NFTs, the next wave of stupidity

nickiewinters said:
What’s the purpose of spending a billion on an NFT when there’s no guarantee that when you’ll need money you can easily find a buyer for your NFT?
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But if you buy the NFT from your friend with dirty money, suddenly he has a shitload of clean money!
 
nickiewinters said:
What’s the purpose of spending a billion on an NFT when there’s no guarantee that when you’ll need money you can easily find a buyer for your NFT?
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You don't understand how rich people operate. They don't buy assets and then sell them later because they "need the money". It doesn't work like that.

They buy assets that appreciate faster than the rate of inflation and then borrow against those assets whenever cash is needed for a purchase, and since it's a loan, it's not taxable. Let's say you inherited 30 acres in downtown San Francisco that someone in your family purchased 120 years ago. I'm sure it would be worth hundreds of millions of dollars today. You wouldn't sell small pieces of your land to finance purchases like houses, cars, etc. You would go to a banker and say, "I've got property worth $500 million. Will you loan me $50 million to buy a mansion, three supercars, and a boat, and I'll use the property as collateral?" And the banker would be, "Sure, no problem". And five years later, you go back to the banker and say, "I don't like swimming so I want to turn my backyard pool into a saltwater aquarium and stock it with the world's most exotic fish. It's going to cost $10 Million for the renovation. And I'd like an additional $10 Million for personal expenses. I just got my property appraised and it's now worth $600 million and I'd like to use that as collateral for the loan. Is that Ok?" And of course the banker would be "Yes, absolutely".

But the collateral doesn't have to be land. It could be almost anything with value that can be demonstrated by a history of past transactions, like fine art, property of all types, NFTs, etc. The NFT market is still young so individual NFTs may not be able to be used for collateral yet, but as soon as certain NFTs change hands and establish an appreciating value, you can rest assured knowing that a billion dollar NFT will hold its value and be used as collateral just like any other appreciating asset of similar cost.
 
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Believe NFT's got a solid use case for unique items in computer games. NFT's allow in-game items like weapons and equipment to be sold and bought between players for real money. It's allows in-games items to be traded on an exchange with real time bid/ask of real money.
 
bln said:
Believe NFT's got a solid use case for unique items in computer games. NFT's allow in-game items like weapons and equipment to be sold and bought between players for real money. It's allows in-games items to be traded on an exchange with real time bid/ask of real money.
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This makes sense. What does not a pixilated ape selling for 1 million or over.
 
I tried to find what the biggest amount was to date as collateral for an NFT, looks like the market in that regard is still small:

https://techcrunch.com/2021/11/16/s...e-can-use-their-nfts-as-collateral-for-loans/

So far 1.4 MM:

"The largest ever NFT-collateralized loan was made last week.A loan has been issued for $1.4 million using the crypto platform NFTfi. The terms of the deal are 30 days at 9.69% APR."


https://www.theblockcrypto.com/post...-a-1-4-million-loan-with-an-nft-as-collateral

And this is between 2 private parties, I don't think a bank would give out a loan of 10+ MM just solely based on an NFT as collateral.

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The established value of an NFT based on its "history" is total bullshit by the way. The particular NFT could change hands between 2 friends or a husband and wife (thus no real money transfer occurs), yet the supposed value of the NFT goes up or gets established.

Then you take out a loan on it let' say 50% of the "value", and never repay it, practically selling a worthless NFT to the sucker aka loaner.

The article says loaners don't always mind not getting the loan back because they get the NFT cheaper. Right. Instead of paying 100K for a worthless something they get it for 50K. I guess that is a good deal... :)
 
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RedDuke said:
This makes sense. What does not a pixilated ape selling for 1 million or over.
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Agree, digital items for ten bucks or hundred bucks I can get. This art stuff for absurd amounts is just weird.

You don't even own the copyright to the work you bought, so a company or anyone is free to use your NFT on websites, news media, advertising or marketing without the NFT owner getting a single cent. The creator owns the copyright and get all the money from royalties.
 
bln said:
Agree, digital items for ten bucks or hundred bucks I can get. This art stuff for absurd amounts is just weird.

You don't even own the copyright to the work you bought, so a company or anyone is free to use your NFT on websites, news media, advertising or marketing without the NFT owner getting a single cent. The creator owns the copyright and get all the money from royalties.
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yep, and all you have ether ledger entry that is tied to a pixilated image. It is a mad mad world :D
 
Baron said:
You don't understand how rich people operate. They don't buy assets and then sell them later because they "need the money". It doesn't work like that.

They buy assets that appreciate faster than the rate of inflation and then borrow against those assets whenever cash is needed for a purchase, and since it's a loan, it's not taxable. Let's say you inherited 30 acres in downtown San Francisco that someone in your family purchased 120 years ago. I'm sure it would be worth hundreds of millions of dollars today. You wouldn't sell small pieces of your land to finance purchases like houses, cars, etc. You would go to a banker and say, "I've got property worth $500 million. Will you loan me $50 million to buy a mansion, three supercars, and a boat, and I'll use the property as collateral?" And the banker would be, "Sure, no problem". And five years later, you go back to the banker and say, "I don't like swimming so I want to turn my backyard pool into a saltwater aquarium and stock it with the world's most exotic fish. It's going to cost $10 Million for the renovation. And I'd like an additional $10 Million for personal expenses. I just got my property appraised and it's now worth $600 million and I'd like to use that as collateral for the loan. Is that Ok?" And of course the banker would be "Yes, absolutely".

But the collateral doesn't have to be land. It could be almost anything with value that can be demonstrated by a history of past transactions, like fine art, property of all types, NFTs, etc. The NFT market is still young so individual NFTs may not be able to be used for collateral yet, but as soon as certain NFTs change hands and establish an appreciating value, you can rest assured knowing that a billion dollar NFT will hold its value and be used as collateral just like any other appreciating asset of similar cost.
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Baron gets it. Most comments in this thread are by those whom do not.

Here are your fine art bluechips. Pak's Merge drop broke records and outside the cryptoart world he's largely unknown. Look into the Defiant's series on Pak for more high-signal-to-noise info.

https://cryptoart.io/artists

On a general note, It's true that Nifties are a thin market and/also they are the building blocks of web3. The durable one's are about social signaling, identity and access. Most pfp nft projects are degenerates and will not retain any value.

If you have the public address of a known collector or flipper, check out;

https://nftbank.ai

to see how well they are doing.
 
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