The latest player in the cryptocurrency business is MLS soccer. The product is non-fungible tokens (NFTs) and they sold for digital currency.
Elon Musk got behind dogecoin. Everyone but you and me once made a million-a-minute off bitcoin. MLS traded street-art posters for the cryptocurrency ether on May 21. They commemorated matches pitting Portland Timbers vs. LA Galaxy and Seattle Sounders vs. Atlanta United.
The Secret Walls Battles featuring the art bearing non-fungible tokens offered an unlimited number of posters for 90 minutes of bidding. The seller took credit cards or the specific cryptocurrency.
IT’S NEARLY TIME... click the link to watch the @MLS X SECRET WALLS battles only on @bitski @ 3pm PT / 6pm PT https://t.co/3KQL4aTzvw
— Secret Walls (@thesecretwalls) May 21, 2021
Frequently NFTs are part of the ethereum blockchain. The emerging hobby of digital art collecting favors it. The piece can be digital. Yet part of it belongs to the purchaser. The buyer gets to claim ownership in the work, with a blockchain entry to verify it.
That specific art’s NFT is a unique token on the blockchain.
So the artist is selling the NFT. The collector is buying the NFT and hopes it gains value. That unique NFT can be resold.
As for the original digital art, every copy is just as pleasing as the one bearing the NFT. So the NFT definitely qualifies as a speculative asset.
At the end of May, Ether, trading symbol ETH and the currency of Ethereum apps, had reached $2,608.71 (US) a unit. Speculators are including it on their spreadsheets.
In technological terms, the blockchain part of cryptocurrency is the decentralized ledger, recording all the transactions across a peer-to-peer network. Proponents consider this at least as impenetrable to outsiders as the familiar version of recording transactions across the Federal Reserve System.
But it’s not perfectly foolproof. It’s just, revealing the transactions doesn’t require an account auditor. It takes data analysts.
That’s who the FBI pulled from the private sector after Colonial Pipeline Co. paid their ransom to Russia-based hackers. The analysts worked their way into that blockchain and recovered 64 bitcoin worth about $2.3 million U.S., as reported in the June 8 Wall Street Journal.
The same Journal issue reported consumers losing nearly $82 million in cryptocurrency scams from fourth-quarter 2020 through first-quarter 2021, citing a Federal Trade Commission report.
These scams don’t hack into the blockchain. They’re carried out the old-fashioned way, by lying to others and duping them.
The blockchain analytics firm CipherTrace says fraud is surging in the area of decentralized finance, such as cryptocurrency markets. Scammers duped people for $83.4 million from January-April.
Yet, within those same decentralized finance markets, crypto crime fraudsters took in $432 million in that same period, compared to $4.1 billion in 2019. Their success waned. Maybe the blockchain system is working.
So MLS waited until a better time to test the cryptocurrency waters. Keep an eye out for those tokens.