The superheated NFTs? A crypto market niche tipped to boom or bust
A pyramid scheme where “somebody will be burnt” or an “exciting innovation?” Is this the year of the nonfungible token?
In a whirlwind seven-day period, which began with Twitter founder Jack Dorsey proving that almost anything…
A pyramid scheme where “somebody will be burnt” or an “exciting innovation?” Is this the year of the nonfungible token?
In a whirlwind seven-day period, which began with Twitter founder Jack Dorsey proving that almost anything can be tokenized — even his old tweets — and culminated on Thursday with a Christie’s art auction that brought a mind-boggling $69.3 million bid for a tokenized Beeple work — fetching more at an auction than pieces by George Seurat, Paul Gaugain or Salvador Dalí — some observers were asking: Are nonfungible tokens spiraling out of control?
Even before the storied auction house catapulted artist Mike Winkelmann, aka Beeple, into the rarified company of Jeff Coons and David Hockney — i.e., living artists able to command stratospheric prices for their works — some were questioning the market’s sanity. Marketing guru and author Seth Godin, for instance, wrote in a blog post, “NFTs are a dangerous trap,” and the current mania is “an unregulated, non-transparent hustle with ‘bubble’ written all over it.”
Meanwhile, on March 8, an NFT version of a deliberately-burned Banksy painting sold for almost $400,000 on marketplace OpenSea, prompting Zavier Ellis, director of a London gallery, to tell the United Kingdom’s The Telegraph: “I wonder if this is some form of pyramid selling where ultimately somebody will be burnt.” David Knowles, who runs an art advisory firm, Artelier, commented that purchasing contemporary works of art is risky generally, but buying nonfungible tokens appears to be the “extreme end” of this.
It bears asking after such a week: Is the NFT market bubbling over, and if so, are people going to be hurt?
Heading for a fall?
“NFTs are an exciting innovation,” Fabian Schär, professor in the business and economics department at the University of Basel, told Cointelegraph, “but that does not mean that every doodle suddenly is valuable just because it is represented by an ERC-721 or ERC-1155 token,” adding:
“There are some interesting projects out there, and they are likely here to stay, but the vast majority of NFTs will be completely worthless once the hype is over.”
“I wouldn’t say things are out of control, but NFTs seem to have become today’s hot trend, and so many opportunists are jumping on the bandwagon in the hope of making a quick buck,” Gary Bracey, co-founder and CEO at Terra Virtua, told Cointelegraph. “I do fear the oversaturation of mediocre products and newcomers not bringing anything innovative or different to the party.”
What might be driving this speculation? Misha Libman, co-founder of art marketplace Snark.art, told Cointelegraph: “The soaring prices are tied to governments pumping trillions of dollars into the global economy to counteract the damage caused by the pandemic, and this excess liquidity is showing itself across the board.”
Do bubbles typically cause some damage when they burst, though? Answered Bracey: “I’d like to think people are smarter than that and won’t fall for any of the ‘Emperor’s New Clothes’ shenanigans.” The entire NFT community would be negatively impacted if things were to burst, suggested Libman, adding:
“But I think that it is important to note that the current attention and investment pouring into the sector is also helping build the much-needed infrastructure and tools that will make it easier and cheaper to build projects that utilize the blockchain technology.”
Blake Finucane, co-author of a position paper on NFT-based art titled “Crypto art: A decentralized view,” told Cointelegraph: “A bubble is especially hard to avoid with NFTs because one of the notable upsides of NFTs is the ability to buy, sell and trade them instantly, from wherever you are in the world.” Therefore, according to her: “Flipping is inevitable in a hot market where buying and selling are as easy as a push of a button.” Those who are in it for the short term — “only to flip whatever they are buying” — are at the highest risk, she added.
Are buyers “blind” to NFTs’ limits?
Godin further wrote in his post: “Buyers of NFTs may be blind to the fact that there’s no limit on the supply.” One example he gave was that “in the case of art, there’s a limited number of famous paintings and a limited amount of shelf space at Sotheby’s.”
Is this a valid criticism? While agreeing that the NFT market is currently overheated, Schär disagreed with this assessment, noting that while anyone can create an NFT, “it is not possible to create copies of a specific NFT.” As for the specific examples cited in the post:
“When I own physical baseball cards, I have no way of telling how many copies of this rookie card exist. In addition to that, the cards are quite easy to counterfeit. Both of these problems can be solved with NFTs.”
Regarding the “famous paintings” comparison: “I agree that most NFTs are completely worthless. But the same is true for paintings, and it certainly does not mean that the concept of NFTs is fundamentally flawed.”
As for the “shelf space” analogy: “There is really no reason why there cannot be a virtual equivalent to ‘shelf space.’” Platforms like OpenSea can be used for curation.
“I would completely disagree with that statement, as it fails to comprehend the nature of the digital collectibles,” said Libman, referring to the Godin remark, adding: “In the art world, the practice of editioning has existed for a long time, particularly in photography and printmaking, and while an artist can certainly violate the trust of their collectors by selling more editions, the loss of reputation would devalue any future work.”
A profligate use of energy?
In his post, Godin also warned that “the rest of us are going to pay for NFTs for a very long time. They use an astonishing amount of electricity to create and trade.” Responding to this criticism, Giovanni Colavizza, assistant professor of digital humanities at the University of Amsterdam, told Cointelegraph that “technological innovation is already ahead on this issue,” adding further, “Ethereum will soon transition to a proof-of-stake protocol that is much more environmentally friendly.”
Farooq Anjum, associate professor at Harrisburg University of Science and Technology, told Cointelegraph that he wasn’t sure the profligate-energy-use scolding was valid. “Don’t we spend an astonishing amount of dollars to protect the Mona Lisa or other valuable non-digital assets?”
Bracey admitted that the ecological issue had bothered him significantly when he first started getting involved in blockchain, “but technology and efficiency has improved since then, and my understanding is that processes are on the way that will largely address the gas/power issue, particularly with level two and the forthcoming next-gen Ethereum.”
Meanwhile, some were questioning if NFTs were just so many castles in the air. “Is this a bubble?” asked Mati Greenspan, founder of Quantum Economics, in his daily newsletter. “It could be, but in my humble opinion, we’re just getting started.” He displayed the NFT for a pixelated ape that “just sold for 800 ETH (approximately $1.5 million), and here I’m using it as part of a newsletter without paying a dime, nor even breaking any rules.”
But this is not about copying art, Greenspan continued: “What these artists are doing is more akin to selling autographed prints of their work, only the autograph is digitally verifiable and limited in supply, ensuring the scarcity element that collectors desire.”
Colavizza told Cointelegraph that it is difficult to identify a bubble when one is actually inside a bubble, adding: “In the short term, the growth of NFTs and cryptos will need some adjustment after a rapid surge. Volatility will likely remain high.” In the longer term, though, the market should grow significantly:
“The innovations of crypto and NFTs are yet to fully materialize. We are still in the early days, like with the World Wide Web in the late 1990s. Was there a bubble then? Yes. Does it mean these innovations won’t in the long term be extremely successful and impactful? I think not.”
Is there a proper use for an NFT?
Is there a proper use for NFTs, then — beyond mere speculation? “Absolutely,” answered Schär. “For artists, it is a way to reach a broader audience and monetize their work,” while for collectors it offers “provable scarcity.”
Anjum added: “NFTs can possibly be used for addressing the problem of assigning ownership of digital media without a trusted third party,” though that problem is still unsolved, presumably because the market is insufficiently decentralized. “We are trying to run here even though we have not learned how to walk,” said Anjum.
Colavizza acknowledged that some “peculiar usages of NFTs” have been displayed recently — he mentioned the tokenized tweets — but added that “we are already seeing plenty of serious creatives and creators being able for the first time to directly reach their market and monetize their work.”
“There are a multitude of ‘proper uses’ for NFTs,” added Bracey, going on to say: “Being able to authenticate ownership, safeguard a limited-edition release of a special collectible, or anything that requires formal validation or certification will benefit from NFTs. We are only just scratching the surface.”
“Is it a bubble?” asked Libman. “Maybe.” But it could also be about something that can fundamentally change how digital content is created, sold and accessed, he said, adding: “This is not a trivial technological shift that will just blow over and revert back.”
Mathematicians use AI to identify emerging COVID-19 variants
Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants…
Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants and could help with other infections in the future.
Scientists at The Universities of Manchester and Oxford have developed an AI framework that can identify and track new and concerning COVID-19 variants and could help with other infections in the future.
The framework combines dimension reduction techniques and a new explainable clustering algorithm called CLASSIX, developed by mathematicians at The University of Manchester. This enables the quick identification of groups of viral genomes that might present a risk in the future from huge volumes of data.
The study, presented this week in the journal PNAS, could support traditional methods of tracking viral evolution, such as phylogenetic analysis, which currently require extensive manual curation.
Roberto Cahuantzi, a researcher at The University of Manchester and first and corresponding author of the paper, said: “Since the emergence of COVID-19, we have seen multiple waves of new variants, heightened transmissibility, evasion of immune responses, and increased severity of illness.
“Scientists are now intensifying efforts to pinpoint these worrying new variants, such as alpha, delta and omicron, at the earliest stages of their emergence. If we can find a way to do this quickly and efficiently, it will enable us to be more proactive in our response, such as tailored vaccine development and may even enable us to eliminate the variants before they become established.”
Like many other RNA viruses, COVID-19 has a high mutation rate and short time between generations meaning it evolves extremely rapidly. This means identifying new strains that are likely to be problematic in the future requires considerable effort.
Currently, there are almost 16 million sequences available on the GISAID database (the Global Initiative on Sharing All Influenza Data), which provides access to genomic data of influenza viruses.
Mapping the evolution and history of all COVID-19 genomes from this data is currently done using extremely large amounts of computer and human time.
The described method allows automation of such tasks. The researchers processed 5.7 million high-coverage sequences in only one to two days on a standard modern laptop; this would not be possible for existing methods, putting identification of concerning pathogen strains in the hands of more researchers due to reduced resource needs.
Thomas House, Professor of Mathematical Sciences at The University of Manchester, said: “The unprecedented amount of genetic data generated during the pandemic demands improvements to our methods to analyse it thoroughly. The data is continuing to grow rapidly but without showing a benefit to curating this data, there is a risk that it will be removed or deleted.
“We know that human expert time is limited, so our approach should not replace the work of humans all together but work alongside them to enable the job to be done much quicker and free our experts for other vital developments.”
The proposed method works by breaking down genetic sequences of the COVID-19 virus into smaller “words” (called 3-mers) represented as numbers by counting them. Then, it groups similar sequences together based on their word patterns using machine learning techniques.
Stefan Güttel, Professor of Applied Mathematics at the University of Manchester, said: “The clustering algorithm CLASSIX we developed is much less computationally demanding than traditional methods and is fully explainable, meaning that it provides textual and visual explanations of the computed clusters.”
Roberto Cahuantzi added: “Our analysis serves as a proof of concept, demonstrating the potential use of machine learning methods as an alert tool for the early discovery of emerging major variants without relying on the need to generate phylogenies.
“Whilst phylogenetics remains the ‘gold standard’ for understanding the viral ancestry, these machine learning methods can accommodate several orders of magnitude more sequences than the current phylogenetic methods and at a low computational cost.”
Journal
Proceedings of the National Academy of Sciences
DOI
10.1073/pnas.2317284121
Article Title
Unsupervised identification of significant lineages of SARS-CoV-2 through scalable machine learning methods
While the size of the United States makes it hard for it to compete with the inter-city train access available in places like Japan and many European countries, Amtrak trains are a very popular transportation option in certain pockets of the country — so much so that the country’s national railway company is expanding its Northeast Corridor by more than one million seats.
Running from Boston all the way south to Washington, D.C., the route is one of the most popular as it passes through the most densely populated part of the country and serves as a commuter train for those who need to go between East Coast cities such as New York and Philadelphia for business.
Veronika Bondarenko captured this photo of New York’s Moynihan Train Hall.
Veronika Bondarenko
Amtrak launches new routes, promises travelers ‘additional travel options’
Earlier this month, Amtrak announced that it was adding four additional Northeastern routes to its schedule — two more routes between New York’s Penn Station and Union Station in Washington, D.C. on the weekend, a new early-morning weekday route between New York and Philadelphia’s William H. Gray III 30th Street Station and a weekend route between Philadelphia and Boston’s South Station.
According to Amtrak, these additions will increase Northeast Corridor’s service by 20% on the weekdays and 10% on the weekends for a total of one million additional seats when counted by how many will ride the corridor over the year.
“More people are taking the train than ever before and we’re proud to offer our customers additional travel options when they ride with us on the Northeast Regional,” Amtrak Executive Vice President and Chief Commercial Officer Eliot Hamlisch said in a statement on the new routes. “The Northeast Regional gets you where you want to go comfortably, conveniently and sustainably as you breeze past traffic on I-95 for a more enjoyable travel experience.”
Here are some of the other Amtrak changes you can expect to see
Amtrak also said that, in the 2023 financial year, the Northeast Corridor had nearly 9.2 million riders — 8% more than it had pre-pandemic and a 29% increase from 2022. The higher demand, particularly during both off-peak hours and the time when many business travelers use to get to work, is pushing Amtrak to invest into this corridor in particular.
To reach more customers, Amtrak has also made several changes to both its routes and pricing system. In the fall of 2023, it introduced a type of new “Night Owl Fare” — if traveling during very late or very early hours, one can go between cities like New York and Philadelphia or Philadelphia and Washington. D.C. for $5 to $15.
As travel on the same routes during peak hours can reach as much as $300, this was a deliberate move to reach those who have the flexibility of time and might have otherwise preferred more affordable methods of transportation such as the bus. After seeing strong uptake, Amtrak added this type of fare to more Boston routes.
The largest distances, such as the ones between Boston and New York or New York and Washington, are available at the lowest rate for $20.
I am a conservation biologist who studies emerging infectious diseases. When people ask me what I think the next pandemic will be I often say that we are in the midst of one – it’s just afflicting a great many species more than ours.
I am referring to the highly pathogenic strain of avian influenza H5N1 (HPAI H5N1), otherwise known as bird flu, which has killed millions of birds and unknown numbers of mammals, particularly during the past three years.
This is the strain that emerged in domestic geese in China in 1997 and quickly jumped to humans in south-east Asia with a mortality rate of around 40-50%. My research group encountered the virus when it killed a mammal, an endangered Owston’s palm civet, in a captive breeding programme in Cuc Phuong National Park Vietnam in 2005.
How these animals caught bird flu was never confirmed. Their diet is mainly earthworms, so they had not been infected by eating diseased poultry like many captive tigers in the region.
This discovery prompted us to collate all confirmed reports of fatal infection with bird flu to assess just how broad a threat to wildlife this virus might pose.
This is how a newly discovered virus in Chinese poultry came to threaten so much of the world’s biodiversity.
Until December 2005, most confirmed infections had been found in a few zoos and rescue centres in Thailand and Cambodia. Our analysis in 2006 showed that nearly half (48%) of all the different groups of birds (known to taxonomists as “orders”) contained a species in which a fatal infection of bird flu had been reported. These 13 orders comprised 84% of all bird species.
We reasoned 20 years ago that the strains of H5N1 circulating were probably highly pathogenic to all bird orders. We also showed that the list of confirmed infected species included those that were globally threatened and that important habitats, such as Vietnam’s Mekong delta, lay close to reported poultry outbreaks.
Mammals known to be susceptible to bird flu during the early 2000s included primates, rodents, pigs and rabbits. Large carnivores such as Bengal tigers and clouded leopards were reported to have been killed, as well as domestic cats.
Our 2006 paper showed the ease with which this virus crossed species barriers and suggested it might one day produce a pandemic-scale threat to global biodiversity.
In the past couple of years, bird flu has spread rapidly across Europe and infiltrated North and South America, killing millions of poultry and a variety of bird and mammal species. A recent paper found that 26 countries have reported at least 48 mammal species that have died from the virus since 2020, when the latest increase in reported infections started.
Not even the ocean is safe. Since 2020, 13 species of aquatic mammal have succumbed, including American sea lions, porpoises and dolphins, often dying in their thousands in South America. A wide range of scavenging and predatory mammals that live on land are now also confirmed to be susceptible, including mountain lions, lynx, brown, black and polar bears.
The UK alone has lost over 75% of its great skuas and seen a 25% decline in northern gannets. Recent declines in sandwich terns (35%) and common terns (42%) were also largely driven by the virus.
Scientists haven’t managed to completely sequence the virus in all affected species. Research and continuous surveillance could tell us how adaptable it ultimately becomes, and whether it can jump to even more species. We know it can already infect humans – one or more genetic mutations may make it more infectious.
At the crossroads
Between January 1 2003 and December 21 2023, 882 cases of human infection with the H5N1 virus were reported from 23 countries, of which 461 (52%) were fatal.
Of these fatal cases, more than half were in Vietnam, China, Cambodia and Laos. Poultry-to-human infections were first recorded in Cambodia in December 2003. Intermittent cases were reported until 2014, followed by a gap until 2023, yielding 41 deaths from 64 cases. The subtype of H5N1 virus responsible has been detected in poultry in Cambodia since 2014. In the early 2000s, the H5N1 virus circulating had a high human mortality rate, so it is worrying that we are now starting to see people dying after contact with poultry again.
It’s not just H5 subtypes of bird flu that concern humans. The H10N1 virus was originally isolated from wild birds in South Korea, but has also been reported in samples from China and Mongolia.
Recent research found that these particular virus subtypes may be able to jump to humans after they were found to be pathogenic in laboratory mice and ferrets. The first person who was confirmed to be infected with H10N5 died in China on January 27 2024, but this patient was also suffering from seasonal flu (H3N2). They had been exposed to live poultry which also tested positive for H10N5.
Species already threatened with extinction are among those which have died due to bird flu in the past three years. The first deaths from the virus in mainland Antarctica have just been confirmed in skuas, highlighting a looming threat to penguin colonies whose eggs and chicks skuas prey on. Humboldt penguins have already been killed by the virus in Chile.
How can we stem this tsunami of H5N1 and other avian influenzas? Completely overhaul poultry production on a global scale. Make farms self-sufficient in rearing eggs and chicks instead of exporting them internationally. The trend towards megafarms containing over a million birds must be stopped in its tracks.
To prevent the worst outcomes for this virus, we must revisit its primary source: the incubator of intensive poultry farms.
Diana Bell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
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