freedom and access - anyone can tailor a unique or novel fundraising models in code.
in theory it's pure democratization of financial instruments.
i recommend anyone new to the space to play around with contracts on testnets.
now anyone with basic coding know-how can play the types of financial games limited to the select few through credentialization, connections, or regulatory barriers.
ICOs absolutely ruin the concept of a venture-backed business.
By providing liquidity on day 1, you release onto an uninformed populace a token with zero intrinsic value. At that point, your goal is not to build a business but rather to market your token - as that is where your compensation comes from. Your compensation isn't tied to any value you create in the business whatsoever - as it would be when trying to raise from VCs - but instead how much hype you can generate.
Now that your blue-sky security (your token) is your product, any money you spend trying to build a business puts you at a disadvantage relative to competitors who do not. Growth isn't even reflected in the token itself since tokens are not equity. It's not even an advantage to token holders for token issuers to try and build a business haha.
That's why in the last 14 years not a single ICO or token-first business has been successful in creating a business.
It is counterproductive to an ICO to actually try and build something under it, for everyone invovled.
I guess what I'm saying is, a large amount of nothing isn't better than a small amount of something. Not to the individual, and not to society. Banks and institutions are owned by pension funds, 401(k)s and individuals meaning that benefit accrues to a whole ton of people.
Further, of course, employees stand to join the 'presale' too, and accreditation only requires $200K/yr in income. At that point you're free to invest in any business that'll take you on for value you create.
Plus there's the ol' JOBS Act, Regulation A+ and Regulation CF.
Are you making a joke here? It's pretty not-great when an average person (that is x<$200k/yr) hears about a dropbox or coinbase IPO but is excluded because they're not rich. One might make the argument that that's just gambling, to which I would point out that accreditation is not required for casinos or the lottery.
That's to take all of the guard rails off. You can participate in earlier stage fundraising without being accredited via Regulation A+ and CF.
The truth is, Dropbox would never have taken your money in the first place unless you brought something to the table. There's real adverse selection risk in allowing anyone to participate.
Why would any startup founder take your cash for equity if you don't provide any value, when they could just stroll down Sand Hill Road with a burlap sack and be done with it? That would leave them with a network, connections, advisors, folks who have built successful businesses before and a portfolio of other companies they can leverage.
The only ones willing to take dumb money in small quantities from nobodies will have been kicked out of every office on Sand Hill.
Not even fairly prominent angel investors make the cut for in-demand seed or pre-seed investments. By the time you get to a series B or higher, you may as well just grab a position in a mutual fund that participates.
> It's pretty not-great when an average person (that is x<$200k/yr) hears about a dropbox or coinbase IPO but is excluded because they're not rich.
By the time a company gets to an IPO, you're not going to see material returns by participating in the IPO itself. You're just not. You may or may not get some initial small spike, but it's as likely to go down. Just look at $COIN. It opened at $381 and is currently sitting at $248. That's not where the value is in being an accredited investor. That's just a coin toss.
On the other hand there's huge returns to be made in the stock market from companies that publish financials. Check out $TQQQ or zoom out on $SQ or $TSLA.
> One might make the argument that that's just gambling, to which I would point out that accreditation is not required for casinos or the lottery.
Casinos and lotteries publish odds. Public companies publish financials. Private companies needn't do any of that.
A decently funded competitor could strip their userbase pretty quickly. There's not a lot of user loyalty in this particular market segment at this particular time, and OpenSea hasn't made much effort to increase it.
That said, just because it could happen doesn't mean it will.
OpenSea is a great example of break the law until you get caught and then pay a small fine. They just haven't reached the "get caught" part yet. Putting utter ridiculousness of NFTs aside, a lot of the art on the site is straight up stolen and artist have very little recourse in what they can do. Here is a good Twitter thread from Loish summarizing the state of affairs for artist https://nitter.net/loishh/status/1470340143970230277
Art can't be stolen by NFTs because NFTs don't contain content, only links to content. When you buy an NFT, you're buying some metadata containing a URL of some art -- a pointer. Artists that are upset about hyperlinks to copyrighted images should go after the hosting servers with DMCA claims or the equivalent.
Consider: Is an NFT that points to another NFT stolen?
Forget OpenSea. If Wikipedia willfully displays unlicensed images taken from Getty Images, Getty Images could get them taken down using existing legal tools.
Isn't the NFT selling the premise that the owner of the NFT owns the art being pointed to? Maybe it isn't theft but it does seem to be fraud? Or if the argument is that NFTs don't convey some sort of ownership over the thing it points to, what's even the point of NFTs?
No, what's being sold is ownership of a unique set of metadata stored in a blockchain. There's nothing connecting a NFT to an underlying asset.
It's like if I gave you the opportunity to buy the words "The Empire State Building" written on a napkin with a promise to never write those words on any other napkin. You might buy that if, say, I was famous. That's an NFT. You're not the new owner of the Empire State building.
I admit I don't understand NFTs much, but would a reasonable analogy be a photograph? I could take a picture of the Empire State Building, sell you the rights to the picture? Except, with an NFT, it's a blockchain identified bit of numbers rather than a picture?
But the complaint is that people are selling the rights to pictures via NFTs that they don't have the rights to sell in the first place, isn't it?
So the analogy would be that some third party took a copy of your photograph of the building and sold the rights to it despite them not having the ability to do so?
No, the complaint is that OpenSea is distributing images that were uploaded by users that lack licenses to do so and that OpenSea does not have a compliant DMCA process. Therefore it is being asserted that OpenSea cannot claim a 512(c) exemption from liability.
In other words, the complaint is that when you curl e.g. https://images.opensea.com/some-pixel-artwork it returns a PNG of the pixel art without adequate license metadata, and there's no one to talk to that will fix the issue.
Dont confuse selling a picture for selling the rights to a picture.
An NFT could include the rights to the actual art itself, but most likely youre buying a sole reproduction. Similar to how going and buying a copy of a photograph at the store doesnt necessarily give you the explicit right to reproduce it for profit. Copyright is different from possession. NFTs are possession, unless they spell out that the purchase also transfers the copyright.
What if, instead of copyrighted works, we put people as an NFT? IE, OpenSea could sell an NFT of Donald Trump, as represented by bits on the blockchain.
This reminds me of the old eBay scam where the listing would be worded in such a way as not to actually say that you got more than the picture of whatever was listed, but people bought it as their expectation was inherently different and they assumed the sale to be for the actual product.
> Isn't the NFT selling the premise that the owner of the NFT owns the art being pointed to?
Correct. The victims here are both the buyer (who bought thinking they purchased from the creator) and the creator (who would have earned that revenue if they created the NFT).
The solution is really just better moderation and UX- OpenSea needs to make it easy to determine whether the creator is actually the creator, or just someone who re-uploaded the content.
The thing is, NFT folks can't have it both ways. The advocates say it's not a URL - it's the art you're buying, that it's going to support artists, that everyone can share in the rewards.
As soon as something goes wrong, well it's actually a URL so take it up with Google, a centralized service, and file a DMCA take-down.
No matter what these grifters are taking advantage of the artist and the buyer.
> The advocates say it's not a URL - it's the art you're buying
I've found that most NFT advocates will agree that you are only paying for a receipt on the blockchain that some central service like OpenSeas equates to you 'owning' a piece of art, and maybe the original artist too, but only conceptually and not legally (services that include signing over copyright notwithstanding).
That this is mostly a status symbol for the wealthy to dump cash into, like digital diamonds, is also a not uncommon view - but the difference is that they think that is a valuable end unto itself, and people like myself don't.
I mean, at some point isn't it reasonable to expect people to do some basic due diligence before dropping 10k on some metadata. If they don't, who's fault is that really?
Read the spec. Jeez (not aimed at you, just generalized exasperation).
I wouldn't go that far. I think there's legitimate value in a digital product that is one-of-a-kind for which the creator is cryptographically prevented from duplicating in an undetectable way. I think there's also value in the idea of some attributes of the instance not being settled or known until the initial transaction completes.
This early phase where NFTs contain URLs to images hosted off-chain is just a situation where an example used to explain the concept ("it's like art") blew up in a completely hilarious way.
how is buying a URL from an artist not supporting the artist. whether you are buying metadata or data seems irrelevant, if the claim is that the money supports the creator through patronage.
buying from the imposter artist obviously doesnt provide patronage to the original artist. that applies to both the NFT world and any other part of commerce in the world.
people arguing here are conflating three or four arguments to create a disingenuous point. the "cant have it both ways" quip stems from a false dichotomy.
.
you are buying a url not a picture. correct
buying a url from the original artist supports the original artist. correct
buying a url from the wrong artist does not support the original artist. correct
there is no logical inconsistency or contradiction.
advocates can claim you are buying the picture at the end of the url all the want, but unless the sales contract includes exclusive reproduction rights, that claim is incorrect and has nothing to do with patronage itself.
Art can't be stolen by NFTs, it can be stolen (for a slightly loose definition of steal, including copyright infringement and wire fraud) by people selling NFTs though.
Openseas looks to be serving up the images, and according to that thread they aren't respecting DMCA requests ("apparently the only way to get them removed is by writing individual emails for each listing"), that's illegal, intentionally doing that is criminal. The people uploading the art without a license are breaking the law regardless of whether or not the site respects the DMCA. The people fraudulently representing themselves as the original artist when they aren't are breaking the law.
That's a good clarification. My point is that there's nothing special happening here legally just because cryptocurrency is involved. It's illegal to distribute copyrighted content without appropriate licenses.
I don't believe anyone ever said it was illegal because cryptocurrency is involved... Indeed this thread started with the comment "[...] Putting utter ridiculousness of NFTs aside [...]
I'd also emphasize the fraud part more here, it's not just copyright infringement, it's lying about authorship for financial gain, that's a separate (and in my mind much more serious) crime.
They're hosting copyrighted material (images, perhaps just cached?) without permission. They had a takedown process that they've now eschewed in favor of making artists give up more personal details to get something taken down.
The interesting problem here is that they have started giving artists and their takedown requests the runaround. Like they're running out the clock and trying to placate the bots for as long as possible without taking things down. The intent and actions here is what may get them in trouble.
Artists can go to their host directly (Google) but that doesn't mean that OpenSeas isn't liable the same way torrent sites might be for their users' content.
I work with a pixel artist whose work was sold on OpenSea. The "owners" of the NFTs certainly didn't seem to understand the nuances you've commented in this thread with - they (and all their buddies) straight up harassed him on every online channel they could find him demanding to talk about "ownership" or otherwise spamming obnoxious and obscene things. So it's not just potential IP theft and fraud, it's also harassment from an army of crypto cultists who don't even understand what it is they're rallying around.
I mean in many countries torrent search/website operators were prosecuted despite only hosting links/metadata. e.g. People involved with The Pirate Bay.
I feel bad about DMCA being used at all.
I don’t want anyone prosecuted for sharing information. I’m just mentioning that the “it’s just links” defense might not hold up, based on prior events.
Consider for a moment that I am comic book artist and have made a wonderful popular series. I consider myself a purist so I've decided to decline offers for merchandising and make plenty of cash just off of comic sales alone. You figure people would really want a t-shirt with my character on it and so you start printing some and selling them - it even turns into an overnight success and suddenly my comic sales are up because memes have caused the character to go mainstream.
You've used my creation without my license in a way that certainly violates current law - just because I had eschewed merchandising myself and just because your impact on my sales was positive and not negative - doesn't negate that you took my creative work and profited off of it without any meaningful fair use exception (like making a transformative work).
The NFT you could create to my photo has value because it's to my photo - additionally it prevents me from releasing an NFT and profiting similarly whether or not I ever chose to do so.
Go ahead and create a Mickey Mouse NFT and see just how many seconds it takes for Disney to crush you into the ground - then realize that the only reason most NFTs of unlicensed material go unchallenged is because there isn't a clear precedent yet established that makes it a knock out case - but there absolutely will be.
I am pretty sure, legally speaking that for both 1, 2 and 3 The answer is Yes - but generally nobody cares.
I'd briefly clarify that IANAL so take everything with a grain of salt but I suspect that if you publish my email address in a manner to invite harassment without me being a public figure you could be served a take down notice to force its removal - similar things have happened with people publishing the addresses of private individuals.
I suspect that if you linked to my favorite picture of me relaxing on the beach in the middle of you describing some truly offensive opinions I'd have a right to disassociate my image from your content.
Lastly there's a classic "loophole" (which isn't it's illegal) to get around requiring a liquor license by selling maps to a location where booze can be freely required - I think that's a pretty good mark of precedent that references to things can be equated with the things themselves in the view of the law.
If I printed some t-shirts with some notable trademarks on them and didn't offer to sell you one - but did sell you some instructions so that you could pick it up by getting a key out of such-and-such postbox and then opening a safe in the alley behind the parking lot - I'm pretty sure that carries the exact same legal implications as directly selling you a shirt I'd printed without a license.
Am I correct in understanding your position as saying that a member of the public offering a URL without the explicit permission of site operator may not just be against the site's TOS but may be illegal?
If that's the case, then yes, I would agree that using a URL would require permission from the site operator. That would basically bring to a halt the Internet, but yes.
In the context of NFTs, it presents a real problem because they are immutable. If the NFT contains a URL that is not authorized or if the authorization is subsequently withdrawn for any reason, then the NFT is tainted but cannot be destroyed.
There's probably a start up idea around creating a catalog of tainted and untainted NFTs where regulated entities like Coinbase, OpenSea would pay to determine whether there are any claims against an NFT by a rightsholder. But, if OpenSea isn't implementing a proper DMCA process right now, they're probably an unlikely partner and there's not really a deep moat around that idea anyway.
I think that most URLs would fall under fair use - generally linked content is being explicitly commented on in the linking content. I'm curious if this has ever gone to court though and I imagine it has.
Thank you as well! It's interesting reading material.
I'd also mention that I find the current level to which trademarks and creative works gain protection to be excessive - so I don't really morally agree with how everything works today - but I do think that these parallels likely would cross over to the NFT domain in a pretty predictable way with laws as they currently are.
Embedding copyrighted images into social media posts without the necessary publishing rights has already been found to be illegal in some cases:[1]
> Federal courts are split, and recent rulings found that embedding social media posts on third-party websites could be copyright infringement.
> Some decisions have even stated that while social media sites “clearly foresee the possibility of entities…using web embeds to share other users’ content, none of them expressly grants a sublicense to those who embed publicly posted content.” The courts rejected motions to dismiss for fair use, stating that sharing such content is not a transformative use.
A seller who embeds a copyrighted image into an NFT marketplace listing without the necessary publishing rights and then sells the NFT would be more likely to be liable for copyright infringement than the social media embedder. This is because commercial use of copyrighted content is less likely to satisfy the fair use criteria:[2]
> Purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit educational purposes: Courts look at how the party claiming fair use is using the copyrighted work, and are more likely to find that nonprofit educational and noncommercial uses are fair. This does not mean, however, that all nonprofit education and noncommercial uses are fair and all commercial uses are not fair; instead, courts will balance the purpose and character of the use against the other factors below. Additionally, “transformative” uses are more likely to be considered fair. Transformative uses are those that add something new, with a further purpose or different character, and do not substitute for the original use of the work.
Someone who sells an NFT without publishing rights is harming the market for NFTs derived from the copyrighted work. This also reduces the chance that a fair use defense would be accepted in court:[2]
> Effect of the use upon the potential market for or value of the copyrighted work: Here, courts review whether, and to what extent, the unlicensed use harms the existing or future market for the copyright owner’s original work. In assessing this factor, courts consider whether the use is hurting the current market for the original work (for example, by displacing sales of the original) and/or whether the use could cause substantial harm if it were to become widespread.
Providing an interface to smart contractors on ethereum and other blockchains. /s
Other than that one employee that was caught front running and was then terminated I see nothing illegal or even close to illegal. There is no difference between opensee and ebay other than that only NFTs are sold.
Let's give OpenSea the benefit of doubt and say they don't know their platform is being used to illegally sale things the distributor doesn't own. I see no reason they shouldn't be held to the same copyright rules that Youtube is after the Youtube vs Viacom judgement that says Youtube has to put forth a good faith effort to upholding copyright on their site. As far as I know OpenSea has no tools to do. If they are seeking a 13B valuation then they absolutely have the resources to implement tool for artist to more easily protect their work and seek compensation if their work is stolen and sold. Also people saying "I see no difference between OpenSea and eBay" are naive. The dose makes the poison and it is much easier for me to steal some artist work and sell it as an NFT than it is for me to steal my neighbor's phone and sell it on eBay. There is a huge risk in getting caught and both eBay as well as cell phone manufacturers have tools in place to reduce theft such as blacklisting the stolen phone's IMEI.
NFTs are not a container in which a stolen artwork can be placed. This current trend of art NFTs are roughly an HTML <img> tag that only one person can own but anyone can read. When the image source url is loaded it resolves to some image.
TLDR: Links are being sold, not art. Not stolen art. You can't steal art and put it into an NFT because NFTs don't carry image data (as currently defined in ERC-721).
I am certainly not playing with semantics. I think you may be very confused about what an NFT is.
You may be familiar with JSON. Can you imagine a JSON document with a URL attribute? Now can you imagine selling that JSON document to someone else? That's an NFT (sans some crypto that makes duplicating that document impossible).
You may be familiar with HTML. Imagine selling a hyperlink to someone else. Literally the string '<a href="...">' tag. That's an NFT (sans some crypto that makes duplicating that string impossible).
Nothing is being sold other than the ownership of one unique JSON document or one unique HTML string.
If people want to believe that a picture of the Empire State building makes them the new owners of the Empire State building, I don't know what to say.
Let's not shift the goalposts too much. The OP was claiming that OpenSea is breaking the law. That's a serious claim. Serious claims require serious evidence. So I asked which law(s) is OpenSea breaking. Not having automated IP infringement detection tools is AFAIK not illegal, and so is irrelevant to the discussion (though a two-second web search showed that OpenSea has a FAQ page on the procedure for reporting IP violations [1]). So again, my question is which law(s) is OpenSea violating, as that is what OP is claiming, without any evidence.
What do people generally mean when they talk about "stolen art" w.r.t. NFTs?
1. Hackers acquiring private keys and stealing an actual NFT (the token) and moving it into an account they control. Aside from the base-level cryptocurrency malware/phishing, this doesn't seem prevalent, and is really the only thing in this list I'd describe as actual theft.
2. Non-artist creates an NFT using someone else's art, without their knowledge or permission. This might be a copyright violation, depending on the terms set by the original artist when publishing their work. Maybe it's a derived work... is "this jpeg but as an NFT" art in and of itself? I don't think so, but what do I know. This seems like what you're referring to here.
3. Artist creates an NFT of a jpeg of their own art, and then either sells or keeps the NFT. Later, someone views the corresponding jpeg in their web browser, right-click -> save-as, now they have a digital print of art that they paid nothing for. I've seen NFT cryptobros sensationally refer to this as "right click fraud," but it really just sounds like crocodile tears. I mean, really. Everybody knows how browsers work. This is one of the many examples of why NFTs are utterly stupid, but this also seems like it would be a copyright violation, at best.
4. Various combinations of 2. and 3. Maybe you right-click "stole" some images from one NFT, and then mint your own NFT of bit-identical images on a different chain. Or maybe you modified the image encoding so that the images are pixel-identical but not bit-identical, and minted NFTs on the same chain. This is all still just "maybe a copyright violation" until you try to pass it off as something it isn't, and then it's "maybe fraud" as well.
It's a surprise because they aren't mining gold. They are mining CO2, with cute little certificates you can leave behind to prove to your grandchildren that Gramps was part of the problem.
There is no gold rush. Nobody's actually buying these apes. They're wash trades among insiders/friends for tax evasion/money laundering purposes. Maybe a dumbass occasionally bites, but they're not the bulk.
The market cap, volume, Github activity, PR/news are all lies; manipulated statistics because people look at them to judge credibility.
It wouldn't surprise me if the "$2.2 million theft" was friends of the owners stealing them so they could take a tax writeoff. Stolen 6 days ago, 2 days before the year ends.
Yeah, can't they get paid in silly cartoon drawings?
I'm laughing at the leading graphic in the article showing a screenshot from OpenSea that says you can buy "extraordinary" NFTs. What the hell is so extraordinary about hundreds of slightly different low-quality caricatures of monkeys? This one has a hat. This one is wearing his hat backwards. This one is chewing bubble gum. I don't understand why anyone thinks this is special.
Why do people pay lots money for a regular shirt that has a particular logo on it? I don’t know either but I know that if you can make it happen you get rich.
Those shirts are dumb, but at least there's an explanation: They're typically associated with premium brands that have a long, rich history in the fashion industry (usually by making lots of products that are quite a bit more challenging than the t-shirt).
There is no such history with random monkey NFT pictures.
The value of the long rich history is just in how much people respect it. There are 20 year old brands more prestigious than hundred year old brands... no reason a one-year-old brand can't be worth more still. And I don't see why making a swan costume for Bjork or a meat dress for Lady Gaga means your T-shirt is worth more.
I don’t get how this is a “gotcha.” That’s like being shocked that people at Black Rock want to be paid in USD and not mutual funds, or employees at Exxon want to be paid in fiat instead of barrels of crude oil. Food, credit card bills, land lords, and utility services demand to be paid in USD regardless of the value of whatever commodity an employer trades.
It seems like there is some new undetected "lead in the pipes" thing going on these days where everyone is going crazy. Sociopathy is running amok. Our institutions used to be able to control these people. We need new ways of identifying bad actors and marking them to the rest of society. Maybe with Elizabeth Holmes getting found guilty the trend can start reversing. Hey you know what? Maybe we could create a trust-less distributed database to keep track of conmen, like a Equifax for bad actors on the blockchain ;).
Say I mint an NFT and then purchase it myself for a high price. The next transaction will be Likely ahead of that price correct? Besides gas fees, what’s stopping by people from pumping their own NFTs?
Nothing. It is all a pyramid scheme so literally do whatever you want. I'm surprised someone hasn't written a script to copy existing ones and re-upload with a lower price.
Buying your own goods counts as a "pyramid scheme" now? That would be market manipulation. A pyramid scheme recruits members via a promise of payments or services for enrolling others into the scheme, and not in an abstract sense.
The usual "crypto bad" argument is calling it a Ponzi scheme. This doesn't count as one of those either, but no one really cares.
It’s wash trading to be exact, but that’s not really the point. The crypto markets as a whole have strong pyramid/ponzi scheme elements where most people are buying useless tokens with the sole intention of later selling them for a higher price to someone else. Not to mention obvious Ponzi schemes like Tether that provide much of the fake liquidity that feeds this mania.
a ponzi scheme pays out dividends or interest from deposits. unless tether is taking money from tether sales and paying it out to holders a kickback, it doesnt fit the definition.
printing shares of tether and having more shares out than underlying collateral (which im not accusing them of doing) is just fractional reserve lending...
Buying a copy by the wrong author is meaningless though, or should be.
When something is part of a limited edition run or a small batch production or a collection, buying a duplicate that isnt signed by the authors is "worthless." Unless for some reason the forgery manages to obtain its own fame and value.
A friend of mine in the NFT business says that OpenSea's relatively high fee is one of the things that makes the site work, by putting a real cost onto wash trading at scale.
If you mint a series of, say one hundred monkey pictures, and you buy one from yourself for $10k, you now have $1m in monkey pictures. The 2.5 points on a 10k transaction to create $1m is worth it.
And NFT traders are savvy to duplicated projects being illegitimate. There is only value in the verifiably legitimate project. If you bought a bored Ape that was "right click + save"d and published on OpenSea, it would be worthless.
The same thing that happens in every marketplace - be it sneakers (StockX), actual stocks, and beanie babies
The thing is, and this is true for every market including the S&P500 - until the new money slows down, people will still profit no matter how little sense it makes financially
As far as I understand the whole GME fiasco, this is exactly what was going on (in reverse)
> The next transaction will be Likely ahead of that price correct?
Being a “next transaction” is a mighty assumption. Just because you list something high doesn’t mean anyone is willing to actually by what you list. If that were the case, the values of an NFT project would theoretically never dip.
They can't freeze an address, can they? They can block an address for participating on OpenSea but that address can participate in and on other marketplaces?
My FOMO about Crypto is getting real. What is the equivalent of an index fund for all the crypto hype? Something I can invest in and only have to check once a month.
There is no US listed Bitcoin ETF. The Greyscale trusts are closed-end funds that are trading at a massive discount to NAV. -21.25% today for GBTC. [1]
The BITO ETF doesn't hold Bitcoin but instead holds CME futures contracts. Scroll down to Holdings. [2] I would strongly encourage folks who do not know the difference between holding the underlying asset and holding futures contracts to avoid aping into this.
Most modern crypto projects are paying massively for users and attention - like UBER in the early days. But OpenSea is just pure cash cow - eighty million a month in revenue, off minimal expenses and no advertising. Regardless of whatever succeeds in the NFT ecosystem, they benenfit.
Lots of other projects have played me-too, or tried to surf the waves and trends in crypto. OpenSea has just been doing their own simple narrow vision thing, regardless of markets going up or down, or NFT's falling completely off the radar for a long time. The site is simple, easy to understand, and has mind boggling network effects.
They probably have the most enviable position right now in crypto-space, right next to Coinbase. Good to be them, and here's to them not screwing it up in the future by throwing money to fix things that aren't broken.
Perhaps you don't feel you owe businesses that you feel are pet rock businesses better, but you owe this community better if you're participating in it. We're trying for a culture of curious conversation here.
I hope they make it impossible for OpenSea staff to insider trade and wash trade. Well, I would hope that, but it seems that there’s no meaningful way for OpenSea to actually enforce such a ban. And this isn’t a hypothetical flaw in OpenSea. It is known that at least one employee (OpenSea’s former head of product, Nate Chastain) has done insider trading on OpenSea an unknown number of times, likely profiting 18.875 ether or more, which is over $50k. Not exactly small potatoes here. Worse is that he was front-running front page content before it went live on the homepage.
We desperately need the decentralized exchange (DEX) equivalent to the centralized exchange that is OpenSea. I could swear I heard about a DEX for NFTs, maybe someone in the comments has some links.
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[ 2.1 ms ] story [ 141 ms ] threadpersonally, I would've preferred an ICO. It's the new-world fundraising model that should be normalized.
in theory it's pure democratization of financial instruments.
i recommend anyone new to the space to play around with contracts on testnets.
now anyone with basic coding know-how can play the types of financial games limited to the select few through credentialization, connections, or regulatory barriers.
i think it's the coolest thing ever.
By providing liquidity on day 1, you release onto an uninformed populace a token with zero intrinsic value. At that point, your goal is not to build a business but rather to market your token - as that is where your compensation comes from. Your compensation isn't tied to any value you create in the business whatsoever - as it would be when trying to raise from VCs - but instead how much hype you can generate.
Now that your blue-sky security (your token) is your product, any money you spend trying to build a business puts you at a disadvantage relative to competitors who do not. Growth isn't even reflected in the token itself since tokens are not equity. It's not even an advantage to token holders for token issuers to try and build a business haha.
That's why in the last 14 years not a single ICO or token-first business has been successful in creating a business.
It is counterproductive to an ICO to actually try and build something under it, for everyone invovled.
Further, of course, employees stand to join the 'presale' too, and accreditation only requires $200K/yr in income. At that point you're free to invest in any business that'll take you on for value you create.
Plus there's the ol' JOBS Act, Regulation A+ and Regulation CF.
Are you making a joke here? It's pretty not-great when an average person (that is x<$200k/yr) hears about a dropbox or coinbase IPO but is excluded because they're not rich. One might make the argument that that's just gambling, to which I would point out that accreditation is not required for casinos or the lottery.
The truth is, Dropbox would never have taken your money in the first place unless you brought something to the table. There's real adverse selection risk in allowing anyone to participate.
Why would any startup founder take your cash for equity if you don't provide any value, when they could just stroll down Sand Hill Road with a burlap sack and be done with it? That would leave them with a network, connections, advisors, folks who have built successful businesses before and a portfolio of other companies they can leverage.
The only ones willing to take dumb money in small quantities from nobodies will have been kicked out of every office on Sand Hill.
Not even fairly prominent angel investors make the cut for in-demand seed or pre-seed investments. By the time you get to a series B or higher, you may as well just grab a position in a mutual fund that participates.
> It's pretty not-great when an average person (that is x<$200k/yr) hears about a dropbox or coinbase IPO but is excluded because they're not rich.
By the time a company gets to an IPO, you're not going to see material returns by participating in the IPO itself. You're just not. You may or may not get some initial small spike, but it's as likely to go down. Just look at $COIN. It opened at $381 and is currently sitting at $248. That's not where the value is in being an accredited investor. That's just a coin toss.
On the other hand there's huge returns to be made in the stock market from companies that publish financials. Check out $TQQQ or zoom out on $SQ or $TSLA.
> One might make the argument that that's just gambling, to which I would point out that accreditation is not required for casinos or the lottery.
Casinos and lotteries publish odds. Public companies publish financials. Private companies needn't do any of that.
(theoretical) billions of dollars in some memecoin might look good on paper but most people and services that care require payment in dollars
That said, just because it could happen doesn't mean it will.
https://www.coinbase.com/nft/announce
Consider: Is an NFT that points to another NFT stolen?
It's like if I gave you the opportunity to buy the words "The Empire State Building" written on a napkin with a promise to never write those words on any other napkin. You might buy that if, say, I was famous. That's an NFT. You're not the new owner of the Empire State building.
So the analogy would be that some third party took a copy of your photograph of the building and sold the rights to it despite them not having the ability to do so?
[1] https://crsreports.congress.gov/product/pdf/IF/IF11478
In other words, the complaint is that when you curl e.g. https://images.opensea.com/some-pixel-artwork it returns a PNG of the pixel art without adequate license metadata, and there's no one to talk to that will fix the issue.
An NFT could include the rights to the actual art itself, but most likely youre buying a sole reproduction. Similar to how going and buying a copy of a photograph at the store doesnt necessarily give you the explicit right to reproduce it for profit. Copyright is different from possession. NFTs are possession, unless they spell out that the purchase also transfers the copyright.
Correct. The victims here are both the buyer (who bought thinking they purchased from the creator) and the creator (who would have earned that revenue if they created the NFT).
The solution is really just better moderation and UX- OpenSea needs to make it easy to determine whether the creator is actually the creator, or just someone who re-uploaded the content.
The thing is, NFT folks can't have it both ways. The advocates say it's not a URL - it's the art you're buying, that it's going to support artists, that everyone can share in the rewards.
As soon as something goes wrong, well it's actually a URL so take it up with Google, a centralized service, and file a DMCA take-down.
No matter what these grifters are taking advantage of the artist and the buyer.
I'm loving this web3 thing.
I've found that most NFT advocates will agree that you are only paying for a receipt on the blockchain that some central service like OpenSeas equates to you 'owning' a piece of art, and maybe the original artist too, but only conceptually and not legally (services that include signing over copyright notwithstanding).
That this is mostly a status symbol for the wealthy to dump cash into, like digital diamonds, is also a not uncommon view - but the difference is that they think that is a valuable end unto itself, and people like myself don't.
Read the spec. Jeez (not aimed at you, just generalized exasperation).
https://ethereum.org/en/developers/docs/standards/tokens/erc...
This early phase where NFTs contain URLs to images hosted off-chain is just a situation where an example used to explain the concept ("it's like art") blew up in a completely hilarious way.
buying from the imposter artist obviously doesnt provide patronage to the original artist. that applies to both the NFT world and any other part of commerce in the world.
people arguing here are conflating three or four arguments to create a disingenuous point. the "cant have it both ways" quip stems from a false dichotomy.
.
you are buying a url not a picture. correct
buying a url from the original artist supports the original artist. correct
buying a url from the wrong artist does not support the original artist. correct
there is no logical inconsistency or contradiction.
advocates can claim you are buying the picture at the end of the url all the want, but unless the sales contract includes exclusive reproduction rights, that claim is incorrect and has nothing to do with patronage itself.
Openseas looks to be serving up the images, and according to that thread they aren't respecting DMCA requests ("apparently the only way to get them removed is by writing individual emails for each listing"), that's illegal, intentionally doing that is criminal. The people uploading the art without a license are breaking the law regardless of whether or not the site respects the DMCA. The people fraudulently representing themselves as the original artist when they aren't are breaking the law.
I'd also emphasize the fraud part more here, it's not just copyright infringement, it's lying about authorship for financial gain, that's a separate (and in my mind much more serious) crime.
The interesting problem here is that they have started giving artists and their takedown requests the runaround. Like they're running out the clock and trying to placate the bots for as long as possible without taking things down. The intent and actions here is what may get them in trouble.
Artists can go to their host directly (Google) but that doesn't mean that OpenSeas isn't liable the same way torrent sites might be for their users' content.
Personally I think information should be free.
How do you feel about DMCA being used to takedown NFTs via Google and Cloudflare, in some cases against the original artist?
I feel bad about DMCA being used at all.
I don’t want anyone prosecuted for sharing information. I’m just mentioning that the “it’s just links” defense might not hold up, based on prior events.
You've used my creation without my license in a way that certainly violates current law - just because I had eschewed merchandising myself and just because your impact on my sales was positive and not negative - doesn't negate that you took my creative work and profited off of it without any meaningful fair use exception (like making a transformative work).
The NFT you could create to my photo has value because it's to my photo - additionally it prevents me from releasing an NFT and profiting similarly whether or not I ever chose to do so.
Go ahead and create a Mickey Mouse NFT and see just how many seconds it takes for Disney to crush you into the ground - then realize that the only reason most NFTs of unlicensed material go unchallenged is because there isn't a clear precedent yet established that makes it a knock out case - but there absolutely will be.
You serve a PNG of your comic character at https://images.munk-a.com/character.png. (1) I create a website with some HTML including <img src="https://images.munk-a.com/character.png"/>. Did I break a law? (2) I create a JSON document with the text {"url":"https://images.munk-a.com/character.png"}. Did I break a law? (3) I create an NFT transaction on a blockchain conforming the ERC-721 specification that contains an optional URL of "https://images.munk-a.com/character.png". Did I break a law?
As the site operator for images.munk-a.com, do you not have complete control of what is served at path /character.png?
I'd briefly clarify that IANAL so take everything with a grain of salt but I suspect that if you publish my email address in a manner to invite harassment without me being a public figure you could be served a take down notice to force its removal - similar things have happened with people publishing the addresses of private individuals.
I suspect that if you linked to my favorite picture of me relaxing on the beach in the middle of you describing some truly offensive opinions I'd have a right to disassociate my image from your content.
Lastly there's a classic "loophole" (which isn't it's illegal) to get around requiring a liquor license by selling maps to a location where booze can be freely required - I think that's a pretty good mark of precedent that references to things can be equated with the things themselves in the view of the law.
If I printed some t-shirts with some notable trademarks on them and didn't offer to sell you one - but did sell you some instructions so that you could pick it up by getting a key out of such-and-such postbox and then opening a safe in the alley behind the parking lot - I'm pretty sure that carries the exact same legal implications as directly selling you a shirt I'd printed without a license.
If that's the case, then yes, I would agree that using a URL would require permission from the site operator. That would basically bring to a halt the Internet, but yes.
In the context of NFTs, it presents a real problem because they are immutable. If the NFT contains a URL that is not authorized or if the authorization is subsequently withdrawn for any reason, then the NFT is tainted but cannot be destroyed.
There's probably a start up idea around creating a catalog of tainted and untainted NFTs where regulated entities like Coinbase, OpenSea would pay to determine whether there are any claims against an NFT by a rightsholder. But, if OpenSea isn't implementing a proper DMCA process right now, they're probably an unlikely partner and there's not really a deep moat around that idea anyway.
[0] https://en.wikipedia.org/wiki/Copyright_aspects_of_hyperlink...
[1] https://www.thompsoncoburn.com/insights/blogs/internet-law-t...
[2] https://btlj.org/data/articles2015/vol16/16_3/16-berkeley-te...
[3] https://curia.europa.eu/jcms/upload/docs/application/pdf/201...
I'd also mention that I find the current level to which trademarks and creative works gain protection to be excessive - so I don't really morally agree with how everything works today - but I do think that these parallels likely would cross over to the NFT domain in a pretty predictable way with laws as they currently are.
> Federal courts are split, and recent rulings found that embedding social media posts on third-party websites could be copyright infringement.
> Some decisions have even stated that while social media sites “clearly foresee the possibility of entities…using web embeds to share other users’ content, none of them expressly grants a sublicense to those who embed publicly posted content.” The courts rejected motions to dismiss for fair use, stating that sharing such content is not a transformative use.
A seller who embeds a copyrighted image into an NFT marketplace listing without the necessary publishing rights and then sells the NFT would be more likely to be liable for copyright infringement than the social media embedder. This is because commercial use of copyrighted content is less likely to satisfy the fair use criteria:[2]
> Purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit educational purposes: Courts look at how the party claiming fair use is using the copyrighted work, and are more likely to find that nonprofit educational and noncommercial uses are fair. This does not mean, however, that all nonprofit education and noncommercial uses are fair and all commercial uses are not fair; instead, courts will balance the purpose and character of the use against the other factors below. Additionally, “transformative” uses are more likely to be considered fair. Transformative uses are those that add something new, with a further purpose or different character, and do not substitute for the original use of the work.
Someone who sells an NFT without publishing rights is harming the market for NFTs derived from the copyrighted work. This also reduces the chance that a fair use defense would be accepted in court:[2]
> Effect of the use upon the potential market for or value of the copyrighted work: Here, courts review whether, and to what extent, the unlicensed use harms the existing or future market for the copyright owner’s original work. In assessing this factor, courts consider whether the use is hurting the current market for the original work (for example, by displacing sales of the original) and/or whether the use could cause substantial harm if it were to become widespread.
[1] https://news.bloomberglaw.com/us-law-week/is-embedding-socia...
[2] https://www.copyright.gov/fair-use/more-info.html
What law(s) are you claiming that OpenSea is breaking?
Other than that one employee that was caught front running and was then terminated I see nothing illegal or even close to illegal. There is no difference between opensee and ebay other than that only NFTs are sold.
It isn't legal to knowingly facilitate sales of stolen goods, is it?
TLDR: Links are being sold, not art. Not stolen art. You can't steal art and put it into an NFT because NFTs don't carry image data (as currently defined in ERC-721).
You may be familiar with JSON. Can you imagine a JSON document with a URL attribute? Now can you imagine selling that JSON document to someone else? That's an NFT (sans some crypto that makes duplicating that document impossible).
You may be familiar with HTML. Imagine selling a hyperlink to someone else. Literally the string '<a href="...">' tag. That's an NFT (sans some crypto that makes duplicating that string impossible).
Nothing is being sold other than the ownership of one unique JSON document or one unique HTML string.
If people want to believe that a picture of the Empire State building makes them the new owners of the Empire State building, I don't know what to say.
[1] https://support.opensea.io/hc/articles/4412092785043-What-ca...
1. Hackers acquiring private keys and stealing an actual NFT (the token) and moving it into an account they control. Aside from the base-level cryptocurrency malware/phishing, this doesn't seem prevalent, and is really the only thing in this list I'd describe as actual theft.
2. Non-artist creates an NFT using someone else's art, without their knowledge or permission. This might be a copyright violation, depending on the terms set by the original artist when publishing their work. Maybe it's a derived work... is "this jpeg but as an NFT" art in and of itself? I don't think so, but what do I know. This seems like what you're referring to here.
3. Artist creates an NFT of a jpeg of their own art, and then either sells or keeps the NFT. Later, someone views the corresponding jpeg in their web browser, right-click -> save-as, now they have a digital print of art that they paid nothing for. I've seen NFT cryptobros sensationally refer to this as "right click fraud," but it really just sounds like crocodile tears. I mean, really. Everybody knows how browsers work. This is one of the many examples of why NFTs are utterly stupid, but this also seems like it would be a copyright violation, at best.
4. Various combinations of 2. and 3. Maybe you right-click "stole" some images from one NFT, and then mint your own NFT of bit-identical images on a different chain. Or maybe you modified the image encoding so that the images are pixel-identical but not bit-identical, and minted NFTs on the same chain. This is all still just "maybe a copyright violation" until you try to pass it off as something it isn't, and then it's "maybe fraud" as well.
They are all nihilists who are heating themselves with wood torn from the sinking ship.
The market cap, volume, Github activity, PR/news are all lies; manipulated statistics because people look at them to judge credibility.
It wouldn't surprise me if the "$2.2 million theft" was friends of the owners stealing them so they could take a tax writeoff. Stolen 6 days ago, 2 days before the year ends.
LOLOL
I'm laughing at the leading graphic in the article showing a screenshot from OpenSea that says you can buy "extraordinary" NFTs. What the hell is so extraordinary about hundreds of slightly different low-quality caricatures of monkeys? This one has a hat. This one is wearing his hat backwards. This one is chewing bubble gum. I don't understand why anyone thinks this is special.
There is no such history with random monkey NFT pictures.
The usual "crypto bad" argument is calling it a Ponzi scheme. This doesn't count as one of those either, but no one really cares.
Also not a pyramid or Ponzi scheme (as you probably know) or much different than Beanie Babies. This is how capitalism is supposed to work.
> Not to mention obvious Ponzi schemes
The obvious ones are the ones which actually are Ponzi schemes (eg BitConnect, PlusToken).
a ponzi scheme pays out dividends or interest from deposits. unless tether is taking money from tether sales and paying it out to holders a kickback, it doesnt fit the definition.
printing shares of tether and having more shares out than underlying collateral (which im not accusing them of doing) is just fractional reserve lending...
When something is part of a limited edition run or a small batch production or a collection, buying a duplicate that isnt signed by the authors is "worthless." Unless for some reason the forgery manages to obtain its own fame and value.
Nothing. My outsider understanding is ... this is exactly what's happening.
The thing is, and this is true for every market including the S&P500 - until the new money slows down, people will still profit no matter how little sense it makes financially
As far as I understand the whole GME fiasco, this is exactly what was going on (in reverse)
Being a “next transaction” is a mighty assumption. Just because you list something high doesn’t mean anyone is willing to actually by what you list. If that were the case, the values of an NFT project would theoretically never dip.
Sure, someone got hacked and they want to protect their assets, but I always thought that if you lost crypto, it was gone for good.
(Genuinely asking.)
The BITO ETF doesn't hold Bitcoin but instead holds CME futures contracts. Scroll down to Holdings. [2] I would strongly encourage folks who do not know the difference between holding the underlying asset and holding futures contracts to avoid aping into this.
[1] https://ycharts.com/companies/GBTC/discount_or_premium_to_na...
[2] https://www.proshares.com/our-etfs/strategic/bito
BOX is an open source formula for digital assets. It includes 7 targets, which are BTC, ETH, EOS, DOT, MOB, XIN, UNI.
Lots of other projects have played me-too, or tried to surf the waves and trends in crypto. OpenSea has just been doing their own simple narrow vision thing, regardless of markets going up or down, or NFT's falling completely off the radar for a long time. The site is simple, easy to understand, and has mind boggling network effects.
They probably have the most enviable position right now in crypto-space, right next to Coinbase. Good to be them, and here's to them not screwing it up in the future by throwing money to fix things that aren't broken.
"Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something."
https://news.ycombinator.com/newsguidelines.html
Perhaps you don't feel you owe businesses that you feel are pet rock businesses better, but you owe this community better if you're participating in it. We're trying for a culture of curious conversation here.
This particular business and the overall NFT market comes across as snake oil to me (and a lot of other people).
I question the ethics of it. Perhaps a snarky comment wasn’t the appropriate way to express that.
Kudos to their team for capitalizing on it though.
...
Well, I guess that's it then.
..
Repent! The end is nigh!
http://29odkrngwwiml6xqsb8nbfh.wpengine.netdna-cdn.com/wp-co...
We desperately need the decentralized exchange (DEX) equivalent to the centralized exchange that is OpenSea. I could swear I heard about a DEX for NFTs, maybe someone in the comments has some links.
https://www.cnbc.com/2021/09/15/opensea-insider-trading-rumo...
https://www.ycombinator.com/companies/opensea