Asklemmy

It's a multi-level scam.

The people at the top convince other people to put their money and effort in. They tell those people "this is going to be the next big thing, you just have to tell the world about it."

Then those people write this stuff for them.

This sort of thing isn't written by the people at the top of the scam. It's written by their suckers, or their suckers' suckers.

Non-Fungible Tokens, or NFTs for short are shaking up the virtual universe, transforming how we vibe with digital assets.

Oh hello fellow humans. Let’s vibe with our digital assets for a bit since it’s something we do so often in our virtual universe. What assets do you especially enjoy vibing with?

This one is actually pretty straightforward. The middleman here charges interest and hopes the borrowers default so they can sell the assets at a profit.

A lot of the underlying scams are very low-tech. I sometimes work for VCs and get asked to investigate blockchain stuff (a lot in 2022, not so much now!). I've vetoed 100% of deals after investigation. For brevity, I'll only describe the main two type of crime I've encountered.

Embezzlement of funds raised is a common one. Most are not exactly criminal masterminds though, and you can see the project accounts being emptied steadily into exchange accounts if you're really determined.

A lot of the rest is wash trading. Usually exchanges will give you a zero-trading-fees account, and tell you that you need to maintain a minimum volume, wink wink. So most of these scammers just trade between accounts they own, to create the illusion of a sudden rise in price (coinciding with a marketing push). This you can also sometimes catch by looking at orderbook timing. Sometimes you can break their bots too. Often they hire external entities to manage this, so won't notice overnight.

Anyway, in this last case there is usually just an illusion of people making money at the top. The price spikes, but the whole orderbook is just someone trading with themselves. So if you buy in, they take your payment (and they make a little money)... but there's no one to actually sell to. You can detect this sometimes by looking for orders being placed then filled within very short time intervals. A lot of these groups make a lot less money than they claim to!

This is easier for NFTs because they are non-fungible. One way you can do this is to track which ones are owned by your company and which are something someone else bought. So you only trade the NFTs that are internally owned in a way that makes them look like they constantly increase in price. Once an NFT is sold to an external account, you cross it off the list and never buy it back, and it's magically immediately worthless.

If you mention these activities on their official channels, they will just ban you.

There's also a whole slew of regulatory compliance issues, fake legal opinions, and so on... but I'll spare you those as it is more boring to read about.

The whole blockchain space is a cesspool of inequity. Stay far away, unless you just like playing around with cryptography for fun. In that case, it's a cool toy and it's fun to build a few blockchains in an afternoon to play around with before getting bored and moving on to other technology. I have built a dozen or so blockchains and a few smart contracts to make sure I fully understand the technology before recommending my clients reject investment deals. This has (perhaps ironically) made me somewhat of an expert in the domain, albeit an unwilling one. I consider that path a career dead-end, and look forward to slowly forgetting about it.

nfts are the biggest fucking scam. Fuck anyone who pushes this shit.

This video is a must watch for explaining the fundamental problems of crypto/NFTs.

Warning: it long, like feature movie long, but really informative.

Same way pyramid schemes do: convince others that it makes cash and sell it to some sucker down the line

"Nooo you can't just download my NFT!!!"

"Haha download manager goes [beep, download complete]"

Pyramid

Thank you for asking. Let me tell you the truth. NFT gamings, all of them, are Ponzi scheme.

If you look at NFT game as a game, sure, some games are good and have entertainment value, such as Axie Infinity.

But if you look at NFT games as source of income, then they are all Ponzi ?

Think, where the money comes from? Who will pay for the token, the "pet" you breed, the item you get from lootbox ? New user, i.e: new Investors.

That's it. Use money from new investors to pay old investors.

If you are unlucky enough to hold the bag. I.e: player who have not sell their NFT before the game close. You lost your initial investment.

This article is so cringey.

I'm going to pretend this article was mostly written by a bot and that there's no way a living, breathing human sat down and wrote this. I'm lying to myself probably, but it helps keep me sane.

Kinda sounds like a ~~great~~ way to launder money.

The repo and NFT itself is symbolic, it's just a digital signature on a contract. The people who are benefiting most from this are people laundering money who get to leverage traditional financial, legal and even extra-legal services with their equity. Even money is symbolic, given most of it doesn't physically exist and it may not even be pegged to a physical resource.

This is how, for instance, a Saudi prince might invest in a new business which he doesn't politically want to be seen as involved with. Should the business fail, the loan system ensures some form of potential loss recovery and debtor verification. Should the business succeed, nobody else needs to know and everyone is happy.

Yes, the con men that are pushing this shit to their sheeple and then selling as soon as the price is high are, but everyone else is loosing money. Why do they keep doing it? Because it's like gambling to them "this next one will for sure be a winner, I can feel it!"

People make money at it, but nobody makes wealth at it

Ah... so you're specifically mentioning about the news article in question?

If you repay the loan, [your NFT token] comes back home. If not, [the token] gets a new owner. Simple as that!

I guess this explains everything... Probably just ppl hustling each other lol. And I assume given what types of shady characters are into NFTs, there are probably a lot of them who want to hustle another person out of some cash