web3/concepts/ficticious-commodity.md

Fictitious commodities

A fictitious commodity or pseudo-commodity is a product is traded like a commodity but has no use value and its demand curve is not generated by any external economic processes. It is a non-economic product which is generated either through enclosure, artificial demand or as part of a greater fool scheme or bubble.

Structurally similar to a financial asset, but unlike a financial asset it renders no contractual claims on income cashflows and thus has zero fundamental value.

Examples of fictitious commodities include:

• Many crypto assets
• NFTs
• Name-A-Star Registries
• Indulgences

See also Tinkerbell effect, bubble and market mania.

References

• Hanley, Brian P. 2018. ‘The False Premises and Promises of Bitcoin’. ArXiv:1312.2048 [Cs, q-Fin], July. http://arxiv.org/abs/1312.2048.
• Taleb, Nassim Nicholas. 2021. ‘Bitcoin, Currencies, and Fragility’. ArXiv:2106.14204 [Physics, q-Fin], July. http://arxiv.org/abs/2106.14204.
• Krugman, Paul. 2021. ‘Technobabble, Libertarian Derp and Bitcoin’. The New York Times 21. https://www.nytimes.com/2021/05/20/opinion/cryptocurrency-bitcoin.html.
• Bellinger, Matthew. 2018. ‘The Rhetoric of Bitcoin: Money, Politics, and the Construction of Blockchain Communities’. ResearchWorks Archive. PhD Thesis. https://digital.lib.washington.edu/researchworks/handle/1773/43342.
• Bindseil, Ulrich, Patrick Papsdorf, and Jürgen Schaaf. 2022. ‘The Encrypted Threat: Bitcoin’s Social Cost and Regulatory Responses’. 7 January 2022. https://www.suerf.org/docx/f_88b3febc5798a734026c82c1012408f5_38771_suerf.pdf.