Hey, Let's Breed Digital Horses
Sportico reports that One Digital Horse Recently Sold for Over $125,000.
Australia-based studio Virtually Human launched Zed [an online horse racing game] early in 2019, selling 4,450 digital horses that year with an average price of about $30. It relied on NFT technology to establish proof of ownership and allow for secondary transactions on sites like OpenSea, the popular digital art and collectibles marketplace.
Zed is now up to nearly 11,000 horses sold, with another 8,000 bred, spread across 3,600 so-called stables. Rare horses are now regularly selling for more than $15,000. One horse sold for $125,000.
“We’ve had hockey stick growth the last four weeks,” Virtually Human cofounder Chris Ebeling said. “The world has taken notice.”
Move Over Crypto Kitties
Does any of the above sound familiar?
On December 3, 2017 I reported People Spent $1M on Totally Useless Ethereum "CryptoKitties"
Q. How do I get a CryptoKitty?
A. Go to the “Marketplace” and look at the CryptoKitties for sale, or breed two CryptoKitties together.
Q. How much does it cost to buy a CryptoKitty?
A. There’s no standard price for CryptoKitties. Users set their own starting price when they sell their Kitty, and the price goes down until the auction ends or the Kitty is purchased by another user.
Q. Are CryptoKitties like Bitcoin?
A. CryptoKitties are NOT a cryptocurrency. They’re more like a cryptocollectible. The real-world analogy for a cryptocurrency is dollars or pounds; a cryptocollectible’s real world analogy is closer to assets like baseball cards or fine art.
Horses vs Kitties
Some greater fool paid $113,000 for a virtual beanie baby crypto kitty.
Hooray, a crypto horse just went for over $125,000.
But, but, but you can race the horses. Let's do the math on that.
"Owners can pay entry fees to participate in races with prize pools ranging from a few dollars to several hundred," notes Sportico.
I do not know what the entry fee might be but for the sake of argument let's call it $0.00.
Next Let's estimate the average purse is $100 with $75 to the winner.
Assuming the $125,000 horse won every race and collected an average of $75 each race and there was no entry fee for the race, your horse would have to win 1667 races to show a profit.
That was a purposely high estimate of a $100 purse with an absurdly low $0.00 fee. It would potentially take tens or hundreds of thousands of wins with a higher entry fee or much lower purse.
I sure see a fraud potential. It works like this.
Early investors or a single person with multiple IDs keeps selling his horse to himself for ever increasing prices.
If it's multiple people it works like this: I will sell you my Cryptokitty or CryptoHorse for $20,000 if you buy mine for $20,000.
The bagholder game stops as soon as some sucker not in the scam game buys the kitty or horse.
The bids then stop.
Ready to invest in digital horses? I hope not.
By the way, the Fed and central banks are the direct sponsor of this kind of speculation when they flood the world with easy money. But, hey, let's not call it inflation.
For discussion, please see Hello Fed, Inflation is Rampant and Obvious, Why Can't You See It?