The Rise and Fall of NFTs: A Lesson in Schadenfreude
Every now and then, we find ourselves secretly reveling in someone else’s misfortune. It’s not a noble emotion, but it’s a human one. Recently, I came across an article that brought me some joy: nearly 95% of all non-fungible tokens (NFTs) are now worthless. And I have to admit, it made me smile.
For those unfamiliar, a non-fungible token is a digital asset stored on a blockchain that certifies its uniqueness. NFTs can represent various forms of digital media such as photos, videos, and audio files. In the past few years, there has been a lot of hype surrounding NFTs, with many proclaiming them as the future of art and innovation.
But here’s the thing—NFTs are not easy to understand. I consider myself quite tech-savvy, but even I struggled to grasp the concept fully. I scoured the internet, reading countless articles and FAQs to gain some clarity, but I was left even more confused. In the end, it seemed that when people bought an NFT, they were essentially buying a link to a JPEG file. It all seemed unnecessarily complex.
My guiding principle when it comes to investments is simplicity. If an opportunity appears convoluted, it’s generally safer to keep your money in your pocket. If you can’t easily explain the concept to someone older and less tech-savvy, it’s best to think twice. That’s why, instead of investing in NFTs, I recommend putting your money into a no-load index fund and forgetting about it.
And here’s the sweet part—while 95% of NFTs are now worthless, those who followed my advice and invested in an index fund have likely seen some decent returns. There’s nothing quite like that feeling of schadenfreude when you realize that you made the right decision while others lost out.
But we should be careful not to celebrate too much. There’s always the possibility that the remaining 5% of NFTs have skyrocketed in value, making some of their owners incredibly wealthy. That’s the drawback of deriving happiness from someone else’s misfortune—it’s always someone else and never everyone else.
In the end, the rise and fall of NFTs serves as a lesson in not getting caught up in hype and fads. It’s essential to take a step back, evaluate the risks and benefits, and make informed decisions. While schadenfreude may bring a momentary thrill, it’s always better to focus on our own financial well-being and not rely on the misfortune of others.
So, whether you found yourself smiling at the downfall of NFTs or you happened to invest in that remaining 5% and are now reaping the rewards, let’s remember to approach investments with caution, seek simplicity, and avoid the temptation of celebrating others’ failures. After all, true success lies in our own achievements, not in the downfall of others.
