Lost money on NFT

HCIMbtw

Malthusian said:

Scottex99 said:

What about the normal fifa game but there’s 100 gold Ronaldo’s and they are NFTs. Players can trf them directly between each other and EA takes a 5% fee of each trade?

1. That's called "pay to win".

2. There is nothing stopping EA doing that already. Multiplayer games have had unique or ultra-rare items since MUDs in the 90s and have never had any problem tracking their ownership with a simple centralised database.

3. Why would EA allow players to trade Ronaldos and take a mere 5% of profits when they could sell non-transferable Ronaldos and capture 100% of what the market is willing to pay?

4. Games using the ubiquitous "loot box" model immediately run into gambling regulation. At present a gamer can pay £10 of their pocket money for a lootbox of random footballers or guns, and it isn't treated as gambling on the (flimsy) grounds that what they pay for has no market value. As soon as the footballers have a quoted market value, that defence, which is already paper-thin, evaporates entirely.

Now you can pay £10 for a lootbox in the hope it contains a Ronaldo or at least a Rashford or two and you can immediately sell the contents on the market for more than £10. That is indisputably gambling. That means EA has to register with gambling regulators in every jurisdiction it sells the game in, comply with the relevant laws and follow its duty of care to potential problem gamblers.

No problem to solve here bro, maybe next time.

While "pay to win" is a lucrative niche, that niche consists entirely of crappy mobile games terribly translated from Chinese. Both the mass market and the hardcore gamers detest being killed purely because some rich kid spent thousands of dollars on a gold AK47.

What we are seeing here is the classic problem of living in brospace and seeing everything through gold-tinted glasses. Bros say "wouldn't it be great if you stuck NFTs in computer games so everyone could have a chance to get rich quick while they played". What they have missed is that gamers aren't interested in getting rich quick, they just want to play. Explaining this to a bro is like explaining to a street preacher why I'm not interested in going to Heaven. Why on earth wouldn't I want to go to Heaven? Does not compute.

In answer to number 3, because they could make more money %5 of 1,000,000 trades being higher than 100% of 0 trades for simplicity's sake 

How many copies of of Fifa 2020 get sold brand new in 2022? How many second hand copies of Fifa 2020 would get sold on a second hand market for £4 if one existed 

This is for me where I see some of the value in NFT style digital asset ownership 

lozzy1965

darren232002 said:

lozzy1965 said:

But as has been said before, would you rather be 40% worse off or have 40% more money printed?

You realise these two things are the same?

Market crashes 40% but money is printed which makes prices reinflate. You're still 40% down in real terms, you just feel better because the number hasn't changed. 

Actually, I think the printing is worse because when money is printed it only goes to the people that own assets which results in increasing wealth inequality. As you've seen for the last decade.

I didn't, no.  Well I knew they were similar but then I have never studied, nor gone into economics in enough detail to fully understand it.
Here's my gut feeling from my own happy little world where everything is wonderful - and I am perfectly willing to be corrected, as I am sure it will sound very simplistic - or even just plain wrong - to those with more knowledge:
If one country prints money, their currency devalues against the rest of the world, their imports cost more, because their money buys them less, their exports cost more because their currency is worth less?  If every country prints more money (at the same rate) then equilibrium is maintained?  
Incidentally, is it not quite amusing to talk about the ills of printing more money when there are 10,000 plus - and growing - 'tokens' that have conjured money out of thin air?

In this country - one reason for 'printing more money' was the furlough scheme.  ie. to prevent people losing their jobs - not to line the pockets of the rich.

EDIT: Perhaps a difference is that 40% more money is printed and available immediately, where as it is inflated away over many years - as inflation isn't 40% at the moment!  Rather than a 40% immediate hit from the costs of the pandemic, because governments (the people we elect to take care of these big issues for us) can't do anything about it in a world where they have no control over money?  I know which of those I prefer.

Scottex99

In this country - one reason for 'printing more money' was the furlough scheme.  ie. to prevent people losing their jobs - not to line the pockets of the rich.

Not to be political but you might want to double check the sham PPE contracts that were awarded by Boris and his chums. Decent chunk of the money printed went there and on failed track and trace shambles.

You are right about creating new tokens though. But majority of the successful ones have some kind of utility which then results in investment or value being locked into protocols. Like Aave or Curve etc. Plus there are tokenomics clearly in place to (in theory) stop any future minting of coins or owners/devs from dumping them on the market. Doesn't always work but its not the same as just printing $ or £ out of thin air

Scottex99

HCIMbtw said:

Scottex99 said:

Emmia said:

NFT's are scams in my opinion. 

I appreciate that there are lots of NFT fans out there. But honestly I don't understand the attraction in paying to have a link to a thing (that can be taken down at the drop of a hat), rather than the actual physical ownership of that thing. 

I'd rather have/buy a raisin, than have/buy a link to a picture of that raisin. 

That doesn’t make it a scam.

The value in the punks and apes is clearly subjective but right now that “art” is being traded for millions.

For me a huge utility is in gaming, items and property etc in game. Skins already trade for millions. Imagine your gun in COD or your player in FIFA is now and NFT and it’s very rare. Suddenly it has value to other players…

I kind of don't understand how NFTs are essential to this.. Steam operated a market place for years which included things like CSGO skins, which carried values based on a whole range of factors, including which event they were issued at

I see NFTs potentially much more valuable as ownership of licensed content, like digital games, and the creation of secondary markets 

Yeah I wouldn't say it's essential and I haven't got my head fully around the whole concept either. But someone with ownership is going to happen. Whether thats the Metaverse, gaming, digital art etc. People are building stuff

lozzy1965

Oh I am by no means saying there is no corruption in the current system.  Just not sure that there will be no corruption in ANY alternative system that could be effectively implemented.  It's always a question of trying to level up as much as possible and limiting the greedy b@st***** from getting too much.  I really don't understand the macro economics of printing money.  I suspect my EDIT.... might be close though.  The trouble is there are always people out there looking for their unfair cut.

Scottex99

https://www.forbes.com/sites/abrambrown/2022/01/20/twitter-nfts-crypto-profile-pictures-facebook/

Frequentlyhere

Aegis said:

Deleted_User said:

Scottex99 said:

And, it's not the price of BTC day to day that is the actual store of value, it's the future potential when govs print our way to oblivion. BTC has no top because fiat has no bottom. Ask the peeps in Venezuela or Argentina.

You know who else talks like this? Gold bugs. You are just gold bugs with GPUs.

Yep.  A major positive is that we see far fewer goldbugs in the last 5 years or so.  The price didn't do much between the run-up to 2012 and the bottom in 2016 ish, but even then with the price rising fairly strongly in the last few years, it's been much quieter on that front, I assume because many of them have made the switch to crypto assets instead.

Were goldbugs just as irritating as their modern day incumbents? I wasn't following finance as closely before BTC.

Imagine though recommending an investment because it of how good it'll be during financial oblivion. That having a small cadre of elite ultra-wealthy Bitcoin holders in the face of global financial catastrophe is a 'winning scenario' for some people.

I mean JFC even if that was somehow true, what a miserable world it would be. Thankfully, it's a complete nonsense. 

User232002

Deleted_User said:

Then you're delusional. Banks don't just pretend you never had money in your account. The problem you're claiming that proof-of-work solves isn't a real problem in the "traditional" banking system.

Erm, I literally gave you two examples proving the opposite that you've conveniently ignored, but sure.. I'm 'delusional.' 

Way more problems than just these too when you give control of a system to centralised entities. Access to the financial system being one - Bitcoin is permissionless. 

Deleted_User said:

On your broader point: there is plenty of corruption and people acting on their self-interest out there. And cryptocurrency does what to solve, or even ameliorate that? Nothing. It's just more of the same, because it's just a bunch of people trying to get rich quick.

Have you just ignored all my previous posts? I literally outlined exactly how this is a system where self interested participants are incentivised to act for the greater good. Something that I know many people do not believe to be true of our current system.

Nash equilibria solutions to game theoretic problems are often solutions that do not result in the highest overall benefit, for example in the prisoners dilemma the Nash solution is to confess, which ends up with both participants in jail. It is not a trivial feat to create systems that encourage co-operative behaviour amongst all particpants. 

There are plenty of scammers and people trying to get rich quick in crypto, but I have no idea why people think this is somehow a reason why it should be shut down. There were also plenty of these types around the internet when it first launched. It doesn't mean it will always be this way and it doesn't mean the innovation itself doesnt have value to others.

Deleted_User said:

It is not true that people are only and irredeemably self-interested. (And if it were, there would be no solution, via crypto or anything else.) People are also often caring and act co-operatively; we would have got nowhere are a species if we weren't. Building on the better aspects of our nature are the way forward. Crypto, in so far as it has a philosophy, is all about rugged individualism, which never works out well for most people.

Sure, but mathematicians model game theoretic situations with rational self interested particpants because it is the most common basis for decision making and generally tends to dominate other strategies. There are plenty of examples of games where 'caring' and 'co-operative' strategies just get absolutely destroyed. I'd like it not to be the case, but Im also pragmatic.

Regarding the bolded, this is only a true statement because you used the word 'irredeemably.' But I've never argued this was the case. I believe people will change their behaviour and decisions if you provide the right incentives - "show me the incentives and I will show you the outcome." There are many many crypto projects that prove exactly this. And there are many real world examples that prove the opposite; that poor incentives result in poor choices.

Deleted_User said:

Then you need to come to terms with reality: https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/

I said 'I want humanity to use more energy in the future,' and you took that to mean 'I want humanity to exponentially expand energy use.' Do you realise those are not the same statement?

And, as your own author points out, "I will admit from the start that the assumptions underlying this analysis are deeply flawed."

Deleted_User said:

As lozzy pointed out, that is just wrong because inflation hasn't been 40% in a year. You seem to be trying to make it true by definition that printing money causes proportionate inflation, but it's an empirical claim, testable by comparing the cost of a basket of goods and services before and after the money-printing. Which is what CPI or RPI do - we can argue about whether they're doing it right, but inflation clearly still isn't 40%.

Can you at least argue with some intellectual honesty... I never said inflation was 40%. That was in response to a hypothetical crash of 40%. There are also plenty of reasons why an increase of 40% in the money supply would not result in a 40% increase in inflation. My argument isn't that these figures are the same, its that they are correlated. 

The original point still stands, that inflating the money supply results in the nominal increase (or, in the example lozzy presented, the re-inflation) of assets but not the real value of those assets. In the March 2020 crash, the S&P lost 25%. The fed printed about that many dollars and now we are infinitely higher. The market says things are doing really well, trading at record P/E ratio's, but I don't think many businesses would agree with that. What I know is that adjusted for M2 money supply, the S&P500 has been approximately flat for the last decade. That feels intuitively more correct to me than the picture presented by the nominal values.

Deleted_User said:

We have had lots of money printing over the last decade (or 2 decades, in Japan). And the results are in: it simply doesn't cause high inflation in goods and services. However, it does cause significant inflation in asset prices (though not proportionate to the money printing); which is a problem for people who'd like to buy their own home.

I think its way more subtle than that. Fundamentally, we live in a deflationary world and prices for all things are going down due to advances in technology which masks some of the inflationary pressures. But ask yourself the question, why would RE prices go up? Once you answer that question and get to scarcity and store of value, it really is a short hop to Bitcoin. 

Deleted_User said:

This (the lack of inflation in goods and services) may seem surprising. For a long explanation of what's going on, read up on Modern Monetary Theory (MMT).

I feel slightly insulted that you really think I'm here discussing this and I don't know about MMT.

For context though, in May 2020 having a large amount of cash at the time, after seeing the Covid responses I sat down and looked at where I wanted to park the money being acutely aware that recessions are usually exceptionally good times to create wealth. I landed on Bitcoin because inflation was going to pick up and rates could not be raised due to the debt burden that most countries were running with. At the time, the narrative from the Fed, other central banks and media was that MMT made inflation not a noteworthy consideration. Another forum I post on ran a pool asking people what inflation would be in a year and people laughed at the Bitcoiners for settling on 4 - 6%.

The narrative changed when inflation was in the 2-3% range when most CBs walked back on their usual target of 2% inflation. It was OK we were told, because the 2% target had been undershot for some of the preceding decade and so a little higher inflation than this was OK because it would average out. 

The narrative changed when inflation started to hit 4 and 5% but it was OK we were told because it was due to supply chain issues and it was only 'transitory.'

The narrative changed when inflation began to continue past this to the 7% level long after vaccines had been rolled out, so much so that Powell, when asked if it was still transitory, made the comment that it "was time to retire that word."

Inflation is at 7% and we've had one interest rate rise of 0.15%. Look at the writing on the wall -> they can't raise rates because of their debt burden. The fed can talk about 3 rate rises and tightening all it wants; I will call their bluff just as I have for the last two years. Inflation actually suits the government right now, but they also know its politically unpopular. The plan has to be to let real rates run like -5% for the next 3 to 5 years just to get some control over the balance sheet whilst praying that another catastrophe that necessitates QE doesnt happen during that time. What asset is going to do well when people start to become acutely aware that their money supply isn't as sound as they thought it was? Sure, stocks and RE will also do well, but I believe Bitcoin is a superior SOV to both (when it gets to what it can be).

Deleted_User said:

But let me try a short explanation: printing money is not quite as dramatic as it sounds. It is just about how the annual public sector deficit is funded. Having an annual deficit is, despite the alarmist claims that it's reckless, actually a normal state of affairs. That just means that usually the public sector spends slightly more in total than it collects in taxes. To fund the deficit (viz. total spending minus total tax receipts), the State must create something of value to pay with. Traditionally, they have created more gilts equal to the size of the deficit. In the QE era, they've created more cash (i.e. IOUs issued by the Bank of England) instead (or actually, it's been a mixture of cash and gilts). That just means that some people/instiutions who are saving (spending less than their income) end up holding some extra cash instead of some extra gilts. Do they rush out and spend the cash, causing inflation in goods and services? No, because (a) if they had gilts and wanted to spend it, they could easily sell the gilts and spend the proceeds; and (b) they are mostly very rich people or institutions, who aren't going to spend more because they have a bit of cash.

I know all this, its BS. Making up IOU's and trading them from one institution to another of the same country isn't creating 'something of value.' Its the same thing as the Romans clipping coins; it worked whilst there were new lands to conquer and acquire from but collapsed otherwise. Every other fiat currency in history has ended in its failure.

Who is buying? China has $3T of USA reserves but its stopped purchasing new ones. Why? Well, its pretty hard to continue to pump money in to something that has a negative real rate of return. What are they buying instead? Rare Earth mineral mines and commodity producing assets or projects in the developing world because of scarcity and demand. What happens when companies like Apple realise that the billions of dollars on their balance sheet are depreciating by 5% a year in real terms and look for alternative stores of value? This is the thesis behind MicroStrategy and Tesla putting billions in Bitcoin on their balance sheets. Nobody wants them, and who can blame them on a 1.7% 10Y treasury in a 7% inflation environment, which is why the rates trend up and then the Fed step in to buy them because they can't afford the higher interest. Buying your own debt IOUs because nobody else wants them is not 'creating something of value.'

Actually, pensions buy them. Mainly because of mandates and dogma though, which is why they have underperformed the markets colossally throughout the QE era. Pension schemes basically all being underfunded will be one of the next reasons we have to put the money printer in to action, although that's at least 5, if not 10, years off.

Regarding the deficits, these are only sustainable with economic growth. You can't spend more than you make in a stable economy indefinitely. But economic growth (and productivity) has been dwindling for the last two decades in every developed country. 

User232002

lozzy1965 said:

I didn't, no.  Well I knew they were similar but then I have never studied, nor gone into economics in enough detail to fully understand it.
Here's my gut feeling from my own happy little world where everything is wonderful - and I am perfectly willing to be corrected, as I am sure it will sound very simplistic - or even just plain wrong - to those with more knowledge:
If one country prints money, their currency devalues against the rest of the world, their imports cost more, because their money buys them less, their exports cost more because their currency is worth less?  If every country prints more money (at the same rate) then equilibrium is maintained?  
Incidentally, is it not quite amusing to talk about the ills of printing more money when there are 10,000 plus - and growing - 'tokens' that have conjured money out of thin air?

In this country - one reason for 'printing more money' was the furlough scheme.  ie. to prevent people losing their jobs - not to line the pockets of the rich.

EDIT: Perhaps a difference is that 40% more money is printed and available immediately, where as it is inflated away over many years - as inflation isn't 40% at the moment!  Rather than a 40% immediate hit from the costs of the pandemic, because governments (the people we elect to take care of these big issues for us) can't do anything about it in a world where they have no control over money?  I know which of those I prefer.

Correct. If all countries print fiat at the same rate than exchange rates should be maintained absent other factors. But the prices of some items and services, particularly those that are scarce, will go up in nominal terms. Why scarce items? Because you can't make more of them, so they respond to greater money supply with greater prices. 

Lets just bring this back to the real world; we all know that we can't just print a bajillion dollars and give everyone a milly and live happily ever after. The nominal value of money has to actually be backed up with something for it to have value.

Buying a crypto just because its got a picture of a dog on it is just as silly as someone buying a dollar that you made with some paper and crayons. People do dumb stuff - but I'm not here advocating that all crypto tokens have value, far from it! Strong projects have strong tokenomics - as I said previously, better incentives for people to act in a better way. The point about Bitcoin is that it has an unchanging monetary policy, and I believe that will prove to be superior to the policy being run by our current governments.

Yes, the furlough scheme that was used by the likes of Totteham Hotspur and Liverpool FC until they were bullied in to backing down? Most working class people got 80% of minimum wage for 6 months. Owners of large scale companies got the benefit of not paying staff for 6 months saving them, cumulatively, millions or billions. The furlough scheme increased wealth inequality; as money printing always does, because it looks after entrenched interests. The closer you are to the money printer, the better off you are due to that money printing - the Cantillon effect. 

As to the edit, I think its broadly correct in that I don't think 40% printing results in 40% inflation, but it will over time (or near it) as you say. I am not suggesting that fiat should die or be removed. We've had this discussion in the Bitcoin thread. I simply believe that Bitcoin is a better store of value than a currency than be created because it has unforgeable scarcity.

lozzy1965

darren232002 said:

lozzy1965 said:

I didn't, no.  Well I knew they were similar but then I have never studied, nor gone into economics in enough detail to fully understand it.
Here's my gut feeling from my own happy little world where everything is wonderful - and I am perfectly willing to be corrected, as I am sure it will sound very simplistic - or even just plain wrong - to those with more knowledge:
If one country prints money, their currency devalues against the rest of the world, their imports cost more, because their money buys them less, their exports cost more because their currency is worth less?  If every country prints more money (at the same rate) then equilibrium is maintained?  
Incidentally, is it not quite amusing to talk about the ills of printing more money when there are 10,000 plus - and growing - 'tokens' that have conjured money out of thin air?

In this country - one reason for 'printing more money' was the furlough scheme.  ie. to prevent people losing their jobs - not to line the pockets of the rich.

EDIT: Perhaps a difference is that 40% more money is printed and available immediately, where as it is inflated away over many years - as inflation isn't 40% at the moment!  Rather than a 40% immediate hit from the costs of the pandemic, because governments (the people we elect to take care of these big issues for us) can't do anything about it in a world where they have no control over money?  I know which of those I prefer.

Correct. If all countries print fiat at the same rate than exchange rates should be maintained absent other factors. But the prices of some items and services, particularly those that are scarce, will go up in nominal terms. Why scarce items? Because you can't make more of them, so they respond to greater money supply with greater prices. 

Lets just bring this back to the real world; we all know that we can't just print a bajillion dollars and give everyone a milly and live happily ever after. The nominal value of money has to actually be backed up with something for it to have value.

Buying a crypto just because its got a picture of a dog on it is just as silly as someone buying a dollar that you made with some paper and crayons. People do dumb stuff - but I'm not here advocating that all crypto tokens have value, far from it! Strong projects have strong tokenomics - as I said previously, better incentives for people to act in a better way. The point about Bitcoin is that it has an unchanging monetary policy, and I believe that will prove to be superior to the policy being run by our current governments.

Yes, the furlough scheme that was used by the likes of Totteham Hotspur and Liverpool FC until they were bullied in to backing down? Most working class people got 80% of minimum wage for 6 months. Owners of large scale companies got the benefit of not paying staff for 6 months saving them, cumulatively, millions or billions. The furlough scheme increased wealth inequality; as money printing always does, because it looks after entrenched interests. The closer you are to the money printer, the better off you are due to that money printing - the Cantillon effect. 

As to the edit, I think its broadly correct in that I don't think 40% printing results in 40% inflation, but it will over time (or near it) as you say. I am not suggesting that fiat should die or be removed. We've had this discussion in the Bitcoin thread. I simply believe that Bitcoin is a better store of value than a currency than be created because it has unforgeable scarcity.

Yes, there is corruption of the furlough scheme, but without any facts at my disposal I do believe that it has helped more people that needed it than didn't need it.  In my naïve view of the world I think that most people are moral and good rather than the opposite, but that does leave a lot of immoral bad people

The issue with 40% money printing and inflation is that we can not and could not take a 40% hit in one go.  Printing money spreads that hit out over a longer period.  Not having the option to do that quite clearly limits your available options.