The Cryptocurrency Trading Journal
- Thread starter Daal
- Start date
Interesting thoughts on NFTs
98% will fail but the ones that succeed will have a big impact. These crypto punks seem to be gaining lots of momentum because they have (more than numerical scarcity) another scare resource which is legitimacy since they were given away for free and they did it early, copycats that came later dont have that legitimacy
https://vitalik.ca/general/2021/03/23/legitimacy.html
The momentum driving the punks seem to be connected with the idea of 'there wont ever be more than 10,000 crypto punks' and its a way for people to be part of a select and exclusive "club" on the crypto community. This community is growing by the millions a year so the price of admission inside the club goes up more and more. What do you get from being in the club? Bragging rights, which presumably is worth a lot in a society that is more and more addicted to validation from social media. So in that sense, they are a store of value and also, an angel investment in the Metaverse. They seem to be like a high beta play on ETH
Whether these investors will do well or whether they would be better off owning more ETH instead, remains to be seen. I bet lots of them dont even consider that possibility:
If a portfolio has 30% in crypto (say BTC and ETH) and the investor decides NFT are the way to go and decides to put 2% in Crypto punks, what if that investor decided to own MORE ETH instead? Say 36% in crypto with the extra 6% going into ETH. Would the risk adjusted performance of that beat the one with 2% in NFTs? I dont know the answer to that but its a good question to ask. The punks are far more likely to go to zero than ETH is, and if they do it, it wont matter for ETH. But if ETH goes to zero, the punks go with it. So its more risky, but potentially higher return as well
98% will fail but the ones that succeed will have a big impact. These crypto punks seem to be gaining lots of momentum because they have (more than numerical scarcity) another scare resource which is legitimacy since they were given away for free and they did it early, copycats that came later dont have that legitimacy
https://vitalik.ca/general/2021/03/23/legitimacy.html
The momentum driving the punks seem to be connected with the idea of 'there wont ever be more than 10,000 crypto punks' and its a way for people to be part of a select and exclusive "club" on the crypto community. This community is growing by the millions a year so the price of admission inside the club goes up more and more. What do you get from being in the club? Bragging rights, which presumably is worth a lot in a society that is more and more addicted to validation from social media. So in that sense, they are a store of value and also, an angel investment in the Metaverse. They seem to be like a high beta play on ETH
Whether these investors will do well or whether they would be better off owning more ETH instead, remains to be seen. I bet lots of them dont even consider that possibility:
If a portfolio has 30% in crypto (say BTC and ETH) and the investor decides NFT are the way to go and decides to put 2% in Crypto punks, what if that investor decided to own MORE ETH instead? Say 36% in crypto with the extra 6% going into ETH. Would the risk adjusted performance of that beat the one with 2% in NFTs? I dont know the answer to that but its a good question to ask. The punks are far more likely to go to zero than ETH is, and if they do it, it wont matter for ETH. But if ETH goes to zero, the punks go with it. So its more risky, but potentially higher return as well
Last edited:
Very cool article about physical NFTs
https://nonfungible.com/blog/physical-nft-art-or-physical-art-nft
This can create entire new markets (and GDP) out of thin air for fans of sports, music, etc
https://nonfungible.com/blog/physical-nft-art-or-physical-art-nft
This can create entire new markets (and GDP) out of thin air for fans of sports, music, etc
Yeah, I dont even waste my time getting info from BTC maxis anyone. People like Jimmy Song, etc. They are so out of their mind one has to question their sanity, but its to be expected, I have been in cults and also studied them and I saw that it does that to people. In my trading/investing career I learned the power of flexibility/open mindeness and the power of optionality. BTC maxis go against all of those. Somehow they think their cult has a monopoly of valuable crypto software creation, which is completely insane. BTC maximalism is a form of shorting human ingenuity. I rather stay open to all coins and forms of digital value. In fact, I'm considering even buying some land on Decentraland currently.
https://decentraland.org/
With Facebook saying they will become a metaverse company and the metaverse should be an integration of different worlds, there is a chance the land there will become very valuable. But I need to do more homework to understand the economics of decentraland
I own btc and not much eth, but I do own Eth erc-20 tokens that are worth 6-figures $
I also own tokens on the Bsc blockchain that are worth 6-figures $ amount
There is a robust and smooth linkage between Bsc and Eth blockchain which is symbiotic but benefits much more so the Bsc side to the point that can be argued is parasitic
I do not see Eth and Btc as competitors, If Btc goes up 100% and Eth goes up 500%, I will be very happy
I honestly wish for Eth to succeed. I have vested interests on the success of Ethereum
Even Michael Saylor has acknowledged the importance of Ethereum and its defi ecosystem which is valuable to the cryptos ecosystem growth and future
Bitcoin is competing more so with gold as a scarce asset, hard money, store of value, pristine collateral. I would recommend "The Bitcoin Standard" book for more clarity on this Bitcoin value proposition
Ethereum may start to compete in that with the EIP-1559 upgrade, but that is not Ethereum's main focus. Ethereum is a robust smart contract platform and its value is cemented
Last edited:
Government's cannot censor data transfer. Not without banning the internet entirely
https://en.wikipedia.org/wiki/The_Uncensored_Library
https://en.wikipedia.org/wiki/The_Uncensored_Library
The Eth locked in staking 2.0 will compound the scarcity effect