• Daily Illinois
  • About
  • Contact
  • Privacy
  • Terms
  • DMCA
  • Sitemap
  • Write For Us
Friday, June 2, 2023
Daily illinois - USA | News, Sports & Updates Web Magazine
  • Covid-19
  • News
    • All
    • Business
    • Education
    • Politics
    • Sports
    • World
    35+ Laugh-Out-Loud Sports Game Lookalike Camera Moments That Are Just Too Good

    35+ Laugh-Out-Loud Sports Game Lookalike Camera Moments That Are Just Too Good

    Dog food is consumed by gym goers to increase their protein intake.

    Dog food is consumed by gym goers to increase their protein intake.

    Effective Stakeholder Management Strategies for Building Trust

    Stakeholder Management Strategy for Building Trust

    A Comprehensive Guide to Choosing the Right Business Diploma Program for You

    A Comprehensive Guide to Choosing the Right Business Diploma Program for You

    Ulysses S. Grant Quotes

    50+ Ulysses S. Grant Quotes: Inspirational Words from a Great Leader

    George Washington Quotes

    45+ George Washington Quotes about his Life, and Impact on American History

    The Benefits of Studying Electronics and Computer Engineering

    Harry S. Truman

    40+ Harry S. Truman Quotes for Personal and Professional Growth

    John F. Kennedy Quotes

    55+ John F. Kennedy Quotes that Inspire Leadership, Courage and Hope

    Theodore Roosevelt Quotes

    75+ Theodore Roosevelt Quotes That Will Inspire You To Take Action

  • Science & Tech
    • All
    • Ai - Artificial Intelligence
    • Apps
    • Mobile
    Effective Ways to Monetize Mobile App

    9 Effective Ways to Monetize Mobile App

    What is Artificial Intelligence and Machine Learning

    What is Artificial Intelligence and Machine learning?

    The Top Python Development Skills for Developers in 2023

    The Top Python Development Skills for Developers in 2023?

    How to Delete a Friend on Snapchat

    How to Delete a Friend on Snapchat: A Step-by-Step Guide

    The Future of Information Technology Programs and the IT Industry

    The Future of Information Technology Programs and the IT Industry

    Best Apps for Android Music Downloads

    5 Best Apps for Android Music Downloads

    Make Clip on Twitch

    How to Make Clip on Twitch?

    Find Someone Information Using Phone Number

    Ways to Find Someone Information Using Phone Number

    What is the Structure of a Mobile App

    What is the Structure of a Mobile App?

    Limit the Damage in an Emergency

    Logging strategy: Limit the Damage in an Emergency

  • Entertainment
    • All
    • Gaming
    • Movie
    • Music

    20+ Divorced People Are Sharing the Moment They Realized Their Ex Didn’t Love Them

    Best Online Games with Voice Chat

    6 Best Online Games with Voice Chat

    Best Apps for Android Music Downloads

    5 Best Apps for Android Music Downloads

    Make Clip on Twitch

    How to Make Clip on Twitch?

    The 12 Best Horror PC Games

    Best Horror PC Games: the scariest titles to play right now

    See a show on Broadway

    Ideas For Your Bucket List In 2023

    CBD DISPOSABLE VAPE PEN 1000MG

    CBD DISPOSABLE VAPE PEN 1000MG

    What Are The Benefits Of Using HWID Spoofer For Valorant

    What Are The Benefits Of Using HWID Spoofer For Valorant?

    Game studios are shelving play-to-earn games

    Game studios are shelving play-to-earn games

    Battle Infinity

    4,400% return! This coin could still increase its price a hundredfold

    • F95zone
  • Lifestyle
    • All
    • Fashion
    • Food
    • Travel
    Ring Finger Tattoos: Meaning, Designs, and Tips for Getting Inked

    Ring Finger Tattoos: Meaning, Designs, and Tips for Getting Inked

    4 Pink and White Wedding Nail Art Designs for Your Big Day

    4 Pink and White Wedding Nail Art Designs for Your Big Day

    How does the average DNP spend their day?

    How does the average DNP spend their day?

    The Impact Of Social Media On The Classroom

    The Impact Of Social Media On The Classroom

    How Can You find True Calling

    How Can You find True Calling? These Tips Help You

    Mindfulness and motorhome vacation

    Mindfulness and Motorhome Vacation

    Can I wear a white shirt with grey dress pants?

    Can You Wear a White Shirt with Grey Pants?

    Cargo Pants Outfit

    How Can I Look Stylish with Cargo Pants Outfit

    New Trendy Bodysuit Outfit Ideas 2023

    New Trendy Bodysuit Outfit Ideas 2023

    How Do You Style A Simple Top

    How Do You Style Your Simple Tops?

33 °f
Chicago
35 ° Sat
35 ° Sun
35 ° Mon
37 ° Tue
No Result
View All Result
Daily illinois - USA | News, Sports & Updates Web Magazine
  • Covid-19
  • News
    • All
    • Business
    • Education
    • Politics
    • Sports
    • World
    35+ Laugh-Out-Loud Sports Game Lookalike Camera Moments That Are Just Too Good

    35+ Laugh-Out-Loud Sports Game Lookalike Camera Moments That Are Just Too Good

    Dog food is consumed by gym goers to increase their protein intake.

    Dog food is consumed by gym goers to increase their protein intake.

    Effective Stakeholder Management Strategies for Building Trust

    Stakeholder Management Strategy for Building Trust

    A Comprehensive Guide to Choosing the Right Business Diploma Program for You

    A Comprehensive Guide to Choosing the Right Business Diploma Program for You

    Ulysses S. Grant Quotes

    50+ Ulysses S. Grant Quotes: Inspirational Words from a Great Leader

    George Washington Quotes

    45+ George Washington Quotes about his Life, and Impact on American History

    The Benefits of Studying Electronics and Computer Engineering

    Harry S. Truman

    40+ Harry S. Truman Quotes for Personal and Professional Growth

    John F. Kennedy Quotes

    55+ John F. Kennedy Quotes that Inspire Leadership, Courage and Hope

    Theodore Roosevelt Quotes

    75+ Theodore Roosevelt Quotes That Will Inspire You To Take Action

  • Science & Tech
    • All
    • Ai - Artificial Intelligence
    • Apps
    • Mobile
    Effective Ways to Monetize Mobile App

    9 Effective Ways to Monetize Mobile App

    What is Artificial Intelligence and Machine Learning

    What is Artificial Intelligence and Machine learning?

    The Top Python Development Skills for Developers in 2023

    The Top Python Development Skills for Developers in 2023?

    How to Delete a Friend on Snapchat

    How to Delete a Friend on Snapchat: A Step-by-Step Guide

    The Future of Information Technology Programs and the IT Industry

    The Future of Information Technology Programs and the IT Industry

    Best Apps for Android Music Downloads

    5 Best Apps for Android Music Downloads

    Make Clip on Twitch

    How to Make Clip on Twitch?

    Find Someone Information Using Phone Number

    Ways to Find Someone Information Using Phone Number

    What is the Structure of a Mobile App

    What is the Structure of a Mobile App?

    Limit the Damage in an Emergency

    Logging strategy: Limit the Damage in an Emergency

  • Entertainment
    • All
    • Gaming
    • Movie
    • Music

    20+ Divorced People Are Sharing the Moment They Realized Their Ex Didn’t Love Them

    Best Online Games with Voice Chat

    6 Best Online Games with Voice Chat

    Best Apps for Android Music Downloads

    5 Best Apps for Android Music Downloads

    Make Clip on Twitch

    How to Make Clip on Twitch?

    The 12 Best Horror PC Games

    Best Horror PC Games: the scariest titles to play right now

    See a show on Broadway

    Ideas For Your Bucket List In 2023

    CBD DISPOSABLE VAPE PEN 1000MG

    CBD DISPOSABLE VAPE PEN 1000MG

    What Are The Benefits Of Using HWID Spoofer For Valorant

    What Are The Benefits Of Using HWID Spoofer For Valorant?

    Game studios are shelving play-to-earn games

    Game studios are shelving play-to-earn games

    Battle Infinity

    4,400% return! This coin could still increase its price a hundredfold

    • F95zone
  • Lifestyle
    • All
    • Fashion
    • Food
    • Travel
    Ring Finger Tattoos: Meaning, Designs, and Tips for Getting Inked

    Ring Finger Tattoos: Meaning, Designs, and Tips for Getting Inked

    4 Pink and White Wedding Nail Art Designs for Your Big Day

    4 Pink and White Wedding Nail Art Designs for Your Big Day

    How does the average DNP spend their day?

    How does the average DNP spend their day?

    The Impact Of Social Media On The Classroom

    The Impact Of Social Media On The Classroom

    How Can You find True Calling

    How Can You find True Calling? These Tips Help You

    Mindfulness and motorhome vacation

    Mindfulness and Motorhome Vacation

    Can I wear a white shirt with grey dress pants?

    Can You Wear a White Shirt with Grey Pants?

    Cargo Pants Outfit

    How Can I Look Stylish with Cargo Pants Outfit

    New Trendy Bodysuit Outfit Ideas 2023

    New Trendy Bodysuit Outfit Ideas 2023

    How Do You Style A Simple Top

    How Do You Style Your Simple Tops?

33 °f
Chicago
35 ° Sat
35 ° Sun
35 ° Mon
37 ° Tue
No Result
View All Result
Daily illinois - USA | News, Sports & Updates Web Magazine
No Result
View All Result
Home News Business

NFTs explained: Why people are spending millions of dollars on JPEGs

by Staff Writer
December 6, 2022
in Business
Reading Time: 9 mins read
0
richerd.png
520
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

 

Table of Contents

  • Bitcoin millionaires
  • A bit of trouble
  • A big 2022


Richerd/OpenSea

Related posts

Effective Stakeholder Management Strategies for Building Trust

Stakeholder Management Strategy for Building Trust

May 5, 2023
A Comprehensive Guide to Choosing the Right Business Diploma Program for You

A Comprehensive Guide to Choosing the Right Business Diploma Program for You

March 31, 2023

What, if anything, could convince you the image above is worth $9 million?

What you’re looking at is an NFT, one of the first ever created. It’s part of the CryptoPunks collection, a set of 10,000 NFTs released in 2017, a time when much of the world was still finding out what bitcoin is.

Most likely you’ve already rolled your eyes, either at the $9 million figure or at the very idea of NFTs themselves. The response to nonfungible tokens hasn’t changed much since March when they first started exploding. The public at large has reflexively dismissed them as environmentally harmful scams. The bigger the sale, the more brazen the injustice.

Entertain your brain with the coolest news from streaming to superheroes, memes to video games.

Which brings us back to the above pixelated chap. Its owner is Richerd, an affable Canadian software developer. He started building cryptocurrency software around 2013, but eventually tired of it. After discovering NFTs earlier this year, Richerd bought CryptoPunk #6046 on March 31 for $86,000 in what he said was the biggest purchase he’d ever made in his life.

Richerd, who has over 80,000 followers on Twitter, last month claimed that his CryptoPunk was priceless to him and wasn’t for sale no matter the price. The very next day his determination was tested when an offer came through for 2,500 ether, or $9.5 million. It was made not because Richerd’s CryptoPunk is worth that amount — similar NFTs now go for about $400,000 — but rather because his bluff was very publicly being called. It was a challenge, but it was still a legitimate offer. If Richerd clicked “accept”, 2,500 ether would have flowed into his wallet.

Richerd rejected the offer.

“Well, obviously, the day before I said ‘I’m not selling it for any price,’ so if I sell it for that price, I’d be going against my integrity,” Richerd told me over a Zoom call. “On top of that, I’ve used this CryptoPunk as my profile pic, as my brand. Everyone knows that’s me.”

Not too long ago, Richerd’s explanation would have sounded insane to me. How divorced from reality would someone need to be to offer eight figures on a picture that looks like a Fiverr job? How scandalously misguided would a person need to be to rebuff that offer? After I spent a few months researching and following NFTs, however, it doesn’t surprise me in the slightest. In fact, it makes a whole lot of sense.

bored-apes-betterbored-apes-better

There are 10,000 NFTs in the Bored Ape Yacht Club collection. Here are three examples. The middle one is owned by Jimmy Fallon.

Yuga Labs

Bitcoin millionaires

Here is one quick fact that explains why NFTs are bought for the equivalent of a CEO’s salary: Bitcoin is estimated to have made over 100,000 millionaires. It’s no surprise that NFTs became a phenomenon in March. That’s when bitcoin hit $60,000, up over 500% from just six months prior.

When you see a headline or a tweet about some preposterous sum being spent on an NFT, it’s easy to become bewildered over how absurd that purchase would be for you. What’s easy to forget is that very expensive things are almost exclusively bought by very rich people — and very rich people spend a lot on status symbols.

Take Bored Ape Yacht Club, for example. It’s a collection of 10,000 ape NFTs, all with different traits that make some rarer than others. Rare ones have sold over for over a million bucks, but common variants go for around $200,000. (At the time of launch back in April, BAYC developers sold the NFTs for $190 each.) BAYC, owned by the likes of Steph Curry and Jimmy Fallon, is what you’d call a “profile pic collection.” The main purpose of the images is to be used as your display photo on Discord, where most NFT business goes down, or on Twitter, Instagram or wherever else.

To recap: $200,000 minimum for a profile picture.

In isolation, that’s insane. But place it on a spectrum of how wealthy people spend money, and it becomes less staggering. You can right click and save a JPEG, so why spend money on it? Well, you can buy a nice house in a safe neighborhood almost anywhere in the world for $1 million, yet celebrities regularly snap up $20 million mansions. You can find a fashionable dress for under $500, yet brands like Chanel build their business on selling ones for 20 times that amount.

Graph showing the rising value of bitcoinGraph showing the rising value of bitcoin

Up to 100,000 people became millionaires when that green line shot skyward.

coinmarketcap.com

We accept that rich folks buy extravagant items offline. Is it so inconceivable they would buy extravagant things online, too?

“In the real world, how do people flex their wealth?” said Alex Gedevani, an analyst at cryptocurrency research firm Delphi Digital. “It can be buying cars or watches. How scalable is that versus if I buy a CryptoPunk and use it as my profile picture?”

Obviously, status symbols aren’t specific to the rich. All of us indulge in some way or another, be it buying a $20,000 new car when a $7,000 used vehicle will do, or buying a $30 T-shirt when Walmart sells basics for under $5. What most status symbols have in common is that they have a specific audience in mind. The banker sporting his Rolex and the chief executive stepping into her Bentley don’t care that I think either of those purchases is excessive. They have a small but powerful group of people they’re trying to influence. So, too, with NFTs.

In the case of Richerd, he runs his own business, Manifold, where he helps show digital artists like Beeple how they can use blockchain technology to make art that could only exist as NFTs. Being a part of the most sought-after NFT collection helps in those circles. And when he says his brand is built on his Punk, he’s not exaggerating — a group of investors even named their organization after him.

“Anybody who owns a CryptoPunk believes certain things,” Richerd explained. “Either you’ve been in the community for a long time so you believe in what these are, or you’ve paid a lot of money to get in, which shows conviction.

“I want to show my conviction. This is one of those projects that makes you put your money where your mouth is.”

A bit of trouble

NFTs are polarizing. There’s a small group of people who believe in the underlying technology (tokens that prove ownership of a digital good), but there are many more who regard it as a hoax. Just as the second group struggles to see any value in NFTs, the first group can sometimes be defensive about the technology’s imperfections.

And make no doubt about it, there are a lot of issues with NFTs.

First is the confounding inaccessibility. There’s a reason software developers tend to do well in crypto and NFT trading: Setting up blockchain wallets and other required digital apparatus is difficult. Even just buying and selling can be perilous. Send money to the wrong wallet address by accident, and it’s gone forever.

Then there are the fees. Imagine you’re interested in dipping your toes into nonfungible waters and you have $1,000 you’re willing to lose. If you’re minting a new NFT during a public sale you’ll usually spend between $120 and $400. Not too bad — until you factor in the transaction fees. Most NFTs are built on the ethereum blockchain, which is notoriously inefficient. The more people using ethereum, be it through trading altcoins or buying NFTs, the higher the fees. At a good time you’ll spend about $100 per transaction, though double or triple that amount is common. Suddenly that $1,000 doesn’t go very far.

This is especially troublesome for NFTs, which are infamous for causing “gas wars.” It’s possible for 100,000 people to buy shiba inu coins at once, since there are a quadrillion in circulation. But when 10,000 people try to buy an NFT, it results in a massive spike in transaction costs as some users outbid each other to speed up their purchase. It may only last a minute or two, but a lot of damage can be done in that time. People spending over $10,000 on a transaction fee isn’t rare. People losing $1,000 on a failed transaction isn’t, either.

failed-txn.pngfailed-txn.png

This is what it looks like when someone spends $4,000 on a failed transaction. It’s rare, but not rare enough.

Etherscan screenshot by Daniel Van Boom

Ethereum’s inefficiency also contributes to the other major criticism of NFTs, the massive amount of energy they consume. Note that this is something of a semantic issue: NFTs aren’t bad for the environment as much as ethereum is. Other networks, like Solana, use a fraction of the power. Ethereum developers are expected to implement an upgrade next year that will make mining it consume 1% the energy it currently does. At this moment though, while no one can say precisely how much energy ethereum consumes, we know it’s a lot. (Bitcoin, despite getting all the headlines, is even less efficient than ethereum, which is why almost nothing is built on its blockchain.)

And finally, there’s the fact that most people trading NFTs are doing so to make a profit. Scams are everywhere, and prices are volatile. Most of the people who create, buy and sell NFTs are ignorant or uninterested in the technology. If there is a technological leap taking place, it’s likely to be obscured by the dizzying price movements.

“I’d call it a bubble,” Gedvani said, “because the amount of speculators that are entering the market is outpacing genuine creators.”

But a bubble can pop and leave something better in its wake. Think of Pets.com. It had a peak valuation of $290 million in February 2000 but by November of that year, as the infamous dot-com bubble began to burst, it had already closed shop. It’s used as a cautionary tale for speculative trading in bubbles. But the impulse to invest in Pets.com evidently ended up being justifiable. That particular venture was misguided, but the e-commerce trend it was flicking at was legitimate. Seven-figure pixel art may not be forever, but proof of digital ownership, which is what NFTs are really about, may be.

A big 2022

Where NFTs will end up is anyone’s guess — and anyone who claims to know is probably trying to sell you something. What we do know is that the amount of people buying NFTs is almost definitely about to grow.

It’s estimated that around 250,000 people trade NFTs each month on OpenSea, the biggest NFT marketplace. In the short term, CoinBase will soon open its own NFT marketplace, for which 2 million users are on the waiting list. Robinhood has similar plans.

More importantly, giant companies that already make money outside of the crypto space want in. Niantic, the company behind Pokemon Go, has just announced a game in which players can earn bitcoin. Twitter and the company formerly known as Facebook plan to integrate NFTs into their platforms, and Epic Games says it’s open to doing so too. Envision a world where instead of buying skins in Fortnite, you buy an NFT for those skins that you own — meaning you can trade it for outfits and weapons in other games, or sell it once you’re done with it. (Epic said it won’t integrate such a mechanic into Fortnite, but that may not stop competitors.)

Richerd reckons the flood of people soon to enter the NFT marketplace will create a broader diversity of digital products sold for different audiences. Your neighbor might not want to spend $200 — much less $200,000 — on a profile picture, but maybe they’ll be willing to spend $10 on a one-of-a-kind skin, or on a product in Facebook’s Metaverse. But though the space may change, he remains confident that CryptoPunk #6046 is safe for a while yet.

“Even if every NFT falls,” he said, “CryptoPunks will be the last one.”

Source by www.cnet.com

Related

Share208Tweet130Share52
Previous Post

Best OBD2 Scanners For 2023

Next Post

Former Navy SEAL from Quincy tells ‘strange, dark, mysterious’ stories on YouTube

Next Post
Quincy native John Allen is a former Navy SEAL turned popular true-crime storyteller on YouTube.

Former Navy SEAL from Quincy tells 'strange, dark, mysterious' stories on YouTube

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News - Daily illinois

Capturing Memories

80+ Famous Friendship Memories Quotes: Celebrating Lifelong Bonds

June 1, 2023
Coffee

Morning Brews Funny Coffee Quotes to Start Your Day

June 1, 2023
quotes about challenging yourself

130+ Famous Quotes about Challenging Yourself

May 29, 2023
Ring Finger Tattoos: Meaning, Designs, and Tips for Getting Inked

Ring Finger Tattoos: Meaning, Designs, and Tips for Getting Inked

May 23, 2023
protect your self from mean people

90+ Quotes About Mean People: Insights into the Dark Side of Humanity

May 23, 2023
4 Pink and White Wedding Nail Art Designs for Your Big Day

4 Pink and White Wedding Nail Art Designs for Your Big Day

May 23, 2023
35+ Laugh-Out-Loud Sports Game Lookalike Camera Moments That Are Just Too Good

35+ Laugh-Out-Loud Sports Game Lookalike Camera Moments That Are Just Too Good

May 23, 2023
Dog food is consumed by gym goers to increase their protein intake.

Dog food is consumed by gym goers to increase their protein intake.

May 23, 2023
Daily illinois - USA | News, Sports & Updates Web Magazine

Copyright © 2020 Dailyillinois.com.

Navigate Site

  • Daily Illinois
  • About
  • Contact
  • Privacy
  • Terms
  • DMCA
  • Sitemap
  • Write For Us

Follow Us

No Result
View All Result
  • About Us Page
  • Contact
  • Daily illinois
  • DMCA Policy
  • Privacy Policy
  • Submit, Guest Post, Write For Us and Become a Contributor
  • Terms of Use

Copyright © 2020 Dailyillinois.com.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.