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NFTs are a dangerous trap

Like most traps, they’re mysterious and then appealing and then it’s too late.

An NFT is digital treasure chest, a status symbol and an apparent item of value.

Like a Pokemon card, or an original Picasso drawing or the actual frame of a Disney animated film from 1955, NFTs are designed to be the one and only, a shred of non-fungible reality in a world gone digital.

You either own this thing or you don’t.

To make it really clear, consider Honus Wagner. A Honus Wagner baseball card is quite rare (Wagner didn’t permit the card to be made because he wanted nothing to do with cigarettes, foreshadowing some of the stuff below) and so there were fewer than 200 all in before production shut down. One of the cards last sold for more than $3,000,000.

Owning a Honus Wagner card doesn’t mean you own Honus Wagner. Or a royalty stream or anything else but the card itself.

For years, this was part of the business model of the collectible card industry. Make billions of cards, most get thrown out, some rookies get famous, some cards go up in value.

Now, consider an oil painting. Perhaps it was stolen a long time ago, or became famous for other reasons. It’s the one and only. If you somehow owned the Mona Lisa, it wouldn’t mean that you own the woman who is portrayed in it, or any part of DaVinci, it would simply mean you own a canvas, one that others also want to own.

People can look at images of the Mona Lisa all day long without compensating you, because you simply own the original trophy, not the idea…

But having it on your wall gives you a feeling, and telling other people you own it gives you another, slightly different feeling.

It’s worth noting two things about the art example:

  1. There’s a three-thousand-year cultural history of owning priceless works of art. Most people understand that an original Rothko is a high-status luxury good.
  2. Almost all paintings are worthless (on a cash basis). They sell at garage sales for dollars, not millions, and original (and beautiful) works of art go unsold every day.

So what’s an NFT? It’s a digital token (the same way a Bitcoin is a digital token) except it’s a one and only, like a Honus Wagner, there’s just one. One of these tokens might refer to something else (a video of a basketball shot, an oil painting, even this blog post) but it isn’t that thing. It’s simply a token authorized by the person who made it to be the one and only one. (The NBA has already sold more than $200 million in video clip highlight NFTs)…

And so the trap:

CREATORS may rush to start minting NFTs as a way to get paid for what they’ve created. Unlike alternative digital currencies which are relatively complicated to invent and sell, it’s recently become super easy to ‘mint’ an NFT. I could, for example, turn each of the 8,500 posts on this blog into a token and sell them on the open market.

The more time and passion that creators devote to chasing the NFT, the more time they’ll spend trying to create the appearance of scarcity and hustling people to believe that the tokens will go up in value. They’ll become promoters of digital tokens more than they are creators. Because that’s the only reason that someone is likely to buy one–like a stock, they hope it will go up in value. Unlike some stocks, it doesn’t pay dividends or come with any other rights. And unlike actual works of art, NFTs aren’t usually aesthetically beautiful on their own, they simply represent something that is.

BUYERS of NFTs may be blind to the fact that there’s no limit on the supply. In the case of baseball cards, there are only so many rookies a year. In the case of art, there’s a limited number of famous paintings and a limited amount of shelf space at Sotheby’s. NFTs are going to be more like Kindle books and YouTube videos. The vast majority are going to have ten views, not a billion. It’s an unregulated, non-transparent hustle with ‘bubble’ written all over it.

THE REST OF US are going to pay for NFTs for a very long time. They use an astonishing amount of electricity to create and trade. Together, they are already using more than is consumed by some states in the US. Imagine building a giant new power plant just to make Christie’s or the Basel Art Fair function. And the amount of power wasted will go up commensurate with their popularity and value. And keep going up. The details are here. The short version is that for the foreseeable future, the method that’s used to verify the blockchain and to create new digital coins is deliberately energy-intensive and inefficient. That’s on purpose. And as they get more valuable, the energy used will go up, not down.

It’s an ongoing waste that creates little in ongoing value and gets less efficient and more expensive as time goes on. For most technological innovations the opposite is true.

The trap, then, is that creators can get hooked on creating these. Buyers with a sunk cost get hooked on making the prices go up, unable to walk away. And so creators and buyers are then hooked in a cycle, with all of us up paying the lifetime of costs associated with an unregulated system that consumes vast amounts of precious energy for no other purpose than to create some scarce digital tokens.

I wrote a book about digital cash twenty years ago. This is precisely the sort of cool project and economic curiosity that I want to be excited about. But, alas, I can see the trap and I wanted to speak up with clarity. I would usually make this into an episode of my podcast, but Everest’s article deserved a link and more focus, so here you go.

Let’s walk away from this one.

“I’m just browsing”

We see it all the time, and not just in the store, with a catalog or on a website.

You can tell the committed students from the ones who are simply skating by.

You can figure out who’s reading the book because they’ve got something at stake and who’s simply wasting time.

When we adopt the posture of commitment, something extraordinary happens: The lessons get more profound and useful. The questions asked get more specific and urgent. The connections that are made get deeper.

The reason that most online videos and blog posts seem to come and go is because we use a browser to interact with them. “What’s next?” is asked too often. Perhaps it would be more useful to imagine that this is the very last thing we get to engage in before we have to commit to our work…

The most important meal of the day

Who decides the rhythm of your day? When are you at your best, when do you drag?

In the old days, when we worked on the assembly line or even in sync at the office or at school, there were good reasons to adopt the timing that was assigned to us.

But perhaps it makes sense to take control and listen and notice and work with our patterns, not against them.

High school students perform better when the school day starts later. So let’s organize around that.

If a workout at noon makes your afternoon more effective, it’s hard to see why you need to do it at 5 am in a world that’s digital and more asynchronous than ever before.

If your day is better if your first interactions are positive ones, why not organize a daily call with peers with nothing but that in mind?

And even if your schedule isn’t completely up to you, you might get to decide when to tackle mindless chores and when to work on the creative elements of the new plan. When to read blog posts and when to write them. You may get to decide when to have meetings that challenge your intellect vs. those that require patience…

And yes, we even get to decide what to eat for breakfast. Tony the Tiger notwithstanding.

The weight of repetitive tasks

As I write this, they’re laying a brick wall outside of my window.

Each brick weighs about five pounds. There are a thousand bricks in this wall. And every brick is moved, one by one, from the truck to the cart to the wall. Over time, any inefficient move is costly indeed. Watching professionals do it gives me more admiration than ever for their commitment and grace.

If we’re lucky enough to work indoors, with free snacks and podcasts in the background, we might not get physically exhausted the way we would moving thousands of pounds of bricks. But the cognitive and emotional toll of repetitive tasks is real, even if doesn’t leave callouses.

The discipline is to invest one time in getting your workflow right instead of paying a penalty for poor digital hygiene every single day.

Hacking your way through something “for now” belies your commitment to your work and your posture as a professional. Get the flow right, as if you were hauling bricks.

A seat at the table

Harvard, Dartmouth and Stanford are always full. The value of their degree is largely based on scarcity. There are always more people who want to get in than they will allow.

That’s intentional. Artificial scarcity to create a credential that appears valuable.

Harvard has enough endowment and tech to offer 50x as many degrees as they currently do.

Now, though, online learning is upending the equation of scarcity.

Do students invest all that time and all that money because they believe they’re going to learn something, or is it simply that they’re going to be awarded a scarce credential?

Because sooner or later, learning wins out. The paper fades, but what you know and who you become lasts.

It’s March (wow) and a year of uncertainty, pain and unrest may be beginning to recede. And over the years, the team at Akimbo has seen that the March sessions of their workshops are often the best attended and most powerful. Something about spring (up here) and autumn (south of here) seems to challenge people to take action and to make a difference.

The Marketing Seminar is back for its 11th session. It’s the most powerful and most popular marketing workshop in the world. More than 10,000 people have been through it (that’s more marketing wizards than Harvard, Wharton and Stanford graduate in any given year) and now it’s your turn. Enrollment opens today and the first lesson starts soon.

The altMBA deadline for First Priority applications is next week, March 9. The August session is your chance to level up, and early applications are given priority.

Writing in Community is back as well. There’s plenty of room for your book in the world, but what you may need is a cohort to help you get it done. Kristin Hatcher leads a group that commits to writing together and publishing together. It opens for signups on March 16th and you can claim a spot on update list by visiting the site today.

And in just a few weeks, the fabled Story Skills Workshop returns. Bestselling author Bernadette Jiwa has taught the world about the magic of story–in branding, in leadership and in communications–and this workshop represents your best chance learn from her and from each other. It opens on March 23, but sign up today for updates.

There are tens of thousands of reasons that people just like you have decided to learn something. Akimbo (now an independent B Corp) is built to make it possible for people to lean into possibility, to connect and to learn.

These four workshops are the best way I know to make a difference. Each is different, each has a different pace, structure and purpose. But together, they represent a clear, powerful and proven vision for how each of us can level up and learn to contribute.

And there’s room for you.

PS here’s what a student posted just this morning as part of the 60th lesson in TMS10…

A letter to your future self

We often send metaphorical letters to our past selves, berating the choices we’ve made. We express regret about missed opportunities or past mistakes. It’s easy to blame our younger selves for the mess we’re in.

What would you say to your future self? And how would you feel when you read that letter in a few months or years?

Maybe you’d discover that the crisis or cataclysm you’re facing right now didn’t turn out quite as badly as you feared. Maybe you’d express some optimism that you could turn into action. And maybe you’d develop some empathy for your past self, who was just doing the best you could.

Avocado time

The perfect avocado… Sometimes they’re too hard, and often, they’re rotten.

But every once in a while, you’ll nurture an avocado until it’s at the peak state of flavor and texture.

You certainly aren’t going to waste it.

You’re not going to sacrifice it to some sort of smoothie, or even hide it in a sandwich. That’s for the other kind, the less precious ones.

And yet…

This Zoom call we’re on, the precious one, where all the right people are on the call, at the same time, ready to see and be seen–you’re really going to spend the first ten minutes having us go around the room and say our names? Really?

This gathering we all came to, back when we could, or when we can again–we’re really going to sit at tables for 10, shouting at each other, while we tolerate loud music and eat lousy food?

This interaction we’re having with the busy professional, the one that we’ve waited for, you’re going to spend it reciting things that we already wrote down on a form?

Face-to-face is like a perfect avocado. The cost of in-sync time, real-time interaction time, that’s time that we don’t get again.

Time is priceless. But the moments when we have a chance to connect, to be in sync, to bring out the best in each other–that’s time that’s worth cherishing.

Don’t waste it if you can. Treat it like avocado time.

“Count me in”

That’s the opposite of, “count me out.”

Either you seek to unite and be part of it. Or to divide and watch it go away.

Whatever ‘it’ might be.

We can seek to trigger those we’ve decided are our enemies, undermine the standards and burn it all down. Or we can commit to the possibility that together, we can create something that works.

It’s not that hard to realize that even if we can’t always see the gunwales on the boat, we’re all in the same one.

Tilting at windmills

The windmills aren’t the problem, it’s the tilting.

In Cervantes’ day, ’tilting’ was a word for jousting. You tilted your lance at an enemy and attacked.

Don Quijote was noted for believing that the windmills in the distance were giants, and he spent his days on attack.

Change can look like a windmill.

When we say, “the transition to a new place is making me uncomfortable,” we’ve expressed something truthful. But when we attack a windmill, we’ve wasted our time and missed an opportunity to focus on what matters instead.

When my dad taught at the University of Buffalo, the heart of his MBA classes was teaching about the ‘change agent’. This is the external force that puts change into motion. The change agent, once identified, gives us an understanding of our options and the need to respond, not to react.

Every normal is a new normal, until it is replaced by another one.

The order of operations

If you put the jelly on before the peanut butter, the sandwich will fail.

And if you try to spread the peanut butter on the plate and then add the bread, it will fail even worse.

Like so many things, the order is not optional.

And yet, we often do the least-scary or easiest parts first, regardless of what the order of operations tells us.

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