Hey guys it's sasha, and today i am going to tell you about a massive problem that is going to lose a lot of people a lot of money. We are going to talk about nfts and i am going to tell you what the really big problem with nfts is that many people seem to not think about. In fact, i will share a few other problems as well. Now nfts are non-fungible tokens and they have completely exploded in 2021.

Just when you thought that the never-ending load of crypto token scams, ponzi schemes and other rubbish was already bad enough. Along came, nfts, nft stands for non-fungible tokens, and these tokens allow you to own a digital asset. You could technically buy any digital asset. You could buy art music piece of code.

Anything else really that can come in a digital format, and the idea in principle is incredibly interesting. Nfts could, in theory, revolutionize how people trade, art or trade anything digital at all, in fact, trade things that are not even digital themselves. What if property, for example, were sold through a distributed? Nft ledger: instead of millions of local authorities and different countries all over the world, keeping their own, sometimes paper, sometimes really bad system records, but as with crypto, the big problem that we are seeing is that nobody actually really cares about real potential of this technology. To solve actual problems or to improve actual processes or to address any real needs.

Instead, what we have is a bunch of celebrities, influencers and scammers tripping over each other, creating pointless jpegs and paint and selling them to each other instead and the people buying. These pointless jpegs think that they are mighty investors because they saw some guy on youtube. Tell them that they can make 5 000 return by flipping that nft a week later. The greater full theory means that if you decide that a pointless jpeg is worth 20, then it must follow that a few days later, there will be some other person who will come along.

Who will happily pay you 100 for it, because that person thinks that if they buy it for 100, then a few days later, somebody else will come along and pay them 500. For the same thing, if you take a step back and actually think about it, does that sound in any way normal and not insane now, as is becoming quite common with new technology over the last few years, we're stuck in this weird loop of people pumping money Into ponzi schemes that operate in exactly the same way, but just change their structure and their names. First, we have the mysterious investment funds that wouldn't tell you what your money was actually invested in and paying off old investors using money from new investors via a traditional ponzi scheme. Then we had one pointless crypto token named after a dog breed or promising to take.

You to the moon or something else after another, tokens that serve zero purpose, have zero value, solve zero problems, offer zero solutions and provide absolutely zero innovation, but somehow attract millions of impressionable young people who think that they can get very rich with their 100 investment. And now we have nfts another technology that could actually solve a lot of problems if it was actually applied in the right way and make really meaningful improvements to many practical areas of our life. But in the end people are selling gifts and pointless jpegs. For thousands of dollars to gullible buyers instead, so let's talk about the big problem with nfts, but before we get to the really really big one.

Let me warm you up with a few others. First off, just because somebody's selling you something for x dollars doesn't mean that that thing is actually worth x dollars. I know a novel kind of concept, but we live in a society where people have sort of gone away, have lost their own ability to place value on things. We're so used to people telling us what things are worth we're used to going into a supermarket and seeing what the price of something is on a label.

We don't need to think about it. We just go and pay it. We don't barter, we just pay the price that we're told our electricity bill will tell us the price of electricity, and we don't argue the petrol station will tell you how much petrol costs on the day when you turn up and you're just gon na pay. Whatever somebody else tells you so naturally enough, if a guy on the internet tells you that a little jpeg that their dog drew, that morning is worth, let's say, a hundred dollars, then of course it's worth a hundred dollars.

Why would you question it? Unfortunately, life is more complicated than that in reality, and a lot of people will one day need to wake up and smell the coffee, which leads me nicely to the second big problem, and that is the actual provenance of this thing that you are buying, because this Is an important point that i think most people don't understand, i don't want to understand. Nft advocates will tell you that these non-fungible tokens give you ultimate ownership of that digital file. That is why you buy it. You get to acquire that thing right, but what does that actually mean? And the problem is most people actually misunderstand what it means, because the simple answer is it doesn't mean very much at all.

You only own the address on the blockchain that confirms your ownership and legally. This is really important and practically it is also incredibly important. You do not own the copyright to that piece of work. You don't even own the intellectual property.

Somebody went and spent six hundred thousand dollars on the nian cat meme nft, and that is incredible in its own right, but that gives that person who bought it zero actual rights over it. I can go and watch the 9cap meme as much as i like on my computer and the nfc owner can do absolutely nothing about it. People often compare nfts to art or baseball cards when they're trying to explain why the scarcity thing is really important, but here's the thing: if you go and buy the mona lisa painting, you can go and put it up in a museum and you can charge people To see it, you can put it up in your house and let nobody see it. You have complete control over the access to that work of art.

If you own the legal rights to a piece of music, you don't have that same control over people's access to it, but you have legal control over the flow of commercial payments relating to that thing within an ft you own, none of those things and here's the Big problem that people seem to be completely missing, they're really really big problem. It is really simple, but a lot of people seem to have put on some blinkers and seem to completely avoid it in its current guys. The ownership of a digital file nft does not give you non-fungible ownership of that digital file, and this is critical. It only gives you non-fungible ownership of the entry in the blockchain ledger.

That says that you are the owner of that file, and this is a crucial difference. If you buy a rare baseball card, the community that trades these cards will have a consensus on its worth and once you've handed the money over, you are then the actual owner of that thing, if you buy a painting, the art world will inform you what a Fair price, for it is and the reason these things can command high prices is because they are non-fungible. You can't go and make another mona lisa the painting is unique. It is physically impossible to make another painting that is identical.

That is made in an identical way. At exactly the same point in time, 600 years ago, the number of printed baseball cards is finite, especially for these rare, expensive ones, and that creates actual real life scarcity. That makes sense, but here is an eye-opener. A digital file cannot have that same level of scarcity.

It is just a different type of entity. If you make a copy of that file, you create an exact replica that is the exact same chain of zeros and ones as the original, instead of there being a one-off thing that genuinely cannot be copied cannot be replaced, which is non-fungible means you can very easily Create any number of identical copies that are in no way different and, as time passes, the servers are upgraded. You know, technology changes and those files are moved between locations, so even the timestamp and metadata about those files is going to be changed. It is not going to be permanently immutable.

This is something that i think most people kind of, like don't really understand in terms of what the actual meaning is. If somebody pays 100 for a jpeg, i can go and look at that same exact, no difference whatsoever. Jpeg with no difference on my computer and the owner does not have any control over my ability to do it. They don't have any benefit or any kind of effect whatsoever from me doing it, and they don't have any legal recourse to me doing it either.

The scarcity does not apply to the digital item that is linked to the nft. It only applies to that blockchain token, and this is the problem. Imagine that you went and paid two hundred thousand dollars for a house, and then you found out that everyone can go and live in exactly the same house with all the same rooms, all the same benefits in fact they're in exactly the same location. And all of these other people can go and do it for free, but for your 200 000 you get to own the line in the land registry that says that, technically you are the legal owner of this house.

Does that sound? Like a good deal to you? I know full well that a bunch of nft fans are going to turn up and smash the dislike button and leave some insightful comments telling me that i just don't get it, but i don't understand it, but that's okay, because sometimes it is hard to see the Forest of the trees. I think that nft as a technology is here to stay, and it is going to make some really cool big changes. It is a good thing, but unfortunately, 99.9 of the stuff that people are buying and selling right now, that is getting all the hype is just a giant load of hype, just a giant bubble of pointless bs and the only cure it seems will be time because Rational explanations and logic, don't seem to hit anywhere near as hard as finding out that your 100 investment is actually completely worthless. Please, let me know your thoughts in the comments below i'd be really interested to have a conversation.

Thank you so much for watching, and i really really appreciate you watching this video all the way through. Thank you. So much and i'll see you guys later, you.