Let me quickly paint a simple scenario for you:
Step 1: You set up two crypto wallets and make a few transfers, a couple of coin trades and whatnot, you make them appear legit.
Step 2: You buy an NFT for 100 magic internet beans (insert here the shitcoin of your choice). Then you wait a couple of weeks, maybe even less.
Step 3: You put up your NFT for sale at a 10x profit. You know it is most likely nobody will buy it.
Step 4: You buy it yourself with your second wallet. The NFT is now worth 1k beans, pretty sick gains for the first buyer isn't it?
Step 5: Again, you put it out for sale at a 2x profit. Most likely, there will be some fool who will buy it from you, effectively giving you a 20x profit from that NFT.
Is it hard to imagine said scenario?
I think it is happening more than what I am comfortable admitting. And there lies a huge problem of Crypto, DeFi, and NFT economies. The whole anon side of some cryptonomics is a net positive as a fundamental, but that same bright side can also be used to fool newbies or normies in buying into scams, rug pulls and yada yada by using little schemes that make a project, a product or an idea seem viable and attractive to the untrained eye.
I am not a cryptoverse expert and I'm pretty sure some of you guys can name tens of subtle scams that are there just to make a project attractive, and not to take money from the users - at least not in a direct way.
We've heard of the Tron Network transaction & fake account pump, where millions of fake tx happen daily between fake wallets in order to show how powerful and scalable the Tron Network/blockchain is. Is that true? Most likely, but there isn't any hard proof, after all, all the wallets are anon and can't be tracked.
The same happens with memecoins such as Shiba Inu and Dogelon - an arguably Doge - where the price is not supported by blockchain fundamentals, great economic basis, developers involved or many other metrics, but just supported by Hype, shills, and market waves that in the end, make the coins attractive to the untrained eye.
And that's where the greater fool - most likely you, but arguably me at some point in life - comes into play.
The Greater Fool Economy
Right now, I consider the NFT economics to be nothing more than a Greater Fool Economy. Don't get me wrong, once there are incredible use cases this will no longer be the case, but right now and if I can be blunt and raw, NFTs are here to overhype an idea that is not here yet, to launder money, and to take hard earned cash from the hands of fools.
We'll get there. This is not a bashing post against NFTs, it's a we're not there yet, and the more we take to get there, the more fools will fall for schemes where there is no value to be earned and a lot of money to be spend.
The Greater Fool theory is simple:
Prices go up because people are able to sell overpriced securities to a "greater fool," whether or not they are overvalued. That is, of course, until there are no greater fools left.
So, a bubble. Simple and plain.
But NFTs are not a bubble, not with all the theoretical use cases, fundamentals - such as scarcity, authenticity, convenience, etc - and hype built around them, right?
Well, if the NFT universe doesn't start delivering and just sells overpriced Monkey Kings then yes, NFTs are a bubble waiting for that last Greater Fool to show up before the whole economy plummets.
But, I don't think that will happen. I believe NFTs 2.0 are coming soon but, in the meantime, pay attention, DYOR and for the love of God, don't be the Greater Fool.
That being said, I will leave you with a simple story:
"Bitcoin's price is often cited as an example of the greater fool theory. The cryptocurrency doesn't appear to have intrinsic value (although this is an area of debate), consumes massive amounts of energy, and consists simply of lines of code stored in a computer network. Despite these concerns, the price of bitcoin has skyrocketed over the years.
At the end of 2017, it touched a peak of $20,000 before retreating. Attracted to the lure of profiting from its price appreciation, traders and investors rapidly bought and sold the cryptocurrency, with many market observers positing that they were buying simply because they hoped to resell at a higher price to someone else later. The greater fool theory helped the price of bitcoin zoom upwards in a short period of time as demand outstripped supply of the cryptocurrency.3
The years 2020-21 saw Bitcoin rise to new highs, topping $60,000 and hovering above $50,000 for weeks. This time, however, large institutional investors and corporations such as Tesla and PayPal have been involved in the buying鈥攁nd it is debatable whether or not they can be considered fools. So, perhaps Bitcoin is not an example of the greater fool theory, after all."
So, take my post with a grain of Salt, perhaps I am judging NFTs too harshly, and the fool, in the end, will be me.