I have a new analogy I’m using to describe Crypto, NFTs, and Web3.
Imagine the whole world runs on candles and gas lamps, and one day we hear that electricity is some big new thing and there are people coming to your town to “electrify” the neighborhood.
Lots of different contractors show up to your town to do the work. Some are excited but careful, and others just want to charge as much as possible, as quickly as possible, and they tend to do bad work.
The result is lots of people get scammed, and a lot of people lose their houses and even their lives due to fraud and foolishness.
What’s even worse, some of people who used the best installers still lost their homes to fires, just because electrification was so new.
What are the lessons here?
I think there are several, and I think they apply to Crypto/NFT/Web3.
Any time you have something dramatically new and different you have extreme risk if you get in early.
This usually brings a massive amount of hype along with it.
With that promise and hype you usually have two different types of people trying to take advantage of that: honest entrepreneurs, and fraudsters (and a whole range between them).
The trick to navigating this new thing, if you want to partake, is recognizing how much risk you’re willing to take on to get the potential benefit of this new thing, and doing your best to detect the difference between entrepreneur optimism vs. the scammers.
Finally, even if the thing is real and worth the hype, you can still get hurt by taking a good-faith risk with an honest entrepreneur.
This is Crypto/NFT/Web3 to me, although we don’t actually know yet if it’s electricity or not.
Putting that aside, the point is that the presence of scammers doesn’t mean a new thing is rotten. Scammers come to electricity the same way they come for snake oil. They’re drawn to hype regardless of merit.
And even assuming all this is the next version of the internet, it doesn’t mean it’s safe to invest in it. Investments aren’t usually in the thing itself, but rather one specific articulation of that thing, which is a guess upon a guess.
TL;DR: Don’t over-rotate on any of this, and don’t ignore it. My advice is to watch optimistically and cautiously. It might be nothing and it might be the internet in 1995.