Well, I did it! I got my first NFT, a Non-Fungible Token. As part of smarter work, I've recently started to delve a bit more into this new investment hype.
At many a get-together these days you are treated to stories of people who have secured their financial independence by trading crypto, bitcoins. Over the past year, a new hype has emerged within that crypto world. A hype that already has more than 30 billion would go around in: NFTs.
NFTs are digital proofs of ownership of digital products such as videos, music or illustrations. In my case, an illustration of a bear with a bag of dollars. So this image does not actually belong to me, but I am the owner of the proof of ownership and that in turn is registered in the blockchain so that I (and anyone else who would care) knows that I am the unique owner of the proof of ownership.
Do you still understand him? At least companies like Nike and Adidas are convinced and are investing millionen in technology to produce their sneakers virtually as well.
By now, virtually every medium has made an attempt to explain NFTs. But as vague as it remains for many, it turns out to be a gold mine for others. At least, that's just what they want us to do make believen. The flip side is that most of the publicity in the crypto world comes from the many scams associated with these new gold rush.
Opponents therefore speak of pyramid schemes. The first investors earn on the backs of the many offspring, attracted with biggest marketing campaigns. The large amount of money circulating in this new business is attracting huge numbers of fraudsters and hackers. In fact, the largest trading platform for NFTs, OpenSea, is already warning that 80 percent of NFTs on their site is false.
Incidentally, this side of the coin does not prove entirely without merit either. There are hacks reported capturing legendary sums of many hundreds of millions.
But also more traditional lists such as the pump and dump are the order of the day. Groups of traders frequently trade a currency or NFT among themselves and/or invest a lot of money in it (pump), only to dispose of it again as quickly as possible after a hysterical price rise (dump).
We did not escape this in the Netherlands either. For example, there were various BN'ers in line to promote the promising crypto currency Xpose Protocol. That rapidly increased in value to 125 million euros before taking a nosedive toward the 125 thousand mark.
Like other forms of trading, it can be an extremely lucrative business (even in a legal way). But where normally you would at least still be trading an actual product, in the crypto world fictitious things are increasingly emerging for the pure purpose of being traded. So all in all, quite an opaque business, with no laws or oversight.
Whether the NFTs will continue to be so successful or whether, as with Clubhouse, you will soon have hear nothing more about it, then, is the question. The technology behind it is promising, but if you ask me, I think the happy-looking bear on my NFT is never going to bring me more than a smile as a realization of the absurdity of this phenomenon.
