Bloomberg published a massive 40,000 word story about crypto Tuesday by veteran finance journalist Matt Levine. In the piece, Levine writes derisively about NFTs, likening them and the majority of the crypto space to a Ponzi scheme.
“The bad way to put this is that every web3 project is simultaneously a Ponzi [scheme],” Levine wrote, asserting that most tokens are bought with the express purpose of offloading them onto others for more money. “Why do you think someone else will buy the tokens? Is it because you think they like the product? Or is it because you think they are planning to get rich by selling to a bigger sucker? Where does that end?”
When Levine wrote specifically about the presence of NFTs in the larger Web3 context, he brought up a few points that undergirded his belief in NFTs’ essential valuelessness: that the NFT is technologically weak, that the legal grounding for NFT ownership, so far as IP is concerned, is thin, and that the general sentiment that the art NFTs represent was for the most just “zombies and kitties”.
There are certain obvious technological and legal issues with NFTs. The basic one that Levine brought up was that, in his words, “the art doesn’t live on the blockchain.”
“If you buy an NFT, what you own is a notation on the blockchain that says you own a pointer to some web server. On that web server…
