This NFT of a destroyed diamond is the perfect microcosm for all NFTs

So I could take the NFT of the destroyed diamond to my jeweler and they could make a a beautiful pendant necklace form the NFT.

Would that be a thumbdrive hanging around her neck or a microSD card encased in gold?

It’s beyond silly.

I really should make an NFT or the deed to my house in case it gets destroyed by fire or flood or my neighbor starting his bonfire with gasoline.

Then I could sell the NFT of the deed and suffer zero loss and even make a profit.


“You see, Your Imperial Majesty, your clothes are now on the blockchain…”


Is this an NFT of a diamond or an NFT of a picture of a diamond?


I have no reason to think she actually destroyed the diamond.


In the land of NFTs is there a difference?


In the land of NFTs, it’s a huge difference. It’s a story you can tell, improve the grift.

Over here in reality? Nope.


I’ve been reading her twitter and blog a little bit.

All the ideas about tokens reminds me of of taking our daughter to Chuck E Cheese or Dave and Busters where you played arcade games for tickets and then redeemed those tickets for things. The only problem is a thing worth a couple bucks required 10,000 tickets that required playing 50 bucks in games.

Lots of talk about getting tokens but no discussion of the real value of those tokens.

I know she has a PhD and I don’t but she has a twitter thread where she says she will explain the whole thing so anyone can understand. Nope, still don’t get it.


BTW, unless you’re in the business, a diamond is a terrible store of value, you never get near what you paid when reselling.


As long as government backed fiat currency is required to pay taxes, it HAS real world value that can be created by the government (i.e. money is future credits for paying taxes) and easily transferred for payment to another individual.

crypto is fiat currently without any ability to pay debts to the government. Crypto will only replace government backed currencies if human beings believe that the blockchain and it’s tech companies are more stable, trustworthy and long-lived as the governments behind reserve currencies.

The total market cap of ALL crypto/NFT is about the size of India’s economy, so it’s not trivial. But the percentage of criminal financial activity in that market compared to “traditional finance” is an order of magnitude or two higher and the volume of actual human to human commerce is literally negligible. No one anywhere is really using crypto to conduct business for any real world goods.

Really rich people have money to throw at ideas that might take off. And criminals have lots of money to launder. Without those inputs to the system, crypto would likey still be small block bitcoin with a $1 valuation being mined by hobbyists. FWIW - Dogecoin’s original implementation as a way to monetize content creation with microtransactions in an attention/content economy largely disconnected from the real world of banks and VCs and investors, STILL makes sense to me.


But my basic idea is that a physical asset like a diamond has value because of two functions:

1/ physical utilities function 2/ asset function as a store-of-value (SoV)

When you destroy a diamond and create a NFT in its place, you transfer function #2 to the NFT. Since by destroying the diamond, the 1-to-1 mapping between diamond and NFT is cemented, the NFT should retain the SoV part of the diamond’s value.

Ummm - what about the loss of value caused by destroying ‘1/ physical utilities function’ ?

I must be missing something very clever because otherwise this sounds idiotic.

Your potential earnings are tied directly to your ability to ignore how much of a grift this all is.


Ah, so sink it in the sea.

Oh no, that won’t work either. Can still be transferred.


The only thing you’re missing is “suckers exist”


You’re required to accept the premise that the two value functions are entirely separate and can be assigned to different objects.

It’s rubbish and relies on everyone believing that computer magic makes everything different.

If you told someone that you could take the store of value function of a diamond and transfer it to a specially carved turnip then throw away the diamond and sell the turnip for the price of the diamond, everyone would laugh at you even if they all agreed that that turnip was absolutely unique and there would never be another one like it.

It seems to me it also relies on persuading people that the ‘value’ of a diamond is arbitrary so we can all agree that the ‘value’ is now attached to this picture and (this is the important bit) that ‘value’ is somehow real and not arbitrary.

It’s a bit like Ford Prefect persuading Mr Prosser to lie down in the front of the bulldozer instead of Arthur - only in this case it’s replacing Arthur with a cardboard cutout.

I suspect it works just about as well as in that example, i.e. hopefully just long enough to get the scammer what they want. The house is still getting demolished.


Nice demolition of the grift - thank-you.


Tascha stated in her tweet “What NFT is doing to the concept of asset, few understand.”
I’m sure she doesn’t understand it either, however…


An NFT of a diamond just makes me think of a receipt. It, too, is unique and connected to the diamond. And sometimes a receipt can even have value of its own (if the object it’s connected with is famous enough) - it’ll even be more valuable than an NFT, as the receipt can be lost, damaged or destroyed making it even more rare. But no one is going to claim the receipt is equal in value to the diamond. Sure, the value of the diamond is an artificiality created largely by DeBeers, but it’s still an aesthetic object with utility value at the very least - qualities an NFT (or receipt) will never have.

The proposals are pretty silly because, as mentioned, they’re just reward programs (with an unnecessary layer of technical nonsense added), and ridiculous proposals - does Amazon want to set up mini-fulfillment centers in people’s back yards? For a multitude of practical reasons, no.

Someone is very confused about why rentier economies exist, it seems.

The smell at least is something, it’s a sensory experience that you could pay money for. This is like:
“I bought a hamburger, but I didn’t get anything…”
“You got a receipt, right?”
“Well, that’s just as good as the burger itself, isn’t it?”


If you make a NFT of a real diamond, and the diamond itself gets destroyed in a fire tomorrow, you still have the same asset.

Because the token still exists and is in limited supply just as before. Nothing has changed.

What NFT is doing to the concept of asset, few understand.

This says more about diamonds being overvalued, than NFTs having any value.

If I make an NFT of 1980 Lando Calrissian action figure, and it gets destroyed in a fire, I still have the same asset … right?

I would want the actual action figure, not the NFT. I want to put it on a shelf or labeled in a box.

Though I know there are virtual trading cards out there that people collect…

When you destroy a diamond and create a NFT in its place, you transfer function #2 to the NFT. Since by destroying the diamond, the 1-to-1 mapping between diamond and NFT is cemented, the NFT should retain the SoV part of the diamond’s value.

Why not skip a step and just mint a diamond NFT that doesn’t/no longer have/has a real world counter part?

A NFT can serve the role as a SoV, because it’s able to satisfy 3 basic criteria for something to qualify as an “asset”:

1/ durability 2/ limit on supply 3/ social agreement

For this to work, enough people have to have a social agreement it has value.

Something durable and limited supply doesn’t not instantly make it valuable. You can find shops full of antiques that some people find interesting, are definitely durable and limited, but how many people find a specific object valuable thus making it an asset may be very low.

So maybe I’m the idiot.

It is akin to me trading Lando Calrissian figures for a new Boba Fett. They have value because the people trading the goods say they have value. People outside of this interest see them as old toys. The difference is - Star Wars figures will continue to have a base of passionate collectors - where as NFTs are most likely a fad for the most part and the agreed upon value is only as high as it is, because of artificial interest.

ETA: From the a article about buying the diamond.

Me: I bought a diamond yesterday.

Mom: Nice. They’re good investments.

Uh - no they aren’t. Unless you are getting them at wholesale prices, they are horrible investments. You will rarely get what you paid for a diamond reselling it, unless you are getting wholesale prices and selling retail. And/or put it in a setting that you can sell for more. If one has ever had to sell jewelry that is otherwise unremarkable, you will never get what you paid for it (factoring in in inflation).

I suppose if you paid wholesale pricing it isn’t a bad way to store wealth, but it won’t be a great investment.


Gee, good thing there aren’t any large organized groups, enriched by crypto scams, working around the clock to undermine that trust :unamused:


Technically it’s legal tender in El Salvador now. And if you can’t trust the government of El Salvador, who can you trust?