BitMEX founder: NFT is expensive because humans like unique ways to show off

BitMEX founder Arthur Hayes published an article today, analyzing in detail the value of NFT in his mind-Flex, and showing himself to others and showing off himself. The following is the full text compilation.

Art is a manifestation of the rich energy of human civilization. From the point of view of net energy, art has no value at all. However, when art is seen as the purest expression beyond the basic human functions (burning calories, reproducing, reproducing, and dying), it is invaluable. We “work” for leisure, and leisure is a personal pursuit, usually involving some art forms, including music, film, painting, sculpture, sports, etc. All these activities consume a lot of energy, but bring endless fun to the participants and the audience.

The emergence of super-intelligent network thinking machines will herald a new era in which most human labor will be economically worthless. Human beings are liberated from the work of the physical world and will turn to the new digital world and the complete expression of the creativity and vitality of civilization. The meta universe is the future.

So, what is the concept of “art” in a pure digital structure? How can money (just an energy abstraction) be “wasted” in the pursuit of digital art? Similar to other “traditional” art forms, are NFT-based art forms both worthless and priceless?

From an energy point of view, NFT art is completely worthless, but it will represent the ultimate way to show social status in a purely digital world. Some people think that art exhibitions like Art Basel and Venice Biennale are the feast for like-minded cultural people to participate. To them, NFT art looks a little ridiculous. But the infinitely reproducible JPEGs traded on the blockchain are no more ridiculous than the wavy lines on the canvas.

Compared to smart machines, you are “worthless”

Compared with intelligent machines with self-learning capabilities, the output of most human labor cannot match the required energy input. No matter how “smart” or “creative” you think you are, machines will be better than you in the next few decades.

What should I do now? Once we can’t bear the lockdown caused by the epidemic, the elderly (I mean millennials and above) will participate in sports, hang out on the beach, and drink and chat in nightclubs. Young people choose to play video games and create new worlds in various digital meta-universes.

The COVID-19 pandemic has only accelerated these trends. Today, a large part of the world is still locked in their residences; their only way of interacting with the outside world may be through networked machines. Whether you like it or not, your online avatar will only become more and more important. The meta universe has come, and you are participating in its creation and development.

The meta-universe will be anything humans can imagine, and it will not be hindered by the traditional laws of physics that we take for granted in physical space. New economies and occupations that we cannot imagine will appear in these worlds. We hope that these jobs can create the same self-satisfaction as traditional jobs and make people feel satisfied with their lives. Otherwise, the other scenario will be that billions of people will criticize the inequality that is felt and actual, especially when capital is further concentrated in the hands of our technological hegemon.

Defined by the number of users it affects, the most powerful person in the world is Mark Zuckerberg. He believes that the real future of the Facebook community is meta-universe. AR and VR devices that allow humans to create communities in the digital space are what Facebook sees as the next iteration of the digital community.

China is building a mobile-first network society. All data and interactions are networked, monitored, and controlled by the state. China’s Meta Universe has a complete social credit score, covering the entire online and offline life of users. Taking into account the R&D expenditure on artificial intelligence and 5G, China believes that in the future, people will be connected first through digital means.

In fact, both Western and Eastern capital believe in the future of the meta universe.

The essence of the game is social

According to Statista, 2.55 billion people have played some kind of video game in 2020. On average, gamers spend 54 minutes a day or 6.33 hours a week on the game.

With 2.55 billion people, gamers represent the largest affiliated group of people. They cross traditional ethnic and religious boundaries. Here is an interesting question: the community in the game and the country of birth/religion in reality, which game players have a stronger sense of belonging to? I bet that as gamers spend more time in the virtual world, they will gradually weaken their sense of belonging to the nation-state or religion and become more enthusiastic about the community in the game.

The game is more than just shooting. I think it is essentially some social activities in the virtual world. This structure will be transformed into any activity in the virtual world. If we consider the time humans spend on the online office tools Zoom and Microsoft Teams, the time spent on socializing/working will be much higher.

People like these new worlds. Human preference for Work From Home draws a line between generations and income levels. The bosses of the baby boom generation (born 1946-1964) want to see their younger and poorer tyrants sitting in their offices to facilitate their management. As for workers, if they can complete their work online, they prefer to sit in the comfort of their own home, and their daily commuting time can be saved and turned into more leisure time. As we gradually form strong connections in a completely virtual environment, it will become untimely to reach a deal through face-to-face meetings.

How to show yourself, show off

As a member of society, the sole purpose of many activities (including shopping) is to publicly show how much energy you can waste. The nightclub economy is an excellent embodiment of this concept. A person walks into a dark room, listens to loud music (art), dances (wasting energy), and pays exorbitant prices for alcohol. Everyone wore very beautiful clothes, which were of no use except to show others present that they had spent a lot of money to show their social status.

If you think nightclubs are too tacky, then let’s talk about global art exhibitions. Rich and famous art lovers, creators and curators waste their energy and go to a place to “collect” useless paintings, sculptures and other things. Depending on the gallery you represent or how many useless things you stock up, there will be a clear social hierarchy in the exhibition. A large amount of food and drinks are provided at the exhibition to allow you to socialize with other like-minded art lovers. After completion, everyone packs up and wastes more energy to return home.

Socialization and communication are what makes human beings different from others. This is how we sent mankind to the moon. This is how we created the Internet and integrated circuits. Flex is not only a 100% energy waste, but also a necessary condition for building social bonds to promote the progress of civilization.

When we imagine what the meta-universe will become, then how will its inhabitants show their social status? Going back to the game, the virtual economy around the skins worn by online virtual characters is booming, and this also points to a digital future in which worthless digital artworks will represent a lot of value.

According to estimates by DMarket, the size of the game skin market is approximately US$40 billion.

Newzoo also released a report that studied the attitudes of American gamers towards game skin trading. This report is quite insightful.

Highlights of the report

  • “Among American core gamers who understand skins, 81% want real-world money through their skins, so they are interested in skin trading. More than two-thirds don’t know that there are some well-known skin transactions in the United States. Platforms (including Steam’s community market, DMarket, OpenSea and Bitskins).”
  • “It is very important that 75% of players interested in skin trading said that if the game skin has monetary value outside of the game, they will spend more on the skin.”
  • From a statistical point of view, young men are most likely to be exposed to game accessories, but large-scale “giant whales” are older.

Our online avatar needs to show ourselves. The value of digital items combined with our online identities will explode. Ask yourself, is a hardcore gamer willing to spend $1,000 for rare skins, or $1,000 for LV bags (you may ask, “What LV bag is only $1,000”)? Rare skins and LV bags actually meet the same needs, they show how much energy you can afford to waste. Similarly, they are also scarce products.

What is Flex product?

Flex products should have the following characteristics:

  • The commodity must be essentially worthless, or if it is as useful as a piece of clothing, but there are cheaper alternatives that can perform the same function. If in doubt, please check whether the product has pop stars mentioned in the lyrics. If there is, then it may be a Flex commodity and essentially worthless.
  • Owning an item should grant membership in an exclusive community.
  • Commodities should be limited in quantity, in other words, scarce.

Have you ever wondered what it’s like to wear socks and shoes? Well, Balenciaga will sell you a pair for nearly $1,000.

Is this an item to show itself (Flex)? Let’s take a look at the list.

Property 1:

You can spend less money to buy a pair of sports shoes to protect your feet while performing a biomechanical activity that humans call walking. A rapper named Cardi B has the following opinions about the above sneakers:

“I like those Balenciaga shoes, those that look like socks.”

Property 2:

If you buy these shoes, you are a member of this small circle who knows how to appreciate high fashion and can afford Balenciaga brands.

Property 3:

This pair of shoes is semi-scarce. Balenciaga produces enough quantities that anyone can buy a pair with only $1,000. However, they are scarce in terms of money, because most people cannot afford to waste $1,000 on socks and shoes.

Self-exhibition of the Encryption Circle: NFT Art

NFT is currently only a record of ownership. NFT tells us which public encryption key is the real owner of a particular data. As far as the current market is concerned, the artwork itself in NFT is easy to copy, but the original ownership is unique in cryptography.

Since most of the current NFT art uses digital images and videos, these data can also be copied for free. Opponents are surprised at why someone is willing to spend so much money (energy). After all, NFT art can be viewed for free or transferred for free. However, what these people do not understand is that art itself is directly related to showing oneself (Flex). This is about having the only encryption certificate, that is, NFT.

The physical artwork is valuable because the artwork itself cannot appear in two places at the same time. There is only one “Mona Lisa” in the Louvre. JPEG images of pixelated rocks can appear everywhere at the same time. So why is there value in both?

In the meta-universe, it is not enough to “wear” or “display” digital objects. You must also be able to prove its scarcity. This can be done encrypted by owning NFT.

There are two aspects to the self-expression of the encryption circle. First, you have a pair of bad-looking virtual sneakers, cute penguins, pixelated faces or jpeg stones, which you can display on various social platforms or as your avatar. See how many people in the crypto circle associate their avatars with NFTs to show their value and membership in the elite community. Finally, and most importantly, you set up a Twitter picture, showing a value 1,000+ ETH after CryptoPunks, you can actually prove that you are in the ether Square in encrypted form to have it on the block chain. Now everyone knows how much you paid for this-you don’t have to shout: “Hey, everyone, pay attention, I am fucking rich.” We humans like to abstract the display of our wealth in commodities, rather than directly Shows our bank balance or wealth held on the chain.

Ether Rocks is an interesting NFT project. Let’s analyze it too.

Property 1:

EtherRock is actually a set of PNG images of stones. I won’t say that they spend a lot on ways to achieve human creativity. They are essentially worthless.

Property 2:

If you own EtherRock, you are part of an exclusive community of no more than 100 people. If you want, you can buy multiple EtherRocks, but there will always be only 100 in total.

Property 3:

EtherRocks are very scarce because there are only 100.

This is an interesting project, because PNG files are obviously worthless and lack creativity, so that many people question: Why would anyone waste a lot of ETH to buy them? In fact, EtherRocks worth nearly 2,000 ETH were traded in the market in August alone. However, the more valueless but expensive NFT, the more flexible it is. As with everything, value can fluctuate. Imagine you own a stone that was once worth a lot of ETH but is now worthless. Value fluctuations also increase Flex, because it means that the owner is completely happy to see that the value of the stone will return to zero when the next Ethereum block is generated (I also paid for the things that are about to return to zero, and more Appears to have a strong ability to waste energy).

Trading NFT

Just like traditional art, a healthy speculator ecology will definitely be attracted by NFT. In the art world, they call themselves dealers or collectors, but they are betting that worthless things will be “cherished” by humans in the future. Over time, it is very difficult to do well and make a profit. Which contemporary artists should people choose to support, and their collections will continue to appreciate over time?

This is equally difficult in the NFT field. How do you know which project’s artwork will be popular? Should the number of minted items be very scarce? It should be an old project. Is its “age” close to the Bitcoin genesis block? Should it be aesthetically pleasing to a particular wealthy person? Should it be directly related to popular games? There are many questions, but there is no right or wrong answer. But there will be a group of traders who are proficient in narrative construction and Meme dissemination. They will be able to collect the most sought-after NFTs and obtain considerable returns in the process.

Transaction data

I will use CryptoPunks and the OpenSea project as useful instructions.

Obviously, 2021 is a breakthrough year for the project. I think CryptoPunks represents energy and activity in the entire industry. People are trying to buy pixelated faces that are essentially worthless for Flex.

OpenSea is one of the most popular NFT markets. It is basically an encrypted version of Christie’s and Sotheby’s.

This market is growing explosively. Imagine if there is a transparent trading market, trading all the artworks in the real world. The transaction volume will be huge. This is the opportunity for NFT now. If you still think of them as a pile of cow dung and shit, that’s okay, because the most sought-after projects are attracting actual liquidity.

The art world employs thousands of people whose purpose is to verify the source and authenticity of works for sale. Considering that it was done by humans who are prone to mistakes and sometimes conflicts, fakes abound in the art world. This is impossible for NFTs traded on public blockchains. When you buy something on OpenSea, you are 100% sure that you are buying something from a certain item.

Using blockchain to verify Flex products is very advantageous because it cannot be forged. Imagine a project that creates a symbol that means that if you display a digital item on your avatar, you actually own the original file of the digital item. This is similar to the “blue √” on Twitter.

A child of mine who sold emerging market foreign exchange and bonds for a large hedge fund during the day and secretly wanted to become a K-pop star/NBA athlete. He has already gotten deep into the NFT. He always wears some fashionable and expensive clothes, the brand we have never heard of. He commented in one of our chats on the topic of NFT:

“It’s like wearable art online, but online”

“You can Flex to more people”

It’s dangerous to ignore this trend

Flex is an integral part of the human experience. We do not question the value of physical objects used to demonstrate social status. We understand and value fashion, painting, jewelry, etc. At work, we all wear clothes that show which professional community we belong to. What is an investment banker who does not wear a Hermès tie or CL red-soled high heels? Clothing is part of self-worth.

Just because robots have taken over all our work in reality does not mean that humans are no longer humans in the meta-universe. Social signals will take a new form and be supported by NFT-based “valueless” items. Those who recognize these similarities and create new markets for digital Flex products early will reap astronomical returns. Those who are dissatisfied with this new social signal can continue to walk down the street, walk into a store, and buy a $500 white T-shirt from a fashion store. Please choose your Flex items appropriately.

Scalable Flex is a technician’s dream. The ability to appear rich and cool is not limited to physical proximity, it also includes your digital avatar.


Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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