When you hear about NFTs, you immediately feel they will make you rich overnight.
At least NFTs sold in 2021 was crazy.
Why do people own NFTs?
There are many reasons, but four major ones stand out:
✅ to access exclusive perks
✅ to profit
✅ to preserve the value
✅ to secure digital ownership and rights
But, it does not explain what I owned when I purchased the NFTs.
You are correct, and that is the beauty of owning an NFT! It is a very blur boundary between owning and having.
So what do you actually own?
Even though people believe that NFTs are Non-fungible Tokens that cannot be replicated through code, the artwork that the code carries on can be duplicated.
You own a string of code despite an immutable digital signature on it.
That does not change the fact the artwork can still be replicated on the internet.
A Smart Contract Ponzi Scheme
To become a smart contract Ponzi Scheme, you need to satisfy 4 conditions:
1️⃣ the contract distributes money among the investors
2️⃣ the contract receives money only from investors
3️⃣ each investor makes a profit if enough investors invest enough money
4️⃣ the new investors join the contract, the greater the risk of losing investments
It is clear that conditions 1 and 2 are easily met because the NFTs are running through a smart contract within the blockchain that is narrow to only people who control their own wallets.
Conditions 3 and 4 will trigger once rug pulls happen.
Owning rights of artworks
No, it does not automatically grant rights of artwork ownership to buyers.
Two different rights need to distinguish here:
👉 Digital proof of ownership
👉 Intellectual property right
Once you purchase the NFTs, you have digital proof of ownership. However, it does not include IP rights automatically.
It means you will face trade marks issues and lawsuits regard of IPs.
That means you have only rights to own but not exclusive rights to reproduce under your unique wallet address.
So, the question back to square 1, why buy NFTs?
👉 support artists
👉 enjoy collecting arts
👉 bragging about it
The most important thing is to brag about it.
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Deglobalization is happening
Deglobalization is happening. Whether or not you believe it.
Since the beginning of 2000, manufacturing power has awakened in Asia, and economists believed that globalization would benefit the whole world.
I am not sure if that is totally accurate, but some countries did better than others.
For example, China has been successfully becoming the world’s second most significant economic zone.
Not until COVID-19 hit and the war between Russia and Ukraine, did the deglobalization accelerate.
However, deglobalization will make currency fluctuate more than ever.
Due to geopolitical concerns, some countries’ currencies would not be tradable globally, making cryptocurrencies more attractive than ever.
Blockchain and crypto may become an alternative to help citizens whose countries with weaker currency to preserve the value of their assets.
Despite political differences, citizens are innocent of political conflicts, and they have options to use cryptocurrencies to buy necessities.
Of course, there will be political disputes such as financial sanction avoidance resulting from the banning of blockchain technology such as tornado cash, and the technology will improve through different ways to achieve the same alternative.
Deglobalization will also result in many countries becoming more isolated than ever. Cryptocurrencies can help citizens to avoid the drag of the nation.
Deglobalization may be a part of political conflict, but you can become apolitical and help yourself.
Kim Kardashian’s $1.26 million crypto ticket
The Securities Exchange Commission (SEC) has charged $1.26M to Kim Kardashian for social media promotion of a cryptocurrency offered by EthereumMax (EMAX).
Kim Kardashian failed to disclose the payment she received for promoting EMAX.
Ryan Huegerich and many other claimants filed a class-action lawsuit against Kim Kardashian, Floyd Mayweather Jr, and Paul Pierce in a California district court, for promoting an Ethereum knockoff, Ethereum Max (EMAX), according to a lawsuit filed on January 7.
At least, “not financial advice” is not a disclaimer of promoting crypto of any kind.
Kim’s influence did make the unknown token become an investment asset as a result:
A striking 19% of respondents who said they heard about the post invested in EthereumMax as a result.
And she claimed to make more money than an entire season of her reality television show that further demonstrating her involvement in the promotion marking:
While it is unclear what the precise terms of the financial compensation that Defendant Kardashian was given by the Executive Defendants, Defendant Kardashian routinely gets paid between $300,000 and $1 million for most promotional posts.
What is EMAX?
According to the filed lawsuit,
EthereumMax has no connection to the second largest cryptocurrency, Ethereum. This name association appears to be an effort by the Company and the Executive Defendants to mislead investors into believing that the EMAX Tokens were a part of the Ethereum network (when they are not). It would be akin to marketing a restaurant as “McDonald’sMax” when it had no affiliation with McDonald’s other than the name similarity and the fact that both companies sell food products.
EthereumMax is to build a robust and scalable ecosystem that fully maximizes the power of DeFi, creating a wide range of products for our community that encompasses everything from a deflationary token and a core stablecoin for processing payments to curing edge NFTs and exclusive events for our community, according to its whitepaper.
Of course, it sounds just like BS. This type of token puts every buzz words together that means nothing.
The court document further approved this assumption:
In plain terms, EthereumMax’s entire business model relies on using constant marketing and promotional activities, often from “trusted” celebrities, to dupe potential investors into trusting the financial opportunities available with EMAX Tokens.
If you check their source code, no devs are working, and codes are forked from open-source codes as usual.
And after dumping and rug-pulling investors, the token majority still controlled by creator(s).
Pump and Dump
Following the EMAX Token’s launch and Defendants’ promotional activities in May 2021, the trading volume and price of EthereumMax surged. By May 30, EMAX already had a transaction volume of over $100 million, up 632% in just two weeks. The day before, it reached its maximum price of $0.000000863, which represents a rise of 1,370% more than its initial price of $0.00000005875.
However, this meteoric rise did not last long, and EthereumMax began to deflate immediately after Defendant Kardashian’s post. On July 15, the price of the EMAX Token hit its all-time low: $0.000000017 per unit, a 98% drop from which it has not been able to recover. On August 1, its transaction volume plummeted to $157,423, which is less than a hundredth of its initial capital.
The result is the price will never get recover.
Celebrities’ promotion of crypto in the future
This is to set a precedence for the SCE to prohibit celebrities and social influencers promote unsecured cryptocurrencies.
“This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors,” said SEC Chair Gary Gensler. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
“Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities,” Chair Gensler added.
“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”
Moral hazard or not, the SCE does make crypto space a better space.
Not an expert
Web3 is the weird place ever. A bunch of people got together to build something that may or may not work.
So why is Web3 the future?
Death of an expert
Who claimed to be an expert? Unfortunately, there are more and more experts on the internet. Watching YouTube for 10 minutes can boost your confident 100%, and watching a week of YouTube has prepared you to teach the rest of the internet how things work.
What makes an expert, then? If you can tell everything that the internet is searchable may not make you the one.
You probably will consider an expert is someone who can provide answers precisely and quickly.
It is not. An expert is a person who can question precisely such field and research depths to provide plausible solutions and make solutions workable.
The problem of the internet, particularly with YouTube guru channels, is that they present them as experts on some kind and get very general solutions to the problem that sound precise. However, because many of us do not have a background in such subject matters, it makes us fall within the expert trap and believe them to sound correct.
Because we did not spend time around the subject, we had no specific expectations about what will happen rather than believing someone told us what would happen.
Scientific Inquiry vs. Guesstimate
There are usually 6 steps to discovering the truth through:
1. Observe and Ask Question: in this stage, we think about a question because of our observations
2. Research: we research our question
3. Formulate a Hypothesis: we come up with a theory
4. Test your Hypothesis: we test our theory in a fair and unbiased way
5. Conclude: we conclude a result of our research
6. Share Results: we share our idea with other people
However, many of the internet shares guesstimate results and skip step 4.
They offer solutions without possible persistence and observe the conclusion they make.
When the internet was doing guesstimate, we made fun of them.
When the government started doing guesstimate, we should be worried.
And that is precisely we are heading into serious trouble when the government is guesstimating our economy.
Why Web3 then? Maybe it is just a guesstimate?!
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