Thanks, twice impeached, ex-President of the United States Donald Trump. I\u2019m kind of an old school guy. I\u2019ve done my best to try to keep up with the technological changes in our world. I\u2019m typing this essay on a two year-old MacBook Pro, and there\u2019s an IPhone 13 sitting on the table beside me. I\u2019ve figured out how to \u201ccut the cable\u201d with my TV\u2019s (though that isn\u2019t saving the money it used to) and I can \u201cstream\u201d, \u201ctweet\u201d and \u201cFacetime\u201d. And while I only text with one finger \u2013 I am desperately show \u2013 I still hold my own there too.<\/p>\n\n\n\n
But one tech aspect I really never got was \u201cNFT\u2019s\u201d. In fact, for a long time I thought the letters \u201cNFT\u201d were some kind of new professional sports league \u2013 NFL, NBA, MLB and the rest. And when some of the \u201cyounger\u201d folks I know talked about investing in Bitcoin, it all seemed like some kind of scam, like buying \u201clakefront property in Florida\u201d or the Brooklyn Bridge.<\/p>\n\n\n\n
This only got reinforced with the arrest of Sam Bankman-Fried in the Bahamas last week. He was the \u201cgolden boy\u201d of crypto-currency (is that currency found in a pyramid along with the crypt of some Pharoah?), someone who looked like the guy who lived at the end of the hall in my college dorm: really smart, except for the drugs he was inhaling. \u201cSBF\u201d (more initials) was a multi-billionaire genius; and a genius grifter.<\/p>\n\n\n\n
But, to be honest, I never really understood what all of this was about until Trump made it \u201cstupid-simple\u201d to understand. <\/p>\n\n\n\n
NFT \u2013 non-fungible transactions, sounds like something that went bad in the refrigerator. But it\u2019s not. It investing your money, real money, cash kind of money, into something that doesn\u2019t exist. You trade your cash for \u201ctokens\u201d, which are really just data-points on some giant spreadsheet. And just like the spreadsheets on this MacBook Pro, sometimes those data points get corrupted, or the formula becomes too complex, and they just \u201cgo away\u201d. And so does your money.<\/p>\n\n\n\n
All of this just sounded like financial gobble-de-gook, until the twice-impeached ex-President jumped into the \u201cNFT\u201d game. And that made it all clear to me.<\/p>\n\n\n\n
For $99 you can buy a Trump \u201ctrading card\u201d, just like the Pok\u00e9mon cards the kid next store is so excited about. And, like those Pok\u00e9mon cards, the Trump trading card has a \u201cvalue\u201d all its own, not determined by the $99 you paid for it, but for what it can bring on the market. And if no one wants Donald Trump as a cowboy, or race car driver, or astronaut; then you $99 investment is worth \u2013 nothing. The \u201ctrading card\u201d is a \u201ccrypto\u201d currency, a hidden form of Trump produced \u201cmoney\u201d. My wife Jenn has it right \u2013 it\u2019s Monopoly money gone real, without having to buy the game.<\/p>\n\n\n\n
In history class we talked a lot about the development of trade. It all started with barter: two chickens for a bushel of grain. But those same two chickens could be used to pay for a day of labor, or a ride on a wagon to town. The chickens had \u201creal\u201d value, they could lay eggs, or serve as tomorrow night\u2019s dinner. <\/p>\n\n\n\n
But it was a pain to carry around a lot of chickens, so \u201csymbolic\u201d currency (fungible currency) was developed to make things easier. Here\u2019s a coin, made of some metal we find valuable. This coin is worth two chickens at the chicken market. So instead of hauling chickens around, we had bits of metal that represented the ability to purchase chickens, or the equivalent bushel of grain, day of labor, or ride to town. And so money began.<\/p>\n\n\n\n
But money had drawbacks too. As it was easier to carry, but it was easier to lose, or steal. And since money was symbolic, even as a valuable metal, it could gain or lose value. What if the \u201ctwo chicken\u201d coin was all of a sudden only worth one chicken because of a chicken shortage? So we developed other forms of currency, even more symbolic than the coins. I have an \u201cold school\u201d book of checks in my desk drawer. I can \u201ccreate money\u201d simply by writing a sum onto the check, and getting someone to accept my check for a more \u201cfungible\u201d form of currency. And we have laws that punish us if we create money that we really don\u2019t have.<\/p>\n\n\n\n
So Trump\u2019s cards are like taking a check that doesn\u2019t have a value written on it. It might be a great investment, but it also might be a complete loss. But one thing\u2019s for sure: Donald Trump got his $99 in real cash for a single card. He got his \u201cfungible\u201d from these Non-Fungible Transactions. And once he\u2019s sold it, he is no longer responsible for its value, unlike my \u201cbad\u201d check.<\/p>\n\n\n\n
There\u2019s an ad on TV right now from the Liberty Mint.\u00a0\u00a0You can buy a silver half-dollar, minted privately by Liberty, for $12.52.\u00a0\u00a0It\u2019s supposed to sound like a great deal \u2013 a \u201cpure silver coin\u201d for only $12.52 (supplies are limited).\u00a0\u00a0But what are they really asking you to do?\u00a0\u00a0They want you to pay $12.52 for a coin with the face value of – fifty cents.\u00a0\u00a0Just like Trump cards, they want you to invest in something that is a \u201ctoken\u201d with limited face value.\u00a0\u00a0Maybe someday it will be worth the $12.52 (or $99) you paid for it \u2013 or maybe not.\u00a0\u00a0<\/p>\n\n\n\n
But they got their fungible cash. And now you own a Brooklyn Bridge.<\/p>\n","protected":false},"excerpt":{"rendered":"