a Ponzi scheme actually is.

5605056

For what it's worth, this is also a very popular opinion among the young. Crypto fans are just loud but they're absolutely a minority.

Thanks for the informative post. The growth of crypto shit this year has been horrible to see. That something so obviously hollow can spread so far so quickly.

I find crypto fascinating, honestly. Because it's just another fiat currency. Ive looked into it recently and the thing that really stood out to me was how all the exchanges call real-world currency "fiat" (instead of just, say, "money") as though it were somehow different in that regard from crypto. In the most egregarious cases they used "fiat" in an outright negative connotation.

But that doesn't change the fact that cryptocurrency has value only so long as people say it has value. Though, as noted in the blog, a lot of that value derives from it's inherently easy-to-launder nature.

So, no, I don't think the digital currencies are really a scam nearly so much as they are just overhyped.

NFTs are that on steroids. There is absolutely no reason a digital certificate of authenticity should be worth that much. It's an interesting concept, but it is most definitely tulips all the way down and when that bubble pops there are going to be a (relatively small) number of people out a LOT of money because they simply got caught up in the hype.

On a side note, a lot of crypto relies on distribution for security. Someone would need to control more than half the assets in order to make changes. This is very unlikely. But any tabletop gamer knows from experience that "very unlikely" is absolutely NOT "impossible". And I kind of look forward to the havoc that particular event will cause.

5605135

So, no, I don't think the digital currencies are really a scam nearly so much as they are just overhyped.

I think this is a point worth expanding on.

Cryptocurrencies aren't a scam in the sense that they don't work or don't do what they claim. They are a scam in that their value is speculative, and by design there's no way to really stabilize or regulate its value. Overhyping something with speculative value is a scam, since the hype directly inflates the price, and in the sense that people are buying into crypto solely to make money flipping it.

Or, as it's already been said here; At least you can plant tulips.

I just watched Apes on Twitter threaten to bill somepony for posting a jpeg. Couldn't tell whether t'were a joke or sheer raging stupid.

The thing that gets me is if you take away all the environmental / energy issues, NFT's are still incredibly dumb.

5605150
Honestly the biggest benefit of using cryptocurrencies is your bank can't track you or prevent you from making a purchase. I have to purchase medical marijuana in cash because the credit agencies won't do business with them, for one clear example, and cryptos potentially provide an alternative.

The question arises to how much control large agencies and governments should have over private commerce in the first place. (I don't have an answer.)

Sorry, I think in scattered pieces so I have to post multiple times.

There are no guarantees on when the music stops on the game of musical chairs. It’s not a game worth playing.

Knowledge is power. We made a good amount of money on crypto investment because we knew when to get in and when to get out. The best time to take advantage of the system is when a new wave of hype is beginning. I'm not sure whether it's ethical, in retrospect, but my husband was able to quit work for a couple of years and focus on a private startup because he traded wisely. It helps that we're both computer engineers.

5605135
Yeah, I was part of a discussion that felt that gold had real value, as opposed to fiat currency. They were unable to answer my question as to how the value of gold is not just as fiat.

5605101
Yeah, I’m still in school and haven’t touched the stuff, I’m still planning on putting some of my savings into investments, but I’m in no rush.
Great article by the way. I haven’t watched the guy in a while, but Coffeezilla on youtube does some interviews with people that have fallen for some ponzi schemes, and his main channel Coffee Break has done some really good content, one his best is on the ethical dilemma of prohibiting vaping.

RBDash47
Site Blogger

Artwork has speculative value.

For more on this (in a more traditional context for "art"):

Artwork has speculative value. As a result, what buyers are purchasing isn’t what they believe the artwork is actually worth - usually it’s a truly godawful procedurally generated piece of clipart made from a character-generator worse than what you’d find on Deviantart. What they’re buying is their ability to flip it, later, when demand rises.

Exactly like half of the IRL art market. The other half, of course, is billionaires flexing that they can buy a painting for $66 million by outbidding the poorcel who capped at $65million. Both these market distortions go into full effect once the artist has died.

5605158
This is venturing into slightly off-topic territory, but one of the reasons I prefer the concept of fiat currency over gold (specifically) is that gold is too useful in electronics. I do not want to have a market ruined with subpar electronics because all the gold became the world’s retirement savings.

5605150
That’s kind of like diamond-handed traders. The stock may have some inherent value, but the price may be purely driven by speculative behavior unrelated to the company itself.

Quite possibly the best general source on cryptocurrency and everything wrong with it:

David Gerard - Attack of the 50 Foot Blockchain

5605176 You missed a third value, which is OK, since it is a fairly modern invention. Art has speculative value, as in it may/should become more valuable as time goes by and the artist eventually passes away. Art has social status value, as in high society people with a Rembrant or such on their walls to brag about. And art has (name undetermined) value when the son of a high official paints some worthless slop on canvas and people currying favor purchase it. A Renoir or Picasso can run you a cool half-mil, but investing in a Hunter can get your company several mil more in return from government contracts. The former way of channeling money was for multi-million dollar book advances or bulk buys of overpriced volumes (See Speaker Jim Wright). This seems to be much more cost and labor effective.

Interesting and informative, however

This isn’t just sunk cost fallacy, because nothing is ‘sunk’ yet. Your relationship is only bad if they’re right. You keep something good if they’re wrong. You throw something good away if you believe them and they’re wrong.

You are misinterpreting what the 'sunk' in sunk cost fallacy means and yes, it is exactly a sunk cost fallacy. What is 'sunk' in sunk cost is that you've spent something (time, effort, money) on a thing and because you've done that, you're unwilling to pull out because it means whatever you've invested would have been wasted. That's exactly what you're describing. It does not require absolute proof that whatever it is has failed, but simply for your thinking to be predicated on what you'd have wasted/lost if you give up without logically examining how you might only lose further by continuing to spend it on whatever. The whole point of the sunk cost fallacy is you convincing yourself that things will work out if you continue to spend resources on a course, without questioning that. And it is not predicated on you being wrong, things really could work out! It is only required that your reasoning be wrong. But if you're paying more attention to what you've put into the past of the relationship and less on what you'll realistically get out of it, it's sunk cost.

The minute you've spent any time, effort, or money on anything, you're vulnerable to a sunk cost fallacy and that definitely applies to an engagement.

That said, it also looks like this is partially based on a desire for personal validation as well.

Artwork has speculative value. As a result, what buyers are purchasing isn’t what they believe the artwork is actually worth - usually it’s a truly godawful procedurally generated piece of clipart made from a character-generator worse than what you’d find on Deviantart. What they’re buying is their ability to flip it, later, when demand rises.

Which, of course, overlooks the fact that no one really wants godawful clipart.


Liquidity's a mystery; it's very rarely seen,
It strikes and then is gone again, its getaway is clean,
And despite forensic evidence and great deductive flair,
The conclusion's inescapable, Liquidity's not there!

Liquidity, Liquidity, there's nothing like liquidity,
Its presence gives you confidence, its absence gives timidity,
You own perhaps a property, you own perhaps a share,
But once you've lost your credit card, Liquidity's not there!
Your understated opulence inheres in what you wear,
But in the end, you face the fact, Liquidity's not there!

Liquidity's a nifty term, it's business talk for cash,
It's money not tied up in things or hoovered in the crash,
Investments may return amounts of staggering obscenity,
The vastness of your holdings may explain your great serenity.
In publishing, to take the case of either of the Fabers,
A warehouse full of Larkin and The Bumper Book of Neighbours
Is very well, and when they sell, will satisfy the editors,
But not much use, in real terms, when dealing with the creditors.

Liquidity, Liquidity, there's nothing like Liquidity,
The glint of actual duckets brings respect and dip the lid'ity,
It's likely to self-immolate on contact with the air,
Say 'Raffle' in a crowded room; Liquidity's not there!

In the conduct of a company (proprietary, limited)
There's always a suspicion that the system's maladministered,
In proper corporate planning you allow a little spare,
But when you need the wherewithal, Liquidity's not there!

Liquidity, Liquidity, there's nothing like Liquidity,
In purely economic terms it constitutes validity,
I wish I had a pound for every credit millionaire,
Who completely failed to register, LIQUIDITY WASN'T THERE!
When reputations tumble and the search is on for clues
(I might mention humpo-bumpo, I might mention drinkie-poos)
There's a suspect who can prove he was in Lima at the time,
They can't catch him, he's the brilliant Scarlet Pimpernel of crime!

What I've been trying to figure out is what is actually different about a "real" security vs a Ponzi scheme security. Not to say there is no difference--I've just seen lots of "crypto is a scam" but never "here's why the stock market ISN'T a scam, unlike crypto." Maybe something to do with being backed by extracting value from natural resources? But then maybe the crypto people would say that the value of e.g. Bitcoin is secured by the power used to mine it, which sounds like kind of the same thing (given that I don't totally understand what I'm saying and am mostly judging the genre of the words).

5605158
Gold is a little more complicated. First is that gold has legitimate real-world uses. There is also supply limitations. Couple that with it's artistic, social and historical values and the fact that paranoid people like to stockpile the darn stuff as a hedge against inflation (and/or societal financial collapse). So there is a market baseline, but strong fiat influences as well.

Most financial systems, and crypto in particular, are very strictly fiat.

5605135 5605150

...cryptocurrency has value only so long as people say it has value.

Hell, currency only has value until people stop believing in it. Fortunately for World Capitalism™, people will believe the most ridiculous things:
i.ibb.co/5MWstnV/10tril.jpg
(I got this in change for US$5 after buying a loaf of bread, BTW.)

5605056

I have an unpopular opinion among the young. Crypto is much like tulips, only when it goes bust, you're not going to be able to plant them and enjoy the pretty colors.

Jesus God, this a million times. This is maybe the most right you've ever been, Georg.

A lot of people have trouble wrapping their heads around cryptocurrency. What finally broke the logjam for me was this realization: the word "currency" is fooling a lot of people into sloppy thinking. They try and contextualize crypto as money.

Crypto isn't money.

Crypto is a commodity. Like tulips! Or Beanie Babies. Or gold. Only its worse than most physical commodities, which tend to have some kind of non-speculative use. You can turn a tulip bulb, as you said, into a tulip. A Beanie Baby is a passable toy. Gold has industrial, commercial, and artisanal uses.

Once you conceptualize it like this, suddenly everything falls into place and thinking about crypto is a lot less headache inducing. It isn't money. You cannot pay taxes with it. (The sine qua non of money, of currency, in my opinion is "will a state accept it as settling your tax obligations, and will it enforce the use it for the settlement of private debts." If you don't have at least one of those things, you are not money.) Don't think of it as money. Think of it as a thing, a commodity.

5605348

In theory, securities are used to allocate capital to production. You're essentially gambling on the most efficient place to spend money, and rewards are based on correctly working out when the market is undervaluing something and boosting it. Even the really abstract derivatives still tie back into real-world production and prices. There's a real asset there.

Which actually ties into 5605372 's excellent comment.

Crypto has a minimum cost tied to its energy use, but you can't redeem that, you can't extract the energy back out of it. It affects the production cost, but not the value, which isn't actually true for state currencies - states demand their own currency be used to pay taxes.

So long as that state exists and so long as people need to pay its taxes, that currency will have value, and that state will have price control mechanisms. Sometimes, those states are Zimbabwe.

5605399

I typed my last comment up on the train, while I was out of internet range, only to hit 'send' and find out you made the exact same point regarding taxation.

But, yeah, all of this

5605399
Cryptocommodity as term to replace cryptocurrency may stick with me quite a while.

Would have been a hell of a thing to see El Salvador recognizing Beanie Babies as a legal form of payment.

5605482 So fun fact, the crypto bros have been crowing about this ever since it happened... only it didn't actually happened.

What El Salvador has done is set up an official, streamlined process by which you may convert BitCoin to pesos (I believe at a preferred rate, but don't quote me) and then use the pesos to pay your taxes.

In other words, they don't actually want to hold BitCoin on their own balance sheets.

The other day I saw a reddit post that was a screenshot of some cryptobro raging over someone saving a copy of the picture he owned an NFT of.

Someone in the comments then decided to make an NFT of that screenshot. I'm sure if the original cryptobro ever saw it he'd have an aneurysm, but I thought it was hilarious.

Then today in a Discord server I'm on, someone posted these:

pbs.twimg.com/media/FD2DB0JXIAYbVcF.jpg:large
pbs.twimg.com/media/FD2DCC1WEAoch3w.jpg:large

5605851
Oh yeah, the Rule of First Adopters. That's a better point than most people are willing to admit.

NFTs are a next step to this. When the coins themselves are so abstracted, NFTs serve a role in this scam by attaching the coins to something of a tangible value, through artificial scarcity.

I really appreciate you writing out this tether between crypto and NFTs, it's a great point. NFTs could just as easily be a random string of letters and numbers and artwork could be digital artwork, there's no reason for them to be tied together at all.

5605851
That second picture doesn't really apply. Majority of people into NFTs aren't trading for supporting artists or anything like that, otherwise they wouldn't be trading ugly apes.

R5h

5609997
I think that's the point: NFT people claim that it's a way for artists to make money, and it's all bullshit for several reasons.

Login or register to comment