The NFT game is all about making your NFTs look unique and noteworthy, with as much fanfare and publicity as possible. That’s because the only way to make money from an NFT is by flipping it to someone else, who thinks they can flip it to someone else, and so on. Having a 12-year old kid get hundreds of thousands of dollars for blockchain receipts of whales is a great way to get headlines, but I'd be cautious about taking this story at face value.

The more noteworthy you can make your NFT, the more you can convince people that they might be able to make some profit by flipping it, meaning the more you can sell it for.

The high prices are a known gimmick for grabbing headlines. “Useless NFT sells for $100,000” is (or was) a sure-fire way to get your NFT into the headlines. The trick was that you could actually bootstrap these high prices yourself without actually spending the money. If you have $100,000 in ETH sitting around, you didn’t have much to lose by using it to “buy” an NFT from yourself in a transaction with yourself. You keep the money, you keep the NFT, but now you’ve generated a public record of the NFT having sold for $100,000, and now you can claim to hold an extremely valuable NFT. After all, the record is on the public blockchain! No one can deny it “sold” for that high price.

Maybe this kid actually lucked into a trading fad where crypto-rich individuals had so much extra money that they didn’t care about tossing hundreds of thousands of dollars to a kid in exchange for a virtual blockchain receipt for the lulz. Or maybe they think they can use these headlines to further flip the NFTs at a profit to someone else.

But whenever you see a headline like this, it’s important to remember the possibility that maybe nothing actually changed hands at this price at all. If this kids’ dad (who works in finance) wanted to generate headlines hopes of flipping NFTs to someone else, what better way to do it than by getting headlines about your 12-year old making hundreds of thousands of dollars? All he needs to do is “buy” those NFTs with crypto funds, keeping the crypto funds in the family, and then start contacting news reporters about these miraculous, high value NFTs that they should totally write about in every outlet so that hopefully someone else will buy them for an even higher price. Come tax time, you can always argue that you never actually sold anything because you control both wallets, so there wasn’t any profit to be taxed.

You’re only out the transaction fees, so you can buy headlines like this for tens of dollars.

I wish the media stopped propagating the cycle of pump-and-dump baiting the general public. Someone is going to stuck paying off a check they probably can't afford in the end.

Father works in traditional finance, someone pays an incredible amount of money for his son’s NFTs. Hmm.

From the article: "Benyamin's father, Imran, a software developer who works in traditional finance, encouraged Benyamin and his brother, Yousef, to start coding at the ages of five and six."

I view NFT's with a hefty dose of skepticism, although I have a very talented ex-colleague that has been creating 3d artwork and made a few thousand. My view is that there's a chance his father etc was already invested in bitcoin and wanted to put it to good use...

If you look at this NFT stuff along with the many other absurd things humanity is busy focusing on, one might deduce that Roger Waters was exactly right with the phrase,

"But on eliminating every other reason

For our sad demise

They logged the only explanation left

This species has amused itself to death"

NFTs are mostly used as a ponzi game. There's not enough physical art or exotic cars or other collectibles for the moneyed folks to trade, so now they have NFTs.

This, plus the stories of groups and corps buying up homes, negative interest rates, etc., all suggest that too much money has been concentrated in too few places (hands, people). And those people seem to be focused primarily on just making money, so they need vehicles like NFTs as another place to play. It's just mind boggling where humanity has ended up.

Who are buying these things? The only plausible explanation to me is that the NFT exchange owners are selling to themselves using sockpuppet accounts to drum up media attention.

The article even mentions that they are keeping the profits as Ethereum, which would be necessary as he can't cash out since the money isn't actually his.

I may teach my kid programming. If he’s interested. But I’ll never ever tell him that anything to do with crypto is a good thing to be involved with.

I kind of have the same mental association I have with drug cartels. Except somehow it’s legal.

Are we watching the new way of laundering money? What's wrong with laundering in the traditional way at art auctions?

We built this really cool iOS app a couple years ago called Editional that was centered around NFTs. Anyone could create one, and they would mint so many editions, the first being the most valuable (since it’s the “original”). I still contend that we were far ahead of anyone even today: we had the ability to facilitate multi-atomic swap trades even.

…we ended up closing shop. We were paying for minting transactions behind the scenes and the market was too expensive in 2018-2019. We made a crucial error there, but we didn’t think people would be willing to pay so much for transactions.

..boy, were we wrong. I just sold a couple remnants of my old Editional wallet for a good chunk of money. I had a…hard time doing it though: transaction fees cost from a minimum of $40 and and a maximum of $160 for those smart contract transactions. Add in the fact that every provider takes a large cut: from Coinbase, to NFT marketplaces, to the 10+ dollar fees to actually complete a successful transaction.

To be honest, I was intimately involved in this space for a while, and I don’t get it anymore. We had this hypothesis that the ecosystem would scale and mature as we went, but we didn’t see much of that at all. It’s all gambling. It’s not even cool gambling: the decentralized prediction markets I was particularly excited to see never really took off.

I got interested in the space because I thought: decentralized consensus is really interesting, how important that’ll be in a world trending lower on trust; but this crypto world is so dishonest that I’ve realized that trust is integral to most effective systems.

The second sentence here is such an odd one to include in the article:

"Benyamin Ahmed is keeping his earnings in the form of Ethereum - the crypto-currency in which they were sold.

This means they could go up or down in value and there is no back-up from the authorities if the digital wallet in which he is holding them is hacked or compromised."

NFTs are one of the most manipulated markets ever. Just take a look at the massive upvote fraud that is happening on r/NFT

https://upvotetracker.com/blog/beware-of-NFTs-promoted-on-r-...

That boy is to be commended, regardless of what one thinks about the NFT hype.

What a former Christie's auctioneer thinks on this (as quoted by the BBC here) is _especially_ irrelevant, as they are of course partially disrupted by the NFT hype. Like asking a telco company in the 90s about the internet.

Strong Demis Hassabis vibes (DeepMind founder who did Theme Park at the age of 17)

Is gambling allowed at that age?

A bit of a silly thing for people to celebrate, why not celebrate people that won the lottery ?

>The children have had the advantage of a strong network of technology experts to call on for advice and help - but he is extremely proud of them.

Strange addition, a little defensive there BBC? Something something coal miners and programming

Exactly, people are 'diversifying' their ETH etc into NFTs.

I do not believe anyone is spending millions of actual hard-earned cash on these digital works, let alone just the NFT, which amounts to a 'digital autograph'.

it would be really helpful to see this in a flowchart or diagram. Crypto seems unapproachable because of all the prerequisites involved. Add on to that the sheer volume of counterparties all taking a cut.

I wouldn't write off NFTs yet.

The many malicious actors in cryptocurrency are not representative of the many organizations and individual contributors in blockchain technology.

I think the common applications of NFTs now are entirely primitive, and I find understanding the concept of blockchain oracle networks to be hugely influential in framing my perspective of the 5-10 year landscape of IP and digital media. Lex Fridman's interview with Sergey, Chainlink founder, is exceptional, if lengthy.

A blockchain represents a public and immutable* ledger of "things that happened," and smart contracts represent agreements of "things that will happen if [conditions]." If the storage, execution and outcome of those smart contracts occurs on the same blockchain, that's a seriously powerful mechanism. Its primary limitation is that it cannot GET data from outside the blockchain, because that would compromise system integrity.

Oracle networks are simply another layer of distributed consensus. Weather is a straightforward and common example. Let's say there are a dozen entities that all operate as oracles in a weather network, and they report certain meteorological data at 24hr intervals. Should entity A report inaccurate or fraudulent data, the network would reject that and entity A would be penalized in some way. The number of oracles, or nodes, in the network is relative to the significance of value reliant on their data, so a handful of nodes is fine for early stages, and at larger scale, more nodes are incentivized to participate in data collection and validation to strengthen the system integrity.

There's a rapidly expanding body of research surrounding all of these concepts, but I find oracle networks to be the infrastructure required to begin standardization of the bridges between traditional, legacy agreements, comprised of legally binding contracts and IP / patents / copyright licensing, and smart contracts executed autonomously based on conditions and outcomes that are universally knowable and agreed upon.

With those bridges in place, we unlock a lot of efficiency by dis-intermediating the fulfillment of contractually obligated outcomes that are contingent on enforcement from a legal structure, which may not exist in developing nations. A smart contract for crop insurance that pays a claim if there is no rain in a region for a year will GET weather data from a smart contract provided by an oracle network (which already has its standards for validation published and verifiable) and simply pay out claims if those conditions are met.

A traditional insurance company might simply be bankrupt.

NFTs, conceptually and somewhere in the future, will represent a vast majority of the management of digital assets and probably many real world assets as well, because they are represented on chain. Maybe an oracle network formed of real estate title search companies offer a homeowner verification function and provide it as a zero-knowledge proof to a larger protocol that assesses some future form of creditworthiness. Maybe not in the next few years, but certainly in the next few decades, all titles, deeds, and other legal documents that represent ownership of an asset will have a primary digital representation on some sort of blockchain.

They probably won't even be called NFTs, but who cares, I'm sick of hearing about them anyway.

* there's a lot of discussion around finality but most implementations of blockchains have a strong degree of immutability

p.s. I sent Editorial an email