Opinion | What Is Happening to the People Falling for Crypto and NFTs

To understand the latest incarnation of colossal crypto-fraudsters who continue to devour the internet, I think we should start with all those boring monkeys , because how does it happen?

I'm not talking about real monkeys: the section in this section is about things you might call "real" in a real sense. Instead, I'm talking about the digital art collection known as the Tired Monkey Cruise Club . Created about a year ago by a quartet with a mysterious nickname . The cryptocurrency fan, Bored Apes is a collection of thousands of hyper-color "program-generated" images of young, messy primates of the kind you do not take home for mom.

For reasons that seem nothing more than the weird things that happen on the internet , creepy monkeys have become a hot commodity on the market for irreplaceable tokens or NFTs . As of Thursday morning, the cheapest NFT Bored Ape available, a kind of digital certificate that gives its owner vague ownership of the monkey artwork, sells for the equivalent of about $ 340,000 ; last year, a very rare boring monkey NFT, one of the few golden fur monkeys,sold at Sotheby's for $ 3.4 million .

Have you been with me so far? People on the internet are becoming monkeys when it comes to Pokemon primates, basically. You may be wondering what monkeys do and why people pay so much for legally unsafe claims and how you grow old and lose contact. All questions are good, but we have passed them.

Over the past year, Yuga Labs, the well-funded startup that produces Bored Apes , has launched a parade of new digital fuels and has gone even further than monkeys. His latest adventure has highlighted the thrill of a bankrupt casino, scratching his head and burning money, of what has been hailed as the next big thing on the internet. Cryptocurrencies, blockchains, NFTs and the tech constellation known as "web3" have all been recognized as a way to free the internet from the tech giants that currently control it. Instead, what happened to the Bored Apes shows that they are doing the opposite: polluting the digital world in a dense fog of expensive and largely unregulated financial insecurity, fraud, and speculation that undermines everything that can be trusted remains online.

The last sale of the jumpsuit was last weekend and it was a total disaster . High demand has defeated Ethereum , the open source blockchain that houses the Ether cryptocurrency and is evolving into a cryptosystem more capable than Bitcoin . Deficiencies in technology have caused thousands of people to collectively pay about $ 180 million in transaction fees. Some seem to be paying more tariffs than they did for NFT. They are luckier; Some have paid high transaction fees just to make their monkey purchase fail for unknown reasons. (Yuga said he returned the money spent on failed transactions.) Others suffered from various hacking and phishing scams . Meanwhile, Yuga, whose supporters include some of Silicon Valley's leading venture capital firms, has made at least $ 320 million in sales. What sales? Oh, a piece of "land" on Otherside, a virtual world that may come out soon .

Of course, buyers participate in the sale of their own free will. You may find it hard to gain much sympathy for people who have paid large sums to speculate about digital assets in an unbuilt corner of metavers. Play stupid games, win silly prizes.

But Molly White, the software developer who runs Web 3 Is Going Just Great , a website and Twitter link documenting the dramatic seemingly daily crashes of crypts, tells me that a lot of people are falling behind and becoming guinea pigs. from a new set of technologies that are far more powerful than promoters acknowledge.

"On the one hand, we are seeing problem after problem on a scale never seen before in most technologies," he told me. On the other hand, well-funded companies are running Super Bowl ads promoting crypto to the public, and large financial firms are preparing to allow people to invest in digital currencies as part of their pension funds . And many of these things are unregulated.

"There will only be more damage as this goes on," White said.

Web3's nominal target is quite high. The early internet boom of the late 1990s, what might be called Web 1.0, was a period of massive stock market valuation that created several lifelong companies and many internet companies to die. The era of the post-Web 2.0 crash from the mid to late 2000s was marked by an explosion of new technologies and new businesses: mobile devices, social media, streaming services and a much more dynamic and interactive web. Over the past decade, however, four companies - Google, Facebook, Amazon and Apple - have emerged as the leading gatekeepers of the internet and technology industry more widely.

Supporters of cryptography and Web3-related innovations claim that this technology could change the turn of the Internet monopoly. They argue that by building the next generation of blockchain web applications, essentially a public book that can record monetary transactions and store data in a decentralized manner, i.e. not under the control of tech giants, we can expect the carpet under it. Internet giant. . Web3 promoters also highlight other virtues not yet accomplished. They say cryptocurrencies will free us from major financial powers like Wall Street and the Federal Reserve, allow people to send and receive cheaper money, or bring millions of "unbanked" people worldwide into the modern financial system. .

To be honest, for a long time I tried to keep an open mind to these claims because I was horrified when I saw how a handful of companies have invaded the internet that I once saw as a source of innovation. If there really is a new website that solves all the problems of the old one, write to me.

But the constant explosions should have destroyed that hope. Just as the Ethereum blockchain was destroyed by the sale of Bored Apes last weekend, the robot took another supposedly clever crypto network, Solana, offline, one of many full or partial outages it has experienced this year. Two other crypto firms, Rari Capital and Saddle, were hit by a hacker that resulted in a combined $ 90 million loss on Ether. Early last week, Deus Finance lost $ 13.4 million in its second strike in two months. I could go on, without a break.

There is also a little decentralization that they promise us. Many Web3 companies are funded by the same people who build the Web that we are trying to change.

The main problem is not that this technology is the foundation of the future of the internet. Of course, they were not ready for it yet: as White said, "If Web3 can not afford the 55,000 NFT of Bored Ape, how can it handle technology on a web scale?"

But how many people have to lose shirts before they realize that web3 is not the solution to all our problems?

Working hours with Farhad Manjoo

Farhad wants to talk to readers on the phone . If you would like to speak with a New York Times columnist about anything that concerns you, please fill out this form. Farhad will select some readers to contact.