Are NFT’s, cryptocurrencies breeding us into gamblers and impulse driven generation?
The way I perceive it NFT’s, crypto (additionally could mention metaverse, but lets skip that for now) has some correlation to lotto. Both play a pursuit of a better life with several opportunities to make money via lotto/scratch cards which are more familiar with the older generation as Boomers and Gen X while crypto/NFT’s mainly with the Millennials and Gen Z. I myself have took part in both and still partake in them (mainly NFT’s) and had an urge to address my concerns.
The only value in cryptocurrencies is that another punter will come and pay more. There is no social benefit in them.
The same applies for NFT’s, digital land as well as sports cards, antiques and more, its mostly about perceived value that we bring them and making a quick buck is surely a high one.
Gambling
Investments are long-term while gambling is short-term, which can be the same reason why cryptos and NFT’s are playing with the same emotions that gambling does. Even though the holders are often long term the reason why they may get in would be the quick and high dopamine rush.
Additionally a lot of cryptocurrency casinos are out there for example True Flip Bet and King. Scammers are also very present and weary of this opportunity, but lets not get into that now. Gambling as a result can also disqualify for a loan which might bring changeless if you would plan of getting dream house you always wanted. These actions could be reported to your financial institution so that they will be aware of your involvement.
In certain cases, financial institutions avoid loaning funds to gamblers. So, if you’re looking for a loan, you might not get the chance to obtain one.
The Covid-19 pandemic sucked us deeper in this spiral of social media, gaming and of course reckless gambling as mass amount of people where bored, restless and mainly desperate.
Regarding NFT’s it is even more so as they don’t have any intrinsic value, pricing your NFT relies on the question of whether people are looking for your creation and if it’s rare enough that its value would skyrocket once it hits the market. Naturally, pricing your NFT asset is based on how much it means to you, not the actual demand in the NFT marketplace.
Traders are selling themselves their own NFT’s to drive up prices
This ☝️☝️☝️ is known as “wash trade”, the act of buying and selling a security in order to fool the market was once a commonplace at Wall Street and has been illegal for nearly a century. But the vast and unregulated NFT marketplaces have shown to be a golden opportunity for scammers.
The risk reward ratio is a lot thinner in NFT’s but then again we still constantly assume that the project we invest in will succeed(myself included).
A study by Oxford Risk found that 1 out of 5 UK crypto investors have a poor or non-existent crypto knowledge.
FOMO
Everyone knows FOMO but I would like to reference the Wikipedia description of it.
Fear of missing out (FOMO) is the feeling of apprehension that one is either not in the know or missing out on information, events, experiences, or life decisions that could make one’s life better.[2] FOMO is also associated with a fear of regret,[3] which may lead to concerns that one might miss an opportunity for social interaction, a novel experience, a memorable event, or a profitable investment.[4]
Everyone now is aware of crypto and a lot of people FOMO’d in the hopes of unreasonable profits. Uncle, mom, pops, cousin maybe even grandparents are now opening their own hot wallet.
Timing!
Timing is key and most of us don’t get that, it’s a crucial in order to maximize profits and minimize risks, sadly the bull cycle is most likely is over to receive these insane gains. Bitcoin has risen nearly 70% since the start of 2021 driving the entire crypto market to a combined $2 trillion in value.
A lot of people because of it are aping into NFT’s due to BAYC and CryptoPunks. Multiple celebrities jumped the boat of being BAYC owners including Post Malone, Jimmy Fallon, Steph Curry, Justin Bieber etc.
Social Media is high reason for all the FOMO, Youtube, Twitter etc is becoming a spam show of crypto and NFT’s(NFT’s has an addition Discord to its list)
There is always the saying, This is not financial advice! It is partially funny with all the hype they place on a coin/NFT everything seems to based on emotion not logic, and it has affected me too.
You will watch, and they will tell you the same things you can find online — and they will tell you what you want to hear of the possible high returns. They usually don’t go past a simple rundown of the project, roadmap, and price action. The risk reward ratio is barely(would say never) talked about because reality do not bring visitors!
A lot of content creators and scammers are exploiting the part of humanity to get rich approach because we are the easiest victims to fall into the ponzy, pyramid schemes. Follow the most common process of earning no matter how slow, stay far away from get rich quick schemes and the people who propagate them. And that leads to the last part impulses…
Impulses
Ones again will quote Wikipedia due to thorough explanation:
In psychology, impulsivity (or impulsiveness) is a tendency to act on a whim, displaying behavior characterized by little or no forethought, reflection, or consideration of the consequences.[1] Impulsive actions are typically “poorly conceived, prematurely expressed, unduly risky, or inappropriate to the situation that often result in undesirable consequences,”[2]
I am mentioning this because I noticed it taking a toll on my personal life apart from crypto/NFT’s etc. Starting off with the lower logical approach on everyday situations like work, relationship, health(drinking, etc) ending off with financial discipline, limiting screen time, easily distracted and so forth.
By the end of 2013, there were over 50 different cryptocurrencies. And by the end of 2014, this figure had increased by approximately 10x to over 500.
Today, there are over 16,000 cryptocurrencies in circulation.
This should be alarming as the bigger the influx of new ones are popping up their success dramatically decreases. Many of us do still get involved with the new upcomers out of the sense of ego, to feel wiser compared to other counterparts.
With NFT’s it is similar as with crypto, but there is more of a fad here as well as clout chasing. You may ask how is it clout chasing and a fad? Well just check twitter and find out, to start it off celebrities are changing their profile pictures to BAYC. As of recent update Twitter will let you choose and NFT from your MetaMask wallet and set it as your profile picture.
In our desperation for credible explanations, there has emerged a compelling rationale for NFTs: They are status symbols. At least that’s the subjective value we placed upon them.
All of this is not to bash on crypto or NFT’s as I was heavily invested in crypto now transitioned more to NFTs. My OS account 👇
I am just raising my mistakes and things I wish I would have known earlier about how to avoid scams, how to asses the market correctly and avoid the money burning mindset.
Final thought it is always better to do something that may bring value to others and the payoff will come with time naturally. The 5$ earned on medium felt more rewarding than bigger amount I got from timed investment made with crypto! 🦾 💖