According to a new takedown video by Canadian YouTuber Dan Olson, NFTs and bitcoin are a “greater fool swindle.” “Line Goes Up – The Problem With NFTs,” a tremendously popular new YouTube documentary that runs over two hours, takes an in-depth look at the hot new investment vehicle that everyone from Waka Flocka Flame to Jimmy Fallon and Paris Hilton is getting into.
Foundationally, crypto and NFTs are “a bigger fool scam,” Olson says. “The whole thing operates by buying worthless assets believing that you will later be able to sell them to a bigger fool.”
That’s because, as Olson explains, Bitcoin, Ethereum, and the other blockchain technologies that serve as the platform for both cryptocurrencies and NFTs have inherent flaws.
According to Olson, the value of cryptocurrency is extremely volatile, making it unsuitable as a money in everyday transactions for ordinary people. Spending $5 in bitcoin at Starbucks, for example, may be worth $45 an hour later. It could be worth $1 an hour later, or it could be worth $1 an hour later.
Furthermore, he claims that each cryptocurrency has its own set of problems.
Bitcoin is famously slow to process, with transactions taking minutes to complete. Each transaction in ethereum incurs a processing charge, known as “gas” fees, which make it similarly unsuitable as a currency to carry out everyday transactions such as buy the aforementioned cup of coffee.
Perhaps a $50 gas cost isn’t such a huge problem if you’re spending the equivalent of $69 million in ethereum on an NFT from renowned digital artist Beeple.
Notably, Beeple switched his $53 million ethereum settlement for that art sale into US dollars shortly after he was paid, citing the volatility of the cryptocurrency in his interview with The New Yorker. “I totally believe it’s a bubble,” he said of the NFT market last year on Fox News Sunday.
According to Olson, the bubble is based on speculators driving up the value of specific NFTs.
“None of this is about the art at all, but about the speculative value not what it’s worth to you, but what it will potentially be worth in the future to someone else,” he says. “It’s not a market, it’s a casino, gambling on the receipt for an image or video that’s otherwise infinitely digitally replicable. The thing itself is immaterial as long as it can make a line go up.”
NFTs function as a means of enhancing the value of the cryptocurrencies used for purchase because they can only be acquired and sold with cryptocurrency, he claims. To put it another way, “NFTs exist to persuade you to acquire cryptocurrency,” he argues.
The complete video goes into much more depth, explaining how the same erroneous financial machinations that caused the 2008 mortgage catastrophe also caused the crypto gold rush.