Tech

Here's why NFTs are crypto's latest pump-and-dump scheme designed to make crypto insiders rich

Published 9 mins ago - USVI News

$Summary List PlacementNon-fungible tokens have taken the world by storm, becoming the hottest thing in the cryptocurrency market within only a few months. They are touted as a way to revolutionize the way digital art is bought and sold. But a closer look reveals NFTs are no more than a pump-and-dump scheme designed to make a few crypto insiders rich. NFTs are one-of-a-kind tokens that live on a blockchain. Whereas fungible tokens, like bitcoin, can be swapped out one for one, NFTs are unique and can be used to reference images, sound clips, videos, and more. The speculative mania for NFTs peaked in March when Christie's sold an NFT linked to "Everydays: The first 5000 days," a digital collage by Mike Winkelmann (more commonly known as "Beeple"). The token claiming to represent the massive JPEG sold for $69.3 million with fees, paid for in ether, the native cryptocurrency of the Ethereum blockchain. But the craze didn't begin there. Beeple NFTs were being pumped by crypto bros months beforehand, only to culminate in a large sale that brought a media storm to NFTs and the world's attention to a graphic artist who few people previously had ever heard of. The true value of NFTs The intrinsic value of an NFT is zero. When you buy an NFT, you are not buying the underlying object. You are buying an entry in a distributed database, which allows you to pass that entry on to someone else. There is also a bit of code in there that points to the digital object somewhere on the Internet, but that's basically it. An NFT doesn't convey copyright — or any legal rights at all unless there is a specific contractual agreement saying so. The digital artwork itself continues to live on the internet, available for anyone to admire, watch, listen to, or copy, without paying a penny to the owner of the NFT. Jorge Stolfi, a computer science professor at the University of Campinas in Brazil, says the very idea of a digital collectible makes no sense at all. "A purely digital artifact — a pattern of bits, like a JPEG image or an MP3 song file — cannot be a collectible, because it can be duplicated trillions of times, and every copy is exactly the same as the original. Not just similar or even identical, but the same thing," he said. He likens NFTs to the International Star Registry. In 1979 Ivor Downie, a Canadian, had the idea of selling the stars in the sky. You gave him a few dollars, and he would pick a yet-unnamed star on an astronomical photo, and enter its coordinates along with your info into his company's ledger, thus making you the "owner" of that star. "Everybody (well, almost everybody) understood that the registry provided only pretend ownership, no legal right of possession of the star," Stolfi said. Here's the difference — while the price of stars on the registry never rose above $100, NFT prices have skyrocketed, so what's driving their value? Bidding wars A quick look at the NFTs selling for the biggest sums reveals that prices are generally the result of bidding wars between two crypto insiders — or one crypto insider and some anonymous agent, who nobody is able to identify. The price of the NFT linked to Beeple's "Everydays" shot up because the buyer — who went only by "Metakovan" at the time, but was revealed to be crypto entrepreneur Vignesh Sundaresan — was locked in a bidding war with Justin Sun, the CEO of the Tron blockchain. Metakovan placed the winning bid in the final moments of the auction, making him an instant celebrity, and bringing heaps of attention to another project he had been pitching — his B20 token, a way to fractionalize an earlier series of Beeple NFTs he'd acquired, in a strategic plan to triple or quadruple his investment. It turns out, this wasn't Metakovan's first NFT rodeo. The Singapore native had been anonymously bidding up the price of Beeple NFTs starting in October. That's when Beeple — who previously sold his pieces for as little as $100 and had recently gotten a tip-off that NFTs were the thing — launched his first drop on Nifty Gateways, a specialized online marketplace. The drop consisted of three pieces: "Politics is Bullshit," a limited edition of 100, and two singles: "Crypto is Bullshit," an obese President Trump wearing a Guy Fawkes mask and giving the bird while riding a bull; and "Crossroads," a 10-second clip interpreting the 2020 election. The NFTs for "Politics is Bullshit," a defecating bull with an American Flag painted across its side, initially sold for $1 each, but since April have resold for as much as $600,000. (Many of these online marketplaces allow the artist to get a cut of future sales. In this case, Beeple gots 10% of that.) Both single editions were snapped up by Pablo Rodriguez-Fraile, a long-time NFT collector, but the price was driven up by Metakovan bidding against him to push up the price of Crossroads. While someone known only as "Ozark" pushed up the price of "Politics is Bullshit." Rodriguez-Fraile ended up paying $66,666.60 — the exact same figure — for each of the items. (A mathematician who likes patterns and numbers, Rodriguez-Fraile claims to have started the unconventional bidding numbers.) Four months later, Rodriguez-Fraile made $6 million when he flipped "Crossroads,"for $6.6 million, selling it to an anonymous buyer, in a deal brokered by Nifty Gateway's art buying service. (He would not name the buyer, but told me it was someone "very known and respectable.") Anonymous buyers, friends, aliases Wash trading — when assets are bought and sold by the same people to drive up the price — is a noted problem in cryptocurrency trading. As a result, the asset becomes attractive to naive investors, who think the price will continue to go up and up, or that they've just landed a fantastic deal. Here is an example of how that might work. I mint an NFT, and I buy it from myself for $1 million, giving that NFT a value of $1 million based on its price history. I then sell that NFT at "half price" in a fire sale to someone who doesn't know any better. I've just made $500,000. Will Cong, a Cornell University professor who wrote a paper on crypto wash trading, says the incentives to partake in wash trading in NFT markets and regular cryptocurrency markets are the same, but pinpointing the fraud is even more difficult. "Even in traditional auction houses, buyers and sellers may request to be anonymous," he told me. "It's just the detective work here is even harder." And that is the problem. Because NFTs are often bid by anonymous buyers, it is difficult to gauge exactly what the relationship is between the artists, the sellers, and the buyers — if some of them are even the same people, or if they have some pre-existing business arrangement. When Metakovan, for example, bought up all 20 single editions in Beeple's 2020 Collection on Nifty Gateways in December for $2.2 million, he used aliases. And he gave 2% of the B20 token supply — an index fund representing the value of those NFTs — back to Beeple. Even if initial sales of NFTs appear to be gangbusters, how will the value hold up when people go to resell their NFTs on secondary markets? That's the true test of whether the primary sales are real or just a bunch of crypto whales who know each other tossing money back and forth. It's hard to gauge, however. The nonfungible market is highly illiquid. In liquid markets, like bitcoin, where there are lots of available buyers, you know where you stand. Whereas if you are selling your wares on an NFT marketplace, it may take weeks to realize you've been snookered. CryptoKitties — collectible, "breedable" cats on the Ethereum blockchain — were one of the earlier use cases of NFTs. They were a huge hit after their launch in late 2017, with one of the highest priced cats selling for $155,000 in ether. Six months later, prices were down 95%. Similarly, buyers of NFTs will be left holding the bag, when people realize what people were convinced were collectibles, are better off being disposables. Join the conversation about this story » NOW WATCH: Why wasabi is so expensive$

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Sports

Goran Pandev is a Macedonia legend who’s older than his country, was a part of Jose Mourinho’s treble-winning Inter Milan team and ready for Euro 2020 swansong starting with Austria clash

Published 26 mins ago - USVI News

Goran Pandev is widely regarded as the greatest Macedonian player of all time, and at the age of 37 is actually older than the country he represents. Still, the veteran was key to his nation’s qualification for Euro 2020, scoring the play-off final winner against Georgia to cement his status as a national hero – […]

Entertainment

Read an Exclusive Excerpt From We Were Never Here, One of Summer's Hottest Thrillers

Published 26 mins ago - USVI News

Whether you're planning far-flung summer travels or kicking it closer to home, you're going to need a great beach read - and that's where We Were Never Here comes in. This twisty thriller from the bestselling author of The Lost Night and The Herd follows best friends Emily and Kristen on their annual reunion trip.
It's a total blast until the final night, when Emily enters their hotel suite to find blood and broken glass on the floor. Kristen says the cute backpacker she brought back to their room attacked her, and she had no choice but to kill him in self-defense. Even more terrifying? This isn't the first time one of their trips has ended in bloodshed.
As Emily feels the walls closing in on their cover-ups, she must reckon with the truth about her closest friend. Can she outrun the secrets she shares with Kristen, or will they destroy her new relationship, her freedom - even her life?
The novel comes out Aug. 3, but you don't have to wait until then to start reading. In this exclusive excerpt, Emily's enjoying a drink at a Pisco distillery in Chile with Kristen - and marveling at how, unlike last year, this trip has gone perfectly so far.

A fat bee bumbled around our glasses, and Kristen waved her hand, fearless.
"Feels like we're the only non-locals for miles," I said. The isolation was both thrilling and unsettling.
"It won't last. My guidebook says all the tourist buses arrive on Saturdays." She stretched her arms, recrossed her muscular legs. Kristen had gotten into CrossFit in Sydney, and sometimes her limbs still looked off to me. Tawny and taut, like they belonged on another body.
Kristen had moved to Sydney eighteen months ago; her market research firm opened up an Australian office and her boss encouraged her to apply. To my dismay, she'd complied, murmuring about how she was over Milwaukee - her hometown - with its smallish size and polarized communities.
Kristen in Australia: It'd seemed like a whim, fleeting and outlandish. I didn't know adulthood without her, from when we became friends as fellow econ majors at Northwestern to when we both found jobs in Wisconsin and shared a ramshackle apartment off Brady Street. Together we fumbled through our postgrad years, through bad dates and good job news and rough nights and even rougher mornings, until we emerged, fresh-faced and triumphant, in our late twenties, me with my very own apartment in the Fifth Ward, her a few miles away in Riverwest. We spoke casually of how we'd someday be each other's maids of honor, how she'd eventually be my future children's "auntie." I'd grown to love Milwaukee by then, with its broad lakefront and myriad festivals and friendly little art-and-music scene, all of the talent and none of the pretension of larger cities. I'd tried hard not to take her digs at the city personally.
I'd been happy for her, of course, but almost glowing with self-pity: left out and left behind and left, left, left. I dipped into depression in her absence, forcing myself through life as if there were a layer of dust dampening every moment. But we kept up a tradition we'd kicked off in Milwaukee: annual trips to someplace exotic, far-flung places most people never put on their lists.
I'd only been to popular international destinations (London, Cancún, Paris . . .), so each vacation with Kristen felt like slipping into a wormhole and appearing in another dimension, dizzy with sounds and smells and sights. Vietnam had been first, Hoi An and Hanoi, exploring tube houses and night markets and elaborate temples, more colorful than a field of poppies. Then Uganda, all our savings poured into once-in-a-lifetime experiences that piled up like snow, miraculous at first and then oddly normal: staring into the marble eyes of gorillas in Bwindi, boating past Nile crocodiles and bloats of fat hippopotami, clutching each other from the back of a jeep as a lion regarded us during a game drive in Kidepo Valley.
The third trip - Cambodia - was when things had gone awry. It was our first time meeting up from opposite corners of the globe, and I couldn't wait for all that concentrated face time, the kind we took for granted when we both lived in Milwaukee. I never imagined it'd take a turn for the terrifying, become my own personal horror movie. But Kristen, as always, had helped me, saved me, taken care of me. And here we were, with our final hours in Chile's Elqui Valley dwindling like the flame of an old candle, and everything felt gushing and good between us.
Kristen plucked a grape from the bunch and tossed it into the air, catching it neatly in her mouth. She grinned as she chewed.
"Open your mouth, Em." She held another up, like a dart.
"No!"
"Let me try! I have really good aim."
"I don't trust you."
"Hey, you're talking to King of Kings' three-time basketball MVP. Here, throw one in my mouth." She unhinged her jaw.
"This is not going to end well," I warned, giggling as I pitched a grape her way. It bounced off her chin and landed, rather miraculously, in her empty glass, and we both stared in quiet awe.
It'd taken a few hours to find our rhythm here in Chile. On the long drive up from the Santiago airport, I'd been grateful to bask in Kristen's aura again, her casual confidence and glinting wit. But my nerves had hardened and sparked when she'd crunched our rental car onto the dirt in front of an empanada stand. We ate lunch leaning on the car's hot hood as the cook, a stout lady with leathery skin, looked on. A woman out here all alone, nothing but stubby trees and choky dust for miles - I tried to give her a friendly smile.
Packed inside each doughy triangle was an entire hard-boiled egg and seasoned ground meat, and without thinking, I lifted my phone to snap a photo.
"What are you doing?" Kristen swallowed her bite and raised her eyebrows. "Did you forget?"
"I wasn't gonna post it," I muttered, blushing.
"Hand it over." The sun beat into Kristen's open palm. UV rays shooting onto each crease in her palm, each groove of her fingertips. I didn't move and she flicked her wrist. "You know the rules."
A breeze sent the bushes and shrubs around us hissing. The woman glanced up from the counter, where she was rolling out dough.
I dropped my phone into Kristen's hand and grinned. "Digital detox commencing now."
It hadn't come up again. Our phones were in our purses now, there in case of emergency, but turned off, dead blocks of metal and glass. Our Cambodia trip had involved a no-phones-allowed two-night yoga retreat at the beginning, and we'd both agreed to keep it up. And then the decision had served us so well. So much luck, so many incidental details lining up to bring us here: alive, safe, free.

Entertainment

Should You Watch ‘Manifest’ On Netflix? Read This First

Published 26 mins ago - USVI News

NBC

'Manifest' is wildly popular on Netflix but somewhat infuriating to watch at times. Should you dive in? Read this first.

Tech

Under pressure, G7 leaders vow to deliver at least 1 billion extra COVID-19 vaccine doses in the next year

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Biden will warn Putin the US will respond 'forcefully' if Russia continues its 'reckless and aggressive actions,' Blinken says

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Video shows AOC dancing with NYC mayoral candidate Maya Wiley at a Strokes fundraising concert

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Raheem Sterling gives brilliant response when asked if he justified his selection with winning goal against Croatia in England’s Euro 2020 opener

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APPLE GAVE DOJ DATA ON DEMS…

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