36k wallets own 80% of NFTs, 10x that number of wallets own all of them [1]. And that's wallets, not people. That's not what "people" want, that's what a bunch of millionaires push, hoping to get out first.
Constant wash trading and front-running; truly innovative. A lot of people will lose a lot of money because grifters told them their NFTs will be worth something.
“I thought that as a casual investor, I could engage and help pump my bags about the project, as I normally do on here
(especially with my apes; and other people who own heavy bags of other projects). But doing that caused my followers to buy more into the project.”
This is the market that OpenSea is serving. Their revenue, valuation is all a product of “pumping bags”. Maybe that has long term viability… maybe that’s worth 10s of billions. Maybe.
VC's have really exposed themselves recently with the amount of money they've thrown after web3, NFT, and crypto startups - showing they are perfectly happy to try to cash out before the pyramid scheme collapses. No long view. No ethics.
There’s a case to be made that crypto is the trojan horse that brings down the house. The utility we’ve all been waiting for is manifest in its futility, which serves as a weapon, a negation of the status quo, sucking in capital and attention like a black hole.
Nah it's just another scam that will leave the gullible and desperate in a very sad state when it falls apart. It's basically a modern equivilant of the Albanian ponzi schemes that led to civil war.
Seconded. Is pumping bags some kind of cross between pump and dump + bag holder? Searching pumping bags only got me results about bags for breast pumps??
Yeah, that's the origin of the phrase. What I don't get in that quote is the "But..." clause, when followers buying in is exactly the desire result of pumping bags. As a whole, the quote makes little sense to me.
Edit: Ah, reading the thread I think he means that buy tweeting a lot about a particular project he could raise the secondary market values (which could be considered a good thing even if you don't cash out at those levels), but instead his followers bought in at the mint level, which he was being paid a percentage of.
In other words, he was making money from his followers buying into the project. I can see how he'd consider that differently and regret it.
> “In 2021, the world woke up to the potential of NFTs to unlock utility and economic empowerment across a vast set of industries, communities and creative categories,” said Devin Finzer, one of the founders and the chief executive of OpenSea.
Can anyone explain to me the utility of an NFT? I don't understand why it's anything other than some code (written on a blockchain) saying you own this. But people can just copy whatever you own (assuming it's digital like an image). And if it's a physical thing with an NFT attached to it, why is an NFT better than a certificate of ownership?
I guess a better question is: what problem does an NFT solve?
The utility of an NFT is for the seller, and that utility is an opportunity to make money by selling it to someone. When you buy an NFT you gain the ability to sell it, and that's about it. People buy NFTs hoping that they can sell them for more money than they bought it.
Value in price is whatever someone is willing to pay for the product. There is 0 requirement for it to be logical or make any sense. Any commodity can be valuable given a market demand for it.
NFTs provide a way to "own" something digital, except unlike DRM, the asset is based on an open standard and easily transferable without any intermediary. It's easy to verify the creator and prove you're the owner. Combine that with speculative price discovery and you have a pretty fun way to bet on art online.
I'm not a huge fan of NFTs, but they do actually solve a problem. They allow you to prove that you own a digital asset, without having to have anyone "vouch" for you. I can prove I own it myself. They also allow me to trade that digital asset without being encumbered by arbitrary or unclear rules.
For example, an NFT could be a usable as a game license. It's nice that I could trade the game license to someone else without having the game developer approve it.
Now the practical applications for this are pretty limited at the moment, largely due to the fact that the larger/more secure chains such as Ethereum are very limited in their transaction rate, and as a result transactions cost a lot. This restricts the use case to multi-thousand dollar digital assets, such as dumb rock jpegs or digital real estate.
To most reasonable people, this looks dumb. I agree that it is. However, if the transaction rate goes up dramatically (which is currently possible on layer 2), then the use cases open up dramatically to things that normal people might actually be able to use.
We aren't there yet (I do think we will get there, but really it's totally fair to criticize NFTs before we get there).
No, you do prove that you own a digital asset. Now whether that asset is blessed by some third party, and whether that blessing is considered valuable, is largely unrelated. I never said that you own an image or anything the NFT references. I said you own a digital asset, which in this case is the ability to trade the NFT.
You can certainly have someone sign an NFT, or issue a certificate, and that may be valuable to someone. But whether or not this occurs, if you own a digital asset, then you can easily prove it. That's the novel invention.
> Now whether that asset is blessed by some third party, and whether that blessing is considered valuable, is largely unrelated
It seems pretty directly related, in fact, it seems to be the only distinguishing factor between one NFT and another, without the blessing of the central authority the NFT is fundamentally interchangeable with any other ublessed NFT... making it quite fungible.
So I think we're talking past each other. For NFTs, there is the minter and the current owner. You can have third parties sign NFTs or validate their provenance, but ultimately the NFT's value is determine by the market (offers from buyers). Typically these buyers will value an NFT due to the rarity of the NFT. An NFT cannot exist without a minter. If this is the authority that you are referencing, then they only have authority at the moment of the minting. Past that point, more NFTs of the same type cannot be created. Even if the exact same parameters were used to create a new set by the same minter, it would be a different set of NFTs. No central authority is needed after the minting.
> Typically these buyers will value an NFT due to the rarity of the NFT
This is burying the lede, rarity of the NFT matters once the 3rd party is tying something to it.
Think about this for a second, what is an NFT allowing? Allowing you to prove you own the NFT. When do you prove you own the NFT? ... when someone 3rd party that asks to check it. And why do they ask to check it? Because they've added some sort of meaning to it by tying it to a non-NFT asset.
If a 3rd party does not assign some value to it... who's going to check you own the NFT? To what end will they check you own the NFT? An NFT with no 3rd party value is essentially a non-fungible cryptocurrency, and what good is a non-fungible currency?
> this is the authority that you are referencing
You know it's not. You're replying to an article about how the centralized agency that maps NFTs to non-NFT assets held by 3rd parties is now valued at 13 billion dollars.
Without the provenance of the minter assured, the NFT is worthless. If the central authority states "those NFTs were actually minted by an imposter" they would rapidly trend towards a value of 0 (minus gas fees of course).
"I said you own a digital asset, which in this case is the ability to trade the NFT." ... you realize you just repeated their statement right?
> Now whether that asset is blessed by some third party, and whether that blessing is considered valuable, is largely unrelated.
No it is related when people are talking about if it solves an actual problem. And without that blessing you're spending money to own a token with no meaning, so there's no problem being solved. It's literally buying a receipt with no purchases written on it and then claiming "well the receipt is a purchase!"
NFTs rely on centralized systems to actually do anything. If you own a Bored Ape and get invited to a party, the people at the party don't have to let you in just because you showed them proof you own some NFT: https://www.theverge.com/22824387/bored-ape-yacht-club-nft-p...
If you use an NFT to show ownership of a video game, the publisher doesn't have to respect your ownership, if they revoke access tied to your NFT token, what difference does it make vs the pre-NFT world where you could have proven ownership with a paper receipt?
In any situation an NFT is literally a token. A widget that you can prove you own without relying on a specific 3rd party.
A widget that has no value until said specific 3rd party agrees to tie your widget to some asset. But once you rely on the 3rd party to make your widget actually do something, you've essentially recreated a digital copy of your receipt with extra steps and killed all usefulness of the decentralized aspect.
> It's nice that I could trade the game license to someone else without having the game developer approve it.
These concepts break down extremely quickly in practice.
For the above to work, the game developer would have to support all of this and code it into the game. There's nothing inherent to NFTs that makes a game license automatically transferable, nor does the game developer have to code their game such that the NFT-ed license continues working after it has been sold to someone else (all transaction history is part of the blockchain).
What would really happen, in practice, is that the game developers would almost certainly require the NFT contract to involve some kickbacks to them. For example, you can trade the NFT license, but the contract requires sending X dollars to the game developer. Do you really think game developers are eager to leave money on the table?
Not to mention, NFT transactions are bonkers expensive right now, at least on Ethereum. It's fun to think about trading game licenses on the blockchain, but if the transaction is going to set you back $50-100 USD just to make the contract go, you're not going to be trading anything on the blockchain that can be bought new for $10-$50.
> game developers would almost certainly require the NFT contract to involve some kickbacks
Perhaps. But I think you may be jumping to conclusions there. The truth is that licenses have not been easily transferable in the past. So there's the effect here that the value of transferring the license can be accounted for by the user. If one platform (Steam/GOG) begins to utilize NFTs, then it's very possible that could cause market expectations to rapidly change.
Imagine if cars were not transferable easily, then one day they were. What do you think would happen to the car market? Certainly, I'm sure if car manufacturers could have their way, they would make it impossible to transfer used cars because it artificially constricts supply. Yet under this hypothetical I don't believe that would occur. Instead, the car makers would need to adapt to having a secondary market.
Can someone prove they own it without a massive energy consuming network, though? That’s my main concern, the sustainability of blockchains in their current form just aren’t very sound.
Yes, eventually I believe proof of work will be replaced by other protocols such as proof of stake. This is already the case on many chains. The cost for proof of stake is minimal, as in you can run a full node on a raspberry pi.
I think the main confusion is about "ownership". In the analog world ownership means enforcement if someone takes it from you. In digital world such things are not quite possible. We have a history of law enforcement enforcing some digital ownership (fighting piracy and such), but we do not have any experience law enforcement enforcing ownership of NFTs, simply because it is very young tech and it remains to be seen how it will interact with analog world.
No, they can't just copy what you own. The double spend problem is one of the core problems solved by blockchain. You can't copy and paste a Bitcoin. A blockchain is a ledger. The ledger is validated by a network of thousands of nodes using deterministic logic and cryptographic signature verification.
Likewise, NFTs are records in a smart contract that has been deployed to a Turing-complete blockchain. Following the ERC721 standard (which is the most popular but not the only example), the contract must implement an interface consisting of several methods that define how rules for ownership transfer are handled and what metadata defines the NFT.
An NFT could be better than a certificate of ownership, due to the ease and universality of on-chain verification. You can observe the entire chain of ownership of something if it begun as an NFT. You can also use an NFT in software programs to provide token-gated content, or to customize the user experience. Another major benefit is worldwide markets with 24/7 liquidity. It's also trivial to fractionalize or place into the custody of a DAO (on-chain organization). By no means is this list exhaustive, but there is a few.
assuming you trust the issuer (contract, in blockchain) there is a public and verifiable record of your ownership of an individual item
paired with signing messages to prove your blockchain identity, you can prove to others your identity and assets in your control
think if the contract was for movies from hbo, and by logging in you can view and download movies you own nfts of.. this is obviously not the case today, but may help highlight what the future may look like. you can of course think of and read about similar use cases for assets we ‘own’ today.
a lot of the push in blockchain is for decentralizing authority and democratizing access, where the above example is only solving the former
> think if the contract was for movies from hbo, and by logging in you can view and download movies you own nfts of.. this is obviously not the case today
No, it is the case today, at least for services that sell videos. Let's say today proof of ownership is your bank statement and an email from Amazon saying you bought a movie:
You can buy a movie from Amazon Video. You can have proof of ownership. Amazon is not contending your proof of ownership. Amazon agrees you clicked "Buy" and paid money. Amazon reserves the right to pull the movie from their site.
You still have your proof of ownership, Amazon just... doesn't care. Their servers will not serve you bits of data anymore.
-
Now let's replace your bank statement with an NFT:
You can buy a movie from Amazon Video. You can have proof of ownership. Amazon is not contending your proof of ownership. Amazon agrees you clicked "Buy" and paid money. Amazon reserves the right to pull the movie from their site.
You still have your proof of ownership, Amazon just... doesn't care. Their servers will not serve you bits of data anymore.
It enables models of funding work that allow you to set the financing terms with less(not necessarily zero) oversight from an enforcing body. The main concepts of most NFT markets today are inherited from existing art markets, but done cheaper, with less human involvement.
As a speculative instrument, art ownership has always been a bit detached from the physical art, with many works simply sitting in storage while a certificate is traded. Anyone can view a photo of a famous painting - access in a general sense usually is not the issue with the art world, today. Moving it on-chain is just a further move towards centering the finance of it. The net outcome is that you have more artwork being made than before, since there is additional financing opened through this channel, and with more complex terms made possible by using smart contracts. (At large scale, it's hard to engage with royalty payments, etc without automation)
From there, the actual utility of the tech can be discussed. Because you can make these cheaply(Ethereum's current gas fees notwithstanding, other L1 chains like Tezos demonstrate that they can be made with truly "micro" payments), you can use them as giveaways, tickets, passes, incentives etc. So they can be multipurposed into something beyond a link to an image and turned into a form of access - they are just "unique identifiers" after all. And those parts are still developing in the background.
Of course, we're still working through the hype cycle part of it. And the art makes for a good story.
Related to this valuation: it's a marketplace. Putting aside my thoughts on NFTs themselves, is there data that suggests the marketplace itself provides enough utility to justify the valuation?
Separately, I really do wonder if it's time that places like OpenSea borrow from traditional investment and provide some warning upfront.
For example, modified from the traditional investment verbiage:
> Investments in NFTs: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in NFTs involves risks, and there is always the potential of losing money when you invest in NFTs.
Amazon is a marketplace. Marketplaces are great businesses if you are early - they have strong network effect, are strong monopoly candidates and are not capital intensive.
In addition to being a marketplace, OpenSea stands to become the rubber stamp on an NFT that allows it to be used in other places (or have verified status when it is). Twitter seems to be going in that direction (for profile picture verification): https://twitter.com/thesmarmybum/status/1478505321433735169?...
(The fact that using a central verifier seems to contradict what web3 is supposedly about is not lost on me)
Maybe I am a Luddite who simply does not understand NFTs, but despite reading many articles about them, I still am left feeling that an NFT is just a decentralized digital furby.
I suppose it is a great way to launder money. Other than that there is no other value. Or you can try to scam some people by pumping the value of NFTs you own.
This site is a joke. a long time ago I listed some NFTs and they didn't show up anywhere. zero views on the listings. a hundred dollars of eth down the toilet.
OpenSea surpassed $10 billion in total trading volume a few months ago [1]
Their valuation is essentially equivalent to their total trading volume at this point. Both are absurdly large numbers.
What's really wild, though, is how hard NFTs have been pushed as decentralized, democratized, and so on. Yet again we have a huge centralized company cleanup up in the space and, apparently, skimming enough money off of the top of the trades to warrant a $13 billion valuation.
lol, the conspiracy theories keep getting wilder. So it's OpenSea wash trading or their users? Pretty hard to do with a 2.5% loss on every transaction.
Yeah, one employee swindled about $50k. He was immediately let go. OpenSea does $200m/day in volume. So about 20 seconds of their tx volume (not 100% sure I'm doing the math right).
NFT's are based on finding a greater fools, so ironically platforms like this become a "fool's market" which makes the NFT's themselves more valuable, and in turn the platform more valuable. And now NFT's are becoming the Rolex/Tesla/Ferrari where rich people buy them and they don't care if they make money on them, it proves they can afford them.
While the concept is alluring, "own a digital good", the reality is that you still need some authentication mechanism to prove someone has the right to sell the digital good in the first place. This means centralization. I am fascinated that people lack the ability to scrutinize this appropriately.
Recently, I learned about an art sale in my town. Pieces were all anonymous and with the same price (VERY affordable for original art). Since this is HN, I should clarify: these weren't NFTs and such, they were drawn by hand on a predefined canvas size.
The name of the artist was revealed only after the piece was sold & there was a high chance that the person was some neighbour living close to you.
I had an absolutely delightful time browsing the art — imagining my room with some of them. I was also astonished to learn that it was the 18th event of our local chapter and this one had over 700 works for sale. They exceeded their sale target by 10%.
I had no idea it existed, but I have known what OpenSea was since about a year ago. One of my friends was complaining that her brother is wasting his time on it and gets absolutely nowhere. Since then I have only seen crypto transaction fees climb so I don't imagine there are less barriers to putting stuff out there.
I wonder in a world where we value things based on their social good and objective usefulness, how many Billions of dollars would my local anonymous art show be worth.
It would be worth 0 billion dollars. The art show provides a good time for a few people. It’s nice, but not very impactful in the grand scheme of things.
I imagine this art show you went to was filled with actual art that a human spent hours creating and enjoying. Meanwhile, as I looked through OpenSea for the first time, I see that most of it appears to be algorithmically generated images, which are much like web ads, although I may have never seen that particular variation before, my mind easily recognizes its form and filters out most of the details.
88 comments
[ 6.6 ms ] story [ 51.0 ms ] threadWhich scammers, money launderers, and ponzi schemers love and benefit from, yes.
1: https://nwn.blogs.com/nwn/2022/01/second-life-nft-ownership-...
1. https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-...
“I thought that as a casual investor, I could engage and help pump my bags about the project, as I normally do on here (especially with my apes; and other people who own heavy bags of other projects). But doing that caused my followers to buy more into the project.”
This is the market that OpenSea is serving. Their revenue, valuation is all a product of “pumping bags”. Maybe that has long term viability… maybe that’s worth 10s of billions. Maybe.
https://en.wikipedia.org/wiki/Albanian_Civil_War
Edit: Ah, reading the thread I think he means that buy tweeting a lot about a particular project he could raise the secondary market values (which could be considered a good thing even if you don't cash out at those levels), but instead his followers bought in at the mint level, which he was being paid a percentage of.
In other words, he was making money from his followers buying into the project. I can see how he'd consider that differently and regret it.
https://www.themarysue.com/dont-buy-your-girlfriend-an-nft-f...
The Twitter hate on Carson's Turner buying of @JoeRogApe is just astounding.
https://twitter.com/carsonturner/status/1477520574620606465
I think we've hit peak NFT. Given that and all the verbal web3 hate I've been witnessing, I expect NFT to go south shortly.
says who?
if the s&p 500 crashes, people are gonna want as much cash as possible to move into stable assets, so they're gonna pull money out of crypto too.
I would expect the price of precious metals will go up, as that's a trusted strategy in a bear market for many investors.
Can anyone explain to me the utility of an NFT? I don't understand why it's anything other than some code (written on a blockchain) saying you own this. But people can just copy whatever you own (assuming it's digital like an image). And if it's a physical thing with an NFT attached to it, why is an NFT better than a certificate of ownership?
I guess a better question is: what problem does an NFT solve?
(I think Trading jpg files is stupid)
Just like Bitcoin... https://henvic.dev/posts/bitcoin/
It automates and simplifies the identification of Tusser opportunities.
For example, an NFT could be a usable as a game license. It's nice that I could trade the game license to someone else without having the game developer approve it.
Now the practical applications for this are pretty limited at the moment, largely due to the fact that the larger/more secure chains such as Ethereum are very limited in their transaction rate, and as a result transactions cost a lot. This restricts the use case to multi-thousand dollar digital assets, such as dumb rock jpegs or digital real estate.
To most reasonable people, this looks dumb. I agree that it is. However, if the transaction rate goes up dramatically (which is currently possible on layer 2), then the use cases open up dramatically to things that normal people might actually be able to use.
We aren't there yet (I do think we will get there, but really it's totally fair to criticize NFTs before we get there).
Well, no. They prove you own an NFT, but they don't prove you own anything other than the crypto asset.
That NFT might be a fake NFT, that is not issued by the artist/game themselves.
Instead, it is the central authority, of the artist themselves, that determines who actually owns the asset.
Or, in other words, you do need someone to "vouch" that you actually own the real digital asset, and that the one you have is not just a fake.
You can certainly have someone sign an NFT, or issue a certificate, and that may be valuable to someone. But whether or not this occurs, if you own a digital asset, then you can easily prove it. That's the novel invention.
It seems pretty directly related, in fact, it seems to be the only distinguishing factor between one NFT and another, without the blessing of the central authority the NFT is fundamentally interchangeable with any other ublessed NFT... making it quite fungible.
> Typically these buyers will value an NFT due to the rarity of the NFT
This is burying the lede, rarity of the NFT matters once the 3rd party is tying something to it.
Think about this for a second, what is an NFT allowing? Allowing you to prove you own the NFT. When do you prove you own the NFT? ... when someone 3rd party that asks to check it. And why do they ask to check it? Because they've added some sort of meaning to it by tying it to a non-NFT asset.
If a 3rd party does not assign some value to it... who's going to check you own the NFT? To what end will they check you own the NFT? An NFT with no 3rd party value is essentially a non-fungible cryptocurrency, and what good is a non-fungible currency?
> this is the authority that you are referencing
You know it's not. You're replying to an article about how the centralized agency that maps NFTs to non-NFT assets held by 3rd parties is now valued at 13 billion dollars.
> Now whether that asset is blessed by some third party, and whether that blessing is considered valuable, is largely unrelated.
No it is related when people are talking about if it solves an actual problem. And without that blessing you're spending money to own a token with no meaning, so there's no problem being solved. It's literally buying a receipt with no purchases written on it and then claiming "well the receipt is a purchase!"
NFTs rely on centralized systems to actually do anything. If you own a Bored Ape and get invited to a party, the people at the party don't have to let you in just because you showed them proof you own some NFT: https://www.theverge.com/22824387/bored-ape-yacht-club-nft-p...
If you use an NFT to show ownership of a video game, the publisher doesn't have to respect your ownership, if they revoke access tied to your NFT token, what difference does it make vs the pre-NFT world where you could have proven ownership with a paper receipt?
In any situation an NFT is literally a token. A widget that you can prove you own without relying on a specific 3rd party.
A widget that has no value until said specific 3rd party agrees to tie your widget to some asset. But once you rely on the 3rd party to make your widget actually do something, you've essentially recreated a digital copy of your receipt with extra steps and killed all usefulness of the decentralized aspect.
These concepts break down extremely quickly in practice.
For the above to work, the game developer would have to support all of this and code it into the game. There's nothing inherent to NFTs that makes a game license automatically transferable, nor does the game developer have to code their game such that the NFT-ed license continues working after it has been sold to someone else (all transaction history is part of the blockchain).
What would really happen, in practice, is that the game developers would almost certainly require the NFT contract to involve some kickbacks to them. For example, you can trade the NFT license, but the contract requires sending X dollars to the game developer. Do you really think game developers are eager to leave money on the table?
Not to mention, NFT transactions are bonkers expensive right now, at least on Ethereum. It's fun to think about trading game licenses on the blockchain, but if the transaction is going to set you back $50-100 USD just to make the contract go, you're not going to be trading anything on the blockchain that can be bought new for $10-$50.
Perhaps. But I think you may be jumping to conclusions there. The truth is that licenses have not been easily transferable in the past. So there's the effect here that the value of transferring the license can be accounted for by the user. If one platform (Steam/GOG) begins to utilize NFTs, then it's very possible that could cause market expectations to rapidly change.
Imagine if cars were not transferable easily, then one day they were. What do you think would happen to the car market? Certainly, I'm sure if car manufacturers could have their way, they would make it impossible to transfer used cars because it artificially constricts supply. Yet under this hypothetical I don't believe that would occur. Instead, the car makers would need to adapt to having a secondary market.
Check out Tezos, Cardano, et al.
Likewise, NFTs are records in a smart contract that has been deployed to a Turing-complete blockchain. Following the ERC721 standard (which is the most popular but not the only example), the contract must implement an interface consisting of several methods that define how rules for ownership transfer are handled and what metadata defines the NFT.
An NFT could be better than a certificate of ownership, due to the ease and universality of on-chain verification. You can observe the entire chain of ownership of something if it begun as an NFT. You can also use an NFT in software programs to provide token-gated content, or to customize the user experience. Another major benefit is worldwide markets with 24/7 liquidity. It's also trivial to fractionalize or place into the custody of a DAO (on-chain organization). By no means is this list exhaustive, but there is a few.
paired with signing messages to prove your blockchain identity, you can prove to others your identity and assets in your control
think if the contract was for movies from hbo, and by logging in you can view and download movies you own nfts of.. this is obviously not the case today, but may help highlight what the future may look like. you can of course think of and read about similar use cases for assets we ‘own’ today.
a lot of the push in blockchain is for decentralizing authority and democratizing access, where the above example is only solving the former
No, it is the case today, at least for services that sell videos. Let's say today proof of ownership is your bank statement and an email from Amazon saying you bought a movie:
You can buy a movie from Amazon Video. You can have proof of ownership. Amazon is not contending your proof of ownership. Amazon agrees you clicked "Buy" and paid money. Amazon reserves the right to pull the movie from their site.
You still have your proof of ownership, Amazon just... doesn't care. Their servers will not serve you bits of data anymore.
-
Now let's replace your bank statement with an NFT:
You can buy a movie from Amazon Video. You can have proof of ownership. Amazon is not contending your proof of ownership. Amazon agrees you clicked "Buy" and paid money. Amazon reserves the right to pull the movie from their site.
You still have your proof of ownership, Amazon just... doesn't care. Their servers will not serve you bits of data anymore.
-
See the difference?
As a speculative instrument, art ownership has always been a bit detached from the physical art, with many works simply sitting in storage while a certificate is traded. Anyone can view a photo of a famous painting - access in a general sense usually is not the issue with the art world, today. Moving it on-chain is just a further move towards centering the finance of it. The net outcome is that you have more artwork being made than before, since there is additional financing opened through this channel, and with more complex terms made possible by using smart contracts. (At large scale, it's hard to engage with royalty payments, etc without automation)
From there, the actual utility of the tech can be discussed. Because you can make these cheaply(Ethereum's current gas fees notwithstanding, other L1 chains like Tezos demonstrate that they can be made with truly "micro" payments), you can use them as giveaways, tickets, passes, incentives etc. So they can be multipurposed into something beyond a link to an image and turned into a form of access - they are just "unique identifiers" after all. And those parts are still developing in the background.
Of course, we're still working through the hype cycle part of it. And the art makes for a good story.
Tax evasion
Making tech bros richer
Separately, I really do wonder if it's time that places like OpenSea borrow from traditional investment and provide some warning upfront.
For example, modified from the traditional investment verbiage:
> Investments in NFTs: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in NFTs involves risks, and there is always the potential of losing money when you invest in NFTs.
(The fact that using a central verifier seems to contradict what web3 is supposedly about is not lost on me)
Yeah, this valuation is easily justifiable. First chart is OpenSea's monthly transaction volume. Multiply by 0.025 to calculate OpenSea's take.
Just go on wallstreetbets, plenty of people use brokers who use such language to make let’s say… ill advised trades.
Their valuation is essentially equivalent to their total trading volume at this point. Both are absurdly large numbers.
What's really wild, though, is how hard NFTs have been pushed as decentralized, democratized, and so on. Yet again we have a huge centralized company cleanup up in the space and, apparently, skimming enough money off of the top of the trades to warrant a $13 billion valuation.
[1] https://decrypt.co/85507/nft-marketplace-opensea-hits-10b-to...
Its like Opensea is really just a startup to modernize Tax Loops for the wealthy.
[1] https://www.reddit.com/r/Bitcoin/comments/rqg0fh/forgive_me/...
https://www.theverge.com/2021/9/15/22676075/opensea-insider-...
While the concept is alluring, "own a digital good", the reality is that you still need some authentication mechanism to prove someone has the right to sell the digital good in the first place. This means centralization. I am fascinated that people lack the ability to scrutinize this appropriately.
The name of the artist was revealed only after the piece was sold & there was a high chance that the person was some neighbour living close to you.
I had an absolutely delightful time browsing the art — imagining my room with some of them. I was also astonished to learn that it was the 18th event of our local chapter and this one had over 700 works for sale. They exceeded their sale target by 10%.
I had no idea it existed, but I have known what OpenSea was since about a year ago. One of my friends was complaining that her brother is wasting his time on it and gets absolutely nowhere. Since then I have only seen crypto transaction fees climb so I don't imagine there are less barriers to putting stuff out there.
I wonder in a world where we value things based on their social good and objective usefulness, how many Billions of dollars would my local anonymous art show be worth.