Climateer Investing: "The more complex crypto seems, the higher the pyramid schemes can go"

Saturday, April 10, 2021

"The more complex crypto seems, the higher the pyramid schemes can go"

From Real Life Magazine:

Money for Nothing

The recent hullabaloo over NFTs has mostly produced a lot of confusion. In nearly every article about them they are framed as an incredibly complicated technological phenomenon requiring careful explanation, rather than an incredibly boring one that tends to repel one’s focus. This dissonance produces doubt: You may say to yourself, “Okay, what I am understanding about this seems ridiculous, but it’s pretty high-tech and there’s apparently a lot of money in it, so maybe I’m missing something?” Reader, you are not. NFTs are just as absurd and banal as you probably believe.

I think of this as the Christopher Nolan effect: If you explain an incredibly simple premise — like, for example, “a guy forgets everything every five minutes” or “you can go inside people’s dreams and make false memories” — over and over in increasingly abstruse ways, the person it’s being explained to will eventually tell themselves, “I just don’t get it.” This effect is only strengthened the more people there are agreeing that the matter at hand is “cool,” “interesting,” or “complicated” — a process of mass, self-inflicted intellectual gaslighting.

If the popular press is full of explainers “clarifying” what a “very complicated” investment phenomenon is all about, hide your wallet: You are being shilled into a game of Three-Card Monte

It is understandable enough to want to participate in such collective delusions. It’s much more fun to be awed by not getting a movie than to realize that you do get it and it’s just boring. This same idea also helps explain speculative bubbles. It’s more fun to believe in magic than to recognize how much of financialized capitalism is just scams and pyramid schemes. Nonetheless, if the popular press is full of explainers “clarifying” what a “very complicated” investment phenomenon is all about, hide your wallet: You are being shilled into a game of Three-Card Monte.

If you flip over all the cards with NFTs, what’s revealed is how the current economic moment depends on technological mystification. Hidden behind a lot of art talk and techspeak (Blockchain! Ethereum! Non-fungibility!) is an extremely simple example of an everyday phenomenon: the transfer of objects of value. What makes it supposedly difficult to grasp is that these objects, rather than being stretched canvases or hunks of marble, are seemingly just lines of code (or, more accurately, a bunch of electricity). When we pay for a “subscription” or a “membership,” we generally have no trouble understanding it as legitimate; it’s as intuitively “real” as when you use your phone to deposit a paycheck and make a credit-card payment. That is, we immediately grasp that the transfer of value doesn’t depend on physical objects but on a system of accounting, sustained by a series of socially agreed upon relations and representations (although we will occasionally reflect on how that disempowers us and rage and weep and fight).
But with an NFT, we are suddenly supposed to be totally baffled by the same idea. Since you can’t hold it in your hands or stash it in a freeport zone, buying a piece of digital art doesn’t give you anything other than the feeling of ownership, right? No. NFTs are discrete, ownable commodities — digital objects typically produced through a process of brute-force computing power churning through millions of pointless equations till it lands on the “right” one, generating a token on a blockchain that can be linked to any image or string of data the person running that computer chooses. (See how your eyes glaze over when I do that? That’s because it’s boring nonsense.) ....

....MUCH MORE