Seth Godin’s popularity has always been something of an enigma. It’s like he has no talent or any particularly insightful observations yet is successful anyway. His success is evidence that being early , persistent, and having connections, is a substitute for talent or skill. Another example Zeynep Tüfekçi, who is widely read despite all of her commentary being banal or wrong, by appealing to folksy populist sensibilities and suspicion of authority figures, which is a popular niche to be in. The success of Godin and Tüfekçi (and I will also throw in Malcolm Gladwell and Nassim Taleb into the pile of purveyors of pseudointellectual bilge, too) is evidence that if you confirm people’s suspicions and preconceived notions, whether they are ill-founded or not, that you can retain a captive audience by cultivating a cult of ignorance of sorts. [Because I have already done articles exposing Krugman, Gladwell, and Taleb, I will do one about about Tüfekçi later]. Godin is also the author of such indispensable contributions to the canon Western of literature, such as The Purple Cow and The Dip. He may be awash in a sea of his intellect, but fortunately for him it’s a very small and shallow one. The only reason I am talking about him is because one of his articles “NFTs are a dangerous trap” went massively viral a couple days ago and caught my attention. As to be expected of anything written by Mr. Godin, it is full of obvious observations, and what isn’t otherwise obvious is wrong.
Owning a Honus Wagner card doesn’t mean you own Honus Wagner.
Thanks for clearing that up.
If you somehow owned the Mona Lisa, it wouldn’t mean that you own the woman who is portrayed in it, or any part of DaVinci, it would simply mean you own a canvas, one that others also want to own.
So you don’t get ownership of whoever is depicted in the painting or who painted it? Who knew. I guess I should file a buyer’s dispute on Ebay for that Baseball card because I am also expecting the baseball player to come with it too.
People can look at images of the Mona Lisa all day long without compensating you, because you simply own the original trophy, not the idea…
I guess this guy has never heard of art museums.
BUYERS of NFTs may be blind to the fact that there’s no limit on the supply. In the case of baseball cards, there are only so many rookies a year. In the case of art, there’s a limited number of famous paintings and a limited amount of shelf space at Sotheby’s. NFTs are going to be more like Kindle books and YouTube videos. The vast majority are going to have ten views, not a billion. It’s an unregulated, non-transparent hustle with ‘bubble’ written all over it.
If the NBA makes an NFT commemorating a certain dunk shot by a certain player, with a specified timestamp, there is only one NFT that satisfies this criteria of being authorized by the NBA for this particular game, player, and timestamp. Seth is confusing popularity for value. It is possible for something to be valuable without being that popular. Harry Potter books are very popular yet retail for little.
THE REST OF US are going to pay for NFTs for a very long time. They use an astonishing amount of electricity to create and trade. Together, they are already using more than is consumed by some states in the US. Imagine building a giant new power plant just to make Christie’s or the Basel Art Fair function. And the amount of power wasted will go up commensurate with their popularity and value. And keep going up. The details are here. The short version is that for the foreseeable future, the method that’s used to verify the blockchain and to create new digital coins is deliberately energy-intensive and inefficient. That’s on purpose. And as they get more valuable, the energy used will go up, not down.
People have this odd notion that energy providers are like a giant charity that subsidizes the production of Bitcoin. Alarmists of Bitcoin power consumption fail to understand that Bitcoin energy consumption is not a charity but rather a voluntary economic transaction between the Bitcoin miner and the energy provider. Hence, it must be mutually beneficial for both sides: the Bitcoin miner and the energy provider must both make a profit. It’s not ‘waste’ or ‘inefficient’ as Godin put it, but rather an economic transaction. As long as energy demand increases as prices for NFTs and Bitcoin keeps rising, production will likewise rise to meet demand. It is not like electricity for non-crypto purposes is diverted for NFT and Bitcoin mining. Although the production of Bitcoin consumes a lot of energy, it is still very small relative to global energy production and energy consumption for everyday items. TVs, appliances, cars, airplanes, etc. require more energy.
Replace Bitcoin with ‘Beanie Baby,’ and one could have made a similar argument in the late 90s about Beanie Babies causing a fabric shortage or fabric being wasted on toys that could instead be used for better purposes. When the Beanie Baby market crashed, the problem effectively fixed itself, as there was this sudden glut of fabric. Additionally, increased demand for Bitcoin production means more power will generated, similar to how increased demand for cloth due to Beanie Baby production lead to more total cloth being produced overall. It is not like cloth for clothes was diverted to create Beanie Babies. The increased production of power to mine Bitcoin is funded by Bitcoin profits as the price rises, and represents a voluntary economic transaction between two parties, not wastefulness.