A Response To Dan Olson's "Line Goes Up – The Problem With NFTs"
Channel: David Veksler
Date: 2022-02-03

Why Dan Olson is wrong about Bitcoin (https://www.youtube.com/watch?v=YQ_xWvX1n9g)

Dan's video is well researched and gets many details right, and a lot of NFT criticism is valid.  

BUT:

* Dan fundamentally misunderstands the problem crypto is solving
* He confuses problems with our culture and economic system with the technology.  The NFT crazy reflects (1) our culture (which is Dan's real problem, not the tech) (2) lack of accessible savings mechanism for the middle class
* The blockchain is a revolutionary invention: both as better money and a censorship-proof record of ownership

# Why are there so many scams in crypto?

* A $2 trillion market is bound to have get rich quick schemes
* Most estimates place the financial services sector at around 20-25% of the world economy at $22.5 trillion.  This is a far larger source of waste and corruption.
* You should always ask "as opposed to what."  The alternative to Bitcoin is fiat money - an enormously destructive legacy.

# Criticism of NFT's is misguided:

* NFT is just a technology.  It's expensive, hard to use, and easy to screw up with because it's new.  And we don't really have a killer use case for it - yet.
* Many of the technical problems and limitations like high transaction fees, lack of privacy, and fraud are caused by lack of maturity.  Solutions like 2nd layer chains are rapidly maturing.
* Broader, so many scams in crypto is caused by barriers to entry in the legacy financial system and the destruction of savings by fiat money, which forces the middle class to invest.

# So what problem does Bitcoin solve?

* Fiat money & inflation
* Interest rate manipulation
* Total war, business cycles, bubbles in healthcare, education, housing

* The problems with "the banking industry" is not caused by "patterns of human behavior" but a recent 100-year old invention: fiat money.

* Bitcoin doesn't fix human nature; doesn't fix your pet problem. It fixes a relatively recent creation: the central bank currency.

* Bitcoin is not intended to be a wealth redistribution mechanism
* Bitcoin protect people's savings, and the poor are most vulnerable to inflation, war, recessions, etc

# Bitcoin's energy usage:

* Inactive ATM's are not the problem
* Problem is total war, military-industrial complex, the 2008 financial crisis, etc.  That's the real source of "wasted energy."
* Note: Bitcoin's energy usage does not scale with adoption.  A fixed amount of mining can secure infinite transactions.
* .1% of global energy use is small price to pay for a sound money: https://ccaf.io/cbeci/index

---

# Note on Stablecoins:
* Tether: $78 billion vs USDC $50 billion
* Total other stablecoins are now much bigger than tether
* Claim that Tether 0% backed is a baseless conspiracy theory.  Real reason for not being audited is regulations making what Tether provides (circumvention of capital controls) illegal.

---
# Bitcoin is not a zero-sum game:

* Crypto is not a zero-sum game because a money transmission and storage network provides value

# Bitcoin vs baseball cards:

* aesthetic value aside, baseball cards exist only to be cashed out for fiat
* cards can't be used to circumvent capital controls
* cards not scarce
* aren't fungible and divisible: not practical for salary or paying for coffee
* bitcoin 2nd layer can be used to pay for coffee
* not portable
etc - not a good money


# Why are NFTs so popular?

* NFT fees are an innovation tax, not a permanent feature
* This market is driven by low returns on savings and exclusion of middle class from financial system
* While there will be a lot of losers, the NFT craze drives innovation
* Focus on self-contained art is caused by lack of financial integration and monopolistic nature of intellectual property markets
* The Non-fungible token has a real future in property deeds

# Conclusion:

* Current NFT wave will collapse, 
* But future waves of pop art will build on the technology
* Bitcoin has a 12-year track record, NFT's are only a few years old.  Yes, the influx of money is premature, but it's mostly because young people are locked out of the the legacy system.