Past performance is no guarantee of future results. You’d have thought that few people would understand this better than Michael Owen. The former Liverpool and England striker shot to prominence as a teenage sensation – thanks to wonder-goals like the one he scored against Argentina in the 1998 World Cup – only to then struggle with injuries and never quite fulfil his early promise.
Now he has become the latest famous name to launch his own range of non-fungible tokens, or NFTs, a type of digital asset based on the blockchain technology that underpins cryptocurrencies including Bitcoin.
It would be hard to think of a better example of how frothy the whole crypto sector has become (although the soon-to-be launched Mr Bean NFTs come a close second).
Lucky fans will soon be able to buy unique digital clips of Owen’s goals with commentary from the man himself. Owen claims his NFTs, issued in partnership with a company called Oceidon, “can’t lose their initial value”. Needless to say, that’s a bold claim.
Indeed it’s one that’s somewhat contradicted by Oceidon’s T&Cs: “We do not make any representations of any kind that the value of any products or assets … bought or sold on Oceidon ecosystem … will retain the value of its original purchase price or attain any future value.”
A closer look at Owen’s scheme suggests it simply won’t allow the NFTs to be sold for a price below the initial sale price. But not allowing people to sell at a loss is not the same thing as guaranteeing an asset can’t fall in value. In fact, such an arrangement could exacerbate the downside.
If you buy an asset for, say, £10,000 and its value starts to fall, you may want to cut your losses and sell at £9,000. If you can’t, the value of your investment may fall to precisely £0.
When the authorities in emerging markets sometimes suspend trading on their stock exchange in periods of extreme market volatility they are habitually accused of locking the doors on a burning building and trapping investors inside.
Owen is ushering investors into a shiny new construction and making a virtue of the fact its doors only open from the outside.
And he is doing so while the rest of the neighbourhood goes up in flames. Last week, TerraUSD, a so-called “algorithmic stablecoin” collapsed, prompting a multibillion-dollar sell-off across crypto markets. Stablecoins are intended to maintain a fixed value, which is typically $1 a coin.
Some are backed by genuine, honest-to-goodness assets. But others are “algorithmic”, which means their price is maintained through a promise to either create more of the currency or withdraw it in order to match supply and demand. However, this approach can – and last week did – lead to a “death spiral” if investors lose confidence.
“The failure of Terra’s peg has sent shocks through the decentralised finance sector,” warned Fitch Ratings with impressive understatement. Bitcoin is also having another of its periodic nightmares.
The cryptocurrency’s value has almost precisely halved since its high in November. Overall, the market value of the top 500 digital assets is down by more than half from their highs last year, according to CryptoCompare data collated by the Financial Times. You can almost set your clock by what happens next.
Long after the crypto-bubble bursts and investors are left licking their wounds, there will be a regulatory crackdown, new rules will be drawn up and the pendulum will swing too far the other way with a whole swathe of unintended consequences.
It is the same pattern after every financial meltdown. That is why it is worth drawing a distinction between consumer protection for retail investors and digital innovation for wholesale financial markets. Finance executives point out the absurdity of it currently being easier for individuals to buy cryptocurrencies than shares.
Meanwhile, it is easier to set up a legitimate digital finance business in New York than London. Both situations should be the other way around.
The Government, which frequently says it wants to increase the pools of patient capital in this country and bemoans the fact that British companies keep getting snapped up by foreign investors, should be fostering a share-owning culture while also turbo-charging the financial technology sector.
Fintech has been one of the biggest success stories in the UK in recent years. Investment in such firms grew sevenfold last year to $37.3bn (£30.4bn), according to research by KPMG, with London attracting more funding than the rest of Europe put together. It is crucial this burgeoning sector is not hampered by the coming clampdown.
A distinction must be drawn between cryptocurrencies and the distributed ledger technologies like blockchain on which they are based. Many consumers are currently learning about the perils of investing in the former. However, the latter has the potential to radically transform the way financial markets function – through, for example, tokenisation and smart contracts.
Smart contracts are essentially programs that are stored on the blockchain and run automatically when certain, predetermined conditions are met.
They are accessible to anyone that has an internet connection and can be used to make up almost instantaneous transactions.
It is clear they will eventually have applications in almost every corner of the financial industry, helping increase efficiency, reduce charges and lower the cost of capital.
There is a big difference between the value of Michael Owen’s NFTs and the importance of the underlying tech on which they are based. It would be disastrous, when the inevitable regulatory crackdown comes, if the UK were to throw the blockchain baby out with the crypto-asset bathwater.
“leading the plunge”
yes that sounds like Blighty
There isn’t much to lose for the issuers of NFT’s if they don’t have to give anything up and the NFT’s don’t seem to do much more than Panini football stickers – maybe I’m missing something big, good luck to those who buy them
Either this is fake news or The Daily Telegraph doesnt have a clue about Bitcoin and the crypto world.
–
As it stands 1 Bitcoin is $24,522.78 to £1 sterling (as of 10:11am)
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And the beauty of this is that all the U.S. Federal Reserve banks are not getting a sniff of this due to the bitcoin community engaged in a long term campaign of attrition against the banking system. We will see the collapse of several U.S. banks by the end of this year.
–
Its going to be epic.
Blockchain is junk technology. A solution that’s looked for a problem for over a decade now, and not found it.
That’s despite hundreds of thousands of people desperately trying to find a problem it will solve, so they can become filthy rich off the back of it.
People will now reply to me with their random shitcoin of choice, claiming it does something amazing, but ultimately it does nothing of use and has no adoption beyond speculation from other desperate nerds hoping to get rich quick.
About the only actual ‘problem’ it’s managed to solve, is the one of ‘How can we possibly accelerate the destruction of our earths atmosphere whilst making sure we produce absolutely nothing of worth as a byproduct’..
It would be a real shame if the UK became a world leader in this snake oil.
Words really can’t describe my dislike of this technology, and its evangelical followers. But hopefully what I typed above goes some way towards describing it.
Michael Owen has an NFT? 🙄
Grab ahold of a boat anchor as it sinks. Is that cause for celebration?
7 comments
Past performance is no guarantee of future results. You’d have thought that few people would understand this better than Michael Owen. The former Liverpool and England striker shot to prominence as a teenage sensation – thanks to wonder-goals like the one he scored against Argentina in the 1998 World Cup – only to then struggle with injuries and never quite fulfil his early promise.
Now he has become the latest famous name to launch his own range of non-fungible tokens, or NFTs, a type of digital asset based on the blockchain technology that underpins cryptocurrencies including Bitcoin.
It would be hard to think of a better example of how frothy the whole crypto sector has become (although the soon-to-be launched Mr Bean NFTs come a close second).
Lucky fans will soon be able to buy unique digital clips of Owen’s goals with commentary from the man himself. Owen claims his NFTs, issued in partnership with a company called Oceidon, “can’t lose their initial value”. Needless to say, that’s a bold claim.
Indeed it’s one that’s somewhat contradicted by Oceidon’s T&Cs: “We do not make any representations of any kind that the value of any products or assets … bought or sold on Oceidon ecosystem … will retain the value of its original purchase price or attain any future value.”
A closer look at Owen’s scheme suggests it simply won’t allow the NFTs to be sold for a price below the initial sale price. But not allowing people to sell at a loss is not the same thing as guaranteeing an asset can’t fall in value. In fact, such an arrangement could exacerbate the downside.
If you buy an asset for, say, £10,000 and its value starts to fall, you may want to cut your losses and sell at £9,000. If you can’t, the value of your investment may fall to precisely £0.
When the authorities in emerging markets sometimes suspend trading on their stock exchange in periods of extreme market volatility they are habitually accused of locking the doors on a burning building and trapping investors inside.
Owen is ushering investors into a shiny new construction and making a virtue of the fact its doors only open from the outside.
And he is doing so while the rest of the neighbourhood goes up in flames. Last week, TerraUSD, a so-called “algorithmic stablecoin” collapsed, prompting a multibillion-dollar sell-off across crypto markets. Stablecoins are intended to maintain a fixed value, which is typically $1 a coin.
Some are backed by genuine, honest-to-goodness assets. But others are “algorithmic”, which means their price is maintained through a promise to either create more of the currency or withdraw it in order to match supply and demand. However, this approach can – and last week did – lead to a “death spiral” if investors lose confidence.
“The failure of Terra’s peg has sent shocks through the decentralised finance sector,” warned Fitch Ratings with impressive understatement. Bitcoin is also having another of its periodic nightmares.
The cryptocurrency’s value has almost precisely halved since its high in November. Overall, the market value of the top 500 digital assets is down by more than half from their highs last year, according to CryptoCompare data collated by the Financial Times. You can almost set your clock by what happens next.
Long after the crypto-bubble bursts and investors are left licking their wounds, there will be a regulatory crackdown, new rules will be drawn up and the pendulum will swing too far the other way with a whole swathe of unintended consequences.
It is the same pattern after every financial meltdown. That is why it is worth drawing a distinction between consumer protection for retail investors and digital innovation for wholesale financial markets. Finance executives point out the absurdity of it currently being easier for individuals to buy cryptocurrencies than shares.
Meanwhile, it is easier to set up a legitimate digital finance business in New York than London. Both situations should be the other way around.
The Government, which frequently says it wants to increase the pools of patient capital in this country and bemoans the fact that British companies keep getting snapped up by foreign investors, should be fostering a share-owning culture while also turbo-charging the financial technology sector.
Fintech has been one of the biggest success stories in the UK in recent years. Investment in such firms grew sevenfold last year to $37.3bn (£30.4bn), according to research by KPMG, with London attracting more funding than the rest of Europe put together. It is crucial this burgeoning sector is not hampered by the coming clampdown.
A distinction must be drawn between cryptocurrencies and the distributed ledger technologies like blockchain on which they are based. Many consumers are currently learning about the perils of investing in the former. However, the latter has the potential to radically transform the way financial markets function – through, for example, tokenisation and smart contracts.
Smart contracts are essentially programs that are stored on the blockchain and run automatically when certain, predetermined conditions are met.
They are accessible to anyone that has an internet connection and can be used to make up almost instantaneous transactions.
It is clear they will eventually have applications in almost every corner of the financial industry, helping increase efficiency, reduce charges and lower the cost of capital.
There is a big difference between the value of Michael Owen’s NFTs and the importance of the underlying tech on which they are based. It would be disastrous, when the inevitable regulatory crackdown comes, if the UK were to throw the blockchain baby out with the crypto-asset bathwater.
“leading the plunge”
yes that sounds like Blighty
There isn’t much to lose for the issuers of NFT’s if they don’t have to give anything up and the NFT’s don’t seem to do much more than Panini football stickers – maybe I’m missing something big, good luck to those who buy them
Either this is fake news or The Daily Telegraph doesnt have a clue about Bitcoin and the crypto world.
–
As it stands 1 Bitcoin is $24,522.78 to £1 sterling (as of 10:11am)
–
And the beauty of this is that all the U.S. Federal Reserve banks are not getting a sniff of this due to the bitcoin community engaged in a long term campaign of attrition against the banking system. We will see the collapse of several U.S. banks by the end of this year.
–
Its going to be epic.
Blockchain is junk technology. A solution that’s looked for a problem for over a decade now, and not found it.
That’s despite hundreds of thousands of people desperately trying to find a problem it will solve, so they can become filthy rich off the back of it.
People will now reply to me with their random shitcoin of choice, claiming it does something amazing, but ultimately it does nothing of use and has no adoption beyond speculation from other desperate nerds hoping to get rich quick.
About the only actual ‘problem’ it’s managed to solve, is the one of ‘How can we possibly accelerate the destruction of our earths atmosphere whilst making sure we produce absolutely nothing of worth as a byproduct’..
It would be a real shame if the UK became a world leader in this snake oil.
Words really can’t describe my dislike of this technology, and its evangelical followers. But hopefully what I typed above goes some way towards describing it.
Michael Owen has an NFT? 🙄
Grab ahold of a boat anchor as it sinks. Is that cause for celebration?