Let’s be honest, the new trend toward NFTs and cryptocurrencies are a complete scam, a tax on the gullible and stupid who have more dollars than sense. Yet it doesn’t stop people from being dumb, does it? It doesn’t stop people from just wanting things so much that they’d rather hand over their hard-earned cash for, effectively nothing.
So why are people so damn stupid these days? Let’s go talk about it for a while.
No before I get started, I know we’re going to get some that say “It’s not a scam!” Who are those people? Invariably, people who are profiting off of NFTs or people who can’t handle the fact that they got scammed themselves. Let’s keep that part in mind. Nobody can actually explain how the value for these things actually, demonstrably works.
I heard a story recently and I don’t remember where I saw this, so keep in mind that I’m just paraphrasing and I didn’t come up with it. Let’s say you walked into the Louvre and you saw the Mona Lisa and you found someone there and said “I want to buy that!”
“Okay, fine,” they say. “Bring me $70 million dollars and it’s yours!” So you go to the corner ATM, withdraw your $70 million dollars and hand it over and they pull out a receipt, write down “Mona Lisa, now owned by <your name>” and they take that into the back of the museum, open a broom closet and stick it to the wall, behind the dustpans. “There, now you own the Mona Lisa!”
“But I want to take it with me!” you protest. “It’s mine now!”
“Oh hell no,” says the guy. “You don’t actually own the Mona Lisa, you just own the receipt that says that you own the Mona Lisa, so that anyone who knows just what broom closet to look in, they can see your receipt and know that you do.”
But that’s just stupid. Because if the Louvre ever sells the Mona Lisa, they’re not going to come asking your permission or giving you any part of the profits, because you don’t actually own the Mona Lisa, you just own the receipt. You can’t hang it on your wall because you don’t own it in any demonstrable way. This is just dumb!
The only way that you can make money off of your NFT crap is to find other people, more stupid and gullible than you are, to sell it to and sorry, if that’s what you want to do, your morals are subhuman. That’s not really a surprise these days, scamming people online is all too common, but it shouldn’t be a national past time.
There is no inherent worth to any of the things being sold as NFTs. Twitter CEO Jack Dorsey sold the NFT for his very first tweet, a misspelled, barely coherent scrawl, for nearly $3 million. What does that get you? I mean, what if, next week, it comes out that Jack Dorsey is a pedophile? Not saying that he is but, given the state of Silicon Valley, I wouldn’t be that surprised. So if that happens, or if we find that he made a single tweet years back that could conceivably be considered racist if you look at it sideways, your “investment” would be ruined because nobody is going to pay you for your imaginary NFT for a stupid tweet. You have nothing. Nothing at all. You don’t even have something to burn to keep warm.
It’s like the tulip craze in Holland, where people invested in bulbs of tulips between 1634 and when it collapsed in 1637. People lost fortunes and at least they had tulip bulbs to plant. NFT buyers don’t even get that!
Now don’t get me wrong. I understand the collector mentality, being a collector myself, but this is just stupid. Some of it, I’m sure, is borne out of the desire to collect things but the modern sensibility to de-clutter one’s life. Except that’s still stupid because collecting things requires clutter. My sister, decades ago now, she had a huge collection of Magic cards. Then, when she was done, she sold the whole thing and bought a car wholesale with the proceeds. She got something out of it. She made a nice profit and while that’s not the purpose of collecting, I talk about that over on my other blog from time to time, if you’re just buying things from which you can never get anything, how is what you’re doing better than just lighting your money on fire?
Because sooner or later, someone is going to manage to hack the blockchain. It’s not a question of if, it’s a question of when and the second that happens, all of this is going to go away. Someone is going to get really, really, really rich and the whole system is going to collapse. It isn’t like you can prove that you owned anything when the entire digital wallet system goes belly up. It’s not like you’ve got your “property” in a safe somewhere because most of these things, they aren’t physical to begin with. It’s just an idea. You have some kind of ownership in a concept. You don’t even own the copyright and because most of these digital images are just thrown out there for free on the Internet, it isn’t like you can even profit by selling an exclusive line of products featuring your property. Because anyone can do that and you get no cut of anything!
Are we seeing just how idiotic this whole thing is? Granted there are a lot of real idiots out there, but this just takes the cake. Let’s just throw away our money on absolutely nothing, but I bet when it all goes south, people are going to scream about it and demand their money back, but there’s going to be no actual proof that they ever owned anything at all. Because, in reality, they never actually did.
I weep for the future of humanity. I really do.
Absolutely and one day very soon, Nvidia and other shop’s newest RISC chips (run in parallel processor applications) will make hacking a blockchain as easy as hacking an e-mail account “protected” by dual authentication. And some of that has already happened: “Coinbase says hackers stole cryptocurrency from at least 6,000 customers,” etc.
Another wild card is if Govt.’s ban it at some point. Why would they allow people to by-pass the currency they control?
Also, the problem with holding BTC is that if the dollar does implode due to excessive money printing, you get paid more dollars for your BTC. Now, who wants more dollars at the same time that they go worthless?
Finally, just having to declare crypto profits to the IRS would cause all these coins to struggle to hold on too. Yellen is all for 80% tax on profits, unrealized or not.
But you’re thinking long-term. Most are probably doing hit and run. Just like an IPO run up and then flipped. Pump and dump. Yes, always bag holders but most think they will get out before they become bag holders. Only to become bag holders.
The biggest problem with crypto now is that there are no controls. If someone hacks the chain and steals it, there’s really no recourse because there’s no official backing for any of it. You just lost all of your money and there’s nothing you can do about it. I have no idea what the courts would even do in that case. It would be like suing over losing your microtransaction items in a video game. If we think the courts are a disaster now, just wait.
Also, while I don’t know that governments will shut down bitcoin out of spite, the simple reality is that it’s a way to get around paying taxes and no government can permit that. At the moment it’s a minor inconvenience. If it continues to grow, then governments are going to have to act, forcing it to either go away entirely or to at least pay their fair share and that’s going to be another fight. There really is no legitimate reason for bitcoin other than “I don’t like the government!” and “I want to hide what I’m doing from the authorities!” The simple fact is, society needs income to operate. Just because you don’t like paying taxes, that doesn’t mean you don’t have to. The ridiculous sovereign citizen crap gets stomped on all the time. If you don’t like the rules, either work within the system to change them or leave.
re: no recourse because there’s no official backing for any of it. YES💯❗
re: If we think the courts are a disaster now, just wait.
Absolutely, in particular, the question of whether or how courts will be able to enforce judgments against cryptocurrency assets is still a developing matter. The security and reliability of the decentralized ledger makes cryptocurrency assets fairly traceable, however, the courts and regulatory bodies are still at a loss as to whether or how to enforce judgments against those assets and because the value of cryptocurrency is dependent solely on the market, courts seem to have real difficulty ascertaining how to value crypto.
re: it’s a way to get around paying taxes and no government can permit that.
Well, tax havens where folks hide assets in offshore trusts and private investment corps. and avoid taxes have existed for over a hundred years. I use to work for a bank in the Cayman Islands and I have seen this firsthand. Guess who is one of the largest users of offshore banks: the U.S. Government. This allows the US to fund operations all over the world without it being traceable and being off balance sheet. The US could have shut down these tax havens easily by not allowing them to use major clearing center banks but they allow it. That’s what I think would happen with crypto, the US govt. would just have its own so that it can trace and regulate it. I’m married to a tax attorney, the government always allows a certain amount of tax slippage if the entity structuring is correct but your also correct: you can’t have everybody just not paying taxes. No way that works.
And the funny thing is, we just don’t know how much hanky panky is going on right now in the blockchain. There could be, in fact there almost certainly are scams running right this second. There have been widespread thefts in regular accounts, where a few cents are diverted out of thousands of accounts and nobody notices, but it adds up to millions of dollars. If someone has control of the blockchain, and I refuse to believe that nobody does, that isn’t even possible because there’s no independent oversight, but skimming off a few fractions of a bitcoin here and there, that’s probably already making people rich. So it happens. What then? What do you do about it? Who can you complain to? Who can take your complaint seriously? There’s a widespread belief that your digital wallet is safe, but how do you know? How do you prove it? What difference does it make if it isn’t because it’s not like you can easily convert your funds to something else.
The reason the courts are going to have problems valuing crypto is because crypto has no actual value. It’s worth as much as you can get people to agree that it’s worth. The entire thing is just a fantasy. It’s not going to survive forever. Eventually, every con job falls apart and I’ll be laughing my ass off when it does.
Very well said! But just like the methods of cryptocoin debasement (taking small accounts from accounts) as you mentioned, think about the massive dollar debasement from the untold Trillions the Federal Reserve just prints up in its computer systems. Now, that is serious currency debasement that rivals anything crypto is doing.
And this has been going on for as long as governments existed. As you know, the way they used to do it was take gold coins and chip amounts from the edges and THE GOVERNMENT would let the coins continue to circulate at face value. Then they couldn’t even wait that long. Governments wanted to inflate the amount of currency in circulation faster. –And so, just like the current Federal Reserve money printing in the Trillions, often the silver and gold coins were just mixed minted with cheaper metals in a blend from the get go (when the coin was minted.) Governments would let those coins circulate at face value too.
re: There have been widespread thefts in regular accounts, where a few cents are diverted out of thousands of accounts and nobody notices, but it adds up to millions of dollars.
Yes, without big four type cross-audits where they run automated check-sums out to untold digits individuals are not looking for those type of abuses.
re: there’s no independent oversight, but skimming off a few fractions of a bitcoin here and there, that’s probably already making people rich.
Yes, the crypto miners can probably do something very similar to coin clipping in the Middle Ages where small pieces of gold and silver added up to serious money.
re: Who can take your complaint seriously? There’s a widespread belief that your digital wallet is safe, but how do you know? How do you prove it? What difference does it make if it isn’t because it’s not like you can easily convert your funds to something else.
Yes, it has the potential to end v-e-r-y badly.
re: crypto has no actual value. It’s worth as much as you can get people to agree that it’s worth. The entire thing is just a fantasy.
I agree. At least with silver and gold and oil you have some value but worthless dollars are just printed up endlessly debasing the dollar. Without a real commodity backed currency, this always happens.
The reason the US dollar became the reserve currency of the world is because up until we went off the gold standard, you could always redeem your dollars for gold. Now, nothing but “FAITH” is behind the US currency. It is completely a fait currency system. History shows fait currencies always end badly.
re: I’ll be laughing my ass off when it does. Let’s just hope the US dollar doesn’t end up like the Deutsche Mark of the Weimar Republic. Piles of new banknotes completely worthless for anything but toilet paper and wallpaper.💲
That’s why folks need to be diversified across lots of asset classes, currencies, etc.✔
Unfortunately, we just don’t hold the government accountable anymore. Everyone has their hand out and so long as the government is willing to just hand money out for free, nobody cares. Worse yet, as the single major world power, the planet needs us more than we need them and therefore, we get to borrow as much money as we want, never really have to pay it back and that makes the entire economic system worldwide a joke. There is no one out there, no world economy that can tell us to knock it off. Even China, who we’re into for trillions, doesn’t care because they can’t call in their markers and they know it. It’s just sad.
So, so true. If China called in all those trillions in loans there would be nobody to buy all their goods and services because everything these days is just being bought on debt. It’s the same thing that’s happened in Europe where the only country not technically bankrupt is Germany and they keep loaning to southern Europe so that somebody will be there to “buy” Germany’s production.
I watch those US treasury auctions very carefully. The thing that absolutely blows me away about US Treasury bond auctions is how high the bid-to-cover ratio is on the new treasury bonds. For every new treasury bond there’s often one and a half to two times the amount of demand and most of that demand is coming from foreign countries.
China is still one of the major purchasers of all of the treasury bonds produced by the Federal Reserve. But China will not stop lending the USA money, as you point out, because if they did there would be no one buying all their production and the country has an enormous population and without jobs they might start armies and actually implode internally.
It’s an unsustainable mess bigger than any religion’s false hopes and empty promises. That’s why people need some diversification into hard assets. Now that can be in the form of real estate or infrastructure etc. but having everything wrapped up in these infinitely issuable paper currencies looks like a bad idea.
And it all goes back to what you’re always talking about with personal responsibility and holding people accountable. We live in a world where people and entire countries can just be immersed, like religion, in a wish world, in a fantasy and not be held accountable and not be held responsible.
I see that often in my own life because reality is one Hard Road. No wonder people escape off into false fantasies, false hopes and wish worlds. We all can deal with some parts of reality but there are always other parts that people are escaping from no matter what the escape, or rather, defense mechanism is.
Foreign countries own our ass, in hopes of having influence over our politics. We’ve done the same thing for other countries for decades. If you want our foreign aid, you do what we tell you to do, otherwise the pipeline might get cut off. It isn’t just the bonds that foreign powers buy either, they buy up real estate by the ton. China, Saudi Arabia, lots of countries own good sized chunks of our land and we’re only too happy to sell it because it makes us money in the short term and nobody bothers to think about the long term. It all does come down to personal and fiscal responsibility, but no parties care about that anymore because it’s easier to just throw money at people for immediate gain than to actually do the hard work to do things right. I’m glad I’m not going to be around to see most of this come back on the U.S. I’m only sorry that my kids won’t be that lucky.
Absolutely the next generation is going to really inherit a load of horrible problems. That is very sad.
re: they buy up real estate by the ton. China, Saudi Arabia, lots of countries own good sized chunks of our land.
Yes, but maybe the thought there is that how do you take the land when it is in this country? In other words, if things get really bad, you just nationalize all the assets and take them back (-just like other countries have so often done). It’s not like you can take the land back to China, Saudi Arabia, etc.
Hellfire and Brimstone, it is so much easier to post on this WordPress platform than YouTube. On your last video (Irish Fail), everything went right into YouTube’s moderation filter no matter the modifications. “Held for review” “Likely spam” and then there are the posts that just disappear never to be seen again. Ha, ha, ha, ha, ha. Comments get whisked away for the most minor of things: Again, too many emoticons, too many dots [. . . . .], the names of various drugs, too much N.T. Greek. It mistakes all kinds of things for spam, hate speech, etc. If I re-write and re-write and re-write them, finally 18 hours later they often then post.
No wonder people just sometimes make comments like a Smiley Face ha, ha, ha, ha -or- “Blub” (whatever that means) Ha, ha, ha, ha, ha. Anyway, it is what it is.💌
I just went and checked and there was nothing in my moderation queue so I don’t know what to tell you. YouTube sucks. Now they try to hide anything “offensive” even from the channel owner, like they’re trying to protect us. Screw them.
Thank you for checking. It’s all good.
I have faith that God will use even this to His glory and our good. Ha, ha, ha, ha –just kidding.
re: Now they try to hide anything “offensive” even from the channel owner, like they’re trying to protect us.
Yeah, that is just crazy. Those who make conversations impossible, make escalation inevitable.
I don’t like it either but it isn’t like we have a lot of choices out there.