Posts Tagged ‘FOMO’

NFTs Are a Pyramid Scheme and People Are Already Losing Money

Mark Twain allegedly said, “Buy land, they’re not making it anymore.” While not technically true (China and other countries and fabricating new human-made islands by dredging, undersea volcanoes may do the same naturally, etc.), the concept makes sense even to a kid not yet old enough to take an economics class – scarcity of a resource will increase the perceived value of that resource.

When it comes to artwork though, it takes more than just scarcity to make something valuable. (Otherwise my daughter’s limited run of sketches of Undertale characters from when she was 11 would be pulling in six figures for us from the local gallery.)

Minting and subsequently buying an NFT of a years-old meme only makes it a good investment if you can guarantee that there will be others out there willing to purchase it from you at an inflated price down the line. And though I appreciate the Budweiser “WHAZZUUUUUUP” commercials from the 2000s as much as the next person, I can’t really see someone buying a digital collectible of a 30 year commercial in about ten years time, for umpteen thousand dollars, nostalgia value or not. Judging by the plethora of trash .gifs and unoriginal crap NFTs being sold on sites like Rarible, it’s clear there’s a boom of buyers at the moment, but will these speculators be able to sell off their digital properties later? (I’m looking at YOU, Beanie Babies collectors, and possibly YOU, Pog collectors, both of which have a rarified low number of offerings that MAY be earning a few investors back their money for every thousand or so investors that won’t end up making a dime off their musty old collectibles.)

If you’re not already in the NFT biz, don’t let FOMO suck you into this next bubble right before it bursts. Going to Vegas and playing blackjack is probably a safer bet for your money in the long run – at least at the casino you know the odds and can enjoy the people-watching while you eventually lose your money…