How much electricity is used refrigerating frozen desserts in the US? It's probably a lot. Probably more than a small country. Is ice cream an unnecessary and "dangerous" trap that we will all pay dearly for in the end? Probably.
I don't understand the point of this comment. It's almost schizophrenic in nature. Are you advocating for wasting energy by saying that wasting energy is fine because it's done in other places but not criticized?
It’s probably more like if we had a common point of comparison for all the energy spending points in our society we wouldn’t be focusing on blockchain that much.
Pointing out the environmental impact of NFTs is not taking away a meaningful amount of attention or effort from pointing out the impact of nonrenewable power, cars, etc. What it can do is clue in NFT users who may not understand the impact of their participation.
Anecdotally I've seen several artists on social media making posts recently saying "wow okay I just heard about the power use of NFTs, this is nuts" because it's really not obvious if you're not already familiar with blockchain-related stuff.
Even if something like frozen desserts used the same amount of energy as NFTs, it's still not a good light for NFTs considering those frozen desserts probably support a large number of jobs, infrastructure, and at the very least some kind of nominal amount of calories (even if not very healthy ones).
NFTs might help some artists get money. That's not really as much of an impact.
So if we're comparing things, the full context needs to be included as well, not just some strawman of a magnitude.
And all of that being said, if the world decided that it would stop producing desserts, I'd probably be on board with it anyway, but the impact would be pretty large. If the world decided to stop supporting NFTs, not much would change (I suppose it could in the future, but based on their current trajectory it doesn't seem like that'll be the case).
I've noticed that low karma accounts like the one above yours tend to leave snarky comments to gain karmas. It's ambiguous enough to get some up votes from readers that like their humour and not get down voted out right for its vagueness.
It’s easy for a famous entrenched artist who mass produces their work thanks to legacy infrastructure to talk down on this but I’m seeing lots of independent creator artist friends making some money for their work
What property of NFTs has suddenly made them make money where previously they weren't? Like how did adding NFTs to the mix suddenly make their art start selling?
This is exactly what I don't understand. If it's the same art, why does it matter if the art is in an NFT or in a physical representation? Like, why are people buying pieces of art using NFTs?
Digital art doesn't have a natural physical representation, and people find it interesting to get rid of the requirement for creating and maintaining one just to make it a thing to exist as art. I.e. fundamentally digital art pieces are today often sold as part of installations which are a pain to maintain long-term. Or as physical media, which also are difficult to maintain long-term, or if you don't require the specific media to be preserved you get into the chaos of which later copy is an "original". That really only works at an expensive high end.
Or you don't create exclusivity and sell it cheaply, but while people do buy e.g. music that apparently doesn't work as well for other art forms (artists certainly have tried).
Limited/unique prints apparently do work (as in people are willing to spend money on those), but limits you to static 2D media.
In principle nothing stops you from selling digital art with licenses like we do sell software with licenses, but that hasn't caught on, for whatever reason. (I'm actually expecting that to be added to NFTs soon-ish)
Enough people do seem to be currently willing to accept the concept of an NFT representing ownership of a digital thing to put a price on it, and that price is noticeably higher than what they pay for non-exclusive digital art. For many artists, that's reason enough to use this new avenue to sell their art.
One amazing use-case is recurring revenue on secondary market sales by coding royalties into the smart contracts. Artists used to die poor and their family saw nothing as their work skyrocketed in value. Not anymore with NFTs.
The problem I think, is that their art still isn't selling. NFTs aren't art, they are effectively trading cards referencing art.
These trading cards are, somewhat mysteriously, selling, and that does get money into the hands of artists which is good, but they're not doing it by encouraging people to buy art or tip artists, and it's hard to see how "everyone can just print trading cards referencing things" is a sustainable anything.
People pay for mods and skins all the time. People will pay secondlife furniture. They will pay to be be able to display it in their VR houses. They will display it like badges on their forum avatars.
The speculation and whales will being the capital to generate a steady market and build out the partnerships and incentives for customers. Once people are used to digital wallets, sending a few bucks for instant delivery of some unique design is easier than etsy.
> People pay for mods and skins all the time. People will pay secondlife furniture. They will pay to be be able to display it in their VR houses. They will display it like badges on their forum avatars.
All of those are neat ideas which do not require NFTs, and are not enabled by NFTs. People already pay for Second Life furniture.
And advantage I see is the shared protocols and blockchains offer quick and seemless ownership validation even after the original merchant has gone out of business or stopped selling. And for the merchants, its painless and seemless to sell and delegate ownership without having to manage that inhouse, or pay a large fee for the service.
I don't have the impression people buying NFT art consider there to be much difference between the art and what you call a "trading card" referencing art. (sure, many probably buy for speculation, but that happens with meatspace art too)
Thought experiment: if they sold a digital art piece in traditional terms, would you consider the printed licensing contract (which is our usual legal tool represent selling a file) to be a "trading card" and the art itself to be not sold? (the legal meaning of an NFT is less defined, true, but I suspect people will tie licensing contracts into that soon enough)
Especially in art, a lot of this comes ultimately down to social convention of what people do consider to have value, and as long as enough people agree it doesn't really matter what the rest of us thinks. (I think I get how the logic works for NFTs, but it doesn't work for me in the sense that I currently don't consider owning an NFT to be meaningful to me, unlike owning other kinds of (representations of) art)
> if they sold a digital art piece in traditional terms
People do sell licenses to digital art, yes. I've both bought and sold such licenses, primarily on TurboSquid (https://www.turbosquid.com/), a digital market place which has been doing that for over 20 years.
That's neither a trading card nor the art itself, but it's certainly closer to "art" than "trading card", because I get specific legal rights to do specific things with the art, such as use it and reproduce it in a book, website, computer game, etc.
It is worth, I think, asking what is being offered by NFTs that TurboSquid (and it's endless competitors and equivalents for other media types) don't offer. Scarcity? Nothing stops such marketplaces from selling exclusive licenses, and some have tried, although I don't think it's ever been popular.
> the legal meaning of an NFT is less defined, true, but I suspect people will tie licensing contracts into that soon enough
Well, yes. People might start selling some sort of "NFT + rights" package at some point, but they don't come with any now, hence the "trading card" digs. Even if people start adding rights in the future, it's not clear that these rights will be (or will be seen to be) an integral part of the NFT. If I can sell an NFT of my 3D model now, and I can sell the right to use my 3D model in a game now, why would I combine these in a package and not just keep selling them independently?
(Now, one interesting thing is that the rights attached to NFTs would presumably be transferable, while licenses to digital art are currently overwhelmingly non-transferable. That is a big change. But...we could sell transferable licenses now; you don't need NFTs for that, and the concept is currently not popular. I rather think that rather than NFTs true value being that they enable transferable licenses, the transferability of licences attached to NFTs will be a drawback.)
> Especially in art, a lot of this comes ultimately down to social convention
That is true. Art prints are an interesting example; you're basically paying for 1) the right to reproduce an artwork on a single piece of physical media and 2) paying for the artist to do that reproduction for you. Both are legitimate services, but it's odd to find them packaged together like that so frequently. And yet, art prints are a huge and very well accepted part of the art market. If NFTs become widely accepted, they will seem less strange, to be sure.
The turbosquid comparison is fair...basically NFTs are recreating that, but without the need of turbosquid.
To your other point many NFTs already include these additional legal rights, it’s articles and forums like this where people are talking about NFTs as if they are all just digital baseball cards.
Just look at decentralized domain names as the obvious counter examples (Unstoppable Domains and/or Ethereum Name Service). You aren’t just buying an NFT for a domain name, the NFT includes the rights to the actual name. I use both companies as examples, because even if this new space they are not offering the same rights over the underlying domain and it’s incumbent on the user to understand what rights they actually get with the NFT.
That still doesn't make any sense to me. Would anybody have paid for a physical certificate of authenticity for a digital file pre-NFTs? If the NBA started selling certificates of authenticity for video clips that didn't come with any intellectual property ownership or exclusive ability, people would have laughed and would have never paid millions for them
Exactly. What would you say if I told you I have a famous painting and a certificate of authenticity and am willing to sell you the certificate for $$$ and keep the painting?
Suppose I own a game on steam. I pay a friend to write me a certificate saying whoever owns the certificate owns the game. I sell you the certificate. You pirate the game. Do you own it?
If the NFT doesn't come with conventional legal rights, you don't own the thing the NFT points to in the real legal system. If it does, it's redundant.
If first sale doctrine is ever fixed, your friend could sell you their copy that way.
I don't know why all your examples involve third parties stamping sweet nothings onto a piece of paper. Of course something made by a non-author and with no ownership is useless. I said that in my first comment.
> If the NFT doesn't come with conventional legal rights, you don't own the thing the NFT points to in the real legal system. If it does, it's redundant.
An NFT needs to have some kind of rights in the contract or it's a scam. Notably you at least need exclusivity!
But that doesn't make it "redundant". It's a way of making a contract, not a replacement for contracts.
> If first sale doctrine is ever fixed, your friend could sell you their copy that way.
Yes, but NFTs claim to get similar effects without changing the law.
> I don't know why all your examples involve third parties stamping sweet nothings onto a piece of paper.
The third party is the blockchain. Because the blockchain can't enforce that you actually hand over real ownership rights to correspond with the NFT ownership.
> An NFT needs to have some kind of rights in the contract or it's a scam. Notably you at least need exclusivity!
If I own a piece of paper my country's legal system will accept as meaning I own something, why would I also want a piece of virtual paper that a bunch of people on the internet will accept as meaning I own some sort of rights to something.
> But that doesn't make it "redundant". It's a way of making a contract, not a replacement for contracts.
What NFT can I use to make a contract that any real legal system will accept?
> If I own a piece of paper my country's legal system will accept as meaning I own something, why would I also want a piece of virtual paper that a bunch of people on the internet will accept as meaning I own some sort of rights to something.
So you can buy and sell it easily, and show everyone that you own it.
That's much better than paper!
> What NFT can I use to make a contract that any real legal system will accept?
Surely they have terms of service? That's where the legal system ties in.
Previously there was no way to credibly sell an "original". You can produce a commission for someone, but the nature of a digital artwork is that anyone you show it to has the whole thing.
To a certain extent this was already the case with photos, and IMO that's part of the reason that prices for photographic artwork are much lower than other media. You'll sometimes see photographers selling a series of 500 numbered prints (or whatever) as a sort of a way around that, and NFTs are kind of a more digital version of that.
No, the NFTs are a separate thing which apparently has some sort of sentimental value. The digital artwork is still whatever it was before. I could sell an NFT for my cuckoo clock. It has nothing to do with my cuckoo clock.
It's akin to a certificate of authenticity for a numbered print in a series. Anyone can make another copy of the print, and it doesn't really matter which copy a certificate goes with, but without the certificate the print is worthless.
Well for one, NFTs on art create a unique money laundering strategy.
Drug dealer buys an art NFT for $1k (using legit money), sells the NFT plus a bag of drugs to someone for $10k. They just made $9k in "artwork" profit, which is clean money....and since the value of art is always subjective, it can't really be questioned. On top of that, all monetary exchanges and transactions can be handled via smart contracts, so this reduces risk to everyone involved.
I suppose the reality one would have to buy in to is that people were previously sitting around with tens of thousands in disposable cash ready to spend on art, but were held back by the fact that ownership of the art could not be proven digitally.
Access to markets. Like it or not, there are many, many wealthy cryptocurrency holders. NFTs are a way of exposing the new artist class to the new rich.
The possibilities of NFTs fascinate me, especially for portable, digital identities and assets that transcend any specific virtual realm and can't be arbitrarily erased by any central authority.
But I also won't put a single sat in any of them right now.
> The possibilities of NFTs fascinate me, especially for portable, digital identities and assets that transcend any specific virtual realm and can't be arbitrarily erased by any central authority.
I'm struggling to understand the possibilities. Can you enlighten me? It seems like people buying these things are just speculating. Can you paint a picture of what kind of possibilities you're excited about?
A very simple example is that it could partially solve the problem of verifying digital identities. If I follow/friend your NFT based identity, and various virtual realms (games, social media, virtual spaces) integrate with that 'identity' NFT for user accounts, then any new virtual realm I enter, I can immediately find and connect with people I already know, or identify imposters. There will obviously still be some other hoops I need to jump through to know a digital identity maps to a particular physical person.
I could also see game studios start to issue varying tiers of rare in-game items as NFTs that can then trade on a free market, like collectible cards. Not only would I suspect people will be much more likely to pay more for digital items they can actually take uncensorable possession of (and still sell after they get banned from a game), but different studios could even make deals to make their NFT items cross compatible. (Mario NFT skins and items in Minecraft?)
Maybe I'm starry eyed and delusional, and I'm sure it's a LONG, messy road to get wherever we're going with this.
> A very simple example is that it could partially solve the problem of verifying digital identities. If I follow/friend your NFT based identity, and various virtual realms (games, social media, virtual spaces) integrate with that 'identity' NFT for user accounts
You don't need Crypto Kitties for account verification. All you need is a cryptographic keypair, like the kind you already get by default in any Bitcoin wallet. Just sign a message proving you own a public key with the corresponding private key.
> Maybe I'm starry eyed and delusional, and I'm sure it's a LONG, messy road to get wherever we're going with this.
Evidently we’re going back in time to 2015, when “NFT” meant a blockchain representation of a digital trading card game. No one cared then, and no one cares now. The only thing new to the 2021 “NFT” narrative cycle is Twitter trying to monetize itself by selling tweets. Needless to say, none of the historical attempts at NFTs have ever resulted in lasting value to society, and probably this won’t either.
> A very simple example is that it could partially solve the problem of verifying digital identities.
It does not. In fact, it reduces to the public/private key system we already have for verifying digital identities.
I have zero way of proving that I am the owner or creator of an NFT without the private key used to sign the original transaction. Why bother with an NFT and the complexity of a wallet when I can just sign whatever you'd like me to sign and you can verify it with the same public key that verifies my identity claim?
Thank you for your answer. Personally, as a gamer the idea of cross game microtransactions and collectibles does not interest me. Minecraft skins are free and easy to create, you can make yourself look like Mario if you want, or anything else. The idea of putting that on the blockchain instead seems dystopian. On top of that, I’m pretty sure that Nintendo would never want to do such a thing.
Ooohhh not the evil speculation. So scawwrry. Seriously though, everything in life is speculation. Do you have a job? That's speculation on return for your time. Do you own a house? That is speculation on property prices. Do you have a bank account? That is speculation on inflation. Everything is speculation unless you have a God's eye view of the world. Get over it.
> portable, digital identities and assets that transcend any specific virtual realm
Why not just have a government or trusted company sign things rather than an NFT? If the UN says "we will digitally sign digital passports", that seems strictly better than an NFT for identity. Without a central authority to verify identity, how do you solve the problem of a thousand people creating NFTs saying they're john doe living at location X? Don't you need someone to validate it, at which point you have a central authority?
Or is this for digital assets like "I own this git repository", which you can already do by signing it with your gpg key and then distributing it via ipfs or such?
> can't be arbitrarily erased by any central authority.
Sure they can be. If a government creates a law saying "anyone that processes NFTs must first put them through this list of NFTs to filter, must filter them out, etc, or go to prison", well, now NFTs are effectively erased.
>If a government creates a law saying "anyone that processes NFTs must first put them through this list of NFTs to filter, must filter them out, etc, or go to prison", well, now NFTs are effectively erased.
Just like how the government successfully erased the drug market by making drugs illegal.
Here I'm talking more about pseudonymous virtual identities that aren't necessarily publicly tied to meat world people. Digital passport for verification of physical world identity probably will be some government agency.
Boy would it suck if they 'accidentally' delete your digital identity and suddenly you can't participate in any social media. As more and more of our lives go virtual, this could legitimately become a prison like punishment and hopefully there's an arm of the justice system that manages that transparently.
You mean like getting your facebook profile banned?
As always, this always exists and the question is why Facebook would want to give up their centralized control of it, just like national central banks won't willingly accept loss of control over their own currencies.
NFTs do not exist outside of the blockchain, a central authority would not care in the least about the NFT, they would simply target the actual asset in the realm of their authority.
> The environmental critique rings hollow. Our economy revolves around this unnecessary consumerism
It is only proof of work which needs to be more wasteful the more efficient things become.
If it turns out t-shirts are polluting massively, and someone finds out that by replacing one chemical with another they pollute much less, then people will do that.
If a more efficient machine comes out for making a t-shirt, t-shirts will become cheaper to make.
Proof of work chains can't take advantage of any improvements. They waste X amount of money in electricity intentionally. If computers get faster, they need more computers. If electricity gets cheaper, they need to burn more electricity to have similar security (make the cost of a 51% attack the same again).
Any time computers get significantly better, old hardware has to be thrown out in favor of the new fancier hardware, or else other miners outcompete you.
Can but doesn’t, and of course there’s a ton of generating capacity that would need to be replaced with green power first. Let’s operate in the reality domain.
Wasting electricity may share a good feature with wasting water or wasting internet bandwidth. It's troublesome in the short term but it leads to increased capacity being made to meet demand which benefits everyone in the longer term.
Tip the artists you love. If you want you can send them money by paying for prints, or buying originals, but ultimately just send them money. There's no need for it to be transactional. If there are artists in the world that make things a little more beautiful for you, you can just pay them for that, without any need for it to be tied to something concrete.
How can the contract know the actual sales price? I.e. sure, it can see a transaction, but it can't see the second transaction with the rest of the sum, or the cash that changed hands at the same time.
My understanding is that the USD value attached to an NFT is just the equivalent of however much ETH is being traded. If some outside monetary platform is being used to exchange the item then the real price wouldn’t be known.
So basically the same way it's done with traditional meatspace paintings: you make a (legal) contract stipulating it, or you rely on people to do it because they think it's right.
It's also transactional if they put the work behind a centralized DRM system, yet somehow we are not pushing back against that, which to me suggests a lack of imagination.
NFTs have been the wildest mania to sweep the internet in the last three weeks. If you're not watching, well, check it out.
People are paying millions of dollars for artwork that doesn't exist.
The bid for Jack Dorsey's "first tweet" is over two million dollars. (What does that even mean?!)
Sure, I suppose you could link ownership of intellectual property or actual goods to NFTs, but what's the benefit? Who enforces it? And what happens when crypto is broken and people can't prove they owned the private keys?
For a more technical definition following the citations:
> NFTs are distinguishable and you must track the ownership of each one separately.
> The pair (contract address, uint256 tokenId) will then be a globally unique and fully-qualified identifier for a specific asset on an Ethereum chain.
NFT is an initialism [0], not an acronym. Acronym is used when you say the initials as a single word (eg, “nift”). Initialism is used when you say each letter distinctly.
Exactly, with all the VCs, celebrities, etc hyping up their own coins and launching an ICO to potentially pump and dump the coin for a quick exit scam in 2017.
This is no different and it is another giant scam. Where was the same 'thought leaders' on Twitter who were screaming and hyping about ICOs in 2017? Bust.
On to the next get rich quick scheme I suppose for the VCs and the hype brigade on Twitter, I guess.
Regardless of what you think of NFTs, you have to recognize that the author's only counterargument against NFTs is that they're bad for the "rest of us" due to externalities that everyone else has to pay.
The "rest of us" don't pay for the electricity use. The ETH miners are paying for it directly. And creators and buyers are paying for it indirectly through ETH usage. It isn't an externality. That's like saying the physical art world shouldn't exist because it uses physical real estate, electricity, and raw materials to be made on -- and the rest of us pay for those things.
Is it a good use of electricity? Maybe, maybe not. That's for people to decide individually, unless we'd want to go down the moral rabbit hole of judging every single use of electricity.
That's an argument for a different question, which is "should we allow people to waste electricity if they pay for it?". If your answer is that we should regulate what people are allowed to use electricity for, then we'll need to change the laws in this country.
It is very difficult to start being the moral judge for every single use of electricity. Instead, we let the free market decide in most situations. And when there are true externalities (meaning costs that borne by the broader population, e.g. car emissions) we do impose regulations to reduce those externalities.
What hasn't he delivered on? Does he have any track record of delivering what's been promised? If I recall correctly, proof of stake already started to roll out this year.
That’s a bit disingenuous. Ethereum isn’t as static as bitcoin; they’ve been making steady progress. Proof of stake also has started rolling out already
The question as I interpreted it is "what has he not yet delivered on" - not "what has he promised to deliver on and appears to be making progress on, and has started rolling out, but is not yet broadly available" :)
Yes, let's rely on word play to make it seem that ethereum isn't being actively upgraded as we speak ;)
Kidding aside, I would think that most people understand "what has he not yet delivered on" as "he's completely broken his promise and he's no longer working on it". I didn't have a "yet" in that sentence.
"This is bad because of externalities, the externalities are big and will grow" is exactly why we don't have general nuclear power, saying it's the only argument doesn't make it a weak argument.
> you have to recognize that the author's only counterargument against NFTs is that they're bad for the "rest of us
No, I think he makes a valid point that they're intentionally misleading and a scheme to sucker someone out of money.
Let's look at Jack Dorsey's 'minted' first tweet.[0]
This is in no way gives to exclusivity to 'owning' this tweet. It literally is just 'owning' the rights to 'Valuable's' NFT of this tweet (if they even are committing, legally, to never create another NFT of it). There are no limit of companies that can do exactly what they are doing and 'selling' this tweet in the same way, nor is Jack Dorsey committing never to accept those 'sales'.
To me, it seems like an outright scam that anybody but Twitter is trying to do this.
Same for art though. You don't own a copyright. You own only the bragging right as well as the useless physical canvas and paint. All artful beauty it has can be copied much more cheaply than the original painting's price.
Until the price of carbon is accounted for in the price of electricity, using ridiculous amounts of electricity for such trivial uses is externalizing the costs of these transactions onto all of us.
We are facing a climate crisis that is projected to accelerate a mass extinction crisis and create tens of millions of displaced refugees and yet we are spending 200 KgCO2 of wasted compute on a 'digital ownership token' on this: http://cryptoart.wtf/#https://superrare.co/artwork-v2/the-fo...
The "rest of us" don't pay for the electricity use. The ETH miners are paying for it directly. And creators and buyers are paying for it indirectly through ETH usage. It isn't an externality. That's like saying the physical art world shouldn't exist because it uses physical real estate, electricity, and raw materials to be made on -- and the rest of us pay for those things.
Negative environmental consequences with costs imposed upon society are literally externalities. All the things you list are textbook examples.
The electricity argument loses weight when you look at the world allocation of GPUs. Although mining has cut into supply, they're also being used for gaming, workstation, and cloud compute tasks. One way or another all of that chip supply would be sold, and then it is a case of benchmarking the social value, load and efficiency of the different uses to some utilitarian optimum.
Much easier to cut off the framing early and declare "all crypto is bad and has no value", which is what the contra side is leaning towards. It's easily embraced by authoritarian-left ideologues, since their inclination is to reject market solutions anyway.
My suspicion is that we'll all be surprised in eighteen months. The "boom" will be gone, but an unalterable trend will have taken hold regardless, and the platforms will have largely moved on to proof of stake, closing the environmental argument.
The thing of cryptocurrency is that at the end of the day, all you have is a file of a few hundred gigabytes that somehow represents hundreds of billions of dollars of market value. That value means that an absolutely huge number of eyeballs are scrutinizing it, looking for a way to protect their investment. They can't "turn off" the system and make sweeping changes. The hypotheses of anything-goes "assassination markets" have not panned out - crypto has become a sector with a civic outlook.
> One way or another all of that chip supply would be sold, and then it is a case of benchmarking the social value, load and efficiency of the different uses to some utilitarian optimum.
I disagree. Cryptomining created a new market that increased the demand. There's no reason to assume the same numbers of GPUs with the same utilisation rate would be in use if we didn't have crypto. Thus, it does have direct environmental consequences.
Not all of that electricity use is a total waste: a friend of mine uses part of his mining heat to warm up the apartment in the winter. It's an expensive heater though.
> They use an astonishing amount of electricity to create and trade. Together, they are already using more than is consumed by some states in the US. Imagine building a giant new power plant just to make Christie’s or the Basel Art Fair function. And the amount of power wasted will go up commensurate with their popularity and value. And keep going up. The details are here. The short version is that for the foreseeable future, the method that’s used to verify the blockchain and to create new digital coins is deliberately energy-intensive and inefficient. That’s on purpose. And as they get more valuable, the energy used will go up, not down.
Binance Smart Chain has many NFTs and doesn't use Proof of Work. Ethereum is migrating to Proof of Stake soon and will eliminate the power waste argument. If he wanted to attack NFTs he should have used a better argument.
"Don't worry, we'll be on PoS soon!" is what the crypto space has been saying for years, and as far as I can tell right now the majority of NFTs are done on PoW chains, and still people doing them trumpet "but soon!!" instead of putting their money where their mouth is and actually using a PoS setup today. As mentioned elsewhere, some actually do, props for that, but the overall impression of the crypto space is that they're completely fine with deflecting to some point in the future, and then they shouldn't be surprised if people judge what's actually done and not what's possible and are a bit tired of that argument.
Even without proof of stake, it's possible to make transactions low-cost.
Bitcoin is going to burn power whether or not you attach your token-tracker to it. If you design a system with thousands to millions of users that makes one bitcoin transaction per day to secure itself, then it's responsible for a pretty negligible amount of wasted power.
> Even without proof of stake, it's possible to make transactions low-cost.
only at the cost of reversibility.
the central thesis of proof of work is that an attacker must expend more energy than the "main" chain, across the duration of time they want to be able to reverse a transaction (older transactions require more time).
The amount of energy expended is determined by mining rewards - over time, mining profit will converge to zero, miners will expend however much energy the mining rewards buy.
as such - any reduction in energy expenditure (i.e. a reduction in mining rewards) will lead to a reduction in security, making it easier to reverse transactions.
I know what an NFT does. It doesn't even give you ownership on anything other than a blockchain print. To me, the logical conclusion of this is copyright protection, where, say, an eventual platform only plays content where the player can only be verified as the owner.
It’s to much of a hypothetical but in general it would be the same as being the registered owner of a domain name and selling/leasing it direct to someone.
In other words if I own abc.eth and abc.com and sell them both to you directly but I keep the abc.eth NFT and keep abc.com, then you could still bring me to court to enforce our agreement
Neither the content nor the ownership is protected by the NFT. The NFT has literally no connection to the content at all, except that someone said, "Hey, buy this and you own the 'original'!" Except in all things digital, "original" means absolutely nothing.
There's a guy who has been selling property on the moon[1]. This is exactly the same thing.
People are attempting to create a new world so scary and different to what you know, that it seems insane and completely off base. But we know what we're doing. We know this is leading to the future of a world where artists and fans can take back and redefine ownership.
It doesn't matter what you think ownership is. We're redefining it. :)
It doesn't have connection to the content, unless it's declared that it does.
All intellectual property law works this way already. The copy you have does not have any bearing on the copy someone else has, but we created laws that link it back: you don't "own" the copy you have, and using it in certain ways is made illegal.
NFTs as they are now, without any legal protection, are still innocent, but they are bought because people want to "own" something. Since NFTs don't actually provide technological means to implement that "ownership", the next logical step is to declare it by law: "owning" an NFT gives "ownership" of the content. I hope it never comes to this.
NFTs make perfect sense for representing a claim on things that can be used, like event tickets or in-game virtual goods. But as certificates layered on top of collectibles... I'm not so sure.
With something like CryptoKitties, you can do something with the tokens (play a virtual pet game). But with something like CryptoPunks you're essentially paying for digital beanie babies, which are worse than real ones since anyone can display and enjoy the image you paid for.
You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set. When a set's popularity wanes, so does your token's value, and your ability to show it off.
I'm always happy to see artists being paid for their work, and if they can make some money during this craze - more power to them. Beyond a few creators being rewarded, it seems like this is going to be 90% bubble (with plenty of hucksters), and 10% real use cases that stand the test of time.
> it seems like this is going to be 90% bubble (with plenty of hucksters), and 10% real use cases that stand the test of time
All the most interesting developments in computing start like this. This is good. The future is being born now and not without the required creative destruction.
CryptoPunks will be in the MoMA one day. They are a pioneer — and will be valued as such. Derivative works and obvious cash grabs are a bubble and low effort art will trend back to $0.
Most contemporary art has a lot more effort put into it than you think. It’s perfectly okay to not value that effort, but things like those “black squares” or whatever actually aren’t just that. If you see them in person, you can see how the different brush strokes overlap and theoretically signify different things.
The example you're using isn't contemporary, it's over a century old, and it's a design for a stage curtain. It's not valuable for the effort put in * (it's literally just a solid black painted square), it's valuable because of the point in time it represents w/r/t art history
* edit for clarity: what would be commonly considered technical artistic effort, although a large % of graphic designers would disagree with that as composition is a skill, and conceptual artists would disagree due to the thought put in (which imo feels post-hoc but hey ho)
Just to expand on that, I love Malevich as an artist. I've travelled specifically to see exhibitions of his and his contemporaries' works. If I had large amounts of spare cash and I were in a position to buy an original, I probably would. From an artistic pov, I feel the ideas he introduced are extremely important. From a technical pov, I think his colour and composition are superb. From a conceptual pov his art is a pretty laser-sharp distillation of the ideas he had regarding what art means or can mean. From a personal, professional point of view, I'm trained as a designer, and worked as a designer and illustrator. The tenets of constructivism and suprematism have been formational to much of my approach to design.
So, it's not that being technically spectacular in some arbitrary "really accurately painted or drawn picture of reality, like a photo" way makes art valuable (photography effectively destroyed that a long time ago, sorry!). It's that it has some special significance. If that significance is more than personal, as in it has some historical/cultural significance, then it becomes valuable. There's no point to it, it's art. So w/r/t original subject, above reasons make me think twice about any knee-jerk cynicism I have toward it (which I do have, I just have to have an open mind)
Art is what people say it is. Its appreciation is what probably separates us from the animals and certainly separates us from the AIs.
We say "Beauty is in the Eye of the Beholder", because it's true. There will be no accounting for a persons own taste or for what society finds fashionable today or over time.
If what you personally call Art and its story speaks to you then it is valuable. If others share that feeling then it is even more valuable. It's just that simple.
I personally like the idea of commissioning art like what big families did back in the Renaissance, but use Social P2P networks like what is already happening with customized digital Avatar makers/artists. NFTs have a role to play here equivalent to an old Renaissance painter signing the bottom of the painting, only now it's with the owner(s) and all future owner(s) signatures there for all to see.
I'll give you the Animals as your likely right and it's more a turn of phrase than a logical argument, however I have to respectfully disagree with regards to AI. A thing that is trained to recognize and prefer is exhibiting behavior - it is not experiencing 'appreciation' with all that implies at the human level. A machine may pick good art out of a line up but that art will not improve its mood or inspire it to take up painting or make it want to write a poem to an old lover it was reminded of. AI can be useful in creating art perhaps, but I don't see it ever as an end user consumer of art's appreciation.
But how good are they going to be at laundering money? I can't imagine they're going to be in the class that contemporary art is in, so they aren't really comparable.
> You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set. When a set's popularity wanes, so does your token's value, and your ability to show it off.
And only as long as people recognize your NFT claim to ownership as even being valid. Other people may view that brag as being as sad as someone bragging about their land holdings on the moon: https://lunarland.com/.
What rights do you have in a tweet that you made in your capacity as an employee of a company?
What rights do twitter as a company have with respect to tweets? Or to impose restrictions on the ability of people to transfer rights with respect to tweets?
Right. This is an example of the dumbest kind of NFT. It's not even a signed original, it's just a token that says "You own the thing!" but for a resource that anyone could download anyway and ownership isn't tied to use or display. It's about what I expect from Jack.
At least with cryptokitties, love em or hate em, the NFT was the character and the permission, so while anyone could admire your cat nobody but you could publish actions from it.
> NFTs make perfect sense for representing a claim on things that can be used, like event tickets or in-game virtual goods.
There’s absolutely no reason for that to be decentralized, only one party can honor the tokens anyways. Like most things crypto they don’t actually make sense for anything.
Agreed. I still think there's some charm to the idea that it can be supported passively but as you say the fulfilment is ultimately not passive, so it doesn't really gain you all that much.
> If that’s what you want throw a “transfer” button on your site.
Well when you buy a ticket from ticketmaster you can’t exactly dictate what features they offer through their platform...not to mention ticket master is a 3rd party service that they take a massive cut.
blockchain is cutting these 3rd parties out in these use cases, allowing the event holders to easily mint the admission tickets and users take advantage of peer to peer open source technology. Meaning easily trace the tickets and buy/trade/sell without relying on Ticketmaster.
The thing that makes ticketing difficult is not minting and selling unique items of inventory - that's a well understood problem with many viable solutions. Nor is verifying at any given moment if a single piece of inventory is valid and who owns it - again, that's a solved problem.
The secondary markets in ticketing exist because there's an excess of demand and entities who can exploit access, speed, or technical know-how for arbitrage. Blockchain ticketing companies don't fundamentally change that statement - they enable it.
No one likes Ticketmaster - but to call them a 3rd party service that takes a massive cut is inaccurate. Ticketmaster is owned by Live Nation, which usually owns both the venue and the artist's tour schedule. And owns the primary and secondary ticketing sales. So Ticketmaster is usually the first, second, and third-party in ticketing.
Blockchain doesn't magically fix this. It doesn't change the deep relationship Live Nation has with labels and artists, their fodness for excluding artists who play at rival and independent venues, their habit of defining contract requirements that can only be fulfilled by Ticketmaster software...
Blockchain is solving all of the wrong problems in ticketing. I don't need a distributed, trustless ledger of who owns a ticket when all of them are issued by and redeemed at the same location. The only real reason to push for blockchain in ticketing is to help scalpers hide what they're doing.
> The secondary markets in ticketing exist because there's an excess of demand
I don't buy "excess of demand" as being fundamental, though, except in the most technical sense. Imagine a super niche event, where the organizers know there are exactly 200 fans on the entire planet, and they offer that many tickets on sale. It still makes sense for a random scalper to take a loan, buy all 200 tickets, and resell them with a markup. It would still make sense if the organizers offered 300 tickets, i.e. greater supply than demand in terms of heacount! A scalper could still come ahead buying all 300, selling 200 at a high enough markup, and feed the remaining 100 tickets to a cat.
I think scalping (arbitrage) can occur in any situation in which the supplier isn't charging the maximum the market can bear (perhaps that's what is meant by "excess of demand" and I'm missing some technical definitions here).
>Well when you buy a ticket from ticketmaster you can’t exactly dictate what features they offer through their platform...not to mention ticket master is a 3rd party service that they take a massive cut.
Is this an argument? We're talking about ticketmaster moving to a chain, why can't we talk about them moving to a cheaper better service that isn't based on crypto?
And besides, crypto isn't free. The network takes a cut. Doesn't it cost like $20 to perform a transaction right now?
There is a reason. Just not a technical one. It becomes obvious when you ask the simple question: why hasn't it already been done? The answer is that it's in no actor's local incentives to create the public commons.
Why is there no global market place for reselling digital event tickets? Certainly Ticket master and the other retailers could agree on an open standard protocol, pay for a centralized clearing house, and create a digital market place. But they don't. And they don't because it isn't in any of their local interests to maintain such a thing.
This problem, which is fundamentally social and economic in nature, is what is solved by smart contracts. It allows the creation of a public commons, not one that technically couldn't exist, just one that no private actor is ever incentivized to create.
The example you give - reselling tickets, is actually something that is directly something ticket sellers want to discourage, crypto doesn’t solve that.
And there's always a necessary third party to a p2p ticket exchange anyway: the entity that actually puts on the event the ticket gives entry to. Where they want ticket exchange (or at least refunds) to be possible they can do so in a centralised manner and when they don't, they're not a middleman that can be cut out.
One could imagine it being a kind of emergent community-organized event, somewhat modeling a decentralized peer-to-peer network itself. There will still technically be at least one intermediary of a sort, but hypothetically the only real intermediary could be restricted to the single person or group who initially proposes the event and issues the batch of ticket NFTs.
There are plenty of major concerns here, like how security and access are physically enforced if there are no official organizers or designated volunteers, but in theory you could maybe distribute a phone app so everyone is automatically scanning for unauthorized people, and just rely on physically capable attendees and police to deal with potential security incidents. Still probably a recipe for utter Fyre Festival-esque disaster and lawsuits in many cases, but feasible in theory.
If I’m in ticket selling business, if I can maintain a level of control with crypto I can, but back tickets and resell them, but most importantly I can capture any upside I missed by selling the tickets for too low of a price, and the purchaser resells the tickets for a profit given I get a cut of each and every transaction
They can verify ownership by signing something with the wallet that the token is associated to (signing is free). They're only able to do so if they own the private keys of the wallet.
It should be noted that private keys can be shared if the owner wishes. In the case of using NFTs as event entry the event organizer would still need to keep a record of which NFTs have been used already for a given event because the wallet can be shared. Third party services will almost certainly pop up to fill this need.
Exactly. It'll have to be like a software license key: in theory you can share your key, but the service can just authorize and lock in the first device/entity that presented the license key. This kind of DRM is often annoying for regular customers since you may have to manually contact customer support in order to request a transfer of the license to another device you own, but it does help mitigate non-paid use to an extent.
This could be enforced for real-life events by handing out a wristband with a GUID QR code to the first person to demonstrate they possess the private key that owns a particular ticket token, then never handing anything out for that token again, and also triggering an alert if the same QR code is ever seen on more than one person (to mitigate "pirates" who might offer identical or similar-looking wristband material and "replay attack" with an existing assigned QR code).
There are probably other attacks I'm missing (including obvious existing stuff like people just sneaking in and evading wristband checks), and there are lots of questions about whether an NFT or decentralized blockchain is a smart idea for a given live event, but from a security perspective I think it should probably be feasible if an event organizer does decide they want to do it for whatever reason.
However, there are other analogues that I think are much less feasible or perhaps totally infeasible. There are some NFT... apps? platforms? companies? DAOs? that are providing some service where an NFT grants you access to something like a restricted Discord server. Even aside from how valuable or sensible that may or may not be, there's absolutely nothing stopping a token-holder from just sharing their Discord account email and password with as many people as they want. The platform and the Discord servers would have no idea if anyone's doing this and how many people could be sharing any given account. (Discord employees could potentially detect some cases but I doubt they'd play any part in this.)
For a real-life physical event, someone can't just copy your body and make it a shared proxy for pirating, but any NFT ticket use case short of in-person events is probably often just going to rely solely on the goodwill of people to not abuse/pirate things, and we all know how that goes - especially in anonymous online communities.
The rubber-meets-the-road real-world crossover part is where NFTs and "Web 3.0" in general tends to become really shaky. I'm still mildly optimistic about it in the long-term, but I think a large percentage of existing use cases are going to fizzle as pointless dead ends that are surviving purely based on flavor-of-the-year hype and fad waves. Things are obviously stuck in one such fad right now.
> This could be enforced for real-life events by handing out a wristband with a GUID QR code to the first person to demonstrate they possess the private key that owns a particular ticket token, then never handing anything out for that token again, and also triggering an alert if the same QR code is ever seen on more than one person
This is quite close to what unlock-protocol[1] did for several conferences pre-covid. Overall it worked, though there are some key difficulties: gas prices make interesting on-chain things too expensive for most people, and wallet ergonomics aren’t great for this sort of thing.
Scalping is also selling tickets at market price - after first making sure the market price is a big multiple of what it was before scalpers got to work.
I like the idea of building in a percent cut taken out of the resell price and given to the venue/artist. It taxes scalpers and allows artists to benefit from secondary markets if they mispriced their initial offering. Its also easy to do in a contract
What does the tokens even mean anyway? It doesn't mean "I'm the owner of this one in five paper canvas art", it just means "I'm the owner of this one number, which someone decided is related to that digital piece of art for which there can exist infinitely many copies that are perfectly identical".
What does it even mean? Let's say I buy a NTF $1000 and get a digital copy, what prevents me (barring legalities) to perfectly duplicate it and massively redistribute it (not the token, the distributed supposedly high quality file) for a fraction of $$$ and turn a profit (because since it had such a high price it must be in high demand)? The question is not about the legal consequences but about the thing you own: of you have one original painting you have only one, it's quite hard to exactly duplicate it for resale.
I may be naive (the dropbox-is-just-rsync kind) but I've yet to see a tangible explanation of a use† of CryptoArt/NFT that could not be done with `xxd -l 128 -p /dev/random` and PGP[0].
† No. "being in the blockchain" brings absolutely nothing (except burning watts). If the author wants to reissue anything he readily can. You. Just. Own. A. Number. I also hear some picture the author getting a cut of resales of the token, which is even more crazy when you manage to entertain the thought while trying to keep a straight face.
> Let's say I buy a NTF $1000 and get a digital copy, what prevents me (barring legalities) to perfectly duplicate it and massively redistribute it (not the token, the distributed supposedly high quality file) for a fraction of $$$ and turn a profit
The file is usually publicly accessible, why would anyone give you money for something they can just download?
Some rich dude has bought the "first tweet" for $2.5 million, despite the fact that it's publicly accessible [0]. I imagine it's about showing off how rich they are. They could achieve the same result by throwing $2.5 million into a furnace.
I don't think that's the question. That guy paid for the exclusive NFT thing, but no one else is going to make a profit selling cheap copies of that tweet.
What rights do you get with ‘owning’ the first tweet? Who could you buy those rights from? Do you get any responsibilities along with that? Like if UNESCO declare the first tweet a culturally significant artifact, could you be held liable for allowing it to fall into disrepair?
And what does the existence of an NFT allow you to do with respect to that bundle fo rights you bought that couldn’t already be done by having someone write down a rights assignment on a piece of paper, sign it and hand it over to you in exchange for some consideration?
The buyer gets to own not the tweet but a "digital certificate of the tweet" which is the actual NFT thing. So what they buy is a certificate although I'm not sure what it certifies.
Correct. Although there is only one brand that has sold a Tweet NFT for $3mil.
The enforcement, interestingly, is more traditional; the owners of the "Valuables by CENT" trademark can use existing legal structures to prevent anyone else using that name.
Meanwhile the NFT is digitally linked to the Valuables by CENT smart contract on Ethereum, which will presumably have an 'author' property attached to it, set to the string "Valuables by CENT".
Sotheby's was founded in 1744 (1). They have a track record, a _brand_ to maintain.
Your average blockchain was founded recently, and have a lot less to lose taking the money and running, or popping up again under a new name, for a second go at the same shtick.
> Also, how is "there will never be another certificate for the same thing, from the same brand of certificates" technically enforced?
A Merkle chain[0] append-only ledger contains a transaction minting the certificate, and the consistency rules for that Merkle chain mean that any extension of the chain which mints another such certificate is not valid (the same as a extension that spends money from a account with no money in it is not valid).
0: technically a blockchain specifically, but that's not actually relevant
But when you buy a baseball card you get a card. Here it seems that you only get a receipt stating that you have paid (aka the certificate) AND NOTHING ELSE.
If I understand it correctly, that receipt in conjunction with your keys allows you to prove you own the NFT and can control it on the blockchain(sell it, trade it, etc).
> If I understand it correctly, that receipt in conjunction with your keys allows you to prove you own the NFT and can control it on the blockchain(sell it, trade it, etc).
And one should be happy to control the receipt of their purchase of imaginary goods? Ok.
But the NFT is the receipt, if I understand correctly. You own a receipt (the NFT), and you can trade it, but why are people buying and selling receipts? You make a payment, you get a receipt, and nothing else, which makes absolutely no sense. Usually, when you buy something you get a receipt for free and then the actual thing that you have bought.
I think at that point the platform upon which the receipt resides will prevent people from making duplicates on their chain, and the owner of the receipt have control over buying/selling it.
If you have essentially bought a jpeg image, you have as much control over it as anyone else: Anyone can view, transmit or edit it, etc. Your "proven purchase" grants you exactly nothing extra.
But this would only make it unique on the CENT blockchain, no? What if another blockchain becomes the standard offerer, wouldn't that devalue everything on the CENT blockchain? Further, wouldn't we expect multiple blockchains to be competing to become the "primary" chain in which these items are deemed valuable, i.e. CENT and blockchain A & B & C trying to be the medium which holds a unique cert to Jack's first tweet. Jack's first tweet has a unique copy on each blockchain, but being that each chain has it's own NFT of jack's tweet, the digital certificate of the tweet is not necessarily unique. Or is twitter supposed to maintain their own blockchain that creates NFTs for each of their tweets and users are going to assign the most value to this chain since it's maintained by the company itself?
Further, I don't understand how this works in music/art. Grimes' copy of her music is issued on Nifty Gateway, but isn't that art only valuable as long as users assign value to the Nifty Gateway platform? What stops another art blockchain from becoming more desirable/valuable and creating a NFT of Grimes' art there? Doesn't that erode the value of the original NFTs?
That's correct. Which makes it all even more absurd. Although the smart contracts are there forever, so at least it can't "go bust" (although the web front-end certainly could).
This is the argument that gets me applied to bitcoin. It's first mover advantage. And the "gold2.0" market value is this perceived incorrectly if there is no other moat. That's why today we are announcing ... Bitquan!
There's no social validation in throwing $2.5 million into a furnace. Spending $2.5 million on a tweet means you are validating everyone who believes that NFT's are real and an industry with a promising future. Especially in an environment where these objects are so hyped and driving a lot of venture capital investment, participating has large social benefits.
It's not just some "rich dude". The highest bidder [1] (so far) is Justin Sun, creator of TRON crypto [2]. I see this as a big publicity stunt for his personal branding.
Not too different than paying $4.5M to have a dinner with Warren Buffett [3].
> "I'm the owner of this one number, which someone decided is related to that digital piece of art for which there can exist infinitely many copies that are perfectly identical".
Which the ARTIST has decided is a digital certificate for the price of art.
Just I could make a duplicate of the supreme brick, my duplicate wouldn't have as nearly much value if I tell people it is a duplicate. Supreme could sell bricks again but they probably won't. There's nothing physical that's stops them but there's still an implicit agreement between artist and buyer.
I may not wish to buy own a supreme brick, but I can at least understand why people find it valuable.
Jesus Christ Mary and Joesph, what is the name of all things pure and holy...
Look, I get it outside of the money laundering scheme to modern art, throwing around how rich you are by buying "stuff". I get it. Tiny pecker syndrome. But let's stop and remember that Rockefeller and Carnegie, the OG capitalist titans, were dick measuring by donating their money. Sure "to the arts"... at least they were building halls and museums. They participated in some solid currency velocity that helped pay the wages to construction contractors. Still, they were assholes, but a lot better than just shoveling money between other rich cunts as a form of showing off.
Personally I think these should have a legal license associated with them. Like if the author transfers NFT it transfers the creative license as well (so the purchaser actually owns the art). For instance, Nayan Cat beanie babies can now only be manufactured by owner of said token, and whenever the new owner transfers the token the license goes with it. Etc.
Basically, if Token == Intellectual Property ownership then it makes sense.
This would mean if a creator, say a musician wrote a song and transferred the NFT and it became a wild success in the future, the owner would earn profits from the investment, but so too would the content creator receive the mentioned dividends proportional to the value.
How would you resell a stadium event ticket with a centralized setup? You'd need the event organiser to run the marketplace, which isn't always desirable.
Why is a secondary market in stadium tickets a desirable thing?
If you want to use your ticket to go see the event, use it. If you don't, simply do not go. If you do not want to go and want to recover your costs, sell it back to the venue at the purchase price.
The blockchain is only infrastructure. It is an open decentralized cloud for financial services/contracts. Sure vendors could also have their own service and marketplace but why should they. This way they just print and sell some NFTs and that's it.
It is funny: there are essays in this thread, authors clearly breathless to explain the utility or lack thereof of NFTs.
Yet your two sentence explanation is the most comprehensive.
NFTs enable the possibility of a market that is orthogonal to the channel that distributed the token.
The viability or existence of such a market is not guaranteed, but the likelihood that one could emerge at all has gone up thanks to the novel properties of NFTs.
But of course there’s only one place you can redeem them. That means either that party is ok with transfers (in which case your point is moot because they can offer that themselves like Ticketmaster does) - or they’re not ok with the transfer in which case they won’t honor the token, making your point moot.
So how does the party best offer a trading infrastructure when they are OK with it? Implement it? Good luck. Easiest right now is to offer an ETH based token, and you can trade it for anything you want.
When it comes to in game items... why should one game honor another game's items? EVE Online and World of Warcraft dont exist in the same context. Even if you did it between Guild Wars, Elder Scrolls online and WoW, you still cant interchange the items due to stats, style and general game mechanics let alone the coding rework to have these items function the same way between games.
If there was an mmo framework that is shared between different games, I guess. But even then, why have a universal currency instead of just making it framework/platform specific? It's less work and is all handled in a fast centralized DB. At that why create the extra work of PoW or PoS or whatever algorithm solving process it'll use. currencyAmount += tradedAmount is way easier and makes more sense on the game dev side.
All these anti NFT arguments amount to is, "This is solutionism at its finest, but people already bought koolaid in bulk...so enjoy the show."
In my opinion, it only has the possibility of making any sense if a game itself is (largely or entirely) an Ethereum dapp. I think a WoW NFT would make zero sense (and I think Blizzard would agree, barring the hypothetical potential of trying to exploit a fad purely for extra profit), but an NFT representing an asset in your Ethereum-based Second Life "d-game" could possibly make some sense. I know some dapp games exist and more will be made, but I'm not sure how practical or fun they are or can be.
Even then, there are still a lot of questions: what makes the d-game actually interesting/novel/unique/fun and an appropriate, creative, and clever use of a decentralized blockchain.
And although I mostly agree with this essay and the Medium essay it's referencing about environmental impact, I do think NFTs have some potential use cases outside of games, art, and bilking greedy people. I think those use cases just have to be a little further along the "blockchain from end-to-end" spectrum.
Remember that crowdfunded, over engineered juicer? It was some $400 and claimed to do like 100 pounds of force on a pre-juiced juice packet to squeeze into a glass for you. Some other article showed you can just squeeze these packs by hand into your glass with barely any force. This was "the Keurig" of juicing.
Total shit show of over engineering and solutionism.
I see the same thing with crypto and NFTs currently. Everytime I have this discussion in person, I always say that I do believe there will be a viable digital currency of some sort in the near future. The current gen of tech has proved the want, which is important, but now a real how is needed along with commonsense.
Like, theres a real want for an easy to go, healthy juice. Just bottle it and sell it that way. Why go through the extra step of a juicer if the shit is already juiced. I won't doubt their drinks were good. But they got caught up in solutionism gimmicks. Digital currencies are caught up in the blockchain gimmick.
This assumes that the centralized minter (and ultimately redeemer) of the, say, tickets, is both willing and able to run a secondary marketplace for them.
There is a collectible card game under development which i think is similar to Magic The Gathering. https://coa.se/ In this case it makes perfectly sense. It will be released on the Tezos blockchain which is already LPoS. https://tezos.com/
It serves the token holder if said party just declares the ticket or other item a forgery or otherwise invalid, and doesn't let you in the venue or locks your account. It also serves the holder if they want a safe secondary market to resell or trade tokens.
So basically, decentralisation doesn't serve the vendor, only the consumer.
Yes it does because within the token, you can program that the token creator gets a share of the profit.
Mark Cuban talks about this regarding dallas mavericks tickets. Suddenly the ticket creator can still benefit from scalpers buying everything. Or, you can set the next sell price to be limited to only 10 percent more. etc.
There is a reason for artists and musicians to move to NFTs as well, as royalty is built in. See kings of leon releasing their album as an NFT.
Cryptopunks will always have mindshare as an early mover. In the collectible world it will maintain decent value. More than the original purchase prices.
In many worlds, image NFTs you own are displayed with special indicators that they are yours. You can print out a picture of the Mona Lisa, but its not going to have the same impression as the real painting.
Original Beanie Babies are worth a fortune.
This craze is happening because many people realize that at the least, there is sustained value in first-mover NFTs of various types. Before dismissing this as yet another craze or bubble, consider that a digital world where 90% of NFTs are worthless is no different than real life with commoditized art.
I believe the rarepepewallet project is considerably older (on the crypto time scale) than cryptopunks, maybe the first fully functional NFT market, and operating before the term was even in use. but its less polished and much of the content is laced with various racist smells.
> But with something like CryptoPunks you're essentially paying for digital beanie babies, which are worse than real ones since anyone can display and enjoy the image you paid for.
It seems like the obvious counterpoint is that perhaps all of these “collectible” scarce physical things which are bought and sold for huge amounts of money (art, coins, relics, etc.) are in fact being used simply as a way to identify a unique “token” that is good for generating hype among a group of people and exchanging value among that group because it has a story attached to it and isn’t easily counterfeitable. It’s pretty obvious that a decent reproduction of most of these things would deliver the raw surface aesthetic experience to the vast majority of interested people and would cost much less. For many famous paintings it’s easy to understand why someone would want a reproduction in their house for decoration. It’s less obvious to me why someone would want a reproduction of an old coin with a minting flaw, but perhaps that’s just me.
It is permissionless. You can transfer BTC without a bank or eBay or the postal service being involved. It is the best way to buy LSD from a stranger. So it has some value because of that. Similar to rare wine, most of the price is due today to speculation and asset diversification, and rich hobbiests.
You can transfer an NFT to someone else exactly the same. It's just that someone has made a real world distinction between 2 distinct NFTs, like if someone found that a particular coin's hash spelled out "Jesus will rise again" in base64.
I agree re: rare wine and rich hobbyists. Bitcoin's value is much the same, although without the wine.
Everything Seth is saying about NFTs is true for every crypto coin.
But there's no limited supply of digital coins. I could make one right now, and owning Bitcoin is no different from owning my one except that speculators place more value on Bitcoin than my unknown currency. Everything Seth said about NFTs is true for all crypto coins.
You're not wrong, but there can be more than one thing playing such a role. Bitcoin is Beanie Babies, Ethereum is a varied ecosystem of pet rocks, Monero is Pokemon cards with traces of white powder. Can't hurt to diversify your speculation.
You're correct, though if I understand correctly, some NFT platforms do provide some (centralized) feature for "unlocking" content. For example, you could upload a full resolution art piece to an NFT platform or any other place and have the server serve the content to any request that proves ownership of the token.
This is a pretty terrible system, though, as it's completely off-chain and not "Web 3.0" or decentralized in the slightest. The server has to store the "private" content in a private centralized database, so the server owners also can access the content, and any hacker could access the database and publicly dump all of the supposedly token-walled content.
It's just taking advantage of the fact that any computer can determine the Ethereum address that owns a particular token and can check to see if a message was signed by that address's private key.
I could imagine a future standard that could maybe integrate this into Ethereum proper, though I'm not sure if it's technologically possible.
There's no way to prevent someone from just publicly releasing the art, but one could imagine some system like the full resolution piece stored as a public key-encrypted blob in the blockchain which can only be decrypted by a token holder.
Maybe upon token ownership transfers the key could be encrypted with the token buyer's Ethereum address public key, though I'm not sure how or if it could work since I think the original content key would have to stored on the network in some fashion in order to later encrypt the key for token owners. So it might not be possible even in theory, though I don't know nearly enough about Ethereum and cryptography to say with any certainty.
Except it is different in a way. Owning a physical autograph is different from owning a picture of one; the physical autograph can't be reproduced and has value due to its uniqueness and to its physical existence.
It would instead be like owning a unique piece of paper with a unique number on it, which somehow corresponded to a picture of the autograph. Now the autograph portion is identical between you and anyone else (neither of you has a physical autograph); the only differentiator is your piece of paper. Where is the value?
The NFT is cryptographically signed by the author. You can't forge it, and it's publicly, verifiably linked to the author. It's even better than a physical autograph.
So you'd place value in a cryptographic signature from the author that ties the piece of paper in my analogy above to the photo of their real life signature? How much would you value that at, given that anyone else can acquire and enjoy the exact same photo of the signature that you enjoy, just without the piece of paper saying "this photo that everyone can see and enjoy is owned by andypants"? If the value you'd place on that piece of paper is above zero, why? (Genuinely curious).
> in-game virtual goods. But as certificates layered on top of collectibles... I'm not so sure.
I agree - the problem with most NFTs at the moment is that you can't actually do anything with them, apart from trade them.
There are games coming out now (e.g. Goal Revolution[0]) where your NFTs' properties (and, by extension, value) change based on what you do with them (how you use them). If the NFT thing is going to have any future, it needs to follow this example.
> the problem with most ~NFTs~ art at the moment is that you can't actually do anything with them, apart from trade them.
I dot agree with this statement but perhaps it'll help you expand why you think this way. As the article says, you don't have to own the Mona Lisa to appreciate it's beauty.
This always comes down to how you understand value.
How valuable is Jimmy Hendrix guitar pick? How valuable is a lok of Justin Biebers hair? How valuable is a book owned by Charles Darwin?
Of course NFT is a bubble just like about every other thing humans create, but humans will always attach value and meaning to dead things even digital ones.
And so NFTs can be used for many things including allowing people to buy something overhyped that will depreciate in value.
Only in this case the value is stored in “digital gold”. Unlike gold, which is chemically stable, I’m far from convinced the digital format itself will end up sticking around long term.
Right, but unlike TCP/IP, which is a stateless protocol, the validation of an NFT requires a specific blockchain. While Bitcoin and Ethereum seem to be “here to stay”, they both seem under constant competitive pressure from other blockchains.
NFTs are nonsense and just as much a pyramid scheme as everything else crypto. People will get left holding the bag at the top just like with CryptoKitties. I have several hand painted reproductions of famous paintings (impressionist). I get just as much enjoyment looking at them on my wall as I have at the museums looking at the real ones. I don't need to have $100M. I'm glad that content creators are getting paid now but remember that most "artists" end up penniless and their art is only highly valued posthumously.
>NFTs are nonsense and just as much a pyramid scheme as everything else crypto. People will get left holding the bag at the top just like with CryptoKitties.
You can say this about literally every non-productive asset, including NFT's real-life counterparts eg. painting or trading cards.
Physical goods have a counterfeiting risk. Is it possible to use NFTs to prevent counterfeiting by verifying that a product is genuine? If not then they really have no use. Physical goods need verification but digital goods can be replicated perfectly. A "bootleg" is just as good as the original so no verification is needed.
>Physical goods need verification but digital goods can be replicated perfectly. A "bootleg" is just as good as the original so no verification is needed.
The same can be applied to physical goods as well. Why do people pay millions for the original painting, even though they could probably get a replica that's identical to the naked eye for much less? Clearly they're interested in more than it being "as good as the original".
How is digital not affected by physics ? It's all relying on electricity and thermodynamics to begin with.
Furthermore digital assets undergo similar attrition to physical goods through people losing access to their goods. The BTC block chain is notorious for its forgotten wallets.
The entire point of NFTs is that you can attach a verifiably limited supply to a set of collectables. Just like with their real world counterparts, you can have knock-offs and reproductions that people collect, but the owner of the actual original one knows they have something of a limited set.
I’m skeptical about NFTs too but trying to keep an open mind, because at the end of the day, while you or I personally don’t need the 100M to enjoy the impressionist art, you can’t ignore the fact that someone out there is in fact willing to pay that for the original. And that’s kind of the same weird authenticity bragging rights situation.
Well there's also the allure of the physical object that the artist created by hand. People done go see the Mona Lisa rather than a replica for bragging rights. That's not there with digital goods.
There's a big practical difference between owning an original and owning a print. People have discovered secrets behind paint or canvas before. New technologies often allow us to introspect qualities of the art that we previously didn't know (chemicals used, techniques, tools, lifestyles, etc.). An original is a snapshot of history that includes tons of unique information that is simply not available in prints or nfts.
while you or I personally don’t need the 100M to enjoy the impressionist art, you can’t ignore the fact that someone out there is in fact willing to pay that for the original.
There are people who happily pay $10,000+ for an Italian purse. There are people who are happy with a $10 Chinese knock-off.
There are people who happily pay $2,000 for an Apple laptop. There are people who are happy with Linux on a $100 machine from Goodwill.
There are people who go outside to feel the breeze. There are people who are happy with a fan.
I don't understand NFTs at all. But I have to remind myself that often value is subjective.
You should also account for how early NFTs are. If you've been following blockchains for a while, you may recall that in 2012 and 2013 there were an ocean of Bitcoin knock offs that distinguished themselves by changing things like the difficulty adjustment algorithm, or the hashing function, or the total coin supply. All of these "altcoins" to experts seemed to be completely useless and many chalked the entire category up as worthless. Eventually of course a lot more interesting altcoins were invented, and it turned out to be a great source of innovation, it just had a hurdle to cross first.
I feel like NFTs today are roughly where altcoins were in 2012. Lots of good fundamentals to the ideas, but most of the implementations are really missing the mark. Whatever the NFT equivalent of Ethereum, Zcash, Sia, etc is... it's not here yet. And it may yet be a year or two until it first appears.
I feel your take is the correct one. I'm old enough to remember when home video recorders were criticized because porn, but porn was just the kick off to the wider world of video uses and purposes.
At the time, people were buying video players and recorders just to watch porn because people hadn't figured out and weren't in the habit of time shifting their video viewing. Porn was really the only thing they seemed good for. That was my point.
> There are people who happily pay $2,000 for an Apple laptop. There are people who are happy with Linux on a $100 machine from Goodwill.
This is the weirdest sentiment that I see all the time on HN, but enough people express it that I have to accept it as both widespread and genuine.
However, I think that if you think $2000 US for an Apple laptop isn't the best value for money you can get on the laptop market, then you're either very good at finding bargains or completely bonkers.
Yes, macOS is no longer for developers. Yes, for extreme workloads I use my linux ryzen7/2080ti or the cloud rather than the MBP. Yes, they had a strange couple of years with the keyboards.
But honestly, they're the best hardware hands down. Not just the best absolutely, but the best per dollar. And personally I love macOS, but I'm just a manager these days so I guess I would, right?
I'm not disputing that a Mac laptop is the best hardware out there. I'm stating that not everyone needs it. They're happy with a $100 Goodwill laptop. I've always been someone who believes in using the best tool for the job at hand.
FWIW, I used my Trump Bumps to buy a new MacBook for my wife, and I plan to use my Biden Bonus for a new MacBook for me. (Assuming Apple releases one with a large enough screen in the next six months.)
I have a sager (Taiwanese) laptop i7-9750 9th gen intel 4.5ghz, RTX 2060 with full on CUDA support for deep learning, 1Tb NVMe SSD, 32 GB ddr ram, and a 16" 144hz screen that cost me about $1300 a year ago. It also has plenty of IO connections (3 USB type-a ports, a single type-c USB port, smart card reader).
It's rock solid running win 10 pro, has extremely low DPC/ISR latency for ASIO music recording with Ableton, can chew through blender modeling with cycles, and I can do all my dev work in vs2019 and intellij with zero hiccups.
I challenge your assertion that you can't find equivalent if not superior hardware per dollar as what apple offers. Maybe you're just not looking hard enough.
I worry about the weird effect on society of massive lopsided wealth encouraging hucksterism (from all levels of wealth) just because people don't know what to spend their too-much-money on.
I think art is different in some ways though. Far be it from me to tell others how to spend their money, but at least with physical art it is preserved. The art may mostly be traded by the ultra-wealthy, but at least it still exists for the good of society.
An NFT is really just a digital autograph. Not even really an autograph, isn't it a cryptographic signature? Which would surely need to be random by nature, so the artist can't even do something unique with that. It's external to the work itself.
>I get just as much enjoyment looking at them on my wall as I have at the museums looking at the real ones.
I'm sorry, but I simply don't. Not trying to be contrarian, but reproductions bring me a very different joy and appreciation than provable originals. I agree some things in crypto are scams, but NFTs, in my opinion, have a really important function in some domains.
The equivalent of painting reproductions with unique IDs on the back.
The whole things feels like a scam to me. Taking the best part about digital goods (that they’re non-rival) and attempting to hack on scarcity for the purpose of exploiting a psychological flaw.
I used to hate veblen goods, until I learned to appreciate the "fool and his money" aspect. Now when I see some $100k handbag I'm glad that person gave away a bunch of actual societal influence (money) for a bit of temporary status.
The most charitable interpretation is that it's a way to reward artists for creating digital art in a new way.
The HN article for this comment thread shows the risk here though. If the monetary incentives become pushing these tokens, then the most successful 'creators' will be the people that can maximize getting people to pay for these dumb tokens. The incentives are bad and you end up with the 'artists' being mostly ICO style scammers.
It's like the corrupting influence of ads on media, tokens value will be a similar but different corrupting influence.
You could argue how is this different than monetizing anything? I think it's because of the pseudo-value/speculation driving people to spend more on the hope of a future return. That's the psychological hack of fake scarcity.
Pokemon cards, collectors card, Fortnite skins, art, watches and I could go on. All these and many many more things are thing people pay money for without any conspiracy behind.
These tokens are already diversified beyond anyones control.
Arguably in app purchases have already corrupted a lot of the game space into slot machines.
Tokens take that a step further and make it worse.
Incentives create the world. On one side you have Apple Arcade trying to align incentives for a better global outcome/end state. On the other you have in-app purchases, loot boxes, and NFTs - trying to maximize profit for the house.
again you cant take the human minds tendency to attach value to things in their life and to operate in hierarchies. NFTs were inevitable as tokens of value because they function as physical objects. You can say thats a scam but all ypu are saying is that you dont yet attach value to NFTs. Anecdotes are not the way to validate your claim though.
> NFTs are nonsense and just as much a pyramid scheme
What scares me is that there are artists who I don't think understand how scammy this is. They've drunk the kool-aid and accepted the handwaving "you don't need to know how it works, just that it exists" explanations. Creators who wanted to make an honest dollar but ignorantly perpetuated the scam could find them themselves in hot water.
> Creators who wanted to make an honest dollar but ignorantly perpetuated the scam
To be fair, if they're doing it honestly the value proposition is "Support the artist and get bragging rights for having done so!", which doesn't become a scam (or at least any more of scam, depending on your view of bragging rights) just because there's a scammy secondary market that the patron doesn't necessarily have to participate in.
It seems like there should be a better way to "Support the artist and get bragging rights for having done so!" that doesn't involve the scammy other part. You see this with Patreon all the time where certain tiers get a shout-out.
Oh certainly, and we should encourage such methods where practical. But if we're going to condemn people for using the same financial tools that can be (and are) also used for scams, I have some bad news about that global economy of yours...
As mentioned in the thread, there are different qualities but a couple of hundred will get you something pretty nice that is hand painted. Usually framing will cost more. Impressionist paintings tend to have some thick paint that can't be captured in a print. Large prints can also be just as expensive as real paint on real canvas. I know it isn't as good but I don't sit and stare at it for hours from 6 inches away. It is also a beautiful reminder of a nice trip to the museum.
Worth noting that NFTs aren’t just cryptokitties; there is a lot more you can do with them.
ETH NFT refers to the smart contracts that you would use to digitize ownership of a house or any other (physical or financial) unique asset that you might trade.
You can nest an NFT under an ERC20 token, too, so that you can sell partial ownership tokens in your NFT.
Of all the use-cases in crypto, I think digitizing ownership is the one that seems most likely to be actually used for a non-trivial volume of non-speculative trading.
NFTs are the digital equivalent of a vehicle title, that's the strongest usecase (proof of ownership), IMO. I'm not too keen on the collectibles/art usecases, they're probably the easiest/low-effort ones.
My point is, that states have monopolized property transfers and there's all sorts of weird and arcane laws and practice around how you transfer property- especially real estate- and convincing the state to recognize an NFT as evidence of anything is going to be a real challenge.
ex, if the law requires an actual notarized handwritten signature to transfer ownership, what you and I do on the blockchain will simply not count when it comes down to it.
If I accidentally burn the NFT that represents ownership of my house I'm definitely still the owner of the house, there's no world where a government would shrug and say "I guess nobody owns it anymore, oops"
It seems to me that there's going to be an unbridgeable gap when it comes to physical property. If someone hacks my wallet containing my "house NFT" and transfers it to themselves and I can't hunt them down and force them to return it, who owns the house? How do I sell it, if I don't have the NFT? Can I go get another NFT minted, and who from? How does the buyer know that this newly minted NFT represents the true ownership and the old one doesn't?
Suppose I die taking my wallet keys with me; how do my heirs inherit my NFT-ized house?
If the government is minting these NFTs and deciding which transfers are legitimate and which aren't, why are we bothering with all this?
Basically: at some point, an NFT will become separated from the ownership as recognized by the people who count (banks, governments, etc). Without a mechanism to reunite them, the NFT is not very useful; but if there is some sort of mechanism, it's really that mechanism that determines ownership, not the NFT and you might as well use a centralized ledger.
One easy way to resolve all of these problems is to build an escape hatch in the contract so that in the case of theft, loss, or other special circumstance you can invoke arbitration and mint a new token if needed.
It’s important to understand that these tokens aren’t going to replace the existing legal system (much though the anarchist/libertarian wing of the crypto community might wish it). They just enable certain transactions to occur with lower overhead and time delay. This is about improving friction in the happy path, not providing new solutions for every conflict case.
Personally I don’t think there is a reason to put your primary residence one the blockchain (you don’t trade it that often). But it’s interesting for places where you might want to trade assets at higher frequency (eg micro loans, supply chain finance, etc) and maybe there is a real-estate trust angle too.
When I read about smart legal contracts, all I can imagine is Google's live-staff customer support combined with government flexibility. Is this the future we want?
Blockchains are a shortcut to social consensus, not the final word. There is substantial value in the state giving credibility to a blockchain, allowing an NFT title for a house to be transferred digitally.
That value does not disappear if the state + courts also build in processes for over-ruling the on-chain owner of an object and forcibly transferring it to someone else. The core value here comes from how much easier it is to clear all of the red tape in a fully programmatic world.
So now you have two ledgers: one on a blockchain and another one that's just "the court said X". They will diverge over time, and eventually everyone will just use the latter one, because that's the one that counts.
Before I buy an NFT, I'll have to check the GovLedger anyway to make sure that NFT is actually that person's to sell, and hasn't got a lien on it or something else that means they can't actually sell it.
If the idea is the blockchain is permissioned and the state can choose which transfers to allow and can forcibly recover NFTs, why not just use a database?
The court, in making their ruling, could forcibly transfer the NFT, as it would make sense that they would give themselves admin status in the smart contract. So there's no reason the blockchain would need to diverge.
Regarding liens, it seems simple enough to say that if someone does not own an NFT "free and clear", then they cannot transfer it "free and clear". It might even be a different NFT entirely (a "liened NFT," where the original un-liened NFT is held in trust by yet another smart contract, with limited or conditional ownership rights given to the lien holder.)
The reason not to use a database is interoperability. Any smart contract can transfer these NFTs according to infinitely nuanced scenarios, and only during disputes would a court need to get involved and forcibly transfer the NFT according to a judgement.
I’d add on the “why not use a database” - in general you should always prefer a database to a blockchain/DLT, all else being equal.
The typical case where all is not equal in finance is where currently parties transact via a trusted intermediary like a clearinghouse (who might take a 1% fee, say), and a startup wants to allow parties to transact directly, thereby capturing the fee as upside. Large financial institutions don’t tend to trust small startups that might implode any month, but they can (sometimes, it seems) be persuaded to trust a distributed ledger.
So, let me get this straight: you have an NFT that represents the deed for a vehicle, but the law does not recognize the NFT as the deed for the vehicle... if you don't see any problems with that, boy do I have a bridge to sell you.
You have a piece of paper that represents the deed for a vehicle, but the law doesn't recognize the "paper" as the deed for the vehicle...(this during the time of clay tablets)
Was that clear? or do you still have that bridge for sale?
You're missing the point. A deed is only as good as the legal framework that enforces it as a representation of ownership rights. The thing that matters is that framework, not the technology use to implement it.
There are people who sell deeds to land on the moon (https://lunarland.com/), but they're worth little more than the paper they're printed on, because they have some of the same deficits in legal recognition that NFTs have. Those people have no more ability to will their certificates into having legal force than NFT advocates have.
In short, an NFT is little more than a trading card (representing only itself) unless a court would side with the possessor of an NFT against competing claims for whatever property it's suppose to represent (e.g. transferring ownership of the property/rights to party A using traditional means AND transferring the NFT to party B). If the court picks party A, the NFT meant nothing.
I don’t really get your point. What happens when a judge says “you don’t own your house any more, the government owns it now”? Well, what happens is you lose your house. The fact that the government can circumvent any notion of property ownership isn’t really a criticism of any particular notion of property ownership.
As a sibling mentions, you can't digitize a house. The state has already done that. The whole point of crypto is decentralized trust. You don't need that when the state is the system of trust, whether you like it or not.
Not sure if it's just me but it sounds like you're sort of making an argument in favor of NFTs here. The main argument against NFTs I hear is that what is being certified can just as easily be enjoyed by people who are not the certified owner. And you're saying that that's actually the case for regular art as well - but still someone ends up willing to pay $100M for the original!
I think there is a case to be made for NFTs, but would also not be surprised if you're right that it ends up with mostly bag holders.
I think the real issue is that NFTs are really a secondary to the data they're certifying (i.e. the art). In the same sense that "stealing" means something different in the digital world, "ownership" also means something very different. Ownership of physical goods precludes other people owning them. There is only one original. Ownership of a digital good does not preclude other people "owning" it in the sense that they have one they can use/view/whatever.
The only thing you "own" in the physical goods sense of precluding other people from using it, is the NFT itself. It is exclusively assigned to you, other people can't conceptually say they own it.
Another example of how that divide manifests is how would someone show off their NFTs? Art is easy, hang it on the wall conspicuously with canister lights. You could do the same with an NFT piece, or you could put it on your profile or something, but anybody can do that. You're not showing off your NFT, you're showing off the art. Your NFT is just a jumble of cryptographic data. It has to be random for functional reasons, I presume, so it's not like the author can make your NFT a piece of art in and of itself.
The underlying thing has to be already considered valuable. Consider tokenized single cask scotch.
So, it's made, and costs 150 a bottle. Why? Ostensibly, it's good scotch whiskey, and it's a limited run, 10 years in the making.
So why tokenize it?
Gamification.
Only people with the actual bottle can play.
Open it, scan the qr under the cap, then you can share the official tweet from posh-makers whisky announcing the opening of the bottle.... "that was us last night, good times all around!" maybe you get a 25 dollar certificate for your next limited run bottle. It's a social flex, and it's great publicity for the brand.
...and the remaining 237 bottles just went up in price. Fast forward a few years, and somebody has one of the last three bottles.... Which is mostly because he can actually prove he has one of the last three. Now its worth 270k.
What's nonsense is dismissing the idea and the work that's been done because there are people looking for a cash grab. Following from that logic, you should throw your routeur in the garbage dump. After all, the early days of the Internet were filled with shady companies selling buzzwords. So the Internet is by essence trash, right ?
NFTs are revolutionary for digital assets and allow for something beyond the world of licences as well as much greater scaling.
I think you have my comments out of context but to each their own. Do you believe in NFTs enough to put your entire net worth in them? I don't see this current pump and dump ending any better than CryptoKitties but I guess time will tell for sure.
I wouldn't put my wealth into NFTs any more than I would into Magic The Gathering cards, sports memorabilia or any other collectibles. But that's the point. If you do put your money into it, it's dissociated from central control, online services that might go belly up at any moment and so on. It completely solves the problem of never really owning anything online (software licences, items in video games and so on).
Fads like CryptoKitties are completely irrelevant to the core tech, just like Bitcoin is in the grand scheme of things irrelevant to the potential of block chains.
It seems like your argument is more agains collectibles in general. I also can go online and look at the art for various rare Pokémon cards for example. I think you underestimate the psychological component of ‘ownership’ and the extra satisfaction that might bring a collector.
An anecdote,
I am an avid jazz record collector (vinyl). Every record I own is available to me on Spotify and I actually frequently find new records to purchase on Spotify (they have a great jazz selection).
Interestingly, or maybe not, I find that I listen to the records I own more than those I don’t even though I have access to so many more.
I also find myself having significantly more patience with the records I buy blindly than I would a random thing that comes on algorithm radio.
The point being, ownership creates psychological attachment which in turn creates some intangible form of value that I can’t quite put a number on but I definitely feel.
what is the use-case for an NFT for an in-game virtual good? A sword from World of Warcraft (WoW) can already be traded between players within WoW, since the environment in which it appears is already centralized and that's already provided by the environment. Trading a WoW sword outside of WoW has ambiguous logic. Let's say you sold your WoW sword to a Destiny player. Ok, does the sword still exist in WoW or not? What if the WoW servers just say that it does? Do all players verify that other players have the items the server says they have? If the player uses the sword and the server says "they did 9000 damage because that's how big the sword is", what difference does it make if your client say "NO! Nooo! They don't -HAVE- that sword"? You can't just wave your hand and say "but we'll just make the games peer to peer and that fixes it". P2P lockstep protocols were extremely widespread but fell out of favor due to performance and anticheat issues inherent in lockstep protocols. Most gamedevs would prefer the luxury of not having to run any servers. How do you make a purely P2P multiplayer game protocol that is cheat-resistant and allows more than a very small number of players to witness one another simultaneously? If everyone needs to establish a network connection to everyone near them inside the virtual world, how do you handle crowded spaces?
When the sword is sold -outside of WoW-, how does it have value in another context? Can a Destiny character equip a WoW sword? (No.) Ok but what if the Destiny devs made an in-game Destiny item that was pegged to that WoW sword, and then the games all checked your inventory at login? You'd have to check the ledger -every time the item is used- or the player can just login, trade it away, and then stay logged in and continue to use it (use after sell, essentially).
If players can -already- trade items within the simulation where they were created, but we're not defining what it actually means to move an asset -between simulations-, what is the actual use-case here? That you can trade non-functional skins outside of the game? That's it? Why is that good?
First, I don't think the big use case is for items being traded between different games. However, a system like that is possible. Blizzard would be a good example here, since their games have a high degree of cross-pollination, and they frequently offer promotions that unlock similar items in several of their games at once. So, owning a Blizzard "magic sword" token might give you a sword item in WoW, another one in Diablo, and a sword card in Hearthstone, each adapted for its own game. This is a small use case, in my opinion.
I imagine that the big use case is for any game developer (indies especially) to leverage the marketplace without having to build one, or be locked into one provided by a single publisher/distributor. The game itself does not have to be p2p as you're suggesting. Game architecture would remain centralized, and would communicate with a blockchain where the tokens are stored.
The process might look like this:
1) A player purchases an NFT representing an in-game item issued by a wallet owned by the game developer.
2) The player sends that token to a smart-contract address, also owned by the developer, with a memo that identifies their player account.
3) The smart contract notifies a centralized game server, then sends the token back to the player's wallet.
4) The in-game item appears in the player's inventory, within the game.
There could be any number of steps involved, and the contracts could operate however you'd like. The token could be destroyed after a single use (like purchasing keys for loot crates in CS:GO) or used and traded any number of times. The game server would have to keep track of which player account controlled which token, and update players' inventories whenever the token changed hands.
One more thing - NFTs can be programmed such that creators receive an automatic royalty (a percentage of the sale lands in the creator's wallet address) whenever the item is sold on the blockchain, no matter who is selling to whom. This could be huge for indie developers, who would benefit not only from selling the original items up front, but also from the long-tail resale of such items between their players.
> So, owning a Blizzard "magic sword" token might give you a sword item in WoW, another one in Diablo, and a sword card in Hearthstone, each adapted for its own game. This is a small use case, in my opinion.
I'm like 90% certain that there are cross-game item unlocks in Blizzard games already.
> NFTs can be programmed such that creators receive an automatic royalty (a percentage of the sale lands in the creator's wallet address) whenever the item is sold on the blockchain, no matter who is selling to whom.
Why is that good? Who is it good for? Why would a game developer sign up for this? You seem to be under the impression that I have no concept at all of what NFTs do. The problem is that a multiplayer game server is fundamentally already a trusted third party and the incentives for gamedevs to use them are poor, while the complexities enormous. Boiling the oceans to produce a trustless ecosystem for asset transfer is a fruitless endeavor if those assets can only be reified inside of environments that fundamentally require trusted third parties.
You already need to have a trusted third party (the game server) in order to give any functionality to the assets. Once you've added that trusted third party, you've thrown away the key benefit of blockchains.
The trusted third party is effectively required to moderate custom assets in games; untrusted asset creation is an unchecked liability in general, and is expressly prohibited by the terms of many game platforms. If a player creates content that is hateful, then another player that is a child can download it, and if their parent sees that, the kid will say "I'm playing $your_game", and then the parent will raise a stink about how $your_game has $hateful content in it and $your_game exposed their children to that content. That sort of thing will certainly get your game delisted from the Nintendo or Sony stores. Even if you're only concerned with an unregulated PC market, it's going to be a hit to your sales.
If a child wanders onto a hateful website, the parent is going to say "the web exposed my child to $extremism", and then use parental controls to control what their kid can access on the web, but you cannot do that in a game. Sorry, you can't bring your $valuable_item in here because $other_player has it disabled in their content settings. You'd better believe parents are going to say "$video_game exposed my child to hate speech" and it's going to harm your sales.
Beyond hate speech, assets have to be verified by the game dev to verify their integrity; the asset has to be loadable and working without errors and without breaking the game. That's assuming there are zero vulns in the asset pipeline. Beyond merely being loadable, it should also conform to some guidelines so that the asset doesn't perform well for players with fast machines, but make the game unplayable for players with slow machines.
As for royalties: Steam Workshop already gives royalties to people who create assets (albeit at poor rates) and people already play that game. Why would I, a game developer, sign up for something that makes all of this worse, reduces my revenues, is massively more complicated, requires me to verify data against a blockchain constantly, AND increases liabilities? This is assuming you even -can- verify the data against the blockchain frequently. Even assuming you're using a blockchain with a read latency of zero, you're still performing i/o. You want to perform blocking i/o to an external datastore every single time a player wants to use an item? The only away around that would be to write a lock into the blockchain to prevent transfer with a contract and cache the ownership semantics, at which point you have completely duffed every single advantage a blockchain is giving you.
Let's say, hypothetically, that we ignored all extant games and ONLY considered new games. Again: if you're not moving an item between simulations, it&#x...
That's right, Blizzard does cross-game unlocks already, through their own platform. I don't expect that companies like Activision/EA/Valve would be the ones to use NFTs for this kind of thing, since it's better for them to build and operate their own marketplaces, which gives them total control.
I completely agree with you on the boiling of the oceans. It's a problem that cryptos will have to solve in the long-term to be viable as any part of a green economy. There are a few projects that are energy efficient, but Ethereum and others have work to do. In any case, NFTs aren't specific to any one blockchain.
I think content creation and limitation is a separate issue, and not implicitly part of NFTs. You can issue a token representing a particular game object, with no ability for the player to customize or modify it. You bring up an interesting point though - there could be a limited, controllable level of customization available to players. Consider a smart contract that mints NFTs and allows certain attributes to be modified, which could affect the cosmetic or functional details of the in-game item they represent. You could sell a class of NFTs representing a certain sword, and players could pay extra for a golden version, or a version with infinite durability.
For Steam Workshop, I think you've identified exactly the issue. They control the marketplace, and set the rates. If it's more profitable for a developer to set their own rates/royalties, and it's easy enough to implement, and there are enough players willing to use NFTs (or a platform that manages NFTs for them) then we'll start to see developers use them. Marketplaces aren't mutually exclusive, so you could have some items on Steam, and others on blockchain. You could make certain desirable items exclusive to the platform that nets you the most profit.
I agree regarding difficulty of implementation - this is something that most developers won't bother with at the moment since it doesn't make economic sense, but as the ecosystem develops we'll likely see companies that provide a simpler abstraction layer for NFTs (perhaps even specializing in games). As the implementation costs drop, we'll start seeing adoption. This might take several years.
Regarding blocking I/O, I don't think it would work like that, just like it wouldn't work as p2p. A game server could poll the history of its smart contracts (or the abstraction layer provided by a service platform) every few seconds or minutes, and update its centralized database of items to match whatever transactions have occurred. All reads within the game would still be to its own database, and not directly from a blockchain.
You have to look at the bottom line. The only benefit of decentralization is cross publisher items. If it's through the same publisher it can be done in a centralized way. Publishers care about their profits. If NFT can increase their profits they will do it, but if someone buys a WoW sword on Etherum and uses it in Destiny (I haven't played either so please don't nitpick that Destiny has no swords).
Why would the publisher behind Destiny care? Blizzard is the one profiting off the items. Each publisher would create their own mutually incompatible smart contract to maximize profits. Companies absolutely hate the existence of secondary markets. They want cash shop items to be tied to accounts so that every player has to rebuy the same items over and over again. It simply won't work except as an easter egg.
Totally agree - this will only happen if it makes economic sense for the developer. Big companies like Blizzard won't bother since they can build and manage their own marketplace, but smaller developers who can't afford to do that will still be able to unlock value by participating in an open market.
Players re-buying the same item is definitely profitable, but it may turn out to be more profitable in the long-term to allow players to freely trade items while taking a cut of each transaction as royalties. Also, as mentioned before, NFTs allow for single-use items. A game could provide all sorts of different items with different rules.
> “You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set.”
I think that’s the whole point. An enduring aspect of human culture is that we praise and confer social status on owners or stewards of rare curiosities. You aren’t buying NFTs for tangible value, you’re buying a speculative investment in social status. And people feel very confident that the market cap and liquidity for buying and trading this type of social status will go way up, and that unique, verifiable digital ownership allows the pay-for-status desires to take place untethered to physical goods.
NFTs also suffer from the same attribution issues as traditional certificates for collectibles. You still have to validate that whichever account 'minted' the NFT was actually controlled by the creator of the collectible at that time.
You're missing the point completely and you have to take some time to think about it and let it roll around in your brain to start making sense of it. It took me a long time but now I fully believe. Including cryptopunks.
In real life, people wear rolexes. Why? You and I both know that a casio can tell time just as well as a Rolex. I don't know the difference between one model of Rolex from another, but some may cost 10k and some may cost 20k.
To those deep in the Rolex world, the difference is huge. They can tell right away.
Why do people wear rolexes? A casio is lighter and easier to tell time. But a Rolex. That's status. You're not SAYING you're rich, but you signal you're rich. Big difference. The former, people will scoff at. The latter, people may be impressed. And if you're in the Rolex world and you own the top of the line Rolex? Those in the know are even more impressed.
How does this translate online? How can you signal status online? In centralized systems like twitter, you just look at followers. But what if... you just now made a twitter account to talk about something you love, and you have no followers? How can you signal status to people you talk to that you deserve some clout?
Enter something like cryptopunks. People in the cryptospace use cryptopunks as their twitter pic. Those in the know realize that one cryptopunk does not equal another cryptopunk. Maybe yours has red hair and only 2 percent of cryptopunks have red hair. Maybe you know all red hair cryptopunks command a huge premium and cost tens of thousands of dollars.
They can verify in your wallet that you own that crypto punk.
You can move from one platform to another, with no followers, and suddenly, you have digital clout.
Maybe NFTs for collectibles isnt ideal but Im wondering if there are some more - lets say - utilitarian uses of this concept that we havent discussed yet. The other day I tried buying a bike. Id really like to know it wasnt stolen, and somehow being able to tie a real world representation into a virtual single item good would be somewhat useful.
Bikes have unique serial numbers. https://bikeindex.org runs a free website to let you lookup serial numbers and mark them as stolen, and there's also various other regional websites that do a similar sort of thing.
If you want to buy a bike, make sure it has a serial number (and if the number was filed off, then yes it was probably stolen), and look it up on the index.
How would an NFT be better than the above database in any way?
I do think the bikeindex could be run better (fewer regional websites, a database we can download for archival purposes, sharing of information between multiple registries), but all of those things seem like they're easier and cheaper to do without a blockchain or NFTs.
Rather than do something like NFTs, they could do what the certificate transparency project does, and just dictate "here's the data format, here's how you share data", and get all the benefits I can think of with none of the downsides or ecological waste.
For what it's worth, there is evidence that such a database can be made and work in a similar case, since car registrations, transfers, etc are all quite well handled with no NFTs.
An NFT is inherently decentralized, maintained by multiple independent parties, and more or less tamper-proof. That database is only as resilient as the organisation running it (or maybe less, plenty of organisations have lost their databases before), and presumably there are corruptible humans with write access to it.
The certificate transparency project has the same attributes you mention to my knowledge.
There is the problem of correct data, but I don't understand how an NFT manages to make data correct. How do I prove to the NFT that I own the bike with SN 123? How do I prove it was stolen?
I'd love if we replaced the bikeindex with a certificate transparency project-esque system and each large bike manufacturer ran an instance.
That also seems like it would be vastly easier to create than having people use the bike-stolen-registry-NFT you're talking about, and as a bonus it would be far less wasteful.
It seems like it would optimally require the manufacturer to participate in creating a token representing that serial number and assigning it to the person who bought the bike who would have to transfer it to the next owner and so forth.
If they had been out long enough to be pervasive you could require all online marketplaces ebay,offer up, facebooks etc which are commonly used to traffic stolen goods to upload an NFT as part of the transfer whose description matches the item being sold which is transferred with the good.
It would be like requiring every good sold to have a trivially electronically verifiably accurate original receipt that only someone who acquired it illegitimately would lack.
Certificates still have the problem of who your trusted root is, and don't (by themselves) solve provenance issues - if two people have certificates for the same bicycle then there's no way to choose between them, whereas an NFT inherently has an auditable chain of custody going all the way back to the original issuer (presumably the bike manufacturer in this case) and digitally signed at each stage.
I'd love it if these industries/communities adopted log-structured distributed datastores with digital signing to track provenance of things without wasteful "mining". But the fact is that they've shown no willingness to do so, and it's a lot harder to bootstrap a system like this - if your system relies on a trusted root then you need the trust before you can start to develop the system at all, but users have no reason to trust the system until it's all fully running and proven.
It's another example of the title problem. You can think of it in a similar to how VINs work for cars, or ESNs work for phones. In those cases, there's a centralized database that tracks whether things are stolen or not. It's possible that NFTs could be a decent way to handle supply chain auditing of this variety, considering it's just rebirthing a process that already exists but in a more analogue form.
The advantage over something like bikeindex is that you could make the transfer process a lot more seamless. You could build things like escrowing into the protocol, so when someone sells a bike to you on craigslist, you have a nice clean transactional system which adds some nice anti-fraud measures and protections for you without necessarily requiring you to buy it from a store or marketplace to gain those protections.
> How would an NFT be better than the above database in any way?
It wouldn't depend on the benevolence of a third-party absorbing the cost of running the index.
It would be geographically and culturally agnostic. Zoom out here and notice how little of the World's population is involved:
https://map.bikewise.org/#0/84/-77
It would be globally unique and would not require the cooperation of manufacturers. Neither of my two bikes has a serial number because they're 'too old'. Other bikes have conflicting serial numbers.
It would eliminate the privacy and security risks of maintaining a central database of PII and associated valuable assets.
No instead it would foist that externality on the entire world in the form of carbon emissions and depend on the highly uncertain future value of a cryptocurrency.
And it would still require a third party to benevolently run an app to search and make sense of the data from the ledger, and also to verify that the data inserted was actually real and not poisoning the db.
How would you prove to a blockchain that a particular serial number really is owned by you, or was lost, or all the other things that can happen that don’t occur on the blockchain? Aren’t you sort of back to needing the cooperation of lots of different entities globally, and some kind of authority equivalent to the third party database maintainer to ensure the data makes sense?
I actually had a similar idea, last time the theft of a famous painting was reported in the news. The museum could offer a deal, where they get the painting back but give the thieves a certificate for it. As part of the deal, they have to hang a sign next to the painting, saying, "This painting is considered to be stolen."
The thieves can do whatever they want with the certificate -- use it to pay illicit debts and so forth. They can visit their painting at the museum, and brag to their friends about it. But the rest of the public still gets to enjoy the painting too.
Now closer to home, I'm a musician and play a modestly valuable instrument. I've thought of taking really high resolution images of it, because the grain pattern of the wood is practically like a fingerprint, and would be difficult to conceal without destroying the instrument. A database with hi-res pictures of valuable instruments would be like a serial number database for bikes.
You could do the same thing today, offering a certificate of authenticity or whatever, validated by the relevant comunnaly accepted authority, and it would be be just as baffling and nonsensical an offer. The certificate is not the weilder of value , even if it were required for the object itself to be valuable (eg originality).
With an NFT I don’t even know what you’re certifying, except that this one chain says you own the object. In your example that’s not even true, the museum “owns” it, yet the thieves have it, and the NFT is now just as flawed as today’s understanding of ownership.
> The thieves can do whatever they want with the certificate -- use it to pay illicit debts and so forth. They can visit their painting at the museum, and brag to their friends about it. But the rest of the public still gets to enjoy the painting too.
I love this answer because it's a perfect analogy to explain why NFTs are total nonsense.
Owning a one-of-a-kind, literally irreplaceable painting cannot be substituted for a certificate. The certificate has zero value because it does not allow the owner to restrict access to the original painting.
The core concept of ownership (control over a scarce resource) is violated as soon as you start trading a certificate instead of the original item.
It's like someone saying that owning the last remaining Michael Jordan baseball card is the same as owning Michael Jordan, and that both have the same value. It's ludicrous.
> The core concept of ownership (control over a scarce resource) is violated as soon as you start trading a certificate instead of the original item.
That’s entirely how our markets are run. Nearly all stock is owned by a few trusts and what everyone is trading everyday are “certificates” of the original stock certificates.
Even big ticket items like cars or homes, they really aren’t worth anything without a clean title or deed. On the other hand people buy deeds all the time without ever seeing the actual property.
Stock ownership is backed by the legal system. It also has a ledger that must be settled and sent to the government.
Stock ownership gives you dividends and votes, too. You can sue for these things if they aren't given to you.
Cars and homes are things I can physically interacg with.
Digital certificates of digital goods have none of those qualities. If you do get any legal rights when you own them, it's not any different than copyright, which we've already seen is essentially impossible to enforce for digital works.
Note that I wouldn't endorse owning a person, but whether they have the same value is a matter of whether they have the same utility. Leaving the painting in the museum might make the certificate more valuable for all we know, because it ensures that the painting will be stored properly and not forgotten by the public.
Honestly I didn't even think about a definition of ownership when coming up with my idea.
Couldn’t the thieves just make a new NFT blockchain that says they own whatever they like and skip the messy steps in the middle? You’d end up at the same end state where the museum has a painting and the thieves have a certificate that says they own it.
This all assumes most people care about buying a stolen bike or not. Maybe you care, and maybe I care, but I’m sure there are plenty of people that really don’t give a shit and are thinking “it’s a cheap bike and I don’t have the luxury of money or time to care, I’ve got to get to work”.
The be your own bank headaches that most people can’t handle will then apply. You need to spend a lot of money on gas fees, hardware wallets etc and get a good grounding in cyber security. Or just get a lock and bike insurance.
Youtube has been successful even though most videos are watched a dozen times or so.
NFTs are a parallel copyright system. The market price of an NFT that violates meatspace copyright law would be a function of the relevance and enforceability of the law/jurisdiction in question.
The shortcomings cited by the author are critiques of the distriution of market prices, but there is no alternative proposed. Of course most Youtube videos get a handful of views, and of course most NFTs will be nearly worthless. That concern is orthogonal to the question of whether NFTs offer some benefits over traditional copyright mechanisms.
It would be really awesome if there was a digital exchange that dealt in multi use media. I would love to be able to buy an album, image, movie, 3D model, etc directly from the creators and then own the rights to use for whatever their content license allows. And then I could then resell that content and the original content creator would get an originator fee from the transactions. Some new data formats may need to exist because I would like to share my media with my license and the content creators license/copywrite intact.
I think all of this will happen, it just takes time. Crypto is entering a more mainstream and useful phase right now, but it will take another 5 to 10 years for entrepreneurs to really make the future.
I remember growing up and seeing a very active “Warez” scene online, with cracks being distributed of all sorts of licensed software. Companies have since tried to make the programs “phone home” in order to check the licensec or turn them into SAAS to get revenue, but that is anathema to decentralized assets.
I haven’t looked too deeply into NFTs but it seems clear to me that:
1) NFTs are not for read access, but rather write access to a certain thing. Think Earth2 or MillionDollarHomePage or buying a domain name or some other namespace.
2) Ethereum and blockchains are entirely overkill for NFTs, because they are designed for arbitrary balances. If you want NFTs you can just have non divisible files that are collectively managed on MaidSAFE or something like that.
I hate to be a complainer, but where is the definition of NFT in this article? I was taught in university to expand acronyms the first time I used them. Is this not common practice?
Don't just blindly do what you're taught. There are reasons for expanding acronyms and reasons for not. In this case, I'd say that if someone doesn't know what an NFT is, the article will be meaningless because it also lacks a long "background" section teaching the reader what they are. So maybe you're not the intended audience or it's more effective to let you Google it yourself if you don't know.
I think the immediate value of NFTs lies in industries where you need to keep the producer honest to protect against artificial scarcity.
For example, what stops baseball card printers from re-printing "rare" cards? And how do we know they're not hoarding some of the best cards for a few years, then selling them individually? I could see NFTs being demanded in situations like this to force producers to create digital proof of initial production and distribution.
I haven't thought about it much, but hashing old tweets or a picture of something and claiming it's valuable sounds like snake-oil sales to me.
NFTs are not useful for securing anything in the real world because there is no way to verify that the thing in the real world is uniquely connected to the NFT.
I was thinking they would still make the physical baseball card, but also provide the purchaser with a NFT linked to that specific card that includes the card's metadata, etc.
This way you have the physical card to display, and have the NFT as a proof of authenticity and ownership.
Earth - a small planet in the outer reaches of spiral galaxy M7529, so far the only planet on record that the semi-intelligent biped inhabitants managed to overheat so badly that they became extinct. Overheating has happened before, of course, however the method of overheating is unique - the inhabitants invented a method of identifying uniqueness by making large calculations and attaching small drawings to the calculations, they then proceeded to trade these tokens as something of value, using more and more energy and creating a runaway green house effect. This has been used as an example to disprove the existence of god.
I'm hoping we can do our NFT trading on non-PoW chains within the next couple years. This should reduce the environmental impact to that of baseball cards.
I've seen a bunch of artists jump on https://www.hicetnunc.xyz (which uses Tezos, which apparently is a Proof-of-Stake chain?) after the "wait, ETH uses how much energy?!" shock.
It is LPoS. It means you're able to delegate your validation rights. So you don't need to run a node to participate in the staking process, you just delegate to a baker. And It's self amending. Every 3-4 months a proposal with upgrades will undergo a voting phase. All bakers are able to vote on this to accept or reject the proposal. The source code is written in a purely functional language on which formal verification is applied.
One random idea I had was to use cryptomining to “soak up” excess power: so, for example, you could build nuclear out to meet peak load and then set up mining rigs to use the difference between peak and the current load, subsidizing the cost of power production.
It’s probably a bad idea for other reasons, but it’s one way to reduce the environmental impact of PoW
It's a bad idea because the energy used is worse than wasted since all it does is contribute to an increase in the mining difficulty for the entire network, thus worsening the environmental impact. It's actually better for the environment to leave that energy completely unused rather than use it for mining bitcoins.
This isn’t necessarily true: if the subsidies spread clean power generation then the percentage of miners that have bad environmental impacts will decrease over time. Also, since this would make relatively clean power sources cheaper, it would help phase out fossil generation capacity.
They're not "subsidies", they're just profits earned from selling what was mined, nothing useful happened, it simply makes the blockchain needlessly more expensive for everyone because a nuclear power plant is dumping hashing power into the network. Green energy doesn't change the fundamental nature of PoW, it inevitably expands to consume all available energy because the more energy you can burn the more money you can make.
The important part is that the profits from mining are used to reduce rates: so it’s subsidizing the power costs for the customers as well as offsetting the capital investment into the powerplant.
Any reduction in rates would drive up the costs for everyone else. The capital investment required to construct a nuclear plant utterly dwarfs anything that could possibly be earned by mining.
I disagree with the last part about direct proportionality between energy and money. But my real wonder is if we can use this hashed/mined out coins for something that is actually useful socially.(even if it is a transaction of services anonymously.) I keep wondering if we can create a crypto currency + IOT devices + energy tracking system that can value the coins you have based on the energy sources that fed into mining it. But it feels so complex that I am not optimistic about creating such a thing..
Because not everyone is the "economically rational agent" that just wants to maximize profits as much as they can. May be you disagree, and think most people are and it's strong enough to be a normal distribution. (I am not sure it is, but i sure hope it is not a normal distribution and there are enough people outside).
It doesn't matter that not everyone is a "economically rational agent". What matters is that there are some of them. People who will reinvest their profit into more mining, to profit more and reinvest it further. The people who are currently fabbing their own ASICs and setting up mining farms in places where electricity is cheap. These people left unchecked will, over time, suck up all spare electricity generation capacity and eventually outbid quite a lot of normal electricity use.
Once again I disagree.. these "some people" need to be the majority(of anyone participating in these currencies) for this mining to stay profitable.. Of course i may be mistaken about that part of the reasoning, but I'm fairly confident about it. Please let me know if you think it is an unfair assumption.
Ah... I am talking about who gets to determine the cost of the coins.. So I assumed it's majority of the people who use it as a currency or exchange. But then that's my default assumption about crypto currencies in general and not sure that applies to NFTs..
You can reduce the energy output of a nuclear reactor both through the moderation of the fission reaction (via control rods, coolant temperature variation, neutron poisoning, etc), and through moderation of the electrical generator turbine (slowing down the turbine speed, venting steam, etc).
There is no such thing as "excess power" for crytomining. Even if there was then that energy could just be stored using batteries or gravity storage or something, or it could be sold to neighbouring energy users, or it could be used in the grid and other more polluting sources could be scaled down instead.
> There is no such thing as "excess power" for crytomining.
I was thinking the idea seemed to have some validity.. For ex: storage of solar/wind-powered is critical and the current inefficiencies and batteries rely on lithium and alternatives are still in research.(http://worrydream.com/ClimateChange/#moving-storage) ..
so in theory there's a system that can be built around the excess energy(of renewable systems) + crypto mining as a incentive for taking up renewable energy setups.(Of course this cannot convert the mined stuff back to energy so it's a one-way stuff at best and has it's own cons and pros).
What I’ve generally heard about nuclear and the grid in general is that it’s cost-ineffective to build out generation capacity to meet peak demand and that nuclear power is relatively bad at meeting fluctuations in demand. Sure, you could use batteries or whatever to store/use the power that the grid currently doesn’t need. You could also build aluminum processing plants or arc furnaces or whatever. Cryptocurrencies would be interesting because the mined cryptocurrency could used to reduce rates to consumers.
This is called "Demand Response" and it's an important part of grid management. For example a factory will agree to decrease consumption when asked in exchange for lower rates.
Too much power is usually handled in the generation side by incentivize producers to scale back generation or even paying to have them take a plant offline.
For a bitcoin mining operation, I suspect it would not be profitable to have all that equipment sit idle except when there is an oversupply of electricity.
You could use mining to incentivize the build out of remote energy generation before transmission infrastructure is ready.
For example, drop some solar panels and miners in the middle of the desert and immediately start generating profit. Use the profit to deploy more solar panels and build out transmission lines. You can do this piecemeal at low initial investment to feel out an energy source without committing billions of dollars to build out.
I'm not aware of anyone who's done major operations like this, but with the profitability of mining so absurdly high right now plus scrutiny on using dirty energy sources, I wouldn't be surprised if it starts. Access to mining ASICs is likely the key bottleneck.
This is the story used to explain part of the reason so much mining is in China. They built out a ton of hydroelectric dams over the decades that have been underutilized due to lack of infrastructure. Miners came in for the unused electricity and brought in a ton of money to the area.
I don't see it as a net positive unless you believe high energy cost crypto is of high value to society. You have a large environmental impact in building out and maintaining a mining facility and transport infrastructure thereto, as well as the ongoing waste all the way down to the food put into the pieholes of the humans running the facility.
Net positive means the benefits, ie. eliminating huge amounts of CO2 that would otherwise be released into the atmosphere, outweighs the costs, ie. your list of capex+opex. Turning gas flares into miners is both ingenious and objectively net positive.
Or, there’s an idea, just generate a random string, bundle it with the artwork and sign the whole damn thing using good old RSA. Achieves the exact same goal, uses a fraction of energy and no fancy tech.
Yeah, you could plausibly just transfer these things by having each owner sign an attestation of the new owner's public key. But since it looks like this junk will happen on a publicly accessible slow computer/database, I'm just hoping it happens on e.g. Solana instead of Ethereum.
These can trivially be copied (double spent), which means they're just as scarce as any digital data. Valueless without some significant proof of violence and hyper censorship ability enforcing copyright protection.
The primary revolution of bitcoin was the invention of self enforcing digital scarcity.
Can’t the subject of NFTs also be trivially copied? All you really have is a token that refers to a particular file and proves that you own a token that refers to that file. Everyone else is free to ignore the token and copy the original file at any time.
Is there something that you can only do via the token? Are there special events or access for token holders? I could see something like that being independently valuable, and interesting.
The artist can sign a message including your public key. The message is verifiable using the artist's public key. If other people copy it, they're just copying the proof that it belongs to you.
If you want to sell it to someone else, you sign a message saying you give it to them and so on, forming a "chain" of signed transactions.
What stops an original owner (of the to-be-digitized asset) from selling an NFT on the same thing multiple times? Perhaps on multiple different platforms?
The proof of ownership system described above is a blockchain where every single block is produced at irregular timestamp and contain a single transaction.
Some company can run a DB to record spends. Why trust a third party? Well with any crypto linked to real world outcomes you need it trust a third party. Be that tether or some NFT hustler.
Because if I'm a rich person wanting to spend stupid amounts of money on some 'original' work of digital art, I don't want to trust a third party store the ownership records that could easily be corrupted.
The ownership record in a public blockchain can't be corrupted.
Rich people entrust their entire wealth to third parties to manage it for them. Why wouldn't they trust a third party to keep some ridiculous record of ownership?
Because the entire ethos of the cryptocurrency space is about dematerializing trust from large, complex networks of humans with various carrot/stick incentives keeping them honest to trust based on cryptography and game theory dynamics of open distributed systems that can't be successfully cheated without a massive accumulation of power.
What do you mean dematerializing trust, can you put an example? As far as I know, trust is not made of matter, I don't know how it could possibly be dematerialized.
If the artist signs the NFT to you, then you can't track resales. It will always be signed as belonging to the original person who bought it. So basically this "alternative" to NFTs would be impossible to trade. It blows my mind that people still don't understand stuff this basic.
The only reason for tracking resales is to prevent double-spending, in other words, to create a false illusion of scarcity. The whole thing is a charade.
You can't resell a game in steam because Valve doesn't let you, not because the game is being made artificially scarce.
Which it is, but this is not the reason you can't resell it.
The point is that reselling an NFT doesn't require a central ledger. The central ledger is necessary to prevent the same token from being sold multiple times by the same seller. In other words, to create the illusion that the seller doesn't have something (and therefore can't sell it) when in fact they actually have it.
Each NFT is separate. You can authenticate a digital game by owning the nft. The publisher can sell as many tokens as they wish, that's entirely different. The point is that they can't stop you from reselling, because it's on the blockchain, not on steam.
I've become extremely alarmed at the number of completely non-technical people who don't know anything about how cryptocurrency works getting extremely into it via YouTube click holes. It's obvious that these NFTs are capitalizing on it.
A guy I ran into at the hardware store today was talking to me and he didn't understand the concept of a cryptocurrency that has a stable value so that it can be used as a means of exchange.
He's an airline pilot and he just has tens of thousands of dollars invested in various crypto things that he heard about on YouTube and he's made a ton of money on it..
It was eerily reminiscent of conversations I had with people flipping houses in 2006.
> He's an airline pilot and he just has tens of thousands of dollars invested in various crypto things that he heard about on YouTube and he's made a ton of money on it.
"made a ton of money on it." Until he has sold those assets and turned them into a major, stable currently like USD in his bank account or a diversified collection of other assets, they are as reliable a store of value as Enron stock was in July of 2000.
Isn't it interesting though that the people who don't have the technical understanding of why most cryptocurrencies at the core are unsustainable, just as the housing market was in 2006 are still the ones making money on it?
When betting in any market understanding people and psychology seems to be more important than understanding the product.
No, the price is going up, everyone on average is making money. In a bubble everyone tends to think they are very well informed and investing rationally and getting the psychology right.
Loved it .... I've been craving a replacement for Douglas Adams for a while now.. Terry Pratchett was quite close.. but now he too is gone.. perhaps it's time for me to find other writers or write stuff myself..
I would be a bit more optimistic, here is my take on it.
Hitchhikers guide to the galaxy:
Earth - a small planet in the outer reaches of spiral galaxy M7529. Inhabitants with watery brains came up with technology to use their star energy directly for complex mathematical calculations. Our space archeologists still don't understand why the calculations were producing random outputs so they never managed to get out of their star system and used all their star energy for that. Their Dyson sphere is interesting place to visit because as of now, it is the only civilization that achieved building it and never managed to go any further.
OK, so what happens if, say, the worlds energy demands jump 100x in 2-3 years due to out-of-control feedback loops like crypto?
Energy prices go up. People suffer. There are two possible responses:
- Regulation/laws to stop the feedback loop
- Investment + deployment of new energy technologies to increase supply
Will be interesting to see which of the two scenarios above happen, or if the fears of this crypto wave leading to insane energy cost increases just don't happen.
Sounds like an investment in the energy sector is worthwhile now. Make money selling the shovels (reference to the gold rush where shovel sellers made more than people looking for gold, i.e. valuable NFT's and cryptos being "gold" here)
The reality is neither. No feedback loop will be removed, and no new energy will be ready (at scale) in time. China has been building a lot of coal plants, I expect more of that.
The simplest answer is to move people towards the various networks already operating with very little energy consumption in comparison to bitcoin or ethereum. Cardano and Polkadot both operate on a proof-of-stake mechanism rather than mining.
It's like HN doesn't realize there's more going on in the space than bitcoin and ethereum.
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Anecdotally I've seen several artists on social media making posts recently saying "wow okay I just heard about the power use of NFTs, this is nuts" because it's really not obvious if you're not already familiar with blockchain-related stuff.
NFTs might help some artists get money. That's not really as much of an impact.
So if we're comparing things, the full context needs to be included as well, not just some strawman of a magnitude.
And all of that being said, if the world decided that it would stop producing desserts, I'd probably be on board with it anyway, but the impact would be pretty large. If the world decided to stop supporting NFTs, not much would change (I suppose it could in the future, but based on their current trajectory it doesn't seem like that'll be the case).
Or you don't create exclusivity and sell it cheaply, but while people do buy e.g. music that apparently doesn't work as well for other art forms (artists certainly have tried).
Limited/unique prints apparently do work (as in people are willing to spend money on those), but limits you to static 2D media.
In principle nothing stops you from selling digital art with licenses like we do sell software with licenses, but that hasn't caught on, for whatever reason. (I'm actually expecting that to be added to NFTs soon-ish)
Enough people do seem to be currently willing to accept the concept of an NFT representing ownership of a digital thing to put a price on it, and that price is noticeably higher than what they pay for non-exclusive digital art. For many artists, that's reason enough to use this new avenue to sell their art.
These trading cards are, somewhat mysteriously, selling, and that does get money into the hands of artists which is good, but they're not doing it by encouraging people to buy art or tip artists, and it's hard to see how "everyone can just print trading cards referencing things" is a sustainable anything.
The speculation and whales will being the capital to generate a steady market and build out the partnerships and incentives for customers. Once people are used to digital wallets, sending a few bucks for instant delivery of some unique design is easier than etsy.
All of those are neat ideas which do not require NFTs, and are not enabled by NFTs. People already pay for Second Life furniture.
Thought experiment: if they sold a digital art piece in traditional terms, would you consider the printed licensing contract (which is our usual legal tool represent selling a file) to be a "trading card" and the art itself to be not sold? (the legal meaning of an NFT is less defined, true, but I suspect people will tie licensing contracts into that soon enough)
Especially in art, a lot of this comes ultimately down to social convention of what people do consider to have value, and as long as enough people agree it doesn't really matter what the rest of us thinks. (I think I get how the logic works for NFTs, but it doesn't work for me in the sense that I currently don't consider owning an NFT to be meaningful to me, unlike owning other kinds of (representations of) art)
People do sell licenses to digital art, yes. I've both bought and sold such licenses, primarily on TurboSquid (https://www.turbosquid.com/), a digital market place which has been doing that for over 20 years.
That's neither a trading card nor the art itself, but it's certainly closer to "art" than "trading card", because I get specific legal rights to do specific things with the art, such as use it and reproduce it in a book, website, computer game, etc.
It is worth, I think, asking what is being offered by NFTs that TurboSquid (and it's endless competitors and equivalents for other media types) don't offer. Scarcity? Nothing stops such marketplaces from selling exclusive licenses, and some have tried, although I don't think it's ever been popular.
> the legal meaning of an NFT is less defined, true, but I suspect people will tie licensing contracts into that soon enough
Well, yes. People might start selling some sort of "NFT + rights" package at some point, but they don't come with any now, hence the "trading card" digs. Even if people start adding rights in the future, it's not clear that these rights will be (or will be seen to be) an integral part of the NFT. If I can sell an NFT of my 3D model now, and I can sell the right to use my 3D model in a game now, why would I combine these in a package and not just keep selling them independently?
(Now, one interesting thing is that the rights attached to NFTs would presumably be transferable, while licenses to digital art are currently overwhelmingly non-transferable. That is a big change. But...we could sell transferable licenses now; you don't need NFTs for that, and the concept is currently not popular. I rather think that rather than NFTs true value being that they enable transferable licenses, the transferability of licences attached to NFTs will be a drawback.)
> Especially in art, a lot of this comes ultimately down to social convention
That is true. Art prints are an interesting example; you're basically paying for 1) the right to reproduce an artwork on a single piece of physical media and 2) paying for the artist to do that reproduction for you. Both are legitimate services, but it's odd to find them packaged together like that so frequently. And yet, art prints are a huge and very well accepted part of the art market. If NFTs become widely accepted, they will seem less strange, to be sure.
To your other point many NFTs already include these additional legal rights, it’s articles and forums like this where people are talking about NFTs as if they are all just digital baseball cards.
Just look at decentralized domain names as the obvious counter examples (Unstoppable Domains and/or Ethereum Name Service). You aren’t just buying an NFT for a domain name, the NFT includes the rights to the actual name. I use both companies as examples, because even if this new space they are not offering the same rights over the underlying domain and it’s incumbent on the user to understand what rights they actually get with the NFT.
If the NFT doesn't come with conventional legal rights, you don't own the thing the NFT points to in the real legal system. If it does, it's redundant.
I don't know why all your examples involve third parties stamping sweet nothings onto a piece of paper. Of course something made by a non-author and with no ownership is useless. I said that in my first comment.
> If the NFT doesn't come with conventional legal rights, you don't own the thing the NFT points to in the real legal system. If it does, it's redundant.
An NFT needs to have some kind of rights in the contract or it's a scam. Notably you at least need exclusivity!
But that doesn't make it "redundant". It's a way of making a contract, not a replacement for contracts.
Yes, but NFTs claim to get similar effects without changing the law.
> I don't know why all your examples involve third parties stamping sweet nothings onto a piece of paper.
The third party is the blockchain. Because the blockchain can't enforce that you actually hand over real ownership rights to correspond with the NFT ownership.
> An NFT needs to have some kind of rights in the contract or it's a scam. Notably you at least need exclusivity!
If I own a piece of paper my country's legal system will accept as meaning I own something, why would I also want a piece of virtual paper that a bunch of people on the internet will accept as meaning I own some sort of rights to something.
> But that doesn't make it "redundant". It's a way of making a contract, not a replacement for contracts.
What NFT can I use to make a contract that any real legal system will accept?
So you can buy and sell it easily, and show everyone that you own it.
That's much better than paper!
> What NFT can I use to make a contract that any real legal system will accept?
Surely they have terms of service? That's where the legal system ties in.
To a certain extent this was already the case with photos, and IMO that's part of the reason that prices for photographic artwork are much lower than other media. You'll sometimes see photographers selling a series of 500 numbered prints (or whatever) as a sort of a way around that, and NFTs are kind of a more digital version of that.
Drug dealer buys an art NFT for $1k (using legit money), sells the NFT plus a bag of drugs to someone for $10k. They just made $9k in "artwork" profit, which is clean money....and since the value of art is always subjective, it can't really be questioned. On top of that, all monetary exchanges and transactions can be handled via smart contracts, so this reduces risk to everyone involved.
I think you highly underestimate how liquid the crypto craze market really is.
I'm not so convinced, especially when Seth has been a major proponent of digital currencies and economies for decades now.
But I also won't put a single sat in any of them right now.
I'm struggling to understand the possibilities. Can you enlighten me? It seems like people buying these things are just speculating. Can you paint a picture of what kind of possibilities you're excited about?
I think they mean, you could have the same stuff in different video games
Without integration into large networks, NFTs are worthless.
A very simple example is that it could partially solve the problem of verifying digital identities. If I follow/friend your NFT based identity, and various virtual realms (games, social media, virtual spaces) integrate with that 'identity' NFT for user accounts, then any new virtual realm I enter, I can immediately find and connect with people I already know, or identify imposters. There will obviously still be some other hoops I need to jump through to know a digital identity maps to a particular physical person.
I could also see game studios start to issue varying tiers of rare in-game items as NFTs that can then trade on a free market, like collectible cards. Not only would I suspect people will be much more likely to pay more for digital items they can actually take uncensorable possession of (and still sell after they get banned from a game), but different studios could even make deals to make their NFT items cross compatible. (Mario NFT skins and items in Minecraft?)
Maybe I'm starry eyed and delusional, and I'm sure it's a LONG, messy road to get wherever we're going with this.
You don't need Crypto Kitties for account verification. All you need is a cryptographic keypair, like the kind you already get by default in any Bitcoin wallet. Just sign a message proving you own a public key with the corresponding private key.
> Maybe I'm starry eyed and delusional, and I'm sure it's a LONG, messy road to get wherever we're going with this.
Evidently we’re going back in time to 2015, when “NFT” meant a blockchain representation of a digital trading card game. No one cared then, and no one cares now. The only thing new to the 2021 “NFT” narrative cycle is Twitter trying to monetize itself by selling tweets. Needless to say, none of the historical attempts at NFTs have ever resulted in lasting value to society, and probably this won’t either.
It does not. In fact, it reduces to the public/private key system we already have for verifying digital identities.
I have zero way of proving that I am the owner or creator of an NFT without the private key used to sign the original transaction. Why bother with an NFT and the complexity of a wallet when I can just sign whatever you'd like me to sign and you can verify it with the same public key that verifies my identity claim?
NFTs add _nothing_ to the equation.
Why not just have a government or trusted company sign things rather than an NFT? If the UN says "we will digitally sign digital passports", that seems strictly better than an NFT for identity. Without a central authority to verify identity, how do you solve the problem of a thousand people creating NFTs saying they're john doe living at location X? Don't you need someone to validate it, at which point you have a central authority?
Or is this for digital assets like "I own this git repository", which you can already do by signing it with your gpg key and then distributing it via ipfs or such?
> can't be arbitrarily erased by any central authority.
Sure they can be. If a government creates a law saying "anyone that processes NFTs must first put them through this list of NFTs to filter, must filter them out, etc, or go to prison", well, now NFTs are effectively erased.
Just like how the government successfully erased the drug market by making drugs illegal.
Boy would it suck if they 'accidentally' delete your digital identity and suddenly you can't participate in any social media. As more and more of our lives go virtual, this could legitimately become a prison like punishment and hopefully there's an arm of the justice system that manages that transparently.
As always, this always exists and the question is why Facebook would want to give up their centralized control of it, just like national central banks won't willingly accept loss of control over their own currencies.
we're going to have to suffer hearing about these terrible ways to extract money from people & waste energy for so long.
this is a demented game of make believe, and it's just going to keep getting worse all around us.
The environmental critique rings hollow. Our economy revolves around this unnecessary consumerism. Why single out NFTs? Seems like sour grapes to me.
It is only proof of work which needs to be more wasteful the more efficient things become.
If it turns out t-shirts are polluting massively, and someone finds out that by replacing one chemical with another they pollute much less, then people will do that.
If a more efficient machine comes out for making a t-shirt, t-shirts will become cheaper to make.
Proof of work chains can't take advantage of any improvements. They waste X amount of money in electricity intentionally. If computers get faster, they need more computers. If electricity gets cheaper, they need to burn more electricity to have similar security (make the cost of a 51% attack the same again).
Any time computers get significantly better, old hardware has to be thrown out in favor of the new fancier hardware, or else other miners outcompete you.
Electricity generation can come from non-polluting renewable resources (the sun, the water, the wind, etc.)
Buying one from anyone else is clearly not.
Expand your acronyms, peeps.
People are paying millions of dollars for artwork that doesn't exist.
The bid for Jack Dorsey's "first tweet" is over two million dollars. (What does that even mean?!)
Sure, I suppose you could link ownership of intellectual property or actual goods to NFTs, but what's the benefit? Who enforces it? And what happens when crypto is broken and people can't prove they owned the private keys?
In practice, people will vote down or flag what they will. Asking for permission really won't change that.
The practice of using a recently-coined acronym without definition as the principle focus of a story is pretty egregious.
> NFTs are distinguishable and you must track the ownership of each one separately.
> The pair (contract address, uint256 tokenId) will then be a globally unique and fully-qualified identifier for a specific asset on an Ethereum chain.
https://eips.ethereum.org/EIPS/eip-721
[0] https://www.merriam-webster.com/dictionary/initialism
This is no different and it is another giant scam. Where was the same 'thought leaders' on Twitter who were screaming and hyping about ICOs in 2017? Bust.
On to the next get rich quick scheme I suppose for the VCs and the hype brigade on Twitter, I guess.
The "rest of us" don't pay for the electricity use. The ETH miners are paying for it directly. And creators and buyers are paying for it indirectly through ETH usage. It isn't an externality. That's like saying the physical art world shouldn't exist because it uses physical real estate, electricity, and raw materials to be made on -- and the rest of us pay for those things.
Is it a good use of electricity? Maybe, maybe not. That's for people to decide individually, unless we'd want to go down the moral rabbit hole of judging every single use of electricity.
It is very difficult to start being the moral judge for every single use of electricity. Instead, we let the free market decide in most situations. And when there are true externalities (meaning costs that borne by the broader population, e.g. car emissions) we do impose regulations to reduce those externalities.
Kidding aside, I would think that most people understand "what has he not yet delivered on" as "he's completely broken his promise and he's no longer working on it". I didn't have a "yet" in that sentence.
No, I think he makes a valid point that they're intentionally misleading and a scheme to sucker someone out of money.
Let's look at Jack Dorsey's 'minted' first tweet.[0]
This is in no way gives to exclusivity to 'owning' this tweet. It literally is just 'owning' the rights to 'Valuable's' NFT of this tweet (if they even are committing, legally, to never create another NFT of it). There are no limit of companies that can do exactly what they are doing and 'selling' this tweet in the same way, nor is Jack Dorsey committing never to accept those 'sales'.
To me, it seems like an outright scam that anybody but Twitter is trying to do this.
[0]https://v.cent.co/tweet/20
We are facing a climate crisis that is projected to accelerate a mass extinction crisis and create tens of millions of displaced refugees and yet we are spending 200 KgCO2 of wasted compute on a 'digital ownership token' on this: http://cryptoart.wtf/#https://superrare.co/artwork-v2/the-fo...
How much for the whole world?
Negative environmental consequences with costs imposed upon society are literally externalities. All the things you list are textbook examples.
Much easier to cut off the framing early and declare "all crypto is bad and has no value", which is what the contra side is leaning towards. It's easily embraced by authoritarian-left ideologues, since their inclination is to reject market solutions anyway.
My suspicion is that we'll all be surprised in eighteen months. The "boom" will be gone, but an unalterable trend will have taken hold regardless, and the platforms will have largely moved on to proof of stake, closing the environmental argument.
The thing of cryptocurrency is that at the end of the day, all you have is a file of a few hundred gigabytes that somehow represents hundreds of billions of dollars of market value. That value means that an absolutely huge number of eyeballs are scrutinizing it, looking for a way to protect their investment. They can't "turn off" the system and make sweeping changes. The hypotheses of anything-goes "assassination markets" have not panned out - crypto has become a sector with a civic outlook.
I disagree. Cryptomining created a new market that increased the demand. There's no reason to assume the same numbers of GPUs with the same utilisation rate would be in use if we didn't have crypto. Thus, it does have direct environmental consequences.
Not all of that electricity use is a total waste: a friend of mine uses part of his mining heat to warm up the apartment in the winter. It's an expensive heater though.
No but the rest of are paying it with the overheating of the planet which is way way worse
Binance Smart Chain has many NFTs and doesn't use Proof of Work. Ethereum is migrating to Proof of Stake soon and will eliminate the power waste argument. If he wanted to attack NFTs he should have used a better argument.
Mining wastes power on purpose. Transactions don't waste power on purpose, and there are designs that make them minimally expensive.
Bitcoin is going to burn power whether or not you attach your token-tracker to it. If you design a system with thousands to millions of users that makes one bitcoin transaction per day to secure itself, then it's responsible for a pretty negligible amount of wasted power.
only at the cost of reversibility.
the central thesis of proof of work is that an attacker must expend more energy than the "main" chain, across the duration of time they want to be able to reverse a transaction (older transactions require more time).
The amount of energy expended is determined by mining rewards - over time, mining profit will converge to zero, miners will expend however much energy the mining rewards buy.
as such - any reduction in energy expenditure (i.e. a reduction in mining rewards) will lead to a reduction in security, making it easier to reverse transactions.
If you tie into bitcoin or ethereum once per day, you get the full security while only being responsible for about a millionth of the power use.
That means your NFT trades will only be 100% locked in once a day instead of continuously, but that's plenty.
I’m pretty sure my domain name NFTs give some ownership rights you are overlooking.
In other words if I own abc.eth and abc.com and sell them both to you directly but I keep the abc.eth NFT and keep abc.com, then you could still bring me to court to enforce our agreement
There's a guy who has been selling property on the moon[1]. This is exactly the same thing.
1. https://www.usnews.com/news/articles/2013/03/25/meet-the-man...
It doesn't matter what you think ownership is. We're redefining it. :)
See you on the other side.
All intellectual property law works this way already. The copy you have does not have any bearing on the copy someone else has, but we created laws that link it back: you don't "own" the copy you have, and using it in certain ways is made illegal.
NFTs as they are now, without any legal protection, are still innocent, but they are bought because people want to "own" something. Since NFTs don't actually provide technological means to implement that "ownership", the next logical step is to declare it by law: "owning" an NFT gives "ownership" of the content. I hope it never comes to this.
With something like CryptoKitties, you can do something with the tokens (play a virtual pet game). But with something like CryptoPunks you're essentially paying for digital beanie babies, which are worse than real ones since anyone can display and enjoy the image you paid for.
You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set. When a set's popularity wanes, so does your token's value, and your ability to show it off.
I'm always happy to see artists being paid for their work, and if they can make some money during this craze - more power to them. Beyond a few creators being rewarded, it seems like this is going to be 90% bubble (with plenty of hucksters), and 10% real use cases that stand the test of time.
All the most interesting developments in computing start like this. This is good. The future is being born now and not without the required creative destruction.
Lots of hype, most of which never pans out, with a core of projects that change the world.
This is being continuously disproved since decades by contemporary art.
You had me until this bit
Mama! Yes but ....
* edit for clarity: what would be commonly considered technical artistic effort, although a large % of graphic designers would disagree with that as composition is a skill, and conceptual artists would disagree due to the thought put in (which imo feels post-hoc but hey ho)
So, it's not that being technically spectacular in some arbitrary "really accurately painted or drawn picture of reality, like a photo" way makes art valuable (photography effectively destroyed that a long time ago, sorry!). It's that it has some special significance. If that significance is more than personal, as in it has some historical/cultural significance, then it becomes valuable. There's no point to it, it's art. So w/r/t original subject, above reasons make me think twice about any knee-jerk cynicism I have toward it (which I do have, I just have to have an open mind)
We say "Beauty is in the Eye of the Beholder", because it's true. There will be no accounting for a persons own taste or for what society finds fashionable today or over time.
If what you personally call Art and its story speaks to you then it is valuable. If others share that feeling then it is even more valuable. It's just that simple.
I personally like the idea of commissioning art like what big families did back in the Renaissance, but use Social P2P networks like what is already happening with customized digital Avatar makers/artists. NFTs have a role to play here equivalent to an old Renaissance painter signing the bottom of the painting, only now it's with the owner(s) and all future owner(s) signatures there for all to see.
AI can be trained to recognise and prefer beauty as well.
[0] http://www.bbc.com/earth/story/20150511-why-are-animals-so-b...
[1] https://www.independent.ie/entertainment/sir-david-attenboro...
And only as long as people recognize your NFT claim to ownership as even being valid. Other people may view that brag as being as sad as someone bragging about their land holdings on the moon: https://lunarland.com/.
It's like jack dorsey selling an NFT of the first tweet compared with any random person trying to do the same.
Which of those rights are actually transferable?
What rights do you have in a tweet that you made in your capacity as an employee of a company?
What rights do twitter as a company have with respect to tweets? Or to impose restrictions on the ability of people to transfer rights with respect to tweets?
At least with cryptokitties, love em or hate em, the NFT was the character and the permission, so while anyone could admire your cat nobody but you could publish actions from it.
There’s absolutely no reason for that to be decentralized, only one party can honor the tokens anyways. Like most things crypto they don’t actually make sense for anything.
Well when you buy a ticket from ticketmaster you can’t exactly dictate what features they offer through their platform...not to mention ticket master is a 3rd party service that they take a massive cut.
blockchain is cutting these 3rd parties out in these use cases, allowing the event holders to easily mint the admission tickets and users take advantage of peer to peer open source technology. Meaning easily trace the tickets and buy/trade/sell without relying on Ticketmaster.
The secondary markets in ticketing exist because there's an excess of demand and entities who can exploit access, speed, or technical know-how for arbitrage. Blockchain ticketing companies don't fundamentally change that statement - they enable it.
No one likes Ticketmaster - but to call them a 3rd party service that takes a massive cut is inaccurate. Ticketmaster is owned by Live Nation, which usually owns both the venue and the artist's tour schedule. And owns the primary and secondary ticketing sales. So Ticketmaster is usually the first, second, and third-party in ticketing.
Blockchain doesn't magically fix this. It doesn't change the deep relationship Live Nation has with labels and artists, their fodness for excluding artists who play at rival and independent venues, their habit of defining contract requirements that can only be fulfilled by Ticketmaster software...
Blockchain is solving all of the wrong problems in ticketing. I don't need a distributed, trustless ledger of who owns a ticket when all of them are issued by and redeemed at the same location. The only real reason to push for blockchain in ticketing is to help scalpers hide what they're doing.
I don't buy "excess of demand" as being fundamental, though, except in the most technical sense. Imagine a super niche event, where the organizers know there are exactly 200 fans on the entire planet, and they offer that many tickets on sale. It still makes sense for a random scalper to take a loan, buy all 200 tickets, and resell them with a markup. It would still make sense if the organizers offered 300 tickets, i.e. greater supply than demand in terms of heacount! A scalper could still come ahead buying all 300, selling 200 at a high enough markup, and feed the remaining 100 tickets to a cat.
I think scalping (arbitrage) can occur in any situation in which the supplier isn't charging the maximum the market can bear (perhaps that's what is meant by "excess of demand" and I'm missing some technical definitions here).
[0] http://www.personal.psu.edu/dxl31/econ2/pizza_market.png
Is this an argument? We're talking about ticketmaster moving to a chain, why can't we talk about them moving to a cheaper better service that isn't based on crypto?
And besides, crypto isn't free. The network takes a cut. Doesn't it cost like $20 to perform a transaction right now?
Why is there no global market place for reselling digital event tickets? Certainly Ticket master and the other retailers could agree on an open standard protocol, pay for a centralized clearing house, and create a digital market place. But they don't. And they don't because it isn't in any of their local interests to maintain such a thing.
This problem, which is fundamentally social and economic in nature, is what is solved by smart contracts. It allows the creation of a public commons, not one that technically couldn't exist, just one that no private actor is ever incentivized to create.
There are plenty of major concerns here, like how security and access are physically enforced if there are no official organizers or designated volunteers, but in theory you could maybe distribute a phone app so everyone is automatically scanning for unauthorized people, and just rely on physically capable attendees and police to deal with potential security incidents. Still probably a recipe for utter Fyre Festival-esque disaster and lawsuits in many cases, but feasible in theory.
It should be noted that private keys can be shared if the owner wishes. In the case of using NFTs as event entry the event organizer would still need to keep a record of which NFTs have been used already for a given event because the wallet can be shared. Third party services will almost certainly pop up to fill this need.
This could be enforced for real-life events by handing out a wristband with a GUID QR code to the first person to demonstrate they possess the private key that owns a particular ticket token, then never handing anything out for that token again, and also triggering an alert if the same QR code is ever seen on more than one person (to mitigate "pirates" who might offer identical or similar-looking wristband material and "replay attack" with an existing assigned QR code).
There are probably other attacks I'm missing (including obvious existing stuff like people just sneaking in and evading wristband checks), and there are lots of questions about whether an NFT or decentralized blockchain is a smart idea for a given live event, but from a security perspective I think it should probably be feasible if an event organizer does decide they want to do it for whatever reason.
However, there are other analogues that I think are much less feasible or perhaps totally infeasible. There are some NFT... apps? platforms? companies? DAOs? that are providing some service where an NFT grants you access to something like a restricted Discord server. Even aside from how valuable or sensible that may or may not be, there's absolutely nothing stopping a token-holder from just sharing their Discord account email and password with as many people as they want. The platform and the Discord servers would have no idea if anyone's doing this and how many people could be sharing any given account. (Discord employees could potentially detect some cases but I doubt they'd play any part in this.)
For a real-life physical event, someone can't just copy your body and make it a shared proxy for pirating, but any NFT ticket use case short of in-person events is probably often just going to rely solely on the goodwill of people to not abuse/pirate things, and we all know how that goes - especially in anonymous online communities.
The rubber-meets-the-road real-world crossover part is where NFTs and "Web 3.0" in general tends to become really shaky. I'm still mildly optimistic about it in the long-term, but I think a large percentage of existing use cases are going to fizzle as pointless dead ends that are surviving purely based on flavor-of-the-year hype and fad waves. Things are obviously stuck in one such fad right now.
This is quite close to what unlock-protocol[1] did for several conferences pre-covid. Overall it worked, though there are some key difficulties: gas prices make interesting on-chain things too expensive for most people, and wallet ergonomics aren’t great for this sort of thing.
(I am a former unlock-protocol employee)
[1] https://unlock-protocol.com/blog/checking-key-in
Digital tickets tied to digital identities that can only be transfered at market price. That's not a difficult smart contact to create.
What does it even mean? Let's say I buy a NTF $1000 and get a digital copy, what prevents me (barring legalities) to perfectly duplicate it and massively redistribute it (not the token, the distributed supposedly high quality file) for a fraction of $$$ and turn a profit (because since it had such a high price it must be in high demand)? The question is not about the legal consequences but about the thing you own: of you have one original painting you have only one, it's quite hard to exactly duplicate it for resale.
I may be naive (the dropbox-is-just-rsync kind) but I've yet to see a tangible explanation of a use† of CryptoArt/NFT that could not be done with `xxd -l 128 -p /dev/random` and PGP[0].
† No. "being in the blockchain" brings absolutely nothing (except burning watts). If the author wants to reissue anything he readily can. You. Just. Own. A. Number. I also hear some picture the author getting a cut of resales of the token, which is even more crazy when you manage to entertain the thought while trying to keep a straight face.
[0]: https://twitter.com/lloeki/status/1366804865943556106
The file is usually publicly accessible, why would anyone give you money for something they can just download?
https://twitter.com/jack/status/20
And what does the existence of an NFT allow you to do with respect to that bundle fo rights you bought that couldn’t already be done by having someone write down a rights assignment on a piece of paper, sign it and hand it over to you in exchange for some consideration?
1. That you paid a certain amount for the certificate.
2. That there will never be another certificate for the same thing, from the same brand of certificates (e.g. "Valuables BY CENT").
Pretty much exactly like owning a baseball card, then.
How many "brand of certificates" are there now, and what is the barrier to entry?
I suspect 1) several and 2) low.
Also, how is "there will never be another certificate for the same thing, from the same brand of certificates" technically enforced?
The enforcement, interestingly, is more traditional; the owners of the "Valuables by CENT" trademark can use existing legal structures to prevent anyone else using that name.
Meanwhile the NFT is digitally linked to the Valuables by CENT smart contract on Ethereum, which will presumably have an 'author' property attached to it, set to the string "Valuables by CENT".
Ah, so they pinkie swear not to do it a second time?
Your average blockchain was founded recently, and have a lot less to lose taking the money and running, or popping up again under a new name, for a second go at the same shtick.
1) https://en.wikipedia.org/wiki/Sotheby%27s
A Merkle chain[0] append-only ledger contains a transaction minting the certificate, and the consistency rules for that Merkle chain mean that any extension of the chain which mints another such certificate is not valid (the same as a extension that spends money from a account with no money in it is not valid).
0: technically a blockchain specifically, but that's not actually relevant
And one should be happy to control the receipt of their purchase of imaginary goods? Ok.
https://medium.com/treum_io/on-chain-artwork-nfts-f0556653c9...
Further, I don't understand how this works in music/art. Grimes' copy of her music is issued on Nifty Gateway, but isn't that art only valuable as long as users assign value to the Nifty Gateway platform? What stops another art blockchain from becoming more desirable/valuable and creating a NFT of Grimes' art there? Doesn't that erode the value of the original NFTs?
What am I missing here?
Not too different than paying $4.5M to have a dinner with Warren Buffett [3].
[1] https://www.coindesk.com/twitter-ceo-jack-dorsey-is-offering...
[2] https://en.wikipedia.org/wiki/Justin_Sun
[3] https://www.coindesk.com/trons-justin-sun-finally-gets-4-5m-...
Which the ARTIST has decided is a digital certificate for the price of art.
Just I could make a duplicate of the supreme brick, my duplicate wouldn't have as nearly much value if I tell people it is a duplicate. Supreme could sell bricks again but they probably won't. There's nothing physical that's stops them but there's still an implicit agreement between artist and buyer.
I may not wish to buy own a supreme brick, but I can at least understand why people find it valuable.
https://en.wikipedia.org/wiki/Artist%27s_Shit
Jesus Christ Mary and Joesph, what is the name of all things pure and holy...
Look, I get it outside of the money laundering scheme to modern art, throwing around how rich you are by buying "stuff". I get it. Tiny pecker syndrome. But let's stop and remember that Rockefeller and Carnegie, the OG capitalist titans, were dick measuring by donating their money. Sure "to the arts"... at least they were building halls and museums. They participated in some solid currency velocity that helped pay the wages to construction contractors. Still, they were assholes, but a lot better than just shoveling money between other rich cunts as a form of showing off.
Basically, if Token == Intellectual Property ownership then it makes sense.
This would mean if a creator, say a musician wrote a song and transferred the NFT and it became a wild success in the future, the owner would earn profits from the investment, but so too would the content creator receive the mentioned dividends proportional to the value.
If you want to use your ticket to go see the event, use it. If you don't, simply do not go. If you do not want to go and want to recover your costs, sell it back to the venue at the purchase price.
Yet your two sentence explanation is the most comprehensive.
NFTs enable the possibility of a market that is orthogonal to the channel that distributed the token.
The viability or existence of such a market is not guaranteed, but the likelihood that one could emerge at all has gone up thanks to the novel properties of NFTs.
If there was an mmo framework that is shared between different games, I guess. But even then, why have a universal currency instead of just making it framework/platform specific? It's less work and is all handled in a fast centralized DB. At that why create the extra work of PoW or PoS or whatever algorithm solving process it'll use. currencyAmount += tradedAmount is way easier and makes more sense on the game dev side.
All these anti NFT arguments amount to is, "This is solutionism at its finest, but people already bought koolaid in bulk...so enjoy the show."
Even then, there are still a lot of questions: what makes the d-game actually interesting/novel/unique/fun and an appropriate, creative, and clever use of a decentralized blockchain.
And although I mostly agree with this essay and the Medium essay it's referencing about environmental impact, I do think NFTs have some potential use cases outside of games, art, and bilking greedy people. I think those use cases just have to be a little further along the "blockchain from end-to-end" spectrum.
Remember that crowdfunded, over engineered juicer? It was some $400 and claimed to do like 100 pounds of force on a pre-juiced juice packet to squeeze into a glass for you. Some other article showed you can just squeeze these packs by hand into your glass with barely any force. This was "the Keurig" of juicing.
Total shit show of over engineering and solutionism.
I see the same thing with crypto and NFTs currently. Everytime I have this discussion in person, I always say that I do believe there will be a viable digital currency of some sort in the near future. The current gen of tech has proved the want, which is important, but now a real how is needed along with commonsense.
Like, theres a real want for an easy to go, healthy juice. Just bottle it and sell it that way. Why go through the extra step of a juicer if the shit is already juiced. I won't doubt their drinks were good. But they got caught up in solutionism gimmicks. Digital currencies are caught up in the blockchain gimmick.
Those two things are not a given.
So basically, decentralisation doesn't serve the vendor, only the consumer.
Mark Cuban talks about this regarding dallas mavericks tickets. Suddenly the ticket creator can still benefit from scalpers buying everything. Or, you can set the next sell price to be limited to only 10 percent more. etc.
There is a reason for artists and musicians to move to NFTs as well, as royalty is built in. See kings of leon releasing their album as an NFT.
In many worlds, image NFTs you own are displayed with special indicators that they are yours. You can print out a picture of the Mona Lisa, but its not going to have the same impression as the real painting.
Original Beanie Babies are worth a fortune.
This craze is happening because many people realize that at the least, there is sustained value in first-mover NFTs of various types. Before dismissing this as yet another craze or bubble, consider that a digital world where 90% of NFTs are worthless is no different than real life with commoditized art.
It seems like the obvious counterpoint is that perhaps all of these “collectible” scarce physical things which are bought and sold for huge amounts of money (art, coins, relics, etc.) are in fact being used simply as a way to identify a unique “token” that is good for generating hype among a group of people and exchanging value among that group because it has a story attached to it and isn’t easily counterfeitable. It’s pretty obvious that a decent reproduction of most of these things would deliver the raw surface aesthetic experience to the vast majority of interested people and would cost much less. For many famous paintings it’s easy to understand why someone would want a reproduction in their house for decoration. It’s less obvious to me why someone would want a reproduction of an old coin with a minting flaw, but perhaps that’s just me.
I agree re: rare wine and rich hobbyists. Bitcoin's value is much the same, although without the wine.
Everything Seth is saying about NFTs is true for every crypto coin.
How? You don’t own a (digital) image. You own a token that references an image.
Everyone else can view the image and send it to their friends. But you have some token allegedly signed by the author of the image — who cares?
This is a pretty terrible system, though, as it's completely off-chain and not "Web 3.0" or decentralized in the slightest. The server has to store the "private" content in a private centralized database, so the server owners also can access the content, and any hacker could access the database and publicly dump all of the supposedly token-walled content.
It's just taking advantage of the fact that any computer can determine the Ethereum address that owns a particular token and can check to see if a message was signed by that address's private key.
I could imagine a future standard that could maybe integrate this into Ethereum proper, though I'm not sure if it's technologically possible.
There's no way to prevent someone from just publicly releasing the art, but one could imagine some system like the full resolution piece stored as a public key-encrypted blob in the blockchain which can only be decrypted by a token holder.
Maybe upon token ownership transfers the key could be encrypted with the token buyer's Ethereum address public key, though I'm not sure how or if it could work since I think the original content key would have to stored on the network in some fashion in order to later encrypt the key for token owners. So it might not be possible even in theory, though I don't know nearly enough about Ethereum and cryptography to say with any certainty.
It would instead be like owning a unique piece of paper with a unique number on it, which somehow corresponded to a picture of the autograph. Now the autograph portion is identical between you and anyone else (neither of you has a physical autograph); the only differentiator is your piece of paper. Where is the value?
I agree - the problem with most NFTs at the moment is that you can't actually do anything with them, apart from trade them.
There are games coming out now (e.g. Goal Revolution[0]) where your NFTs' properties (and, by extension, value) change based on what you do with them (how you use them). If the NFT thing is going to have any future, it needs to follow this example.
[0] https://www.goalrev.com/
[0] https://www.aavegotchi.com/
I dot agree with this statement but perhaps it'll help you expand why you think this way. As the article says, you don't have to own the Mona Lisa to appreciate it's beauty.
How valuable is Jimmy Hendrix guitar pick? How valuable is a lok of Justin Biebers hair? How valuable is a book owned by Charles Darwin?
Of course NFT is a bubble just like about every other thing humans create, but humans will always attach value and meaning to dead things even digital ones.
And so NFTs can be used for many things including allowing people to buy something overhyped that will depreciate in value.
That's all good, the more of this the better.
TCP/IP looks pretty solid to me. NFT is basically TCP/IP with memory, why shouldn't that be useful for all sorts of things?
Bitcoin is more like gold, NFTs are more like network based consensus validation of ownership.
You can say this about literally every non-productive asset, including NFT's real-life counterparts eg. painting or trading cards.
I'm a dev at pruf.io and this is one of the many things our platform is designed to do.
The same can be applied to physical goods as well. Why do people pay millions for the original painting, even though they could probably get a replica that's identical to the naked eye for much less? Clearly they're interested in more than it being "as good as the original".
Furthermore digital assets undergo similar attrition to physical goods through people losing access to their goods. The BTC block chain is notorious for its forgotten wallets.
When imaginary cryptohashes have limited supply, it's kind of pointless, or at least there is nothing good for the buyer or society.
There are people who happily pay $10,000+ for an Italian purse. There are people who are happy with a $10 Chinese knock-off.
There are people who happily pay $2,000 for an Apple laptop. There are people who are happy with Linux on a $100 machine from Goodwill.
There are people who go outside to feel the breeze. There are people who are happy with a fan.
I don't understand NFTs at all. But I have to remind myself that often value is subjective.
I feel like NFTs today are roughly where altcoins were in 2012. Lots of good fundamentals to the ideas, but most of the implementations are really missing the mark. Whatever the NFT equivalent of Ethereum, Zcash, Sia, etc is... it's not here yet. And it may yet be a year or two until it first appears.
On the other hand, the morality of NFT's is already mainstream while the usefulness is an open question that's leaning toward "not really".
This is the weirdest sentiment that I see all the time on HN, but enough people express it that I have to accept it as both widespread and genuine.
However, I think that if you think $2000 US for an Apple laptop isn't the best value for money you can get on the laptop market, then you're either very good at finding bargains or completely bonkers.
Yes, macOS is no longer for developers. Yes, for extreme workloads I use my linux ryzen7/2080ti or the cloud rather than the MBP. Yes, they had a strange couple of years with the keyboards.
But honestly, they're the best hardware hands down. Not just the best absolutely, but the best per dollar. And personally I love macOS, but I'm just a manager these days so I guess I would, right?
FWIW, I used my Trump Bumps to buy a new MacBook for my wife, and I plan to use my Biden Bonus for a new MacBook for me. (Assuming Apple releases one with a large enough screen in the next six months.)
It's rock solid running win 10 pro, has extremely low DPC/ISR latency for ASIO music recording with Ableton, can chew through blender modeling with cycles, and I can do all my dev work in vs2019 and intellij with zero hiccups.
I challenge your assertion that you can't find equivalent if not superior hardware per dollar as what apple offers. Maybe you're just not looking hard enough.
An NFT is really just a digital autograph. Not even really an autograph, isn't it a cryptographic signature? Which would surely need to be random by nature, so the artist can't even do something unique with that. It's external to the work itself.
I'm sorry, but I simply don't. Not trying to be contrarian, but reproductions bring me a very different joy and appreciation than provable originals. I agree some things in crypto are scams, but NFTs, in my opinion, have a really important function in some domains.
The whole things feels like a scam to me. Taking the best part about digital goods (that they’re non-rival) and attempting to hack on scarcity for the purpose of exploiting a psychological flaw.
The most charitable interpretation is that it's a way to reward artists for creating digital art in a new way.
The HN article for this comment thread shows the risk here though. If the monetary incentives become pushing these tokens, then the most successful 'creators' will be the people that can maximize getting people to pay for these dumb tokens. The incentives are bad and you end up with the 'artists' being mostly ICO style scammers.
It's like the corrupting influence of ads on media, tokens value will be a similar but different corrupting influence.
You could argue how is this different than monetizing anything? I think it's because of the pseudo-value/speculation driving people to spend more on the hope of a future return. That's the psychological hack of fake scarcity.
These tokens are already diversified beyond anyones control.
Tokens take that a step further and make it worse.
Incentives create the world. On one side you have Apple Arcade trying to align incentives for a better global outcome/end state. On the other you have in-app purchases, loot boxes, and NFTs - trying to maximize profit for the house.
A stone is a physical object, some stones are worth more than others.
You can call the fact that humans apply value to thing a scam but that would give you a suboptimal understanding of the world.
What scares me is that there are artists who I don't think understand how scammy this is. They've drunk the kool-aid and accepted the handwaving "you don't need to know how it works, just that it exists" explanations. Creators who wanted to make an honest dollar but ignorantly perpetuated the scam could find them themselves in hot water.
To be fair, if they're doing it honestly the value proposition is "Support the artist and get bragging rights for having done so!", which doesn't become a scam (or at least any more of scam, depending on your view of bragging rights) just because there's a scammy secondary market that the patron doesn't necessarily have to participate in.
This is supposedly the company the movie Ex Machina used for the CEO’s Jackson Pollock.
I’ve been tempted to get one from them. :-)
https://www.quora.com/Did-they-use-an-original-Jackson-Pollo...
ETH NFT refers to the smart contracts that you would use to digitize ownership of a house or any other (physical or financial) unique asset that you might trade.
You can nest an NFT under an ERC20 token, too, so that you can sell partial ownership tokens in your NFT.
Of all the use-cases in crypto, I think digitizing ownership is the one that seems most likely to be actually used for a non-trivial volume of non-speculative trading.
When it comes down to it, the entry on the local tax rolls or property registration office is going to be the one that counts.
NFTs are the digital equivalent of a vehicle title, that's the strongest usecase (proof of ownership), IMO. I'm not too keen on the collectibles/art usecases, they're probably the easiest/low-effort ones.
ex, if the law requires an actual notarized handwritten signature to transfer ownership, what you and I do on the blockchain will simply not count when it comes down to it.
If I accidentally burn the NFT that represents ownership of my house I'm definitely still the owner of the house, there's no world where a government would shrug and say "I guess nobody owns it anymore, oops"
Suppose I die taking my wallet keys with me; how do my heirs inherit my NFT-ized house?
If the government is minting these NFTs and deciding which transfers are legitimate and which aren't, why are we bothering with all this?
Basically: at some point, an NFT will become separated from the ownership as recognized by the people who count (banks, governments, etc). Without a mechanism to reunite them, the NFT is not very useful; but if there is some sort of mechanism, it's really that mechanism that determines ownership, not the NFT and you might as well use a centralized ledger.
It’s important to understand that these tokens aren’t going to replace the existing legal system (much though the anarchist/libertarian wing of the crypto community might wish it). They just enable certain transactions to occur with lower overhead and time delay. This is about improving friction in the happy path, not providing new solutions for every conflict case.
Personally I don’t think there is a reason to put your primary residence one the blockchain (you don’t trade it that often). But it’s interesting for places where you might want to trade assets at higher frequency (eg micro loans, supply chain finance, etc) and maybe there is a real-estate trust angle too.
That value does not disappear if the state + courts also build in processes for over-ruling the on-chain owner of an object and forcibly transferring it to someone else. The core value here comes from how much easier it is to clear all of the red tape in a fully programmatic world.
Before I buy an NFT, I'll have to check the GovLedger anyway to make sure that NFT is actually that person's to sell, and hasn't got a lien on it or something else that means they can't actually sell it.
If the idea is the blockchain is permissioned and the state can choose which transfers to allow and can forcibly recover NFTs, why not just use a database?
Regarding liens, it seems simple enough to say that if someone does not own an NFT "free and clear", then they cannot transfer it "free and clear". It might even be a different NFT entirely (a "liened NFT," where the original un-liened NFT is held in trust by yet another smart contract, with limited or conditional ownership rights given to the lien holder.)
The reason not to use a database is interoperability. Any smart contract can transfer these NFTs according to infinitely nuanced scenarios, and only during disputes would a court need to get involved and forcibly transfer the NFT according to a judgement.
The typical case where all is not equal in finance is where currently parties transact via a trusted intermediary like a clearinghouse (who might take a 1% fee, say), and a startup wants to allow parties to transact directly, thereby capturing the fee as upside. Large financial institutions don’t tend to trust small startups that might implode any month, but they can (sometimes, it seems) be persuaded to trust a distributed ledger.
No they aren't, and least not until they're recognized by law as such.
Are you implying that laws should come before inventions/ideas?
So, let me get this straight: you have an NFT that represents the deed for a vehicle, but the law does not recognize the NFT as the deed for the vehicle... if you don't see any problems with that, boy do I have a bridge to sell you.
You have a piece of paper that represents the deed for a vehicle, but the law doesn't recognize the "paper" as the deed for the vehicle...(this during the time of clay tablets)
Was that clear? or do you still have that bridge for sale?
There are people who sell deeds to land on the moon (https://lunarland.com/), but they're worth little more than the paper they're printed on, because they have some of the same deficits in legal recognition that NFTs have. Those people have no more ability to will their certificates into having legal force than NFT advocates have.
In short, an NFT is little more than a trading card (representing only itself) unless a court would side with the possessor of an NFT against competing claims for whatever property it's suppose to represent (e.g. transferring ownership of the property/rights to party A using traditional means AND transferring the NFT to party B). If the court picks party A, the NFT meant nothing.
I made a point, which you missed and you're telling me that I missed your point? seriously?
I'm just telling you that this technology is suitable for doing the job of a paper-title, but in a digital way. Is it that hard?
I’m sure there are many asset classes where you can’t write such a contract but I don’t think your categorical rejection is correct.
I think there is a case to be made for NFTs, but would also not be surprised if you're right that it ends up with mostly bag holders.
The only thing you "own" in the physical goods sense of precluding other people from using it, is the NFT itself. It is exclusively assigned to you, other people can't conceptually say they own it.
Another example of how that divide manifests is how would someone show off their NFTs? Art is easy, hang it on the wall conspicuously with canister lights. You could do the same with an NFT piece, or you could put it on your profile or something, but anybody can do that. You're not showing off your NFT, you're showing off the art. Your NFT is just a jumble of cryptographic data. It has to be random for functional reasons, I presume, so it's not like the author can make your NFT a piece of art in and of itself.
https://news.ycombinator.com/newsguidelines.html
So, it's made, and costs 150 a bottle. Why? Ostensibly, it's good scotch whiskey, and it's a limited run, 10 years in the making.
So why tokenize it?
Gamification.
Only people with the actual bottle can play.
Open it, scan the qr under the cap, then you can share the official tweet from posh-makers whisky announcing the opening of the bottle.... "that was us last night, good times all around!" maybe you get a 25 dollar certificate for your next limited run bottle. It's a social flex, and it's great publicity for the brand.
...and the remaining 237 bottles just went up in price. Fast forward a few years, and somebody has one of the last three bottles.... Which is mostly because he can actually prove he has one of the last three. Now its worth 270k.
NFTs are revolutionary for digital assets and allow for something beyond the world of licences as well as much greater scaling.
Fads like CryptoKitties are completely irrelevant to the core tech, just like Bitcoin is in the grand scheme of things irrelevant to the potential of block chains.
An anecdote,
I am an avid jazz record collector (vinyl). Every record I own is available to me on Spotify and I actually frequently find new records to purchase on Spotify (they have a great jazz selection).
Interestingly, or maybe not, I find that I listen to the records I own more than those I don’t even though I have access to so many more.
I also find myself having significantly more patience with the records I buy blindly than I would a random thing that comes on algorithm radio.
The point being, ownership creates psychological attachment which in turn creates some intangible form of value that I can’t quite put a number on but I definitely feel.
When the sword is sold -outside of WoW-, how does it have value in another context? Can a Destiny character equip a WoW sword? (No.) Ok but what if the Destiny devs made an in-game Destiny item that was pegged to that WoW sword, and then the games all checked your inventory at login? You'd have to check the ledger -every time the item is used- or the player can just login, trade it away, and then stay logged in and continue to use it (use after sell, essentially).
If players can -already- trade items within the simulation where they were created, but we're not defining what it actually means to move an asset -between simulations-, what is the actual use-case here? That you can trade non-functional skins outside of the game? That's it? Why is that good?
First, I don't think the big use case is for items being traded between different games. However, a system like that is possible. Blizzard would be a good example here, since their games have a high degree of cross-pollination, and they frequently offer promotions that unlock similar items in several of their games at once. So, owning a Blizzard "magic sword" token might give you a sword item in WoW, another one in Diablo, and a sword card in Hearthstone, each adapted for its own game. This is a small use case, in my opinion.
I imagine that the big use case is for any game developer (indies especially) to leverage the marketplace without having to build one, or be locked into one provided by a single publisher/distributor. The game itself does not have to be p2p as you're suggesting. Game architecture would remain centralized, and would communicate with a blockchain where the tokens are stored.
The process might look like this:
1) A player purchases an NFT representing an in-game item issued by a wallet owned by the game developer.
2) The player sends that token to a smart-contract address, also owned by the developer, with a memo that identifies their player account.
3) The smart contract notifies a centralized game server, then sends the token back to the player's wallet.
4) The in-game item appears in the player's inventory, within the game.
There could be any number of steps involved, and the contracts could operate however you'd like. The token could be destroyed after a single use (like purchasing keys for loot crates in CS:GO) or used and traded any number of times. The game server would have to keep track of which player account controlled which token, and update players' inventories whenever the token changed hands.
One more thing - NFTs can be programmed such that creators receive an automatic royalty (a percentage of the sale lands in the creator's wallet address) whenever the item is sold on the blockchain, no matter who is selling to whom. This could be huge for indie developers, who would benefit not only from selling the original items up front, but also from the long-tail resale of such items between their players.
I'm like 90% certain that there are cross-game item unlocks in Blizzard games already.
> NFTs can be programmed such that creators receive an automatic royalty (a percentage of the sale lands in the creator's wallet address) whenever the item is sold on the blockchain, no matter who is selling to whom.
Why is that good? Who is it good for? Why would a game developer sign up for this? You seem to be under the impression that I have no concept at all of what NFTs do. The problem is that a multiplayer game server is fundamentally already a trusted third party and the incentives for gamedevs to use them are poor, while the complexities enormous. Boiling the oceans to produce a trustless ecosystem for asset transfer is a fruitless endeavor if those assets can only be reified inside of environments that fundamentally require trusted third parties.
You already need to have a trusted third party (the game server) in order to give any functionality to the assets. Once you've added that trusted third party, you've thrown away the key benefit of blockchains.
The trusted third party is effectively required to moderate custom assets in games; untrusted asset creation is an unchecked liability in general, and is expressly prohibited by the terms of many game platforms. If a player creates content that is hateful, then another player that is a child can download it, and if their parent sees that, the kid will say "I'm playing $your_game", and then the parent will raise a stink about how $your_game has $hateful content in it and $your_game exposed their children to that content. That sort of thing will certainly get your game delisted from the Nintendo or Sony stores. Even if you're only concerned with an unregulated PC market, it's going to be a hit to your sales.
If a child wanders onto a hateful website, the parent is going to say "the web exposed my child to $extremism", and then use parental controls to control what their kid can access on the web, but you cannot do that in a game. Sorry, you can't bring your $valuable_item in here because $other_player has it disabled in their content settings. You'd better believe parents are going to say "$video_game exposed my child to hate speech" and it's going to harm your sales.
Beyond hate speech, assets have to be verified by the game dev to verify their integrity; the asset has to be loadable and working without errors and without breaking the game. That's assuming there are zero vulns in the asset pipeline. Beyond merely being loadable, it should also conform to some guidelines so that the asset doesn't perform well for players with fast machines, but make the game unplayable for players with slow machines.
As for royalties: Steam Workshop already gives royalties to people who create assets (albeit at poor rates) and people already play that game. Why would I, a game developer, sign up for something that makes all of this worse, reduces my revenues, is massively more complicated, requires me to verify data against a blockchain constantly, AND increases liabilities? This is assuming you even -can- verify the data against the blockchain frequently. Even assuming you're using a blockchain with a read latency of zero, you're still performing i/o. You want to perform blocking i/o to an external datastore every single time a player wants to use an item? The only away around that would be to write a lock into the blockchain to prevent transfer with a contract and cache the ownership semantics, at which point you have completely duffed every single advantage a blockchain is giving you.
Let's say, hypothetically, that we ignored all extant games and ONLY considered new games. Again: if you're not moving an item between simulations, it&#x...
I completely agree with you on the boiling of the oceans. It's a problem that cryptos will have to solve in the long-term to be viable as any part of a green economy. There are a few projects that are energy efficient, but Ethereum and others have work to do. In any case, NFTs aren't specific to any one blockchain.
I think content creation and limitation is a separate issue, and not implicitly part of NFTs. You can issue a token representing a particular game object, with no ability for the player to customize or modify it. You bring up an interesting point though - there could be a limited, controllable level of customization available to players. Consider a smart contract that mints NFTs and allows certain attributes to be modified, which could affect the cosmetic or functional details of the in-game item they represent. You could sell a class of NFTs representing a certain sword, and players could pay extra for a golden version, or a version with infinite durability.
For Steam Workshop, I think you've identified exactly the issue. They control the marketplace, and set the rates. If it's more profitable for a developer to set their own rates/royalties, and it's easy enough to implement, and there are enough players willing to use NFTs (or a platform that manages NFTs for them) then we'll start to see developers use them. Marketplaces aren't mutually exclusive, so you could have some items on Steam, and others on blockchain. You could make certain desirable items exclusive to the platform that nets you the most profit.
I agree regarding difficulty of implementation - this is something that most developers won't bother with at the moment since it doesn't make economic sense, but as the ecosystem develops we'll likely see companies that provide a simpler abstraction layer for NFTs (perhaps even specializing in games). As the implementation costs drop, we'll start seeing adoption. This might take several years.
Regarding blocking I/O, I don't think it would work like that, just like it wouldn't work as p2p. A game server could poll the history of its smart contracts (or the abstraction layer provided by a service platform) every few seconds or minutes, and update its centralized database of items to match whatever transactions have occurred. All reads within the game would still be to its own database, and not directly from a blockchain.
Why would the publisher behind Destiny care? Blizzard is the one profiting off the items. Each publisher would create their own mutually incompatible smart contract to maximize profits. Companies absolutely hate the existence of secondary markets. They want cash shop items to be tied to accounts so that every player has to rebuy the same items over and over again. It simply won't work except as an easter egg.
Players re-buying the same item is definitely profitable, but it may turn out to be more profitable in the long-term to allow players to freely trade items while taking a cut of each transaction as royalties. Also, as mentioned before, NFTs allow for single-use items. A game could provide all sorts of different items with different rules.
https://twitter.com/isyourguy/status/1366176796996112385
I think that’s the whole point. An enduring aspect of human culture is that we praise and confer social status on owners or stewards of rare curiosities. You aren’t buying NFTs for tangible value, you’re buying a speculative investment in social status. And people feel very confident that the market cap and liquidity for buying and trading this type of social status will go way up, and that unique, verifiable digital ownership allows the pay-for-status desires to take place untethered to physical goods.
In real life, people wear rolexes. Why? You and I both know that a casio can tell time just as well as a Rolex. I don't know the difference between one model of Rolex from another, but some may cost 10k and some may cost 20k.
To those deep in the Rolex world, the difference is huge. They can tell right away.
Why do people wear rolexes? A casio is lighter and easier to tell time. But a Rolex. That's status. You're not SAYING you're rich, but you signal you're rich. Big difference. The former, people will scoff at. The latter, people may be impressed. And if you're in the Rolex world and you own the top of the line Rolex? Those in the know are even more impressed.
How does this translate online? How can you signal status online? In centralized systems like twitter, you just look at followers. But what if... you just now made a twitter account to talk about something you love, and you have no followers? How can you signal status to people you talk to that you deserve some clout?
Enter something like cryptopunks. People in the cryptospace use cryptopunks as their twitter pic. Those in the know realize that one cryptopunk does not equal another cryptopunk. Maybe yours has red hair and only 2 percent of cryptopunks have red hair. Maybe you know all red hair cryptopunks command a huge premium and cost tens of thousands of dollars.
They can verify in your wallet that you own that crypto punk.
You can move from one platform to another, with no followers, and suddenly, you have digital clout.
Mull it over for awhile.
If you want to buy a bike, make sure it has a serial number (and if the number was filed off, then yes it was probably stolen), and look it up on the index.
How would an NFT be better than the above database in any way?
I do think the bikeindex could be run better (fewer regional websites, a database we can download for archival purposes, sharing of information between multiple registries), but all of those things seem like they're easier and cheaper to do without a blockchain or NFTs.
Rather than do something like NFTs, they could do what the certificate transparency project does, and just dictate "here's the data format, here's how you share data", and get all the benefits I can think of with none of the downsides or ecological waste.
For what it's worth, there is evidence that such a database can be made and work in a similar case, since car registrations, transfers, etc are all quite well handled with no NFTs.
There is the problem of correct data, but I don't understand how an NFT manages to make data correct. How do I prove to the NFT that I own the bike with SN 123? How do I prove it was stolen?
I'd love if we replaced the bikeindex with a certificate transparency project-esque system and each large bike manufacturer ran an instance.
That also seems like it would be vastly easier to create than having people use the bike-stolen-registry-NFT you're talking about, and as a bonus it would be far less wasteful.
In the eyes of the law, the guy holding the bike and the receipt owns it. What the NFT says is irrelevant.
So how are NFTs useful again?
It would be like requiring every good sold to have a trivially electronically verifiably accurate original receipt that only someone who acquired it illegitimately would lack.
I'd love it if these industries/communities adopted log-structured distributed datastores with digital signing to track provenance of things without wasteful "mining". But the fact is that they've shown no willingness to do so, and it's a lot harder to bootstrap a system like this - if your system relies on a trusted root then you need the trust before you can start to develop the system at all, but users have no reason to trust the system until it's all fully running and proven.
The advantage over something like bikeindex is that you could make the transfer process a lot more seamless. You could build things like escrowing into the protocol, so when someone sells a bike to you on craigslist, you have a nice clean transactional system which adds some nice anti-fraud measures and protections for you without necessarily requiring you to buy it from a store or marketplace to gain those protections.
It wouldn't depend on the benevolence of a third-party absorbing the cost of running the index.
It would be geographically and culturally agnostic. Zoom out here and notice how little of the World's population is involved: https://map.bikewise.org/#0/84/-77
It would be globally unique and would not require the cooperation of manufacturers. Neither of my two bikes has a serial number because they're 'too old'. Other bikes have conflicting serial numbers.
It would eliminate the privacy and security risks of maintaining a central database of PII and associated valuable assets.
Who's to say everyone is using the same NFTs for this? We already see a variety of different platforms for NFT art.
> It would eliminate the privacy and security risks of maintaining a central database of PII and associated valuable assets.
How are there now fewer privacy and security risks when the entire blockchain is completely public? Where's the privacy?
Wouldn't you rather just have it run by an entity the legal system can point to?
If you don't trust the legal system...then I really doubt that having a third-party website is going to help you with a bike thief in anyway.
And it would still require a third party to benevolently run an app to search and make sense of the data from the ledger, and also to verify that the data inserted was actually real and not poisoning the db.
The thieves can do whatever they want with the certificate -- use it to pay illicit debts and so forth. They can visit their painting at the museum, and brag to their friends about it. But the rest of the public still gets to enjoy the painting too.
Now closer to home, I'm a musician and play a modestly valuable instrument. I've thought of taking really high resolution images of it, because the grain pattern of the wood is practically like a fingerprint, and would be difficult to conceal without destroying the instrument. A database with hi-res pictures of valuable instruments would be like a serial number database for bikes.
With an NFT I don’t even know what you’re certifying, except that this one chain says you own the object. In your example that’s not even true, the museum “owns” it, yet the thieves have it, and the NFT is now just as flawed as today’s understanding of ownership.
I love this answer because it's a perfect analogy to explain why NFTs are total nonsense.
Owning a one-of-a-kind, literally irreplaceable painting cannot be substituted for a certificate. The certificate has zero value because it does not allow the owner to restrict access to the original painting.
The core concept of ownership (control over a scarce resource) is violated as soon as you start trading a certificate instead of the original item.
It's like someone saying that owning the last remaining Michael Jordan baseball card is the same as owning Michael Jordan, and that both have the same value. It's ludicrous.
That’s entirely how our markets are run. Nearly all stock is owned by a few trusts and what everyone is trading everyday are “certificates” of the original stock certificates.
Even big ticket items like cars or homes, they really aren’t worth anything without a clean title or deed. On the other hand people buy deeds all the time without ever seeing the actual property.
Stock ownership gives you dividends and votes, too. You can sue for these things if they aren't given to you.
Cars and homes are things I can physically interacg with.
Digital certificates of digital goods have none of those qualities. If you do get any legal rights when you own them, it's not any different than copyright, which we've already seen is essentially impossible to enforce for digital works.
Honestly I didn't even think about a definition of ownership when coming up with my idea.
NFTs are a parallel copyright system. The market price of an NFT that violates meatspace copyright law would be a function of the relevance and enforceability of the law/jurisdiction in question.
The shortcomings cited by the author are critiques of the distriution of market prices, but there is no alternative proposed. Of course most Youtube videos get a handful of views, and of course most NFTs will be nearly worthless. That concern is orthogonal to the question of whether NFTs offer some benefits over traditional copyright mechanisms.
I haven’t looked too deeply into NFTs but it seems clear to me that:
1) NFTs are not for read access, but rather write access to a certain thing. Think Earth2 or MillionDollarHomePage or buying a domain name or some other namespace.
2) Ethereum and blockchains are entirely overkill for NFTs, because they are designed for arbitrary balances. If you want NFTs you can just have non divisible files that are collectively managed on MaidSAFE or something like that.
Just insane... what a completely indefensible ecological cost for such a trivial and absurd use.
For example, what stops baseball card printers from re-printing "rare" cards? And how do we know they're not hoarding some of the best cards for a few years, then selling them individually? I could see NFTs being demanded in situations like this to force producers to create digital proof of initial production and distribution.
I haven't thought about it much, but hashing old tweets or a picture of something and claiming it's valuable sounds like snake-oil sales to me.
This way you have the physical card to display, and have the NFT as a proof of authenticity and ownership.
Earth - a small planet in the outer reaches of spiral galaxy M7529, so far the only planet on record that the semi-intelligent biped inhabitants managed to overheat so badly that they became extinct. Overheating has happened before, of course, however the method of overheating is unique - the inhabitants invented a method of identifying uniqueness by making large calculations and attaching small drawings to the calculations, they then proceeded to trade these tokens as something of value, using more and more energy and creating a runaway green house effect. This has been used as an example to disprove the existence of god.
It’s probably a bad idea for other reasons, but it’s one way to reduce the environmental impact of PoW
There is no such thing as "excess power" for crytomining. Even if there was then that energy could just be stored using batteries or gravity storage or something, or it could be sold to neighbouring energy users, or it could be used in the grid and other more polluting sources could be scaled down instead.
I was thinking the idea seemed to have some validity.. For ex: storage of solar/wind-powered is critical and the current inefficiencies and batteries rely on lithium and alternatives are still in research.(http://worrydream.com/ClimateChange/#moving-storage) ..
so in theory there's a system that can be built around the excess energy(of renewable systems) + crypto mining as a incentive for taking up renewable energy setups.(Of course this cannot convert the mined stuff back to energy so it's a one-way stuff at best and has it's own cons and pros).
Too much power is usually handled in the generation side by incentivize producers to scale back generation or even paying to have them take a plant offline.
For a bitcoin mining operation, I suspect it would not be profitable to have all that equipment sit idle except when there is an oversupply of electricity.
For example, drop some solar panels and miners in the middle of the desert and immediately start generating profit. Use the profit to deploy more solar panels and build out transmission lines. You can do this piecemeal at low initial investment to feel out an energy source without committing billions of dollars to build out.
I'm not aware of anyone who's done major operations like this, but with the profitability of mining so absurdly high right now plus scrutiny on using dirty energy sources, I wouldn't be surprised if it starts. Access to mining ASICs is likely the key bottleneck.
This is the story used to explain part of the reason so much mining is in China. They built out a ton of hydroelectric dams over the decades that have been underutilized due to lack of infrastructure. Miners came in for the unused electricity and brought in a ton of money to the area.
These can trivially be copied (double spent), which means they're just as scarce as any digital data. Valueless without some significant proof of violence and hyper censorship ability enforcing copyright protection.
The primary revolution of bitcoin was the invention of self enforcing digital scarcity.
Is there something that you can only do via the token? Are there special events or access for token holders? I could see something like that being independently valuable, and interesting.
If you want to sell it to someone else, you sign a message saying you give it to them and so on, forming a "chain" of signed transactions.
But like a painting that can be copied, people decide to disproportionately value the first one...just because.
The ownership record in a public blockchain can't be corrupted.
I thought DRM already invented that.
I've become extremely alarmed at the number of completely non-technical people who don't know anything about how cryptocurrency works getting extremely into it via YouTube click holes. It's obvious that these NFTs are capitalizing on it.
A guy I ran into at the hardware store today was talking to me and he didn't understand the concept of a cryptocurrency that has a stable value so that it can be used as a means of exchange.
He's an airline pilot and he just has tens of thousands of dollars invested in various crypto things that he heard about on YouTube and he's made a ton of money on it.. It was eerily reminiscent of conversations I had with people flipping houses in 2006.
That and Tesla.
"made a ton of money on it." Until he has sold those assets and turned them into a major, stable currently like USD in his bank account or a diversified collection of other assets, they are as reliable a store of value as Enron stock was in July of 2000.
When betting in any market understanding people and psychology seems to be more important than understanding the product.
https://hitchhikers.fandom.com/wiki/Shoe_Event_Horizon
Hitchhikers guide to the galaxy:
Earth - a small planet in the outer reaches of spiral galaxy M7529. Inhabitants with watery brains came up with technology to use their star energy directly for complex mathematical calculations. Our space archeologists still don't understand why the calculations were producing random outputs so they never managed to get out of their star system and used all their star energy for that. Their Dyson sphere is interesting place to visit because as of now, it is the only civilization that achieved building it and never managed to go any further.
Energy prices go up. People suffer. There are two possible responses:
- Regulation/laws to stop the feedback loop
- Investment + deployment of new energy technologies to increase supply
Will be interesting to see which of the two scenarios above happen, or if the fears of this crypto wave leading to insane energy cost increases just don't happen.
It's like HN doesn't realize there's more going on in the space than bitcoin and ethereum.