NFTs (Non-fungible token)

[Electric_Andy]

Not really an advice thread, but just out of interest - does anyone know/trade in these?

I've just been talking to a younger colleague who's only 19, he's been dabbling with NFTs over lockdown. He just told me he's made 2 or 3 grand so far and is bowing out before he gets too involved! He sold one a few months ago and made £1500, but had he kept it and sold today, it would have netted him £12000.

How on earth is this a commodity? I mean, it's a computer generated image, albeit a one-off. It's not as though anyone is printing these htings out and hanging them on their wall? So the sole purpose of having them is to sell? I'm no finance expert at the best of times, but this one I really do not understand!

 

[Seevio]

What's not to understand? They are things. Traders buy things in the hope that they can sell them on at a higher price. In the case of NFTs, they seem to have little intrinsic value to most people so their entire value would appear to be as a tradeable item. Unfortunately, each NFT will eventually come into the possession of the highest bidder who will then be unable to sell without losing money.

 

[Jody]

Tell someone it's a limited asset that will increase in value and loads of people get hyped and start trading them.

A few will make vast sums. Some will make a profit. A lot will get their arses handed to them and lose money.

 

[the_mikey]

 

[matticus]

they seem to have little intrinsic value to most people so their entire value would appear to be as a tradeable item. Unfortunately, each NFT will eventually come into the possession of the highest bidder who will then be unable to sell without losing money.

Sounds like a lot in common with pyramid schemes, and various other complex cons

 

[Profpointy]

Tulip bulbs are the next big thing I tell you, or maybe shares in the South Seas Company.

 

[Electric_Andy]

What's not to understand? They are things. Traders buy things in the hope that they can sell them on at a higher price

ok I get that, but who decides the value of a pretty much arbitrary digital picture? They are all of the same rarity (I'm guessing, becasue they are all unique)...so does it rely on how many times it's been traded? SO one that's been up-sold 3 times has more "value" than one that's been traded 15 times and is close to earning the seller nothing, or a loss?

 

[Oldhippy]

Corporate entities do it daily, buy this now at this price, offer has to end by blah. Why? Because as has been shown repeatedly if it is advertised as it is in demand or short supply people will lap it up. Well some will, a lot in fact.

 

[Chris S]

ok I get that, but who decides the value of a pretty much arbitrary digital picture? They are all of the same rarity (I'm guessing, becasue they are all unique)...so does it rely on how many times it's been traded? SO one that's been up-sold 3 times has more "value" than one that's been traded 15 times and is close to earning the seller nothing, or a loss?

I think their value is related to who has created them.

 

[irw]

Does active want to buy my Christmas tree?
_/\_
_/ \_
_/ ______ \_
l_l

Your’s for only £500…!

 

[irw]

Does active want to buy my Christmas tree?
_/\_
_/ \_
_/ ______ \_
l_l

Your’s for only £500…!

Ahhh, well that didn’t work very well :/ Actually, does that make it limited edition?

 

[Seevio]

ok I get that, but who decides the value of a pretty much arbitrary digital picture? They are all of the same rarity (I'm guessing, becasue they are all unique)...so does it rely on how many times it's been traded? SO one that's been up-sold 3 times has more "value" than one that's been traded 15 times and is close to earning the seller nothing, or a loss?

"Value" is based purely on how much someone is willing to pay for something. It exists purely in the minds of those participating in a trade. For example, the same glass of water would be valued very differently by someone in the Sahara than someone in the Rhondda.

 

[SpokeyDokey]

A load of old rollocks imo - won't catch on long-term.

But then again, I thought the same of the www. back in the late 90's.

I kid you not, yet here I am. 😅

 

[cycling_eejit]

I can't get my head around what an NFT actually is, but sounds like some kind of Ponzi scheme that will come crashing down in the next few years.

 

[Seevio]

I can't get my head around what an NFT actually is, but sounds like some kind of Ponzi scheme that will come crashing down in the next few years.

This might help:

View: https://www.youtube.com/watch?v=XwMjPWOailQ