The world of finance is abuzz with talk about the biggest wealth transfer in history about to begin; around 60 trillion dollars of baby boomer money landing in the gratefully inheriting hands of their millennial offspring.
It may sound like a lot, but there have been many gigantic wealth transfers in history: Japan ending feudalism after WWII and redistributing land from privileged families to the general public. The redistribution of wealth after the French Revolution. The transfer of lands from the Habsburg aristocracy to the state and then to private ownership after the end of the Austrian-Hungarian monarchy. The redistribution of wealth after the end of the Nazi regime. The Russian Revolution… history is full of “wealth transfers”, most of them accompanied by some kind of political upheaval. The US is the exception: wealth disparity is so big in the US because there has never been a cataclysmic redistribution event.
What we are witnessing thus may be the most significant peaceful transfer of wealth. Still, there is another one going on under our noses, and those participating are blissfully unaware of what is happening.
It is meme coin season in crypto and I am talking about the giant crypto wealth transfer.
The crypto circus of the last few years is carried primarily on the shoulders of young males, with a competitive spirit, a reckless attitude, a desire to “belong” in this global world, a need to “join a club”, be part of a “family” and build “community”. All this is seen in a positive light in crypto. Any project owner will tell you that community is important.
I beg to differ.
Community in crypto is largely a ruse to pull the wool over your eyes. It satisfies the combative stance of young males who need to belong to an “army”, a “tribe”, just as they do in gaming. That tribe then justifies blind belief and uninformed allegiance. They fight each other on Telegram, Discord, and Twitter. They do not engage constructively, they do not bother to learn from each other, instead, they relish their roles in opposing camps. The bored apes vs the lazy lions, the Algofam versus the Hederians.
It is a brilliant marketing ploy: allegiance to the cause, loyalty and hodling till death doth part us. Death by battle ax preferably. People who feel an emotional connection to a product spend significantly more on it. There is a Mercedes Benz magazine and GTI meeting because owning the same product creates the same feeling of belonging that loosens the purse. Especially when your mate’s car is better than yours.
Project owners know that. They exploit that. Savvy designers, programmers, and managers come together to collect millions in “club dues”, fees paid by the young recruits of a blockchain army. What better option than to give a badge in return, as you received them in the boy scouts? Now you get an NFT in return. How many do you have? Do you have the much-desired red one? Oh no, you only have two blue pixelated snakes. What a loser you are!
Almost every blockchain now has NFT projects that are purely designed to increase transactions on the blockchain (demand), collect fees with these transactions, and sell worthless images to crypto morons while enriching solely the programmers.
It is in fact the wealth transfer from those football fans and blockchain buddies who are lost in this global world and need to belong to a hood, a club, a tribe, a family and are willing to pay good money for the right to enter, into the hands of programmers who issue meme coin after meme coin, NFT collection after NFT collection in what I consider the biggest wealth transfer that has just begun: the transfer of wealth from the ignorant unwashed crypto masses to the technology-savvy members of in command of Solidity and Rust.
What has happened in crypto over the last few years, and has been rekindled now with utter tosh like green frog coin and LazyLizard NFTs is the same wealth transfer that happened in and after the dot com bubble: companies and individuals who understand technology create products with mass appeal and collect fees, with nothing but disdain for their own users. Miners finance meme projects to increase block space demand and become more profitable. The world of blockchain and crypto that was supposed to make us all more equal, give us fairer access to money, make society more transparent and eliminate corruption, that same blockchain is being used by mining companies and blockchain owners to steal billions from the dumb and deluded.
I spoke to the creator of a currently popular meme coin and he freely admitted: “hey, if I don’t do it somebody else will. I can’t help it if people are so stupid.” He made 14 million dollars in three weeks by coding, promoting, and selling a meme coin that has no value, no functionality, no use case, no future, and no raison d’être apart from being a symbol of allegiance to a project. “People are so dumb, you don’t even have to rug. You just keep building ‘community’ and the money will keep flowing.”
“We are talking about people with very little education, no life experience, few skills if any, people who grew up playing computer games and whose entire way of thinking is like an in-game character.”
Gaming is the most profitable endeavor on Earth because people don’t think it’s serious business. You play a game outside your reality, away from your 9-5 job, and so your mindset is completely changed when you are in the game. Spending money in game almost isn’t a real spend.
“Almost every blockchain running out of money after the 2021 boom and then bust has pivoted to gaming because people have no qualms spending money for in-game assets: if they spend in crypto (rather than credit cards), it doesn’t even feel like spending. The same goes for NFTs – biggest scam ever.”
NFTs add another element, they capture the “artists”. People who have no clue how a blockchain works now have an easy way to earn a few tokens by popularizing their artwork. “We have yet to see real art though. All we have now is infantile comics. NFTs are part of the infantilization of society, which is purely in the interest of the rich establishment.”
He doesn’t just mean the establishment in a traditional sense. He means the “crypto aristocracy”, people who know how blockchains work, may have launched one with good intentions, and then were lured away into the world of NFTs simply because “it’s so fucking easy to make money because people are so fucking gullible in crypto.”
In an interview with the creator of a popular NFT series whose floor price was once over 15 ETH and has now collapsed, we discussed how project owners mislead buyers of NFTs: “Most people just believe what you post. But there are always the ‘more informed’ guys in a club who demand proof that an NFT has a chance of success and will go up in price. All you have to do is show them a chart, however irrelevant, and make spurious comparisons.” Sort of like “this monkey has gone from 1 ETH to 100 ETH in 30 days, my gorilla is better designed than that monkey, so it has the potential to reach 1000 ETH by the end of the year. If it sounds like stocktrader speak, if you can make them think you are an expert, they will eat out of your hand and throw money at you.
People’s attention spans are short. Nobody remembers what was said a year ago. If by chance (as is too often the case), the gorilla doesn’t go up in price, it must be the fault of some extraneous circumstance, like “the economy”, “regulation”, or competing projects, but it almost certainly is not the realization that Gassy Gorillas was a scam from day one. The only one who profited was the creator, who in this case used a free AI image app to create the NFTs in an afternoon, spent $300 to set up a website, and gave $2000 to an influencer with 400k followers who turned that pile of shit into one of the most profitable memes ever. All the while giving millions of young (predominantly) males a “home”, a “cause”, a badge of honor, and a glimmer of hope that this “new technology” will help them get out of the ghetto.
A dear, dear, delusional friend of mine has collected over 23800 NFTs over eight different blockchains. He has lost over 8 million dollars with 95% of them and made around 300k with the remaining 5%. All the creators of those NFTs, the “artists” and programmers behind such nonsense, have cashed in. He still believes he can come out on top. “I just have to find the right project!” How’s that for a gambling addiction!
The biggest wealth transfer in history isn’t from baby boomers to millennials (the boomers have sea voyages and funerals to pay for, not to mention inheritance tax): the biggest wealth transfer now, and for the foreseeable future, given the advent of AI, is the one from tech-idiots to tech savants.
It has been like this forever, since the days of the first looms in Manchester to the railroad tycoons to the Internet billionaires. The means of production (steel and concrete, machines and mathematics, code and AI) will always be the biggest and often the only winners. That is no surprise. The real surprise is that humanity, ie the average Joe, just doesn’t see how much exploitation, fraud and deception is in play here, even from the most serious corners of crypto.
The billionaires of tomorrow grow up in dingy offices with rows of computer screens. They don’t read stock charts and don’t care about the Fed policy. They don’t know about supply and demand or the inverted yield curve. All they know is code, and code is king.
Those who can use blockchain and AI to their advantage will benefit hugely. Those who are afraid of it, don’t bother to learn, and are merely seeking refuge and a team of like-minded imbeciles are cannon fodder in the army of crypto fools.