The excitement around NFTs is hard to ignore, having established a cult-like following that is gaining an ever-growing foothold in mainstream technology. What if an entire financial system was built around little more than hype backed by a handful of tech millionaires?
Dan Olson of Folding Ideas has put together an in-depth critique of cryptocurrencies and NFTs, and while this deep-dive is more than two hours long, it unpacks a highly complex series of ideas and structures, and I’d argue that given the growing influence of alternative financial systems, this is essential viewing.
Ten months ago, I spent a few weeks exploring NFTs and wrote a piece arguing that it was a pyramid scheme. Olson refines this idea explaining how the entire system relies on hype: each investor evangelizes as a result of the potential value of their holdings being entirely dependent on optimism and the arrival of new investors — the bigger fool.
This is not to say that you are a fool for investing in NFTs; it’s simply a means of explaining how the system functions. If you are an investor, however, I’d strongly urge you to spend a few hours watching this video. Buried within the NFT marketplace are some excellent ideas — such as a means of selling digital artworks and artists always receiving a commission on future sales — but for me, these small positives are overwhelmed by a crypto culture that is void of ethics and littered with serious problems.