Lost money on NFT

Malthusian

But again you’re completely assuming that the NFT part of it is all get rich quick and the gaming company somehow hasn’t considered that having super powerful items that only the rich can obtain would spoil their game.

If you're going to attempt to discuss cars without assuming that they are for getting from A to B it's not going to be a very interesting conversation.

Like I said, there's a reason we're having this conversation on a Savings & Investment forum and not on a Fortnite forum where nobody would care (outside the Venn intersection between gamers and crypto bros).

 Your last FCA research paper was a complete joke sample of 31 people but fair play this one actually looks worth reading.

If you have any studies which disprove the FCA's conclusions we're all ears. Especially as crypto threads on this forum have repeatedly backed up the FCA's conclusions. Poke any bro with a reality stick enough times and the chance that they will stop droning on about invoice financing on the blockchain and start ranting about 200%pa returns and "have fun staying poor" approaches 1.

Still though what is any investor looking to do? No investor puts money into things to get less back otherwise they’d just be called spenders

We both know there's a difference between long-term growth and getting rich quick.

Deleted_User said:

Purchases (with real money) for in-game items already exist. What does linking them to NFTs add? Nothing.

Same reason so many companies issued press releases about putting all sorts of random crap on the blockchain shortly after 2017.

The CEO of Acme Inc reads an article in the Wall Street Journal saying that blockchain is the future of everything. He runs into the COO's office and slams the paper on his desk. "We need a blockchain!"

The COO runs into the CTO's office and slams the paper on his desk. "We need a blockchain!"

The CTO runs downstairs to the Pointy Haired Boss who runs the IT department. "We need a blockchain!"

The PHB runs downstairs to the basement and tells the T-shirt-wearing gnomes "We need a blockchain!"

The gnomes say "Why? It's pointless and redun..." "Because the board wants one, just do it or you're fired." The gnomes duly put together a project proposal which says "blockchain" a lot. The PHB runs to the CTO who takes it to the COO who takes it to the CEO who takes it to the head of PR, who issues a press release about how they're putting Acme Inc on the blockchain.

A few years later the project is quietly shelved once everybody has lost interest.

Now for Acme Inc read "Foobar Games Pty Ltd" and for blockchain read an article about how NFTs are the future of gaming.

lozzy1965

I think if you work on that last answer a bit Malthusian you could get a book out of that.  Most amusing

Zola.

What value does an NFT provide? You don't own the copyright to the image. Seems like the biggest load of nonsense. 

What mug would want to spend £100,000 on a picture of an ape that some teenager can draw in 10 minutes in Adobe Illustrator?

The only use I can see in it is money laundering.

Scottex99

I wonder what Gavin actually bought, I hope he comes back one day and tells it.

I still need to read this FCA thing but in other news someone offered me 5.55 ETH for an NFT I own this morning. Around $18k for an animation of a bunny in front of a blue lambo. The world works in mysterious ways

Gary1984

Apparently people are more likely to spend money when using an unfamiliar currency. Sure why not spend 5.55 Ethereums on some nonsense, what's the big deal?

barnstar2077

Gary1984 said:

Apparently people are more likely to spend money when using an unfamiliar currency. Sure why not spend 5.55 Ethereums on some nonsense, what's the big deal?

I would have held out for 10 widgets or at least 3 twingos personally.

lozzy1965

Deleted_User said:

lozzy1965 said:

Deleted_User said:

Purchases (with real money) for in-game items already exist. What does linking them to NFTs add? Nothing.

Why are some games companies thinking of doing it anyway? The only things I can think of are:

1) they hope to cash in on the NFT hype, and sell them for more money than in-game items usually sell for because they are NFTs, to people who foolishly think that games-related NFTs will be good "investments" (probably to people who aren't real gamers, i.e. who are only getting into the game because of the NFT angle).

2) they are themselves long crypto or NFTs, and want to keep the whole hype/ponzi going longer.

Feel free to suggest any other plausible explanations.

1)  ie.  The games company are looking for more ways to broaden the appeal of their game and also make more money from their game.  
No more explanations needed.  When one has a product, one wants to max sales and max an income stream from it.  Absolutely nothing wrong with that.  Players can always chose not to play the game or not to make additional purchases.  It's just another string to the in game purchase argument.  Some people like to have a big expensive car and some people just want something to get from A to B.  People choose hoe they spend their money for their enjoyment.

Yes, I agree that explains it perfectly well.

The problem is that, by trying to make more money out of games in the short term by adding NFTs to them, the companies may make them worse for gamers (which may damage their business in the longer term). The issue is that the new customers will only be in it in the hope of getting rich quick (from the NFTs), and they may well drive up the price of in-game purchases to a level that most existing customers (who are into playing the games) can't afford. Which could easily make the experience of playing the games much less satisfying. Even if that aspect doesn't turn out too badly, the companies will still be hiking the prices of the in-game items, at a time which is financially difficult for most people. Everything about this is negative for the dedicated gamers.

And that's without mentioning the elephant in the room, that NFTs (and cryptos) are a really gratuitous contribution to the on-going climate catastrophe, because the blockchain is incredibly wasteful of energy.

2)  Hype is correct, which might prove to be correct or incorrect in time.  Ponzi?  There has been plenty of debate about this, in my view it isn't.

Well, it's a ponzi scheme if

a) people are buying in the hope that they can sell later on for a higher price; and

b) it adds no value other of any kind other than those future sales.

Specifically for in-game items implemented as NFTs, as compared to "traditional" in-game NFTs, I can see absolutely no value added by the NFT part.

For NFTs in general, I wouldn't make quite such a sweeping statement.

For cryptos, clearly there is a use case as a currency for some drug dealing, extortion, money laundering, and other illicit transactions. (Though some of those are bad things - i.e. except the drugs .) However, the "market capitalization" of cryptos seems extremely high, consdering how niche those uses are, and that cryptos have failed to catch on as general-purpose currencies. So the prices are mainly driven by the speculation/ponzi aspect.

We both believe the same thing .  I just take exception to the use of the word "ponzi".  With cyrpto, what they are buying DOES exist (excluding scammers), therefore people are buying in the hope it will take off and become widely accepted but also buying off the back of the hype of making a quick - or not so quick (12 years!) - buck.  Those people may be proved right but there is no where near enough acceptance yet.  When well known businesses start 'investing'/speculating then one would like to think that they know what they are doing.  With NFT's you and I attach no value to them, and think anyone that does is crazy, but there's lot's that goes on in the world that I think that about. 

Malthusian

Deleted_User said:

Well, it's a ponzi scheme if

a) people are buying in the hope that they can sell later on for a higher price; and

b) it adds no value other of any kind other than those future sales.

To be pedantic, that is not a Ponzi. That's either a tulip bubble or a pig-in-a-poke. If the buyers' expectations are coming from mass delusion it's the former, if it's the seller's sales pitch it's the latter.

A Ponzi is an investment scheme that has no source of funds apart from new investors' money. Or any reasonable expectation of a future source of funds. (The second part differentiates a failed venture capital investment from a Ponzi scheme.)

For illustration:

Florist grows flowers and sells them, idiots pay increasingly ridiculous prices for them, florist rolls their eyes and makes hay while the sun shines = tulip bubble.

Florist grows flowers, tells people they'll sell for millions but they can have them for thousands = pig in a poke.

Florist offers investors "risk-free" returns of 7-8% per year to invest in tulip production on the basis that tulips will sell for massive amounts forever, the profits don't materialise so the florist pays returns with new investors' money to keep new investment rolling in = Ponzi scheme.

It's best to be accurate with our zero-sum-game terminology because otherwise we're no better than the "eVeRyThInG iS a PoNzI" crowd

Scottex99

And that's without mentioning the elephant in the room, that NFTs (and cryptos) are a really gratuitous contribution to the on-going climate catastrophe, because the blockchain is incredibly wasteful of energy.

2)  Hype is correct, which might prove to be correct or incorrect in time.  Ponzi?  There has been plenty of debate about this, in my view it isn't.

Well, it's a ponzi scheme if

a) people are buying in the hope that they can sell later on for a higher price; and

b) it adds no value other of any kind other than those future sales.

Specifically for in-game items implemented as NFTs, as compared to "traditional" in-game NFTs, I can see absolutely no value added by the NFT part.

For NFTs in general, I wouldn't make quite such a sweeping statement.

For cryptos, clearly there is a use case as a currency for some drug dealing, extortion, money laundering, and other illicit transactions. (Though some of those are bad things - i.e. except the drugs .) However, the "market capitalization" of cryptos seems extremely high, consdering how niche those uses are, and that cryptos have failed to catch on as general-purpose currencies. So the prices are mainly driven by the speculation/ponzi aspect.

The Bitcoin blockchain uses a lot of energy, so does the ETH one but neither use as much as the traditional finance industry. Plus ETH is moving to POS. All new coins are also POS so this energy point is barely relevant.

You personally can see no value, doesn't mean there isn't value there in terms of ownership an transferablitity for the in-game items.

Standard boring boomer chat about only illegal cases. You know what's used for the most illegal stuff in the world? USD.

People use crypto every day as an inflation hedge, as a store of value, because it's decentralised, because you can move large amounts of value around the world in minutes and for many other reasons. That's why some of them are the fastest growing assets of all time and the industry as a whole is growing, generating value and sucking up all the best talent from every other type of work.

People trade on it and speculate, for sure. Doesn't make it a ponzi

Aegis

Scottex99 said:

The Bitcoin blockchain uses a lot of energy, so does the ETH one but neither use as much as the traditional finance industry.

Setting aside the other issues for the moment, this is hardly a fair comparison because this completely ignores the fact that traditional finance is used by basically the entire planet, while blockchains are used by a very small minority.  This chart summarises the energy cost per transaction between Visa and BTC:

https://www.statista.com/statistics/881541/bitcoin-energy-consumption-transaction-comparison-visa/

Looking at it per transaction, it's clear that BTC is woefully inefficient, and this problem would only get worse with wider adoption.Even if you assumed that the cost for a BTC transaction is exaggerated by a factor of 1000, it would still be far worse per transaction than Visa.

If everyone adopted bitcoin as their de facto standard currency, the cost of the network would just be astronomical.  Multiple redundant systems all doing the same calculations will inevitably lead to energy inefficiencies - as I keep being told, this is by design rather than by accident, which makes me believe that bitcoin must have been designed to fail before widespread adoption.