“NFTs Are A Scam”

0xApe #15513

I figured before I even share a single opinion on the crypto/NFT space, the bare minimum would be that I actually BE in the space and have skin in the game for a minimum time frame before I can make a logical and sensible opinion on them. It’s easy to make judgements when you’re on the outside looking in and say.. “how old are you buying jpegs at 35 years old?”. I’ve heard similar comments like these many times before when I first started buying plastic toy collectibles called Bearbricks when I was 19 years old for $400, which now fetch for $10,000+ a piece. It’s not about the moment NOW, but rather it’s looking into the future and seeing past the haze and knowing what is in demand in the future.

I bought my first NFT roughly 2 months ago and DAMN! The process of buying a NFT at first seemed so foreign. It’s literally like taking a university course. After finishing my CFA a few years ago I told myself I’m done with learning, so getting on this train was extremely difficult. You need to know what is Ether, gas fees, Opensea, Metamask, Cold Wallet, Hot Wallet, WAGMI, Coinbase, web3 – list goes on and on! I had to learn all this in a span of a few weeks and I’m still learning. I quickly realized how far behind I am in terms of the NFT space and thinking that only 8 months ago if I bought several Bored Apes then for a mere 0.3 ETH (less than $1,000 each)…my bank account would swell up another few million dollars today assuming I had the diamond hands of course. Below is the cheapest Bored Ape you can buy on the market right now for 95 ETH – yeah that’s $237,854 USD…and no it’s not a typo.

So 2 months in and with $50,000+ in the market… what do I think of it and is it a scam? The concept and technology of NFTs is NOT a scam, but the people behind the NFTs depending on the project can be a scam. Whenever there is lucrative money involved you will almost always find greed and fraud. There are literally a ton of projects out there as we speak where everyone is just trying to secure the bag and vanish – that’s what we call a “rug-pull” in the space. The difficult part as a consumer is none of these projects would have “rug-pull” or “scam” on a banner on their NFTs – so when you’re browsing for the next jpeg you want to buy, it’s hard to distinguish which is a legitimate project and which are just going to take your money and run. The best part is the whole purpose of web3 is decentralization, so don’t expect to call the cops and try to get your money back because your money is gone. However, there are a ton of projects out there that are truly trying to provide value for it’s holder and it’s what we call utility and most important of all…they go up in value. I’m sure a lot of people in the space are simply in it with one specific motive in mind and that’s to make some money (including myself). There is nothing wrong with that because the stock market is the biggest casino in the world after all.

With that said, I do see many promising concepts from NFTs that can possibly be the next wave of how we conduct business in the future. As a businessman, it is in my best interest to understand them and be ahead of the curve. Aside from the price appreciation of NFTs, another aspect that caught my attention is the commercialization of the NFT you own. It’s still a relatively young concept, but can be extremely powerful in the future. Take this Inbetweener NFT #6912 I own as an example. Inbetweener is created by an artist called GianPiero, which is the artist behind Justin Bieber’s Drew house brand. Owning this NFT gives you certain perks such as being able to attend Justin Bieber’s concerts in your city and more. Of course, this utility is not what I’m after as I’m too old for this, but rather the commercial rights I have with owning this NFT is what means more to me. In simple terms, if I wanted to mingle this art/image with my brand and sell it and earn a profit off it – I have every legal right to do so because when they check the blockchain, it will show that I own it. Though you might think who would want to put a bear on a t-shirt and buy it? Well maybe not today…but if the brand of this project continues to grow and becomes desirable on the market – the sky is the limit. Imagine if back in the day Nike sold you a NFT of a specific colour swoosh logo and you own that NFT and every time that colour logo gets used on a sneaker you get paid. Yeah, that’s how right clicking or “screen shot” of your jpeg doesn’t work because at the end of the day – it’s on the block chain and I have ownership of it.

Inbetweener #6912

Last but not least, there are undue risk in this space because not only you’re dealing with exposure to the specific project in question, but you’re also exposed to the price movement of Ether. On top of that, you’re also exposed to political risk in which the government can step in anytime and fuck us all (though i think this risk is much lower in 2022). With many moving parts it is no doubt a risky game to be involved, but like they all say – no risk, no reward.

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