The Rembis Report and Other Fascinating Topics - Volume CXIII

Bored Apes. Doesn’t that say it all?

Humans, for all intents and purposes, are quite simply, apes. We define ourselves as superior to our genetic cousins, chimpanzees and gorillas, in that we have domesticated ourselves. We have developed language, tools, farming, and progressed into a society of beings who are able to understand the fundamental concepts of the sciences which rule our worlds, to the point where we can break free of the gravitational pull of the planet and explore the universe.

We have medicine and can treat ailments. We can solve complex equations and invent things. We can build cities and roads and vehicles to carry us to remote places far and wide. We can conceive ideas and write them down and share them instantly with millions of people.

But we get so bored that we can do really dumb things, too, like destroy an entire planet. But before we do that, let’s talk about one of the really cool things that arises from boredom.

We create art.

Art is a generalized concept for whom beauty is in the eye of the beholder. Not all art is for every one. Some people will look at Michelangelo’s masterpiece, David, and see pornography, while others find exceptional artistic merit in the imagery of Playboy magazine. In the art world, they are always on the lookout for the next big thing. Currently, Bored Apes fit the bill.

The Bored Ape Yacht Club (BAYC) was conceived and created by four digital artists who created a virtual world on the Ethereum blockchain. By purchasing one of the 10,000 unique ape head shots, owners are presented with a certificate of authenticity and access to the club, and most notably the bathroom, where members may scrawl graffiti on a digital wall.

BAYC are just drawings. There is no story. While the style is reminiscent of Hanna-Barbera line art, there is no Saturday morning cartoon. Yet, if hanging out in digital playgrounds trying to figure out cryptocurrency is not your thing, and the drawings still speak to you, there are multiple physical trinkets to be found on Etsy. So have fun.

You can pay cash there. No ethereum coin B.K.A. Ether (ETH) necessary. But if you want to own one of these virtual treasures to flash on your phone and show all your friends, you had better pony up some real dough, and I’m not talking about croissant money here.

These things are not cheap.

Meet Bored Ape #3511. As of this writing, ETH is valued at $1,650 per unit and Bored Ape #3511 was for sale for 29 ETH ($47,867). Records show that the current owner paid 110 ETH. No matter how you slice it, this is losing money. The cheapest this could have been purchased for, if bought when ETH was at it’s lowest price ($993) would have been no less than $109,300. So, whoever is selling it at this price is losing at least $60,000, unless the price of ETH suddenly jumps back to its all time high of $4,644, which would make this piece of art worth $134,688.

Is that going to happen? Nobody knows. Buying digital art, A.K.A. non-fungible tokens (NFTs) is gambling. The buyer is betting that somebody is nutty enough to pay more for the art than they did.

Hey, Mike - I don’t get it. Who would want a piece of digital art? What else can you do with it besides look at it on your phone?

The special thing about NFTs is that they can be encrypted with other files. There could always be something more to an NFT that is not advertised, such as plans for nuclear submarines, recipes for pharmaceutical designer drugs, calling cards for hitmen or GPS coordinates for the remains of Jimmy Hoffa. Encrypting an NFT with hidden files is a great way to sell information to anyone who should not have it.

In the case of BAYC their encryptions simply allow you access to places on the website where non-members can’t get to. They are keys. Without an authentic, original, Bored Ape NFT, you don’t get in. So, the membership, the image of exclusivity, is what is for sale. The art is the limousine that gets you past the velvet rope so you can write on a virtual bathroom wall that you were there, where only 10,000 ape owners can get to.

But the club is even more exclusive than that. While there are 10,000 Apes out there on the Ethereum blockchain, not all of them are for sale, and some people own many more than anyone else. One person own around 500 Bored Apes NFTs, 5% of the market, which equates to, even at the lowest price of 29 ETH each, around $24 million.

So, my thinking is that anyone with that much invested in something so insignificant, is a truly Bored Ape. What are they doing with their life?

They could be monetizing their Bored Apes. One of the selling features of the BAYC is that owners of Bored Apes NFTs also get the right to sell copies of their Bored Apes and market them any way they see fit. The person with the 5% market share may have all kinds of things for sale; T-shirts, mugs, keychains, bumper stickers, window decals, or anything else you can imagine emblazing with a Bored Ape on it.

The BAYC creators had a solid plan, and somehow, they knew people would buy these things for loads of money. They get 2.5% of the sale price every time a Bored Ape changes hands. This was the plan from the beginning for NFT creators. Even though they may not own the piece anymore, every time it is sold, no matter if the price goes up or down from the previous sale, the creator gets a cut.

BAYC is not the only game in town for NFTs. There are all kinds out there for sale on a variety of websites. Whether or not you can buy one and make money is a crap shoot. The most expensive NFT ever sold went for $69.3 million. And the ten runners-up for the next most expensive also went for millions. Here is one that went for over $5 million.

Why? What is the point, Mike?

Making money. Nothing else. The point of an NFT is to take advantage of stupid people with money. That’s it.

Basketball star Steph Curry spent $180,000 on his Bored Ape.

Could he have done something better with his wealth? Absolutely. But instead, he chose to throw his money at a screen. Does he do anything worthwhile with the rest of his money? I don’t know. Maybe. What is worthwhile is just like the conception of art. It is decided through the eye of the beholder. Maybe he does a lot of charity work and will sell this to buy a hospital wing. Or maybe he is just taking the route of greed, hoping to find a sucker bigger than himself. Or maybe he will never sell it and get stuck with it. Maybe he really, really loves it.

But no, that’s not it. Steph Curry and lots of Bored Ape NFT investors are unhappy with their purchases. Guess they were not in it for the long haul. These things have only been around since April of 2021. Many of them are suing Sotheby’s because the perceived value of their investments have fallen below the purchase price.

They are not true art collectors, buying art for the sake of art ownership, to support the artist. If they were, they would have no such complaint. But that is not why they chose to buy these things. It wasn’t for the art, it was for profit. They gambled, and if they have already cashed in, they lost. If they have not cashed in yet, whether or not they are able to find a buyer for their Bored Apes remains to be seen.

Did they really think that their bets could not lose?

Apparently, there are some people who have so much money that they really do not know what to do with it. So they buy stuff like this. Worthless stuff that does not do anything good for anybody. The following article explains what is wrong with BAYC and the mentality behind it. While we can not fault the artists for taking advantage of their marks, we can, and should, point at them and ask, how can you be so dumb?

I wish George Carlin were still around to weigh in on this. These people are paying for nothing. Really. Tons of money for nothing.

But it isn’t just the art world, or the virtual artworld on the internet, people buy junk constantly.

Let’s face it. This is junk. Is Sotheby’s to blame for this and the Bored Apes purchases?

No. Absolutely not. Just as you do not shoot the messenger, you don’t blame the dealership when your new car turns out to be a lemon. They are doing what they get paid for: to sell items of imagined value to whoever pays the most. Hype is what auctions are all about.

The only sure fire way to find the return on investment in junk is to turn around and sell it quick. It is easy if you have a few bucks and stick with low-tech. Go out one weekend and buy a bunch of used stuff you don’t need or want. Go to yard sales and second hand stores. Pick up some lamps, tables, knick-knacks, paintings, whatever; enough to load up a small truck. Don’t be picky. Just buy whatever is cheap. Now haul all that stuff to an auctioneer a few miles away and announce an “Estate Sale.” 

Customers will show up to pore over your one-of a kind, rare treasures, make their plans on where they might be able to sell it, figure out who they will give it to for gifts, and what they might keep, just because they have never seen anything exactly like that before, so it must be valuable. All that crap will sell at an auction much faster, generally in one afternoon, than it ever will gathering dust in an antique store, because when buyers see other people trying to buy stuff they think they might want, the person who wants it most will get it. Besides that, you make only one haul to the auctioneer, not a bunch of work for yourself dealing with online bidders on eBay. So, you don’t have to package, ship, track things, and worry about a bunch of other garbage that come with an online store.

It is work. It does require an investment, and of course, all investment involves an element of risk. So, will you make a profit? Maybe. Probably, if your junk stands out, and especially when it looks like somebody else might buy if you don’t.

Don’t feel sorry for anyone investing in junk. They should know the risk. Also, don’t feel bad for anyone investing in art. If they liked it enough to spend a fortune on it so that nobody else could have it, then they must own something they love. If they do so just to flip it, for greed, that is why they end up with a worthless piece of junk.

And in the event of a worldwide blackout due to a massive electro-magnetic pulse, Steph Curry and all the other Bored Ape collectors will have nothing to show for anything.

Let’s see if NFTs can prove their true value then.

Thanks for reading.

If you are new to the Rembis Report and would like to read any of the previous issues, PLEASE CLICK HERE to access the archives. To read it from the beginning, PLEASE GET A COPY of The Rembis Report: An Observation.