I see a statement like this and, well, I'm sort of struck dumb.
NFTs won’t be replacing anything.
I own many paintings. Some of them physically sit on my walls and I can enjoy them.
An NFT does not provide that. Nor does it provide ownership over the art, in part or whole. It is not a reproduction of the art, and it doesn't guarantee that I can access even some reproduction.
So what value does it give me to own an NFT?
Simply that someone else might buy it later? But why would they do that? Because someone else might buy it from them? Because it’s funny?
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Reading history is a great way to learn from the past.
I live in Amsterdam, but the parallel to the crypto ecosystem isn't tulips, it's an example from the land of my birth, the South Sea Bubble, and still the best write-up of it is over 150 years old.
To make a long story short, for centuries stocks had been confined just to nobility, and they were almost always a guaranteed huge return.
Suddenly anyone could issue and buy stock, and so everyone bought every stock offered - I have to quote this paragraph in full.
But the most absurd and preposterous of all, and which shewed, more completely than any other, the utter madness of the people, was one started by an unknown adventurer, entitled “A company for carrying on an undertaking of great advantage, but nobody to know what it is.” Were not the fact stated by scores of credible witnesses, it would be impossible to believe that any person could have been duped by such a project. The man of genius who essayed this bold and successful inroad upon public credulity, merely stated in his prospectus that the required capital was half a million, in five thousand shares of 100l. each, deposit 2l. per share. Each subscriber, paying his deposit, would be entitled to 100l. per annum per share. How this immense profit was to be obtained, he did not condescend to inform them at that time, but promised that in a month full particulars should be duly announced, and a call made for the remaining 98l. of the subscription. Next morning, at nine o’clock, this great man opened an office in Cornhill. Crowds of people beset his door, and when he shut up at three o’clock, he found that no less than one thousand shares had been subscribed for, and the deposits paid. He was thus, in five hours, the winner of 2000l. [Over a million pounds today. /t] He was philosopher enough to be contented with his venture, and set off the same evening for the Continent. He was never heard of again.
And then it all collapsed and almost everyone lost almost everything, except for a few con artists.
And I would add this — stock markets are actually things that are proven to allow people to make money — to invest in corporations that create value from nothing.
You should really take a lesson from this. The crypto bull market will end as every single bull market has, and in a market with no market makers, and where Tether, the “equivalent” of US treasuries (bonds, bills, and notes), is almost certainly also a shell, there will be no supporting it.
Stocks have fundamental value. If someone gave you all of Apple stock for free, and no one else would buy it from you so Apple’s stock price was 0, you’d still be getting tens of billions of dollar in profits each year.
But of course, that would never happen. In a market crash, Apple’s stock value might go down quite a lot, but it always has a fundamental value that supports the market price.
But imagine that someone gave you all of Bitcoin for free, and no one would buy it. You have all of Bitcoin on your drive, but everyone else is like, “Sorry, we aren’t interested in buying it.” It would be worth zero.
Cryptocurrencies have no fundamental value. The entire value of a cryptocurrency is based on sentiment and nothing else.
And one day, everyone will go for the exits at the same time and there will be no market makers and no fundamental value to support it.
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There is still no proof that distributed, trust-free ledgers — “the blockchain” — are actually useful to any honest person at all, outside the crazy bubble. The only use of trust-free transactions is for criminal activities or in broken societies. In an honest society, an honest individual would prefer the protection of law to the false protection provided by algorithms.
If your society is so broken that you have no trust in it to protect you, you should work to fix it, not undermine it further.
The endgame of cryptocurrencies would be that all fiat currency would be worthless, which means all pensions worthless; the inability of the government to follow transactions, which means taxation would be essentially impossible, particularly for the rich, which means the complete breakdown of government services, because “printing” fiat currency would be worthless.
Get out of crypto before the crash! Good luck.
