NFTs are a dangerous trap | Seth's Blog

At inception, tokens are neither digital stores of value, nor equities—they are simply promises that attract an audience.

But what causes customers to jump in?  Community, Identity, & Status: Much like the world of traditional branding, people buy NFTs to communicate something about themselves, such as a community they’re a part of, a social group they belong to, or an interest they’re passionate about.  Utility: NFT collections keep their audience engag... See more

So the parsimonious mental model of an NFT based on what we’ve discussed so far is that it is a promiscuous and vacuous digital social object. A thing that contains no substance itself, not even reliable pointing properties, but has an identity and can be traded, transferred, mixed and matched indiscriminately with other things in a social context.

It’s easy to see why NFTs inspire both excitement and deep skepticism: They’re a completely novel asset class, and we don’t see new asset classes appear that often. But what drives the value of an asset that’s really just a digital token people can pass around? To appreciate NFTs properly, we first have to think through what they actually are and t... See more

A digital file, when intersected with the ubiquity and scale of the internet, can be “seen” by anyone. NFTs push the notion even further. By adding to the ideas of abundance and scale those of passionate distribution, patronage, the day-one fan and, yes, ownership. Concepts associated with scarcity, now distributed out to the abundant world at larg... See more

People collect NFTs for a number of reasons. It could be the thrill of discovering a promising new artist or artwork, the allure of a piece’s potential cultural value, the social status of owning something unique and canonical, or the prospect of turning a profit by reselling the work down the line.