Opinion | What Is Happening to the People Falling for Crypto and NFTs

To understand the latest incarnation of the colossal cryptographic tricks that continue to engulf the Internet, I think we need to start with all these sad monkeys , how could it be otherwise?

I don’t mean real monkeys: there’s a little bit in this column about things that can be called “real” in the material sense. Instead, I’m talking about a digital art collection known as the Bored Apes Yacht Club . Founded about a year ago by a quartet of mysterious nicknames For fans of cryptocurrency Bored Apes - a collection of hyper-color "software-created" images of cold primates, which you will not take home from his mother.

For reasons that don’t seem to go deeper than the weird things happening online , boring monkeys have become a staple in non-fungal tokens or in the NFT market. On Thursday morning, the cheapest of the available Bored Ape NFT - a kind of digital certificate that gives its owner a vague possession of a monkey illustration - was sold for the equivalent of $ 340,000 ; Last year, NFT’s very rare sad monkey with a small amount of gold skinwas sold at Sotheby’s for $ 3.4 million .

Are you watching me? Humans in the network become monkeys, mainly because they are Pokemon primates. You may be wondering what monkeys do and why people pay for so many vague legal rights, and how you are so old and broke away from reality. All good questions, but now they are.

Last year, well-funded startup Bored Apes Yuga Labs launched a parade of its new digital monkey offices. His recent efforts have highlighted headaches , money laundering, destroyed casinos, an atmosphere that is called the next big thing on the internet. Cryptocurrencies, blockchains, NFT and an excessive collection of technologies known as “web3” have become known as a way to get rid of the giant technologies that now control the Internet. Instead, what is happening with Bored Apes shows that they are doing the opposite: making mistakes that undermine network credibility, pollute the digital world with a thick cloud of fraud, and costly and largely unregulated financial speculation.

The last monkey sale took place last weekend, and the disaster was top notch . High demand has overwhelmed Ethereum , an open source blockchain containing Ether cryptocurrency, and has been developed as a more powerful cryptographic system than Bitcoin . Technological shortcomings have cost thousands of people about $ 180 million in transaction fees. Some seemed to pay more taxes than they pay for NFT. They were lucky; some paid large commissions for transactions to see that their monkey purchases were failing for unknown reasons. (Yuga said he returned the money spent on failed transactions.) Others were subjected to various hacking and phishing attacks . Meanwhile, Yuga, its sponsor, including some of Silicon Valley’s largest venture companies, has earned at least $ 320 million in sales. What are the sales? Ah, the “earth” on the other side, a virtual world that could soon be taken out .

Of course, buyers were satisfied with the sale. You may find it difficult to gain sympathy for people who have paid large sums of money to speculate on digital assets in an underdeveloped corner of the metaworld. Play stupid games, win stupid prizes.

But Molly White, a software engineer at Web 3 Thrives who documents the spectacular crashes that happen every day in cryptocurrencies, and a software engineer who runs the Twitter feed, told me that many people turn to cavemen to hire new technology. which are much more reliable than what promoters support.

"On the one hand, we are seeing problems on a scale that most technologies do not have," he told me. On the other hand, well-funded companies place Super Bowl ads that promote cryptocurrencies to the public, and large financial companies prepare people to invest in digital currencies through their pension funds . And much is not regulated.

“As we move forward, the damage will be much greater,” White said.

Web3’s nominal goals are quite noble. The early rise of the Internet in the late 1990s, what you might call Web 1.0, was sometimes highly praised in the stock market, leading to the demise of some well-known companies and the demise of many dot-coms. The post-crisis Web 2.0 era of the mid-late 2000s was marked by an explosion of new technologies and new types of business: mobile devices, social networks, streaming services, and the much more dynamic and interactive Internet. However, over the past decade, four companies - Google, Facebook, Amazon and Apple - have become centers of control over the Internet and, more broadly, the technology industry.

Proponents of cryptocurrency and related web3 innovations say these technologies could turn the monopoly on the Internet. They argue that by creating next-generation online applications on the blockchain, we can basically throw out the carpet under the feet of public books that can record money transactions and store data in a decentralized way. giants. Online today. Web3 Booster also presents many other unrealized benefits. They say cryptocurrencies will free us from major financial forces such as Wall Street and the Federal Reserve, allow people to send and receive money cheaply, or attract millions of people around the world to the modern “bankless” financial system.

Honestly, I’ve been trying for a long time to ignore these claims because I was terribly upset with the way some companies are capturing the Internet, which I once considered a source of innovation. If there really is a new network that will solve all the problems of the old network, subscribe to me.

But the constant appearance should lower these expectations. While the Ethereum Bored Apes blockchain sale was halted last weekend, another alleged cryptocurrency network, Solana, has been shut down by bots , making it one of several full or partial shutdowns this year. Two other cryptocurrencies, Rari Capital and Saddle, were attacked , causing $ 90 million in airtime losses. Earlier last week, Deus Finance lost $ 13.4 million in a second attack in two months. I could go on and on

The decentralization he promised us is a bit much. Many Web3 companies are now funded by the same people who created the web we are trying to reform.

The main problem is not that these technologies will become the basis of the Internet in the future. Of course, they're not for that: as White said, "If web3 can't handle 55,000 Bored Ape NFT, how can it handle web scaling technology?"

But how many people will lose their t-shirts before realizing that web3 is not the solution to any of our problems?

Farhad Manju's schedule

Farhad wants to talk to readers on the phone . If you want to talk to a New York Times columnist about what you mean, fill out this form. Farhad will select a few readers to call.