Thread by @CapnKarlisle

As someone who has been in tech for over a decade now, NFT scams are inevitable.

https://twitter.com/FoldableHuman/status/1445986978189639680

I've seen the growth of the data economy, seen colleagues leave to start their own companies that provide data to other companies.

Just from the companies I've applied to and worked with over the years, I can see how the heavy emphasis on talking big with your marketing and ambition-as-product has spawned so many weird ventures where it's hard to see how they possibly make money.

I've read business plans that are light on evidence and heavy on ambition, making assumptions about how*their* dog-walking app will become ubiquitous. Paths to profitability are paved with heavily optimistic assumptions.

"We connect influencers with advertisers". Ok, assuming you can do that efficiently, what kind of cut of the endorsement deals are you taking? What's the value of a regular endorsement contract?

Are there even enough Instagram influencers in existence to make the kind of money your investors are demanding? How are you planning on taking enough market share from your competition to achieve break-even status?

These kind of questions aren't *really* important, because that's not really what investors care about. They want to know what part of your business is valuable enough that the Amazons or Facebooks will want to buy you.

And that's the key to understanding things like WeWork. Talk a big enough game, keep pushing boundaries to get hype, and you'll either get bought by the big guys or you'll get paid handsomely before it all crashes down.

Enter NFTs.

Crypto itself is an entire genre of dumbassery of it's own, but NFTs are absolutely late-capitalism crystalized. Everything that is wrong with our economy is a crucial building block of NFTs.

Remember those data companies I mentioned earlier? One of them let me see wild fluctuations in stock prices down to the minute. There was no reason for the price to move at all. Nothing had happened to change the company's outlook. Just the trading algorithms crashing together.

Despite the fact that the blockchain does zero things that a secure database server can't do better and cheaper, it's been so over-hyped that is one of those buzzwords that can change how investors see your company.

NFTs are nothing but Blockchain. And for all the lofty promises they make, there's are still just entries in a database. You can't make up a better example of all the worst trends in our economy.

Supposedly it's a secure, decentralized way to log ownership of a given asset. *In theory*, this could mean a lot for how we deal with IP. If you squint and tilt your head, you could see a way that this could help the little guy fight back against their IP being stolen.

But they've skipped that part on the business plan. How are you going to get courts and the copyright system on board with using NFTs as the system of record? No answer, it just "will", because technology.

It will reduce fraud by allowing an artist "own" their work. Except, it won't. If an artist makes a song and mints an NFT, no matter how hard they wave that NFT in the air, they can't stop someone from listening to their song without permission. Or using it in a commercial.

And finally, there's no verification that the person minting the NFT actually owns the associated asset. You can just download my profile picture and mint an NFT of it, and sell it. The system isn't even doing a cursory google search to see if it already exists.

All three of these problems need to be overcome before NFTs can really be as valuable at they say they will. But there's no path to solving any of them. They aren't even trying.

Inevitably, if you point these things out, you'll be accused of "not understanding how they work". You'll be met with a lot of techno-speak. But these aren't tech problems, they are sociological ones. You can't solve a people problem with a better database.

But that doesn't really matter. Because the business model is "get the hype up so you can get bought by someone richer". That's what investors want to see. They'll pressure you to get revenues up and costs down so you look attractive to be swallowed up by the big companies.

So NFTs are perfect for this. They come pre-hyped by being Blockchain, you can demonstrate runaway asset valuation by just pointing to all the wash trading and money laundering going on. It *looks* like it's valuable.

Now you can sell a stake in a book that has yet to be written, a game that has yet to be released, or a picture that will pay off in royalties later. (Who is going to buy the rights to your Ape picture and why? Doesn't matter.) Just keep the NFTs flowing.

Just like so many startups, there's no real plan to get to solvency or popularity. Because like WeWork, just gotta make sure you get paid *before* everyone realizes this thing is a damn money pit. Easy to do when you're paid in crypto, and when you force customers to buy it.

NFTs are the entire business of unchecked tech worship distilled to it's purest form. Make something useless, pretend it's not, hope others will buy the hype, make sure your exit clause has a fat payout.

Maybe you'll blind-squirrel your way into something useful and valuable (also the NFT bros love to say "we don't know all the uses yet."), But you don't really have to. Just generate enough traffic that the transaction fees get you that soft landing you want.

It's a pyramid scheme, but then again.... most golden parachutes are just fraud themselves. Take the money, leave everyone else with the bills. Or with useless procedurally-generated jpegs.

But then again, you have compiled a very valuable list of people who will fall for pyramid schemes, so maybe that's the real "service" being provided here.

Just fyi, if you respond to this thread with asinine bullshit about how NFTs are the future, I'll either block you or mock you.

Noun.eth, this isn't a debate. You're dumb. Lean into it and be a himbo, that will get you more laid than pyramid schemes.