The Internet has become a gigantic repository of post-hoc rationalizations. Its pieces like this, that make me wonder if maybe the library of alexandria would have actually been far less interesting that we thought....
It seems likely that there probably were some small number of unreplaceable works, but there may have also been a gigantic number of tax records and such. This is just based on the history of what writing was largely used for in the ancient world.
I believe high end goods require more participants in the conspiracy to give cover of validity. A 70MM Picasso needs verification, appraisers, art gatekeepers, insurers, etc., to agree on the preposterous valuations. Here it’s two entities; you and your confederate.
But status is usually allocated by people or organizations with higher status. The blockchain has no personality, its hard to legitimize gaining status that way. It s like saying "i paid god $69M and now i have status". I just can't see it Catching up with the general population (although crypto maniacs are delighted)
NFTs only make sense to me if there was "A World", a massive ubiquitous online game that was even more popular than FB. If such "A World" existed, then yes, NFTs would make sense because in the world you would need a way to present "luxury."
Another note is - I'm not sure if NFTs are used for money laundering (they probably are) - but I'd love to watch something like Breaking Bad in the modern time. Money laundering I imagine would be so easy now. Literally just use your drug money, buy a bunch of computers, mine crypto, buy useless NFTs, trade that around a few times, sell your NFT. Boom. Clean money. There's absolutely no need to do convoluted things like bribe a politician to open a casino or open a laundry mat anymore.
Yeah this is always the idea the pro-NFT crowd throws around. As if Disney is going to let Mickey Mouse be in some random video game. Imagine Mickey mowing down people in Call of Duty. Or Mario smoking crack and taking an axe to prostitutes in Postal.
In the hypothetical case that Pokemon start showing up in Facebook, then that's only because Nintendo has a licensing agreement with Facebook with established guidelines and limits for usage of intellectual property.
And beyond that interoperability isn’t a given, easy, or in the interests of game companies. Bringing a sword from Medieval Babes into Demon Masters as sensibly scaled assets when both run on different engines and were released ten years apart isn’t going to happen. Let alone transferring any sort of consistent behaviour.
Not just "A World" but A decentralized world without a central authority that could just sell scarce goods. Think in game skins or second life property.
Can you imagine the positive spin on the patch notes when pre-2030 tokens get deprecated? It's certainly going to be due to technical debt on horse armour or something like that.
We're absolutely dying to make the NFT concept revolutionary. But most of the uses so far are really pedestrian and don't actually require a decentralized blockchain with expensive and immensely wasteful transactions. They could just be hosted by centralized e-commerce platforms, which allow authors of digital assets to enroll.
I'm not saying that Everydays or CryptoPunk #7804 NFTs aren't valuable. They probably are, as historic firsts. But I don't think they prove the existence of a long tail of long-term value of similar tokens.
In my opinion, an NFT actually becomes useful when it represents a right that is decoupled from one specific asset. More like a tradable auth role. In effect, a tradable identity. That would actually merit decentralization, such that any provider that respects that role could use it to authorize access to some asset or experience. Even still, this could be centralized, but I think it's a step closer to enabling something truly novel, rather than simply trying to reproduce mutual exclusive ownership of a physical object.
I think the most interesting use of NFTs is for ticketing. It allows someone to transfer a ticket to another person in a way that the buyer can verify it's valid, the seller can't also sell it to someone else, and neither needs permission from the original ticketing authority. Particularly as a token of online membership or authority itself.
I think the whole NFT for art thing is probably here to stay but not likely to ever be important to the vast majority of the public that never went shopping in real world art galleries.
But if ticket vendors wanted their tickets to be easily tradable, they could make that happen. They clearly aren't that interested, though. I think they see it as a threat to their control of the primary market
Yeah the idea that this was previously a technical limitation and not a commercial one is absurd. Ticketmaster could’ve put a “transfer ticket” button in their system a long time ago - but venues don’t want a 3rd party reselling tickets.
This specifically requires buy-in from whatever venue you're trying to gain access to with the ticket, which remains an authority. As long as they have some other means of associating an identity with the original purchase, they can deny entrance to anyone else possessing the ticket. In other words, you absolutely need permission from the original ticketing authority.
In practice, this would work for any venue that sells tickets to anonymous buyers, but most sufficiently in-demand events at least pay some lip service to trying not to do that to avoid getting all of their tickets purchased by professional scalping operations using bots.
> an NFT actually becomes useful when it represents a right that is decoupled from one specific asset. More like a tradable auth role.
We do have something like that already, the Ethereum Name Service, or ENS. It's basically DNS for Ethereum wallet addresses. Because wallets represent an owner, they're like an identity.
ENS names look like `acjohnson.eth`, and they're NFTs. That means they're also tradable on exchanges and marketplaces.
Unlike DNS, the entire ENS lookup and auction mechanism is on-chain. That means, there's no single point of failure, and given the contracts were written right (still hard to do), shuts down specific vector of attacks.
Thanks for that pointer! I had seen these around, but hadn't looked into it. I guess that kind of makes the point that tradable identity already exists in the form of DNS. Although, in that case, it's the position of the name itself in the namespace that is the commodity of interest, not so much what its ownership provides access to. What I have in mind is something really similar, but the commodity is effectively anonymous, but provides secure and unique access to some asset.
Also, DNS and ENS names are both rented, rather than owned.
> As with anything, it's because someone paid $69 million for an NFT, and everyone else is scratching their heads wondering if these people have gone insane, or if it's something they should pay attention to.
The group that bought it has LOTS of money invested in crypto (and Flow, an NFT focused blockchain) so they benefited by increasing demand for the ecosystem as a whole. Whales can move markets.
Just like the absurdly wealthy buy and sell fine art to launder money and avoid taxes! [1] Blockchain technologies are exceedingly efficient at replicating real-world inequality, privilege, waste, and inconsistency; no wonder they’ve gotten so much traction among the already absurdly wealthy.
I think this obsession with money laundering is kind of absurd. Firstly the entire point of these technologies is it’s a permanent record so authorities could track you down any time. Secondly they’re grabbing tonnes of headlines which is the opposite of what money launderers want. Thirdly there are already plenty of ways to launder money.
The truth is it’s much more likely the frothy Bitcoin market is overflowing into other similar products - almost all the most recent news making headlines have been about transactions amongst people who gained all their wealth through Bitcoin in the first place. It’ll go to 0 next time Bitcoin does, and whilst Bitcoin will probably bounce back, lots of these new shitcoin alternatives won’t.
I think the author has got it all wrong. The blockchain (and the NFT contract) don't make digital art scarce, nor do they confirm 'ownership'. It's been pointed out many times that anyone can create an NFT on a blockchain, and just because you own an NFT with a URL of http://example.com/example.jpg doesn't stop anyone else from creating another NFT with the same URL.
An NFT is 'genuine' solely because the artist says it is. Anyone can make another NFT of Beeple's $69m picture, and it will be identifiable on the blockchain, but it won't be the 'original' because Beeple says it isn't. In other words, none of this is decentralised, it's all based upon real world authority.
Despite all the crypto verbiage, blockchains don't add or enable anything with NFTs. The artist, or a company, could easily just maintain a database showing who 'owns' which artwork NFT, and could update it when works are re-sold. The fact that this runs right now on the blockchain is just because it provides an existing database (and a polluting, expensive and cumbersome one at that!)
The 'NFT company' maintaining the database would still show who 'owned' it long after Beeple is gone. Running such a company could be profitable because you could charge a small fee for the admin: right now it costs around $100 in ethereum fees to buy an NFT, so it could even work out cheaper! As a side benefit, such a company could also host the artwork, ensuring that the inevitable link rot that will otherwise afflict most tokens won't take place. Win win!
A centralized company running a database absolutely can provide digital scarcity. If they could not, then why would there be a real money market around in-game items for many games (which may include some limited run or even one-of-a-kind items).
Sure one can say that NFTs are uniquly identifyable. But that does not mean very much. People might claim it means the owner of the database cannot just make your unique item into something super common by creating many copies.
But they still can create many nearly identical copies differing basically only the NFT token's id, which in effect would act like a serial number.
I don't see this providing any scarcity that a centralized list of "offical" owners does not provide.
This is the same problem with pub/priv keys for email. How do I prove I am who I say I am?
The best defense is just to use a hardware wallet to not get in the situation in the first place. After that all you can do is post to your various social media accounts that you've been hacked and here's your new wallet.
Assuming NFTs become more mainstream and integrated with banks for land deeds and the BMV for car titles, something more official would likely be put in place (this is the best case long term scenario for NFTs).
> Assuming NFTs become more mainstream and integrated with banks for land deeds and the BMV for car titles, something more official would likely be put in place
Ummmm.... elephant in the room! NFT is the trust mechanism
You're saying: "NFTs will be good once we do all this other stuff in the real world that we are already doing". Thus negating the entire reason for NFT to exist.
Obviously. That's not what I'm saying. What I'm saying is that someone can just as easily hack in and steal the key and forge new NFTs as if they were the artist.
Which now, as someone else mentioned, you need a database of invalid NFTs. But if the artist's key is stolen, how does one create a database of "bad" NFTs? Now you have a bigger problem. Either you create a mechanism where a 3rd party can revoke an NFT or you create a separate ledger of "bad" NFTs. But how do you verify that new Beeble is Beeble and old Beeble is not Beeble. And now what if their key for signing the "bad ledger" is stolen?
Do you see how recursive this whole tower of trust is? At least with a central database the maintainer could restore a backup and notify all parties that they were hacked. With a blockchain, you're fucked. There is no "undo".
Great, so why don't you go create your central repository of art ownership, launch it to the world, and let me know how many people use it over NFTs.
You don't get to decide what the best/worst solution is. We already have a mechanism for that called the free market, and the free market is disagreeing with you. Seems like your take on the world isn't as accurate as you believe it to be.
But with blockchain-based NFTs the artist much maintain such a database themselves anyway. Someone must maintain some kind of off-blockchain store showing which NFTs are "official".
The artist could refuse to transfer this if they don't like you, or they don't like who you are selling it to. Or the artist could create a "copy", and sell the exact same thing to two different people and both tell them they own print 03/10. An NFT addresses both of these concerns, and if you are buying these solely for speculation these are both real concerns.
Heck, then print out a certificate on some nice paper, state that the holder of this paper is the owner of the work, sign it, and stamp into some wax on it that has radioactive isotopes mixed in that can be used to date it.
You’ve got your NFT which the holder can then resell as you will. If the artist then sells another certificate claiming it is unique, sue them.
I realize now that calling it an edition was an error on my part, because in irl an edition is a physical copy of the work itself which can be made scarce, whereas a token is just a pointer with a url to some infinitely-duplicable bits, so the edition metaphor does not hold.
Yes the original artist, or anyone else could create NFTs of the same image. And in the same way the artist could come out with a limited series of 10 prints, then make more of the same prints later.
But there is no way to create a forgery and duplicate your NFT. The digital provenance is all there on the blockchain. With a physical object anyone could create it later and claim it was an original.
The NFT is just a receipt, currently without any legal standing.
The digital asset itself is not protected and infinitely copied. Everyone who views the asset has made a copy. There is no original.
Physical items cannot be copied perfectly. There is always an original unit that can only be in one location. This fact alone creates intrinsic value that digital items lack.
I'd argue that this limitation is artificial as well. With some painting forgeries, you're getting down to the molecular or brushstroke level of differentiation. It's all about the value that we humans assign to what's considered "an original", and I think that's what's happening with NFTs today. Unlike tangible art, however, I think NFT art is much more volatile and prone to the Beanie Babies effect if its popularity wanes.
> what's considered "an original", and I think that's what's happening with NFTs today
An original what? Remove everything off-chain from the conversation. All you have left is a small amount text (which itself is *information* !!) in a distributed database. Thats no more original than the particular instance of bootloader code in my desktop computer.
I agree with you. Removing anything off-chain from the conversation, we're left with the equivalent of selling a million pixels on a web page (but at least there was some utility to that, in the form of advertising).
There is a real cost to creating an NFT(on the ethereum blockchain, by people who have valuable ideas/art), it cannot be copied, and it can be sold. That is all you need to have digital scarcity, to have value for speculation. It doesn't need legal standing or any physical attachment to the real world to be valuable.
It's not like people are spending hundreds of thousands of dollars on artwork or signed sports memorabilia because of the utlity. You can get a comparable print or a brand new piece of sports gear for far less. There is some grey area on the lower end though, and an NFT has zero utility here.
Scarcity of precisely what is the question. In this case, a small amount of metadata. That metadata is inherently worthless, because the metadata is just information that can be copied, and a new supposedly "scarce" token can be created with the same metadata.
There's no such thing as digital scarcity. It's only artificial scarcity, and for that you need something to control the supply.
Anyone can copy the asset. Anyone can also create another NFT to the same asset. So which token is the "real" one? That's the centralized scarcity that's required, which really just added a layer of indirection without solving for anything.
> "spending hundreds of thousands of dollars on artwork or signed sports memorabilia because of the utlity"
Again, this isn't about utility. It's about intrinsic value. Physical goods have a single original object which gives them value that digital items don't.
I think the argument is that the buyer wouldn't know whether you still have a copy of the key or not. The idea is that the blockchain is used to ensure you cannot backdate a transaction.
Mind you, I'm not a blockchain fan, and I believe that blockchains and cryptocurrencies are the absolute worst way to solve the problem.
I mean for non NFT art, at a certain point the legal system can prevent you from selling it. Like if you had a piano made of ivory, or if there were international sanctions on the buyer.
You are correct that the NFT is valuable because the artist says it is (though ideally, artists should be digitally signing their works with their private key, which is a whole other thing).
What the blockchain provides, however, which is incredibly valuable in the art world (not saying this isn't vapid, btw) is provenance in a secure verifiable way that would likely extend past the lifespan of any centralized company.
Showing provenance is basically a requirement for any high value work of art, which gets more and more difficult as time goes on and the work changes hands. We're talking timespans of hundreds and thousands of years.
Highly recommend watching the fascinating show "Fake or Fortune" -- on Amazon Prime (at least in the US) -- to really appreciate how much people care about provenance.
It shows how the art has changed hands and been transacted over time. That is an incredibly difficult thing to do in the physical world over hundreds or thousands of years.
You are correct that at the very initial point of minting there still needs to be some proof (i.e. artist cryptographically signing the data of their work with their private key), which as I understand, is not something that's really done currently (and should be).
Right but an NFT is just a link to a URL so there is no guarantee that it points to what it did originally or points to anything at all. All it guarantees is the provenance of the token, not the art itself.
Yikes. OK that seems like not a proper use of all this, then!! Seems like it would be more valuable to transact with just the artwork data signed by the artist's private key maybe with a bit of other metadata. But a URL??? Sounds like a lot can go wrong with that.
> It's been pointed out many times that anyone can create an NFT on a blockchain, and just because you own an NFT with a URL of http://example.com/example.jpg doesn't stop anyone else from creating another NFT with the same URL.
I addressed this under the section called "Common Objections". To sum up, even if someone else created an NFT contract with an entry pointing to the same URL, it likely wouldn't be viewed as legitimate.
Legitimate is whatever most people accept to the be case, in that social context. It doesn't matter if you don't view either contract as legitimate, because you're not a party to the social context where different parties are transacting. It only matters to those transacting in that social context. As long as the two parties can agree what is legitimate in a social context, then that's what works for them--kinda like how people agree on a price on an exchange. As long as a buyer and seller agree on a price, it doesn't matter if anyone else on the exchange thinks it's overvalued or undervalued. The aggregated agreement on which contract is legitimate over all transactions is what we collectively agree is legit.
> An NFT is 'genuine' solely because the artist says it is.
Sort of. It's more like a benevolent dictator position. A creator has the power to dictate which NFT is genuine because that power is conferred by the fans. There is no leader without followers.
But this power can be taken away. I'll refer to Vitalik's "Legitimate" post again.
"To better understand the force that we are getting at, another important example is the epic saga of Steem and Hive. In early 2020, Justin Sun bought Steem-the-company, which is not the same thing as Steem-the-blockchain but did hold about 20% of the STEEM token supply. The community, naturally, did not trust Justin Sun. So they made an on-chain vote to formalize what they considered to be a longstanding "gentleman's agreement" that Steem-the-company's coins were held in trust for the common good of Steem-the-blockchain and should not be used to vote. With the help of coins held by exchanges, Justin Sun made a counterattack, and won control of enough delegates to unilaterally control the chain. The community saw no further in-protocol options. So instead they made a fork of Steem-the-blockchain, called Hive, and copied over all of the STEEM token balances - except those, including Justin Sun's, which participated in the attack.
The lesson that we can learn from this situation is this: Steem-the-company never actually "owned" the coins. If they did, they would have had the practical ability to use, enjoy and abuse the coins in whatever way they wanted. But in reality, when the company tried to enjoy and abuse the coins in a way that the community did not like, they were successfully stopped. What's going on here is a pattern of a similar type to what we saw with the not-yet-issued Bitcoin and Ethereum coin rewards: the coins were ultimately owned not by a cryptographic key, but by some kind of social contract."
This is possible because the NFT is on-chain. It'd be much harder to do if Justin also controlled the centralized database with the NFT records.
Also, blockchains do add and enable things with NFTs. See the sections under interoperability in the post.
Thanks for pointing this out, I'll update the post later to be more clear.
This is similar in the way that you can own a currency note, but denied it's value. Notes in a certain serial number range can be declared to be invalid, even with criminal penalties for dealing in them.
Unbundling enjoyment from ownership is what Museums, Libraries, public parks, radios, youtube, public transit, and just about any other public goods do.
NFTs are amazing because they unbundle enjoyment from ownership, but still allow you to pay. What an innovation /s
The pleasure of ownership of what? Nothing. You just have a row in a distributed ledger indicating that the token currently belongs to your private key.
It does not conver any legal ownership over the image. It does not confer copyright. Anybody else could come allow and create a new series of NFTs that include a token pointing to the same art, and sell it too.
NFTs are basically equivalent to those pieces of paper that claim ownership over a plot on the moon that get sold. Anybody can make them and sell them, and they have zero legal ramification.
The only thing that makes a particular NTF that points at a work of art special is if it is endorsed by somebody.
This can have meaning though. While anybody can make baseball cards for any player for any year, only those made (endorsed) by certain companies have any value in the collector's market (and only certain players and certain years).
But even then at least you really do legally own a physical piece of paperboard.
NFTs are more akin to owning a unique item in a video game, except at least with those you can usually use the item.
Just dropping by to say I actually did develop a NFT version of the Moon (back in 2017!). It was obviously somewhat tongue-in-cheek, but still very much alive and real:
I think your critique of NFTs is mostly valid. Until there is some legal validity to them recognized by governments, they are basically just, well, tokens of ownership. The same could be said about most property or IP at some point in time :)
They are not even "tokens of ownership"; they're just tokens that one owns, nothing more, but the semantic distinction here is significant, because a token cannot own anything outside of itself.
Even though it's not physical, it's exactly like owning a baseball card or a work of art. On their own, those things have no intrinsic value. Just like an NFT, they have value because the creator endorsed them, and other people put value in that endorsement.
And just like an NFT again, you do not have the right to reproduce a baseball card or work of art just because you purchased it.
> Even though it's not physical, it's exactly like owning a baseball card or a work of art.
you're confused.
You don't own anything with an NFT other than a pointer. so it's not like owning a work of art at all. NFT's do not give you ownership over a work of art.
I think he may be accidentally correct about the baseball card though, with the baseball player being the asset the NFT is pointing to and the card being the NFT. As such, the NFT is a collectible, nothing more. If it turns out that people want to trade these collectibles then ... that's fine!
I haven't really spent much time looking. Honestly until message signing becomes a feature of every major wallet, then I'm not to interested. If you can't sign a message with your wallet you can't prove you own the wallet. If you can't prove ownership of a wallet, you can't prove ownership of NFTs associated with the wallet.
No you don’t own anything. With physical items, even if the legality is suspect, you can still possess the actual original object.
But there is no original with digital files. Everything is copied endlessly and with perfect fidelity. In fact everyone has made a copy just by viewing it.
Why don't they? If NFTs tokenized ownership of the copyright of the referenced media (maybe through some kind of transferable copyright assignment contract linked to the given token), then maybe they wouldn't be total bullshit.
Meaning that, if they did confer copyright, maybe they actually would be useful and a good idea.
Sure, fully agree that if they really did represent some form of meaningful ownership, like the copyright to the work, then yeah, they would not be total bullshit.
Because you can sell people a token for $$$ (at least theoretically) without even giving up real ownership of the IP.
If you're ever actually licensing IP the rights holder is going to grant as little freedom as possible for the most money possible. No freedom for lots of money is the ideal from that POV.
even with art, an NFT doesn't confer copyright rights, so you don't even own the art.
> But as it turns out, you can make digital things scarce, through cryptography.
The art isn't stored on-chain, so it's not scarce either.
All the NFT is is a pointer that has some text about who created it and what it points to. Not sure why why that pointer itself is valuable except as a status of "i am the only one that owns this unique pointer".
Of course there's nothing stopping anyone from creating another pointer that points to the same thing as the one you just bought and selling that.
So unless you find some value in pointers, intrinsically in themselves, NFT's are useless.
The following rant is probably obvious to a lot of people but I really have to get it off my chest.
I really don't get NFTs. I feel like every article I read about them (even the critical ones) is describing them in a way which then turns out to be far more mundane.
People (such as the author here) talk about how they are the digital equivalent of trading cards. Pokemon, M:TG etc work because the cards themselves are hard to accurately duplicate. But the images and other digital items supposedly traded via NFTs can all be duplicated easily, like any other file on a computer. The only thing you get here is a record in a database with your (virtual) name on it next to a hash of the file. That's it. It's not even like your 'ownership' according to this database would have any legal implications.
A real world example might be a card system where anyone could easily scan and print out the same card as the one you own, but that in some database somewhere, there's a record of your ownership of the card. It doesn't matter. Everyone has a copy of your card anyway. The reality is that you aren't the owner of it, whatever your protestations.
* If the tickets to concerts were NFTs, you could limit forum access to concert attendees as proven by their NFTs.
* If purchase of a digital album was connected to NFTs, a band could offer a special perk to their original fans.
Personally, I don't get the art thing. Good art is inherently valuable because viewer of the art (my eyes) are built directly into my body. In 1,000 years it is entirely possible no one is going to be able to view a jpeg, or the host of the image has disappeared off the internet. Even URLs that don't disappear are problematic, you want a URL the connected to the hash of the file contents so you can be assured that the file is never changed.
The concert ticket thing is perhaps one use I hadn't thought of. But that seems like a niche solution to a problem that doesn't really exist, and doesn't really solve it anyway? People often buy tickets often in order to resell them outside the venue. That just means the touter handing over the unique private key they used to buy the ticket along with the ticket itself, surely. They same goes for forum access, or anything else.
I'm having trouble wrapping my head around it, too, but I think the idea is that there's ostensibly value in "legitimately" owning a work, as opposed to making your own copy. That is: it's proof that the work is "for" you.
Currently it seems to just be a status symbol, but I feel like it could evolve into a newfangled version of license keys - i.e. proof that you're authorized to have a copy at all, or that you're licensed to incorporate a work in your own work (e.g. songs in videos, or photos on websites, or what have you).
I mean yeah, but it's all just semantics in the end, isn't it? The art (or whatever else) may have been made for you, but it doesn't matter- de facto, it's in the public realm. I'm over here, enjoying the thing, even if some database somewhere says you own it.
As for the license keys idea, is that such a big problem? Do people actively go around stealing license keys from other people? Willingly making copies for your friends and colleagues, sure, but that's no different to giving your friends and colleagues the private key tied to the token, which presumably would be possible if you create a new one per transaction.
> Willingly making copies for your friends and colleagues, sure, but that's no different to giving your friends and colleagues the private key tied to the token, which presumably would be possible if you create a new one per transaction.
That would also give said friends and colleagues the ability to sell your license on the cheap.
Which is what I'm getting at: an NFT-like licensing system would make it possible to formally transfer the rights conferred by that license to someone else, without the original vendor needing to be in the loop. And further, it basically replaces the notion of product registration, since that registration is built into the license: whoever owns the token for that license is automatically the registered user.
And on that note:
> Do people actively go around stealing license keys from other people?
Yes, all the time. A large chunk of the market for Windows product keys in particular comes from people "stealing" them; it's a big reason why sharing photos of product key stickers on computers is typically a bad idea.
An NFT-ish license system would eliminate this sort of product key swiping and actually legitimize product key resale/transfer, so it's a win-win-win as far as the original vendor, resellers, and buyers/users are concerned. Pirates suffer a bit, though, since it wouldn't be enough to just generate a key from scratch anymore (but that's what cracks are for, yaharrr).
You're in luck! I wrote the post just for you. I address how the pleasure of ownership is different than pleasure of enjoyment, and what sort of things it can confer. However, do you have to keep reading.
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[ 3.6 ms ] story [ 186 ms ] threadSame reason people will pay $100 for a Supreme T-shirt, when the same plain white tee sells for $10.
Another note is - I'm not sure if NFTs are used for money laundering (they probably are) - but I'd love to watch something like Breaking Bad in the modern time. Money laundering I imagine would be so easy now. Literally just use your drug money, buy a bunch of computers, mine crypto, buy useless NFTs, trade that around a few times, sell your NFT. Boom. Clean money. There's absolutely no need to do convoluted things like bribe a politician to open a casino or open a laundry mat anymore.
In the hypothetical case that Pokemon start showing up in Facebook, then that's only because Nintendo has a licensing agreement with Facebook with established guidelines and limits for usage of intellectual property.
Conversely, you can turn anything into an NFT whether you own it or not and then sell it: https://www.vice.com/en/article/n7vxe7/people-are-stealing-a...
I'm not saying that Everydays or CryptoPunk #7804 NFTs aren't valuable. They probably are, as historic firsts. But I don't think they prove the existence of a long tail of long-term value of similar tokens.
In my opinion, an NFT actually becomes useful when it represents a right that is decoupled from one specific asset. More like a tradable auth role. In effect, a tradable identity. That would actually merit decentralization, such that any provider that respects that role could use it to authorize access to some asset or experience. Even still, this could be centralized, but I think it's a step closer to enabling something truly novel, rather than simply trying to reproduce mutual exclusive ownership of a physical object.
I think the whole NFT for art thing is probably here to stay but not likely to ever be important to the vast majority of the public that never went shopping in real world art galleries.
In practice, this would work for any venue that sells tickets to anonymous buyers, but most sufficiently in-demand events at least pay some lip service to trying not to do that to avoid getting all of their tickets purchased by professional scalping operations using bots.
We do have something like that already, the Ethereum Name Service, or ENS. It's basically DNS for Ethereum wallet addresses. Because wallets represent an owner, they're like an identity.
ENS names look like `acjohnson.eth`, and they're NFTs. That means they're also tradable on exchanges and marketplaces.
Unlike DNS, the entire ENS lookup and auction mechanism is on-chain. That means, there's no single point of failure, and given the contracts were written right (still hard to do), shuts down specific vector of attacks.
Also, DNS and ENS names are both rented, rather than owned.
The group that bought it has LOTS of money invested in crypto (and Flow, an NFT focused blockchain) so they benefited by increasing demand for the ecosystem as a whole. Whales can move markets.
[1] https://www.ft.com/content/a5beb8e2-5334-11ea-90ad-25e377c0e...
The truth is it’s much more likely the frothy Bitcoin market is overflowing into other similar products - almost all the most recent news making headlines have been about transactions amongst people who gained all their wealth through Bitcoin in the first place. It’ll go to 0 next time Bitcoin does, and whilst Bitcoin will probably bounce back, lots of these new shitcoin alternatives won’t.
An NFT is 'genuine' solely because the artist says it is. Anyone can make another NFT of Beeple's $69m picture, and it will be identifiable on the blockchain, but it won't be the 'original' because Beeple says it isn't. In other words, none of this is decentralised, it's all based upon real world authority.
Despite all the crypto verbiage, blockchains don't add or enable anything with NFTs. The artist, or a company, could easily just maintain a database showing who 'owns' which artwork NFT, and could update it when works are re-sold. The fact that this runs right now on the blockchain is just because it provides an existing database (and a polluting, expensive and cumbersome one at that!)
But after Beeple dies, we will still know the correct one. The authority happened at minting, but from now on is programmed into the ledger.
> Despite all the crypto verbiage, blockchains don't add or enable anything with NFTs.
Wrong - blockchains add the digital scarcity component that you don't get with a centralized company running a relational database.
Sure one can say that NFTs are uniquly identifyable. But that does not mean very much. People might claim it means the owner of the database cannot just make your unique item into something super common by creating many copies.
But they still can create many nearly identical copies differing basically only the NFT token's id, which in effect would act like a serial number.
I don't see this providing any scarcity that a centralized list of "offical" owners does not provide.
The whole point of artificial scarcity is that something can control and prevent the replication, otherwise it's not scarce.
What if hackers hack into it and scramble all the data. What if the artist happens to alter the data him/herself?
I think a decentralized database is a small benefit (when we're not discussing the environmental externalities).
https://en.wikipedia.org/wiki/The_Physical_Impossibility_of_...
The same questions also apply to blockchains. But if a blockchain is compromised, then who will I sue?
The best defense is just to use a hardware wallet to not get in the situation in the first place. After that all you can do is post to your various social media accounts that you've been hacked and here's your new wallet.
Assuming NFTs become more mainstream and integrated with banks for land deeds and the BMV for car titles, something more official would likely be put in place (this is the best case long term scenario for NFTs).
Ummmm.... elephant in the room! NFT is the trust mechanism
You're saying: "NFTs will be good once we do all this other stuff in the real world that we are already doing". Thus negating the entire reason for NFT to exist.
Which now, as someone else mentioned, you need a database of invalid NFTs. But if the artist's key is stolen, how does one create a database of "bad" NFTs? Now you have a bigger problem. Either you create a mechanism where a 3rd party can revoke an NFT or you create a separate ledger of "bad" NFTs. But how do you verify that new Beeble is Beeble and old Beeble is not Beeble. And now what if their key for signing the "bad ledger" is stolen?
Do you see how recursive this whole tower of trust is? At least with a central database the maintainer could restore a backup and notify all parties that they were hacked. With a blockchain, you're fucked. There is no "undo".
You don't get to decide what the best/worst solution is. We already have a mechanism for that called the free market, and the free market is disagreeing with you. Seems like your take on the world isn't as accurate as you believe it to be.
You’ve got your NFT which the holder can then resell as you will. If the artist then sells another certificate claiming it is unique, sue them.
Even if the artist creates millions of tokens, there's probably prestige from having the first to be issued.
But there is no way to create a forgery and duplicate your NFT. The digital provenance is all there on the blockchain. With a physical object anyone could create it later and claim it was an original.
The digital asset itself is not protected and infinitely copied. Everyone who views the asset has made a copy. There is no original.
Physical items cannot be copied perfectly. There is always an original unit that can only be in one location. This fact alone creates intrinsic value that digital items lack.
An original what? Remove everything off-chain from the conversation. All you have left is a small amount text (which itself is *information* !!) in a distributed database. Thats no more original than the particular instance of bootloader code in my desktop computer.
It's not like people are spending hundreds of thousands of dollars on artwork or signed sports memorabilia because of the utlity. You can get a comparable print or a brand new piece of sports gear for far less. There is some grey area on the lower end though, and an NFT has zero utility here.
Anyone can copy the asset. Anyone can also create another NFT to the same asset. So which token is the "real" one? That's the centralized scarcity that's required, which really just added a layer of indirection without solving for anything.
> "spending hundreds of thousands of dollars on artwork or signed sports memorabilia because of the utlity"
Again, this isn't about utility. It's about intrinsic value. Physical goods have a single original object which gives them value that digital items don't.
Really? What if I, the person who bought an NFT, just gave my private key it's tied to, to someone else? What recourse does the artist have then?
Mind you, I'm not a blockchain fan, and I believe that blockchains and cryptocurrencies are the absolute worst way to solve the problem.
What the blockchain provides, however, which is incredibly valuable in the art world (not saying this isn't vapid, btw) is provenance in a secure verifiable way that would likely extend past the lifespan of any centralized company.
Showing provenance is basically a requirement for any high value work of art, which gets more and more difficult as time goes on and the work changes hands. We're talking timespans of hundreds and thousands of years.
Highly recommend watching the fascinating show "Fake or Fortune" -- on Amazon Prime (at least in the US) -- to really appreciate how much people care about provenance.
Surely only the artist can actually do that and that requires the statement saying which NFT is the real one to be stored somewhere for it to work.
You are correct that at the very initial point of minting there still needs to be some proof (i.e. artist cryptographically signing the data of their work with their private key), which as I understand, is not something that's really done currently (and should be).
> It's been pointed out many times that anyone can create an NFT on a blockchain, and just because you own an NFT with a URL of http://example.com/example.jpg doesn't stop anyone else from creating another NFT with the same URL.
I addressed this under the section called "Common Objections". To sum up, even if someone else created an NFT contract with an entry pointing to the same URL, it likely wouldn't be viewed as legitimate.
I'm borrowing the term legitimate from Vitalik, which showed up on HN the other day. https://vitalik.ca/general/2021/03/23/legitimacy.html
Legitimate is whatever most people accept to the be case, in that social context. It doesn't matter if you don't view either contract as legitimate, because you're not a party to the social context where different parties are transacting. It only matters to those transacting in that social context. As long as the two parties can agree what is legitimate in a social context, then that's what works for them--kinda like how people agree on a price on an exchange. As long as a buyer and seller agree on a price, it doesn't matter if anyone else on the exchange thinks it's overvalued or undervalued. The aggregated agreement on which contract is legitimate over all transactions is what we collectively agree is legit.
> An NFT is 'genuine' solely because the artist says it is.
Sort of. It's more like a benevolent dictator position. A creator has the power to dictate which NFT is genuine because that power is conferred by the fans. There is no leader without followers.
But this power can be taken away. I'll refer to Vitalik's "Legitimate" post again.
"To better understand the force that we are getting at, another important example is the epic saga of Steem and Hive. In early 2020, Justin Sun bought Steem-the-company, which is not the same thing as Steem-the-blockchain but did hold about 20% of the STEEM token supply. The community, naturally, did not trust Justin Sun. So they made an on-chain vote to formalize what they considered to be a longstanding "gentleman's agreement" that Steem-the-company's coins were held in trust for the common good of Steem-the-blockchain and should not be used to vote. With the help of coins held by exchanges, Justin Sun made a counterattack, and won control of enough delegates to unilaterally control the chain. The community saw no further in-protocol options. So instead they made a fork of Steem-the-blockchain, called Hive, and copied over all of the STEEM token balances - except those, including Justin Sun's, which participated in the attack.
The lesson that we can learn from this situation is this: Steem-the-company never actually "owned" the coins. If they did, they would have had the practical ability to use, enjoy and abuse the coins in whatever way they wanted. But in reality, when the company tried to enjoy and abuse the coins in a way that the community did not like, they were successfully stopped. What's going on here is a pattern of a similar type to what we saw with the not-yet-issued Bitcoin and Ethereum coin rewards: the coins were ultimately owned not by a cryptographic key, but by some kind of social contract."
This is possible because the NFT is on-chain. It'd be much harder to do if Justin also controlled the centralized database with the NFT records.
Also, blockchains do add and enable things with NFTs. See the sections under interoperability in the post.
Thanks for pointing this out, I'll update the post later to be more clear.
NFTs are amazing because they unbundle enjoyment from ownership, but still allow you to pay. What an innovation /s
It does not conver any legal ownership over the image. It does not confer copyright. Anybody else could come allow and create a new series of NFTs that include a token pointing to the same art, and sell it too.
NFTs are basically equivalent to those pieces of paper that claim ownership over a plot on the moon that get sold. Anybody can make them and sell them, and they have zero legal ramification.
The only thing that makes a particular NTF that points at a work of art special is if it is endorsed by somebody.
This can have meaning though. While anybody can make baseball cards for any player for any year, only those made (endorsed) by certain companies have any value in the collector's market (and only certain players and certain years).
But even then at least you really do legally own a physical piece of paperboard.
NFTs are more akin to owning a unique item in a video game, except at least with those you can usually use the item.
https://lunartoken.co
I think your critique of NFTs is mostly valid. Until there is some legal validity to them recognized by governments, they are basically just, well, tokens of ownership. The same could be said about most property or IP at some point in time :)
They are not even "tokens of ownership"; they're just tokens that one owns, nothing more, but the semantic distinction here is significant, because a token cannot own anything outside of itself.
Even though it's not physical, it's exactly like owning a baseball card or a work of art. On their own, those things have no intrinsic value. Just like an NFT, they have value because the creator endorsed them, and other people put value in that endorsement.
And just like an NFT again, you do not have the right to reproduce a baseball card or work of art just because you purchased it.
you're confused.
You don't own anything with an NFT other than a pointer. so it's not like owning a work of art at all. NFT's do not give you ownership over a work of art.
But there is no original with digital files. Everything is copied endlessly and with perfect fidelity. In fact everyone has made a copy just by viewing it.
Why don't they? If NFTs tokenized ownership of the copyright of the referenced media (maybe through some kind of transferable copyright assignment contract linked to the given token), then maybe they wouldn't be total bullshit.
Meaning that, if they did confer copyright, maybe they actually would be useful and a good idea.
Because you can sell people a token for $$$ (at least theoretically) without even giving up real ownership of the IP.
If you're ever actually licensing IP the rights holder is going to grant as little freedom as possible for the most money possible. No freedom for lots of money is the ideal from that POV.
> But as it turns out, you can make digital things scarce, through cryptography.
The art isn't stored on-chain, so it's not scarce either.
All the NFT is is a pointer that has some text about who created it and what it points to. Not sure why why that pointer itself is valuable except as a status of "i am the only one that owns this unique pointer".
Of course there's nothing stopping anyone from creating another pointer that points to the same thing as the one you just bought and selling that.
So unless you find some value in pointers, intrinsically in themselves, NFT's are useless.
I really don't get NFTs. I feel like every article I read about them (even the critical ones) is describing them in a way which then turns out to be far more mundane.
People (such as the author here) talk about how they are the digital equivalent of trading cards. Pokemon, M:TG etc work because the cards themselves are hard to accurately duplicate. But the images and other digital items supposedly traded via NFTs can all be duplicated easily, like any other file on a computer. The only thing you get here is a record in a database with your (virtual) name on it next to a hash of the file. That's it. It's not even like your 'ownership' according to this database would have any legal implications.
A real world example might be a card system where anyone could easily scan and print out the same card as the one you own, but that in some database somewhere, there's a record of your ownership of the card. It doesn't matter. Everyone has a copy of your card anyway. The reality is that you aren't the owner of it, whatever your protestations.
* If the tickets to concerts were NFTs, you could limit forum access to concert attendees as proven by their NFTs. * If purchase of a digital album was connected to NFTs, a band could offer a special perk to their original fans.
Personally, I don't get the art thing. Good art is inherently valuable because viewer of the art (my eyes) are built directly into my body. In 1,000 years it is entirely possible no one is going to be able to view a jpeg, or the host of the image has disappeared off the internet. Even URLs that don't disappear are problematic, you want a URL the connected to the hash of the file contents so you can be assured that the file is never changed.
Currently it seems to just be a status symbol, but I feel like it could evolve into a newfangled version of license keys - i.e. proof that you're authorized to have a copy at all, or that you're licensed to incorporate a work in your own work (e.g. songs in videos, or photos on websites, or what have you).
I mean yeah, but it's all just semantics in the end, isn't it? The art (or whatever else) may have been made for you, but it doesn't matter- de facto, it's in the public realm. I'm over here, enjoying the thing, even if some database somewhere says you own it.
As for the license keys idea, is that such a big problem? Do people actively go around stealing license keys from other people? Willingly making copies for your friends and colleagues, sure, but that's no different to giving your friends and colleagues the private key tied to the token, which presumably would be possible if you create a new one per transaction.
That would also give said friends and colleagues the ability to sell your license on the cheap.
Which is what I'm getting at: an NFT-like licensing system would make it possible to formally transfer the rights conferred by that license to someone else, without the original vendor needing to be in the loop. And further, it basically replaces the notion of product registration, since that registration is built into the license: whoever owns the token for that license is automatically the registered user.
And on that note:
> Do people actively go around stealing license keys from other people?
Yes, all the time. A large chunk of the market for Windows product keys in particular comes from people "stealing" them; it's a big reason why sharing photos of product key stickers on computers is typically a bad idea.
An NFT-ish license system would eliminate this sort of product key swiping and actually legitimize product key resale/transfer, so it's a win-win-win as far as the original vendor, resellers, and buyers/users are concerned. Pirates suffer a bit, though, since it wouldn't be enough to just generate a key from scratch anymore (but that's what cracks are for, yaharrr).