Last October was the first time I started paying attention to this whole NFT business. It has taken some time to get any type of grasp as to what is going on in the NFT space but a quote I recently read sums up the experience: “Nobody knows what is going on but it is exciting.” If you missed my first NFT post here it is.
NFT became Collins Dictionary’s word of the year for 2021. The reason is that this NFT idea seemingly came out of nowhere, yet there are billions of dollars already passing through the space. It seems surreal because nobody I know in real life knows what an NFT is. Sure, they may have heard about them in the news but none would be able to tell me what they are. My path was made easy due to my cryptocurrency enthusiasm: NFTs are simply the next logical step for anyone who has made decent use of a crypto wallet.
As I spend more and more time in the NFT space I’m getting more sophisticated and so are thousands of savvy opportunists looking to hit the jackpot. As my oldest son said, “People like to collect things,” and boy do they. Seemingly everyday, hundreds of new, absurd NFTs are born. There are more than enough furry animal NFTs to fill infinite virtual zoos and it seems the lunacy knows no bounds with just one example being the ability to buy a “fart in a jar.” Not even the actual “fart in a jar” anymore mind you, but just a picture of it! The gassy contents of this glass receptacle come from an attractive woman and as we all know, the otherwise very high IQs of a certain internet male demographic drop tremendously whenever the combination of beauty and internet savvy manifests itself in a woman with whom any interaction has even the remotest of a possibility.
The sky high prices of NFTs we hear about in the news belong to the big leagues: it is a place that normal people wouldn’t even know how to access let alone afford. Cryptocurrency, primarily Ethereum, is the key to this world as the doors to NFTs remain shut unless you have a crypto wallet with digital currency to spend. Therefore, it is only logical that Silicon Valley types with too much money on their hands are the primary customers. Venturing into their world can be rather depressing for anyone outside this exclusive group since just one NFT (of the A-List projects) is priced in thousands of dollars. No normal person I know would be willing to spend (let alone afford) thousands of dollars on what appears to be a .jpg.
However, outside of this “A-List” that we hear about in the news there are thousands of projects being born every week. Yet, trying to focus, and find valuable yet affordable NFT projects seems impossible. It is mostly the A-List that rises to the top of the Twitter NFT echo chamber and so anything outside that is a shot in the dark. To add to the complexity, everyone has a very bad case of FOMO (Fear of Missing Out) and so a lot of money is being thrown at everything! This is a major problem and ripe for scammers and opportunists. I too have also been touched by this FOMO as it truly seems like a very exciting online party with the opportunity to reap vast monetary rewards if I only choose the right virtual fuzzy creature. However, it is here that my age, being a young GenXer, works to my advantage in what I think is mostly a Millennial party. They’re all quite smart but they’re getting drunk out of a punch bowl which may taste good and provide an incredible buzz, but there is quite a bit of pee in that concotion.
Before I share what I’ve learned and has inspired me to write this post, let me explain what the driver is for anyone who thinks an NFT is just a .jpg. An NFT can give you online clout and access to exclusive clubs on the internet as well as other utility. The “Board Ape Yacht Club” is the most famous and by making your ape your profile picture you’re showing the internet that you have money and are part of the big leagues with this new internet phenomena. Furthermore, projects are being developed around these NFTs with owning one being your entry key. The sky really is the limit with the possibilities these could be used for but just like the sky the promises could be also be nothing more than empty air.
Just like someone with a high fever, the whole NFT space isn’t thinking clearly. Let me share what I’ve learned that has helped me avoid that community bunch bowl and sip the NFT kool-aid of my own choosing.
There is a project called SのKIRA (@sekira_NFT) which has gained forty eight thousand followers on Twitter! Unfortunately, these forty eight thousand people do not speak Japanese or they would know just by looking at the brand name and Twitter handle this is an “authentic Japanese” NFT made in China. The symbol の is pronounced “no” in Japanese, so why is their handle “SEkira?” I called this out in the following tweet.
Well, the very next day they got caught stealing art from @snowlattes who called them out.
They then took down @snowlattes art as well as changed their description from “NFTs from Japan” to “NFTs inspired by Japan”
They apologized to Snowlattes on Twitter but the fact that they stole art had no effect on their followers and in fact the number keeps increasing. I wonder if this is in part because many followers may not understand English that well and so do not pick up on this scam. The crypto/NFT forums truly are a global forum and you’ll find many comments on posts or in forums to simply a mix of morning/afternoon/evening greetings or one word replies. Nevertheless this project stole art, has a brand name that makes no sense but they carry on with idiotic tweets such as “The gate is opening,” and “Are you ready?” And these tweets get hundreds of likes which is truly baffling!! It really would not surprise me if this project tweeted “I pooped,” and hundreds of followers replied with “Moon!,” “Yes, very good!” and then tag three of their friends.
The second project is much less sketchy but still a little off. I began following a project called “Shibuya Girls,” because I like Japan and am still trying to figure it all out. They have a nice Discord community, a good looking website and a fun little cookie game. I interacted with them on Discord but became a little suspicious when the leaders seemed to have little to no interest in personal (real) Shibuya photos and videos I posted nor understood any Japanese. Furthermore, when I asked pointed questions about the project the answers I received were a bit of a deflection or simply not answered at all. As I dug further I found out this project was based out of Italy and behind the facade of Japanese user names like “Miki” are realistically a 30 year old Guisseppis with a fascination for Japan.
I spent some time chatting with the Shibuya Girls community in their Discord server but nobody asked the penetrating questions about the project as I did. It was all superficial greetings, WAGMI (We’re all gonna make it) and “hype” animation nonsense. My bullshit detector began to go off in a big way. They wanted .08 ETH for one Shibuya Girl NFT which comes out to around $220 plus gas for a total of around $300. All together these people were looking to make $1.3 million out of this project The price did not deter the community one bit who continued to insist they liked the “art” and we were all “Shibuya Girls Family.” I swear I must be living in a simulation where the controller continues to ratchet up the insanity setting. The “art” is computer generated kitsch and being a “family” because I own a .jpg of a cartoonish Japanese girl sold to me by an Italian? What the hell is going on indeed! Maybe I’m the one with a fever because this isn’t making any sense!
In order to add some credibility to the Shibuya Girl project they hired some guy who goes by “VonDoom” on Twitter to be their “advisor.” He supposedly has thousands of NFTs, including all the big names as well as 48K followers. I heard he has supported a lot of shady projects that completely tanked and the Shibuya Girl case was no different. There is also no information about who VonDoom is. Everyone is going on the fact he has some top ranked NFTs and 48K Twitter followers, that’s it! Just like VonDoom I looked into the leaders of the project and there was no substantial information about them either, simply a link to their Twitter profiles with very few followers! VonDoom “advised” this project straight into the ground but even without his “advice” the project is 60% hype, 20% promise and 20% vapid utility . You can fool all of the people some of the time and some of the people all of the time but you cannot fool all of the people all of the time. This maxim certainly held true as only approximately 1,800 or so were sold out of a total of 10,000. Furthermore the price has crashed from an official price of $220 down to a secondary market price of $35.
Even though the price has absolutely crashed a good part of the Shibuya Girl Discord community remains faithful. Some throw out nonsense like “paper hands” and continue with the WAGMI and daily greetings. They also still like the “art.” As a parent I want to take away their computers and send them to their rooms for a bit so as to learn a lesson and not double down on their mistakes. It is a shame because many I chatted with seem very nice and nothing is wrong with Italians having a love for Japan. I actually studied with many Italians in Japan and they are wonderful people. But if you’re going to sell a .jpg on a promise of value for $220 then it is going to have to be authentic and much more than a promise of future value. Otherwise it is like buying a Rolex from the souvenir stand in Chinatown no matter how many followers or NFTs your “advisor” has.
A major aspect of this NFT insanity will eventually become a college case study in psychology. In short, these projects are exploiting the primal human need to be part of a group as well as a fear of missing out. The way they do this is by creating artificial exclusivity or rankings, known as “roles” in Discord. The formula is simple but effective:
- Hype up a project on Twitter and create limited opportunities to obtain some “special” role in the project Discord server. Often times there is a stupid “contest” where one has to tag a number of friends about the project as well as chat a lot in the official Discord channel.
- Create a roadmap of what is promised to come and all the first adopters will have special privileges such as the first opportunity to buy the NFT (whitelist)
- Continued hype about how great the project is *going to be*
- Sell extremely overpriced NFTs
- ?
Normally one would create value first and then sell access to that value. With NFTs it is reversed: you sell access to some future project and hope everyone will buy on the hope the promised project will be wildly successful. But that begs the question: why would any project manager continue to build when they already have the money from an NFT sale? It is just like paying a construction company the full amount before they haven’t even broken ground. This is full of risk in the real world where we have the law and courts to help guard against this. There are no safeguards currently in the NFT and crypto space. When your assets are gone they are gone. I’ve heard many times, that there is “so much going on behind the scenes” of these NFT projects. Well, WHAT I ask, WHAT is going on behind the scenes? All I see is a few kids in Moderator roles on Discord talking about their “devs” but where are these devs? What company do they work for? Unlike a construction company where I find concrete information such as past projects and financials all we usually find with these NFT projects are a “roadmap” that could be typed out in 5 minutes and a website that would only take a few minutes longer to make.
Here is my prediction
I’ve seen this movie before and it was the internet bubble back in 2000. Everyone was spending money everywhere and you know what happened? 90% of those businesses failed. San Francisco was full of technology euphoria until the party suddenly ended and most had a terrible hangover. Most looking to make it rich lost so much, packed their suitcases and faded away to less expensive cities such as St. Louis, Kansas City, or Detroit. The same is happening now. Money is being thrown around like it grows on trees. Well to be fair, money really does grow on trees in much of the tech industry. Why not spend $100, $1,000, $10,000 on this Ape, Baby Ape, Mutant Ape, Squid, Squirrel, Octopus, Dogs, Shibas, Shibas in glass receptacles that have been farted in, whatever. In a few months to a few years time 90% of these projects will have died. But just because this will be the reality, 10% is still a massive amount for all the NFT projects out there both current and future. The survivors will be a full spectrum comprising projects on life support to complete “moons” and even beyond wowing everyone. These “interstellar” projects will make the news just like Google and Facebook do now and nobody will talk about the 90% failure rate, just like nobody remembers those who packed up their suitcases and left San Francisco 20 years ago after the .com crash.
I love NFTs and they are the future but it truly is the wild west right now with a lot of outlaws robbing the poor townsfolk. Perhaps the analogy of NFTs being a mirror of the .com boom isn’t exactly right. Those tech companies in the 90s were at least trying to build something of value, something successful, and they just failed. It happens. We can still use a mirror as our analogy but it is a funhouse mirror and clowns are everywhere, so be careful not to bump your nose while chasing a shiny looking NFT.
*Update 2.7.2022 – The idiocy with S のKIRA continues. Here is today’s Tweet and you can see just how many people are being duped. The NFT arena is infested with this crap and it is very bad for the entire space. So many people are going to get financially hurt.
