NFTs Are – Finally – Worthless(rollingstone.com)
rollingstone.com
NFTs Are – Finally – Worthless
https://www.rollingstone.com/culture/culture-news/nfts-worthless-researchers-find-1234828767/
52 comments
Seems like it'd be feasible to fake sales or use NFTs to hide laundering/transfer schemes. Getting even one rube to buy one of these would easily pay for gas?
It's also easy to buy your own for $x, to try and convince the world it has a value of $x. For assets that are not for sale, the price point of the last trade is often taken as its dollar value without question.
Anonymous speculators buying stuff back and forth doesn't mean they'll have value in the end.
But the article says that they have no value now. Someone is still buying and selling some of these things, for some reason.
Wash trading is another explanation. When the same person is buying and selling there is no real value being demonstrated.
Yes. Wash trading for the masses is the biggest innovation of NFTs. It is bananas how many breathless articles were typed and published about how today's crazy kids were buying stoner monkey pictures for $$$ without even a mention of this.
With Bitcoin or Eth or Doge or whatever, it's hard to paint the tape. You can't move the ticker by selling BTC to yourself at a high price, because your offer to buy it at that price will be rudely filled by somebody else selling their BTC, leaving you holding the bag. Since all BTC is presumed to be equally good you cannot selectively buy only from yourself. The exception to this is of course when you operate an exchange in which case you can fake whatever trading you like.
But with NFTs you don't need to be an exchange operator. Wash trading for everyone! Only YOU hold Bored Ape #1337, only YOU can sell it, so you can safely trade it back and forth between two, three, or a dozen of your own accounts all day giving it the appearance of value while losing only transaction fees. You'll never have your buy offer matched with another seller of Ape #1337 since you have the only one.
All NFT sales should be assumed wash trades without evidence to the contrary.
With Bitcoin or Eth or Doge or whatever, it's hard to paint the tape. You can't move the ticker by selling BTC to yourself at a high price, because your offer to buy it at that price will be rudely filled by somebody else selling their BTC, leaving you holding the bag. Since all BTC is presumed to be equally good you cannot selectively buy only from yourself. The exception to this is of course when you operate an exchange in which case you can fake whatever trading you like.
But with NFTs you don't need to be an exchange operator. Wash trading for everyone! Only YOU hold Bored Ape #1337, only YOU can sell it, so you can safely trade it back and forth between two, three, or a dozen of your own accounts all day giving it the appearance of value while losing only transaction fees. You'll never have your buy offer matched with another seller of Ape #1337 since you have the only one.
All NFT sales should be assumed wash trades without evidence to the contrary.
This argument is valid word for word for art, domain names, houses... So I guess you should be willing to follow your logic to the same conclusion in those cases too.
Houses have price history, but usually the identity of the owners is a matter of record and if I sold my house to myself, you could see that. I could try to obfuscate this by creating a shell company to buy my own house but that is about 1,000x more work than creating another ETH wallet and still not very anonymous.
More importantly, even if I manage to create the appearance that my house has a price history of eight million dollars, somebody looking at the physical property will note that it is in a crappy neighborhood, the vinyl siding is cracked, the deck is rotting, and the construction is generally cheap '80s on a quarter acre. There are other ways to estimate the value of the property besides looking at what it last sold for. So we rarely ever see this attempted in real estate.
This is true of domain names too. I am not going to trick anybody into thinking 643626bcaqw.org is worth as much as tesla.com for obvious reasons, no matter what wash trades I perform. Pointing to "well it last sold between two anonymous owners for millions!" fools nobody. The price history of a domain name is not even normally shown when you try to purchase one, just the current asking price.
Art is closer, which makes sense as NFTs are supposed to be a digital equivalent to art. I am not in the market for high priced art and certainly wouldn't recommend it as an investment. Unlike a house, I can't inspect a piece of art and judge how much money it might be worth. Like an NFT, I imagine when a piece of art is sold at auction it's typical for the auctioneer to mention it last sold to so-and-so at such-and-such price. The difference is that "so-and-so" might be, say, Jeff Bezos or the Metropolitan Museum of Art or something. No auctioneer is going to say "well, this piece is highly valuable because it last sold from D6EB90 to CBB0FE at 24.190 WETH"[1]. Nobody would care about a purported sale between two anonymous parties.
The NFT world is the only space I can think of where that data is assumed to be meaningful. Notice how the prominent the price history graph is on OpenSea -- it's almost as big as the image itself. Probably because there is no other way to guess at a valuation for a Bored Ape, so even though this anonymous price history is highly dubious, it's all a prospective buyer has to go on.
[1]https://opensea.io/assets/ethereum/0xbc4ca0eda7647a8ab7c2061...
More importantly, even if I manage to create the appearance that my house has a price history of eight million dollars, somebody looking at the physical property will note that it is in a crappy neighborhood, the vinyl siding is cracked, the deck is rotting, and the construction is generally cheap '80s on a quarter acre. There are other ways to estimate the value of the property besides looking at what it last sold for. So we rarely ever see this attempted in real estate.
This is true of domain names too. I am not going to trick anybody into thinking 643626bcaqw.org is worth as much as tesla.com for obvious reasons, no matter what wash trades I perform. Pointing to "well it last sold between two anonymous owners for millions!" fools nobody. The price history of a domain name is not even normally shown when you try to purchase one, just the current asking price.
Art is closer, which makes sense as NFTs are supposed to be a digital equivalent to art. I am not in the market for high priced art and certainly wouldn't recommend it as an investment. Unlike a house, I can't inspect a piece of art and judge how much money it might be worth. Like an NFT, I imagine when a piece of art is sold at auction it's typical for the auctioneer to mention it last sold to so-and-so at such-and-such price. The difference is that "so-and-so" might be, say, Jeff Bezos or the Metropolitan Museum of Art or something. No auctioneer is going to say "well, this piece is highly valuable because it last sold from D6EB90 to CBB0FE at 24.190 WETH"[1]. Nobody would care about a purported sale between two anonymous parties.
The NFT world is the only space I can think of where that data is assumed to be meaningful. Notice how the prominent the price history graph is on OpenSea -- it's almost as big as the image itself. Probably because there is no other way to guess at a valuation for a Bored Ape, so even though this anonymous price history is highly dubious, it's all a prospective buyer has to go on.
[1]https://opensea.io/assets/ethereum/0xbc4ca0eda7647a8ab7c2061...
The difference is that in those situations it's much harder to keep (convincingly) faking fresh economic identities.
Especially when some governments want to know who you are in order to get the tax-portion of transaction costs.
Especially when some governments want to know who you are in order to get the tax-portion of transaction costs.
To the above comment, we don’t actually know people are buying and selling these. It is also entirely possible these transactions are fraudulent (i.e. buy your own stuff to give an impression of demand).
I mean, I'm sure I will be dismissed since it's just my word and nothing else. But yes, people are buying and selling these, just not at the insane volumes as peak mania 2 years ago.
It's easy to dismiss these sales as wash trades, and I'm sure at least some of them are, but most of them are not. The NFT space has dwindled down largely to a a group of enthusiasts that like gamifying NFT mechanics, generative artists and generative collectors (no I'm not talking about monkey pics), as well as some people who managed to make a bunch of money during the bull market and not lose it all and they continue to refine their holdings expecting a future crypto bull market.
Institutions like the big auction houses and a few galleries still facilitate NFT sales as a few NFT artists and generative artists have been able to successfully bridge into the art world.
I agree though that on a long enough time line, 99% of NFTs will absolutely become worthless if they aren't already. This is true of many types of collectibles. Ultimately this is a good thing, but I'm certain that there will be a community of dedicated creators and collectors that remain as long as the government doesn't squash crypto completely.
It's easy to dismiss these sales as wash trades, and I'm sure at least some of them are, but most of them are not. The NFT space has dwindled down largely to a a group of enthusiasts that like gamifying NFT mechanics, generative artists and generative collectors (no I'm not talking about monkey pics), as well as some people who managed to make a bunch of money during the bull market and not lose it all and they continue to refine their holdings expecting a future crypto bull market.
Institutions like the big auction houses and a few galleries still facilitate NFT sales as a few NFT artists and generative artists have been able to successfully bridge into the art world.
I agree though that on a long enough time line, 99% of NFTs will absolutely become worthless if they aren't already. This is true of many types of collectibles. Ultimately this is a good thing, but I'm certain that there will be a community of dedicated creators and collectors that remain as long as the government doesn't squash crypto completely.
How do you know these aren't wash trades?
When nobody sells an NFT, "journalists" write articles like this one claiming their "market cap" is "zero dollars". When somebody does sell an NFT, shrug it off as a wash trade.
That's true, but I think you're missing the context that NFT's are in fact intrinsically worthless and merely a vehicle for scammers and the terminally gullible. NFT's have shown for a while now what they're really about, as have the people promoting them. It isn't really journalists' fault for no longer trusting "the system" to be honest or even capable of honesty.
At this point I wouldn't believe a sale is legit without both parties coming forward and submitting themselves to forensic accountancy.
At this point I wouldn't believe a sale is legit without both parties coming forward and submitting themselves to forensic accountancy.
I'm fully aware that most NFTs are worthless. I never claimed otherwise. I was merely observing the faulty logic of collecting "evidence" for a position with this kind of "heads i win, tails you lose" tomfoolery.
You didn’t answer the question.
The question was not addressed to me.
Usually when you respond to a post you address what is in the post. Posting that you think it’s a stupid question adds nothing to the discussion. Doubly so when you don’t bother to present an alternative way to look at it.
Ok. Let me spell out explicitly what I already implied.
First, it wasn't a stupid question. How do you know some NFT trades aren't just wash trades? We don't know! It's hard to know that due to the non fungible nature of NFTs.
Second, it was not a genuine question; it was a rhetorical question with an implication that surely, surely, any NFT trades at high prices or whatnot must have been wash trades. I don't agree with this implication.
When you have non fungible assets which rarely trade, it's very difficult to establish what they're worth (or, "what they would sell for", to avoid a detour about intrinsic value).
An NFT can sit a long time in someone's wallet without any trades and it's hard to say if it would sell for $5, $5000, or not find a buyer at any price.
Likewise, an NFT can be traded multiple times at ever-higher prices and it will be difficult as an outsider to establish wether those trades are wash trades or not.
I'm saying it's difficult to establish what the market price for these NFTs is. This is an alternate way of looking at things. The original story was that some people proclaimed they determined the market price for some collections of tokens and confidently concluded that that price was zero. That's ludacrious; nobody trades anything at zero. Either the volume crashed to nothing, or the price was at some level above zero. In any case, I disagree with the premise that it's feasible to measure the market price for illiquid collections of tokens.
First, it wasn't a stupid question. How do you know some NFT trades aren't just wash trades? We don't know! It's hard to know that due to the non fungible nature of NFTs.
Second, it was not a genuine question; it was a rhetorical question with an implication that surely, surely, any NFT trades at high prices or whatnot must have been wash trades. I don't agree with this implication.
When you have non fungible assets which rarely trade, it's very difficult to establish what they're worth (or, "what they would sell for", to avoid a detour about intrinsic value).
An NFT can sit a long time in someone's wallet without any trades and it's hard to say if it would sell for $5, $5000, or not find a buyer at any price.
Likewise, an NFT can be traded multiple times at ever-higher prices and it will be difficult as an outsider to establish wether those trades are wash trades or not.
I'm saying it's difficult to establish what the market price for these NFTs is. This is an alternate way of looking at things. The original story was that some people proclaimed they determined the market price for some collections of tokens and confidently concluded that that price was zero. That's ludacrious; nobody trades anything at zero. Either the volume crashed to nothing, or the price was at some level above zero. In any case, I disagree with the premise that it's feasible to measure the market price for illiquid collections of tokens.
Money laundering is always in demand.
People always parrot "money laundering" when they see (what for them are) large amounts of money moving around.
Can you explain how does one launder money w/ NFTs? Because it's absolute nonsense.
Can you explain how does one launder money w/ NFTs? Because it's absolute nonsense.
A wants to give a bunch of money to B for a reason that they want to remain hidden (e.g. a bribe, illegal purchases, etc.). So B puts an NFT up for sale and A buys it for an inflated price. Now B has a plausible explanation for the source of the money.
You can do this with other assets like fine art or real estate but it is a lot more complicated. NFTs are a simple way to launder money online.
You can do this with other assets like fine art or real estate but it is a lot more complicated. NFTs are a simple way to launder money online.
Nice opinion, too bad it's ... not money laundering.
Found the guy holding the bag
Ok, what do you call it when someone tries to conceal the origin of money?
>what do you call it when someone tries to conceal the origin of money?
Maybe just "concealing the origin of money"? Btw, in your scenario you actually left a public, immutable record of the transaction, which is pretty much the opposite of what somebody engaging in this activity (i.e. not LARPing) would want to.
Money laundering has to do with turning so-called "black money" into clean money. In your example, that is not happening anywhere. If A's money is dirty, B will be dirty as a consequence; whereas if A's money is already clean, B should be fine, so, why bother? It's just a regular transfer of money, you just used a fancy technolord mechanism but not different, in essence, than writing a check or using venmo or w/e.
Also, for anyone thinking they could outsmart RICO[1] (or their country's equivalent) with some PNGs of badly drawn apes, that is just so stupid it's actually quite funny. Levine would have a field day with that.
Also also, congrats, all that money you "laundered" with your fancy tokens is worthless now, per TFA. Very smart.
1: https://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corru...
Maybe just "concealing the origin of money"? Btw, in your scenario you actually left a public, immutable record of the transaction, which is pretty much the opposite of what somebody engaging in this activity (i.e. not LARPing) would want to.
Money laundering has to do with turning so-called "black money" into clean money. In your example, that is not happening anywhere. If A's money is dirty, B will be dirty as a consequence; whereas if A's money is already clean, B should be fine, so, why bother? It's just a regular transfer of money, you just used a fancy technolord mechanism but not different, in essence, than writing a check or using venmo or w/e.
Also, for anyone thinking they could outsmart RICO[1] (or their country's equivalent) with some PNGs of badly drawn apes, that is just so stupid it's actually quite funny. Levine would have a field day with that.
Also also, congrats, all that money you "laundered" with your fancy tokens is worthless now, per TFA. Very smart.
1: https://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corru...
If it's not happening, why do the Fed's seize popular crypto tumblers, like Bitcoin Fog, Helix, ChipMixer, and BestMixer.io?
If you think the NFT marketplace crashing resulting in monetary loss is the first time a business deal has gone wrong between criminals, I'm not sure what to tell you.
If you think the NFT marketplace crashing resulting in monetary loss is the first time a business deal has gone wrong between criminals, I'm not sure what to tell you.
Please enlighten us @fragmede, did any of those mixers processed NFTs?
>If you think [...] is the first time a business deal has gone wrong between criminals
Huh? Feels kind of dumb that I have to type this but ok, here you go, "No. I do not think this is the first time a business deal has gone wrong between criminals".
>If you think [...] is the first time a business deal has gone wrong between criminals
Huh? Feels kind of dumb that I have to type this but ok, here you go, "No. I do not think this is the first time a business deal has gone wrong between criminals".
I don't know where I claimed those particular mixers mixed for NFTs.
My point was that mixers, used for "concealing the origin of money", have been sized for money laundering.
The criminals tried some crypto shit to launder their money. It didn't work. Ah well, back to buying car washing shops for them.
My point was that mixers, used for "concealing the origin of money", have been sized for money laundering.
The criminals tried some crypto shit to launder their money. It didn't work. Ah well, back to buying car washing shops for them.
>I don't know where I claimed those particular mixers mixed for NFTs.
I also think you're very confused, as the topic being discussed is money laundering with NFTs.
Cryptocurrency != NFTs, you know that, right?
I also think you're very confused, as the topic being discussed is money laundering with NFTs.
Cryptocurrency != NFTs, you know that, right?
My god, you're right!
> Can you explain how does one launder money w/ NFTs? Because it's absolute nonsense.
They fact that a person understand something doesn't make it nonsense - and way too high a percentage of internet arguments boil down to essentially this.
They fact that a person understand something doesn't make it nonsense - and way too high a percentage of internet arguments boil down to essentially this.
Run an exchange. have people wash trade back and forth. Siphons.
Yaaaaaay. We took the long way round to work this out.
Now do AI.
Now do AI.
Well NFT was completely useless from the beginning on. Cryptocurrencies, on the other hand, are very useful for a whole lot of blackhat use-cases (and it seems like they are mostly useful for that, unfortunately).
Same applies for AI. There is a whole lot of lucrative bad stuff that can be done with them, so they won't become worthless. Not clear yet if they will bring any good to the world, or if the balance will be mostly on the evil side (like cryptocurrencies).
Same applies for AI. There is a whole lot of lucrative bad stuff that can be done with them, so they won't become worthless. Not clear yet if they will bring any good to the world, or if the balance will be mostly on the evil side (like cryptocurrencies).
Don't have to be a blackhat to enjoy having control of your own funds. Plenty of people don't trust their banks.
I know someone who got his account shut down simply for moving his salary to his home country, where he was building a house. And that causes all kinds of problems, now he's not able to take a legit work, and even identify himself on government websites since that service is also controlled by and connected to a bank account.
Now it's up to him to prove that he's not funding terrorism (we're close enough that I'm positive this claim is ridiculous) for moving his own money between his own bank accounts. People do fall between the cracks in these automated systems and it will only get worse with time.
Unfortunately people are retarded and can't see the true benefit of cryptocurrencies and are only looking to get rich quick and it ruins the entire ecosystem.
I know someone who got his account shut down simply for moving his salary to his home country, where he was building a house. And that causes all kinds of problems, now he's not able to take a legit work, and even identify himself on government websites since that service is also controlled by and connected to a bank account.
Now it's up to him to prove that he's not funding terrorism (we're close enough that I'm positive this claim is ridiculous) for moving his own money between his own bank accounts. People do fall between the cracks in these automated systems and it will only get worse with time.
Unfortunately people are retarded and can't see the true benefit of cryptocurrencies and are only looking to get rich quick and it ruins the entire ecosystem.
I'm quite sure that if cryptocurrency were used at the scale of bank accounts, far more people would be far more screwed over by its much larger cracks.
I would expect him to be scrutinized to a larger degree had the money come from cryptocurrencies. Both sending and receiving banks have money laundry protection schemes.
With crypto he wouldn't need the bank to begin with. There's a reason banks have been so afraid of it, they need us to need them.
Cash always seems like it solves these particular problems just fine. Or rolexes.
Mindless dismissal of hyped technology is no smarter than mindless adoption. Generative AI demonstrably has utility. It's here to stay, no matter how much we hate it.
People hate it? What are some reasons?
Because it's noise. Finding good art on the internet is already hard with just humans producing it, when the barrier to entry is crafting a prompt, the amount of shitty end-results will drown everything else out. And this is before considering the point of view of the artists that get their work incorporated in the training corpus without being paid.
One reason is that it threatens a lot of people's jobs.
The only thing crypto and AI have in common is hype. But not everything that's hyped up is worthless.
[deleted]
What specifically about AI do you want to be worthless?
Why AI?
Don't get my hopes up man
finally what they always were?
no shit sherlock
Exhibit A (15 hrs ago) sold for $81,187: https://twitter.com/DegenerateNews/status/170462244577940731...
Exhibit B (21 hrs ago) sold for $162,795 USD: https://twitter.com/DegenerateNews/status/170453517598236304...
Exhibit C (3 days) sold for $221,590 USD: https://twitter.com/DegenerateNews/status/170391046378291222...
Exhibit D (4 days ago) sold for $682,361 USD: https://twitter.com/DegenerateNews/status/170345129005804759...
Exhibit E (6 days ago) sold for ~$181,506 USD: https://twitter.com/DegenerateNews/status/170287100698810383...
and I could go on and on, but I think you get it now...