There seems to have been a steady stream of posts hyping NFTs lately.
> In October 2020, Miami-based art collector Pablo Rodriguez-Fraile spent almost $67,000 on a 10-second video artwork that he could have watched for free online. Last week, he sold it for $6.6 million.
And I believe in several comments, it's been explained that fake "sales" (really transfers from someone's left hand to right hand) are really easy to implement in order to inflate the "price" of an NFT on the blockchain.
So did someone really part with $6.6 million for this token, and if so did that person actually earn that money, or just win it from the Bitcoin slot machine?
The point the parent was making was that someone could simply “buy” the NFT from themselves, and nobody would be the wiser. They more or less just transferred $X between their virtual bank accounts, but we can’t tell that apart from an actual sale. It’s not proof that $X actually changed hands.
> Is it convertible to USD which can easily be used to buy kitchen appliances, and pants and flights? If so who cares.
$6.6 million is going to be treated a lot differently by someone who worked hard to build that fortune, vs. someone who won it (e.g. from a lotto ticket or by buying $1000 of bitcoins on Mt. Gox on a lark for a $1/per).
> So did someone really part with $6.6 million for this token, and if so did that person actually earn that money, or just win it from the Bitcoin slot machine?
The solution to that problem is amazingly simple: IRS. Whoever made that money, fake or not, gets to pay taxes on $6.6M USD.
Nope. Even if the "seller" pays taxes on that 6.6M we still won't know if he just paid himself that money. If you have 6.6M of dirty money, this seems like a nice way of washing it clean.
>>So did someone really part with $6.6 million for this token, and if so did that person actually earn that money, or just win it from the Bitcoin slot machine?
When you dismiss the concept of cryptocurrency, and another party sings its praises, and argues it will attain massive market value, and the latter ends up profiting from their judgment, they earned their gains. Now when you claim they won the slot machine, you're trying to diminish their accomplishment, and delegitimize their moral right to their success.
The terms of many of these auctions give a percentage of the sale to the original creator. I don't know the terms but it's possible Mike Winkelmann got quite a bit from the resale.
> The terms of many of these auctions give a percentage of the sale to the original creator. I don't know the terms but it's possible Mike Winkelmann got quite a bit from the resale.
I guess the suspicion I have is that someone who's heavily invested in NFT marketplaces may have arranged this to hype them.
And that category may even include this artist, Mike Winkelmann. According to the article linked here https://news.ycombinator.com/item?id=26303420, he'd only ever sold his artwork once before listing it for sale on some NFT marketplace in December 2020 and immediately hitting jackpot.
> Mike Winkelmann never used to call himself an artist. But that was before he made $3.5 million in a single weekend from selling his artworks. In December, he auctioned off multiple editions of three digital artworks, each priced at $969, and 21 unique works, most of which sold for about $100,000 each. It was only the second time he had put his art on sale.
The alternative, which is I think is also very possible, is this is just lucky cryptocurrency money hoping luck strikes twice.
I'm not familiar with the example you gave, but what if it's just an old school tax write-off? "Buy" something for crazy value, whilw knowing the buyer, then later get that money back and claim (some strange tax law) it on tax?
Edit: Ahh I missed you part about other comments, I guess I was pretty close
A friend said something the other day about NFTs that rings just about exactly right:
Humans seem to be in this perpetual fight to artificially reestablish scarcity from the physical world in the digital world. DRM. Invite-only apps. And now NFTs.
The thing that's wonderful about digital is that it should make everything MORE accessible to all, not less.
NFTs remain fully accessible to everyone, unlike DRM assets and invite-only apps. The difference is that a human can pull out their wallet and prove that they have a high level of status linked to the NFT. This is even better than famous paintings, baseball cards, or Cabbage Patch kids because everyone can have the exact same experience with the thing as the "owner. Though, without the dizzying ego high.
These are luxury goods, and luxury has always been built on exclusivity. When real supply is more than enough for demand, marketing and other artificial means are employed and have been used in many industries for a long time. Limited editions, invite-only sales, waiting lists, etc.
I don't know how you can look at this and tell me that our system is efficient, stable, non-parasitical, rational, less wasteful...
It will interesting to consider the effect of randomness on our minds in the coming decades. It has always been possible to become wealthy through luck, but in this current context it has intensified to a different level altogether. Every minute you spend doing something else could have been the minute that would have let you discover the next get-rich-quick bullshit/random fluctuation/new bubble/new craze etc. Hard work over long periods of time can be rendered meaningless in an instant. Creating actual value to be rewarded by a small quantity of inflation-prone currency each month is a sucker's game in comparison.
Hard work over time never really guaranteed success to begin with. Luck has always been a factor on top of that hard work. Luck is also enough on its own.
It's more about the relative change in the weight of the factors. Luck has always been important, but often required extra effort to go with it. Generally if there was an opportunity to be seized you had to do some active seizing. The arena is now a lot more volatile and virtualized. The methods to capture surplus are a lot more random and granular. The surplus itself is bigger and more diversified. Lottery tickets are an old institution, but now you have tickets lying around in random chatrooms all over the place.
This is reflected in modern investing strategies. It's now all about throwing money and hoping some of it sticks to a unicorn.
Not everything NFT related is speculative. Use cases include things like gaming as well. Also, the majority of NFT sales are not these insane sums. A lot are happening in the $10-$200 range and it's a way for people with money to spend to support artists they like, akin to Patreon.
Beeple is a cult digital artist who has been making digital art, releasing an asset per day, for 13 years straight. Yes, you read that right. One asset per day for 13 years. Most of his works were free. So, $6.6M is not just an overnight luck. It's the return for what he has been investing in for 13 years.
Can someone play devils advocate and explain why NFTs might be the next big thing? From what I can tell it’s really the only way to prove ownership of a digital good and have the ability to sell it (outside of the legal system).
Kind of seems like dogecoin or other meme/shitcoins? You own a digital asset that you think will go up in value. Coins are currency while NFTs are more like.. rights to a song?
I think it should be clear based on the digital asset that was sold (https://odysee.com/WvmIn9XyiNHMn3Tc:2) that nobody cares about the digital asset itself. NFTs may be the next big bubble I would say. An speculative market. Right now I could create a similar video, upload it to a NFT marketplace, and buy it myself for 50.000$. That would set the value of my 'art' high enugh to trick other people to buy more 'art' from me.
I'm wondering why we don't get rid of the digital asset itself and replace it with a 1x1 pixel gif... it would accelerate the bubble since one doesn't have to spend time creating fake 'art'.
I'm a "cryptoartist" one one of the curated NFT platforms. I've always had creative hobbies, and over the years have taken time off of my career to try and make a living from art (LOL impossible). Now this NFT thing comes along, and I start uploading my creations and collectors are buying them. Not life changing money in anyway, I'm a nobody in this space, but let's say a few $K in the last year.
My take is that most of the bigger collectors are probably wealthy folks that have $xsx,xxx - $x,xxx,xxx budgets in "investing" in this emerging economy of NFTs. They are creating the market by collecting. That's all fine, but the really promising piece of all of this is that it acts as a type of "patreon" for artists, especially digital artists.
Not sure I even touched on answering your question, but I think it's great that people of means suddenly have an easy way to support artists far and wide, instead of say buying from a gallery, or buying from the guy you walk by on the street when you're on vacation.
This new space has allowed folks to feel like artists, and some of the more talented people that got attention early have even been able to remove themselves from poverty.
People spend money to buy things for many reasons. I think that anyone collecting NFT art because they are "investing" is walking a dangerous tightrope, but it's a great way to support artists you like, especially if you believe "digital ownership" is something that will be moving forward in our culture.
I'm guessing the same reason owning the rights to song lyrics can be very valuable, despite the fact that the lyrics are easy to copy and paste. You can say in legal terms "I own that" which gives you monetisation options you might not otherwise have in the regular economy.
It's obviously a bit tenuous because of the digital only nature. A real Banksy that physically exists with proof of originality affords control and exclusivity over it's access. A digital Banksy is provably yours as an NFT, but doesn't actually prevent others from viewing it trivially and perfect copies obfuscate the nature of "original". So you own it, and assumedly have exclusive rights to sell it, but it's also very easy to copy and distribute.
I'd be very interested to see if the recent push to artificially inflate the price of NFT's in order to set a precedence for what people should expect as their innate value works.
> So you own it, and assumedly have exclusive rights to sell it, but it's also very easy to copy and distribute
And this is also questionable. I mean, anyone can make a perfect copy and sell it. They cannot get that sale recorded on some blockchain, but who cares? There are no legal ramifications, because the legal system does not recognize some random blockchain as authoritative regarding ownership, instead most jurisdictions have their own (central) database about registered/copyrighted works.
From what I understand, it depends on the particular NFT. Some (most?) of them do not transfer copyright, so you couldn't reproduce or license the work for profit. Maybe you could loan the token somehow?
TL;DR
- NFTs help prove ownership without needing a central authority (which is a big deal) e.g. have you ever been misled and bought a fake concert ticket? It's also huge for the collectibles market which is plagued with high-levels of fraud (which is a billion dollar industry).
- NFTs can also make fractionalized ownership more accessible.
So using your analogy, as an artist I release a song but I sell fractions of my song as NFTs to my audience and when I receive royalties it automatically gets distributed to all the nft song owners.
There will be meme NFTs of course (the cat that got sold for $600k), it is a speculative asset that people are experimenting with but I think eventually things will reset and the useful NFTs will remain. They can have real utility whether for a virtual or physical world.
> NFTs help prove ownership without needing a central authority (which is a big deal)
The same artwork or membership card or movie ticket can be wrapped in multiple NFT, each living on a different blockchain or on the same blockchain but in different contracts.
Hence you still need the central authority saying which chain is the true one. For example if the NFT represent a plot of virtual land, the game or software managing that land acts as the central authority.
Insurance policies. Land deeds. Preferential equity. IP. Domain names. Really, any sort of value that is in nature non-fungible that you may want to represent and transact digitally.
Only way I can imagine is if it were integrated with a blockchain-based Content ID system, you could try to force people to pay royalties. Overall, I'm skeptical of NFTs...
And the library of congress has a copyright system for digital books as well.
A big difference is that NFTs do not come with any legal rights, outside of “owning” the NFT itself. You don’t own the underlying asset or the copyright, just the NFT of the asset.
I think the idea is trying to replicate ownership of a physical item. When you own a book or a painting, you don't own the underlying copyright in that item and you don't control reproduction and distribution of the item or the creation of derivative works (i.e., if I buy a paperback copy of Confederacy of Dunces, I can't contract with a movie studio to make a movie based on the book -- I just own a copy of the book and that's it).
But who honestly wants to own a digital copy (without underlying rights) of something that can't be consumed like a movie or book? We're supposed to now pay for an image I can view freely? Where's the benefit in owning the NFT of an asset? Perhaps if a device manufacturer comes out with a device to display ultra-high resolution art images in an attractive frame and you can only obtain a compatible copy of the ultra high-res image if you buy the corresponding NFT, this could be an attractive offering if executed properly but I'm not aware of any devices that create such value for NFTs.
NFTs are somewhat interesting but I strongly suspect there is market manipulation (most likely by players with investments in NFT-adjacent entities) going on with some of these NFT sales.
Am I correct that unlike owning a physical piece of artwork, "owning" the registration of a work on the blockchain only proves that no one else "owns" said work -- I suppose what makes this a trade-able financial asset -- but nothing is stopping someone else from seeing the work?
Trust networks or tools used to keep track of it all are only as effective based on the integrity of the physical accountability and security systems of a nation; if the people in power that you need to care to enforce/protect ownership, then however it's kept track of doesn't matter.
Yeah, I've seen them sold before in "lootboxes" where you can see the artwork that you are gambling to get. The cryptographic proof of ownership is all your paying for.
> "owning" the registration of a work on the blockchain only proves that no one else "owns" said work
It doesn't prove that. It proves no one else owns that particular copy of the work. The author or anyone else can create another NFT in a different collectible contract from another copy of the same work.
Think of it as the certificate you get when someone sells you a star.
Yes, that would be possible. Authenticate users based on them signing messages with their keys, and you can safely see if they are the owner of a NFT or not.
Readit News
> In October 2020, Miami-based art collector Pablo Rodriguez-Fraile spent almost $67,000 on a 10-second video artwork that he could have watched for free online. Last week, he sold it for $6.6 million.
And I believe in several comments, it's been explained that fake "sales" (really transfers from someone's left hand to right hand) are really easy to implement in order to inflate the "price" of an NFT on the blockchain.
So did someone really part with $6.6 million for this token, and if so did that person actually earn that money, or just win it from the Bitcoin slot machine?
Is it convertible to USD which can easily be used to buy kitchen appliances, and pants and flights? If so who cares?
$6.6 million is going to be treated a lot differently by someone who worked hard to build that fortune, vs. someone who won it (e.g. from a lotto ticket or by buying $1000 of bitcoins on Mt. Gox on a lark for a $1/per).
The solution to that problem is amazingly simple: IRS. Whoever made that money, fake or not, gets to pay taxes on $6.6M USD.
When you dismiss the concept of cryptocurrency, and another party sings its praises, and argues it will attain massive market value, and the latter ends up profiting from their judgment, they earned their gains. Now when you claim they won the slot machine, you're trying to diminish their accomplishment, and delegitimize their moral right to their success.
I guess the suspicion I have is that someone who's heavily invested in NFT marketplaces may have arranged this to hype them.
And that category may even include this artist, Mike Winkelmann. According to the article linked here https://news.ycombinator.com/item?id=26303420, he'd only ever sold his artwork once before listing it for sale on some NFT marketplace in December 2020 and immediately hitting jackpot.
> Mike Winkelmann never used to call himself an artist. But that was before he made $3.5 million in a single weekend from selling his artworks. In December, he auctioned off multiple editions of three digital artworks, each priced at $969, and 21 unique works, most of which sold for about $100,000 each. It was only the second time he had put his art on sale.
The alternative, which is I think is also very possible, is this is just lucky cryptocurrency money hoping luck strikes twice.
Edit: Ahh I missed you part about other comments, I guess I was pretty close
Dead Comment
Dead Comment
Dead Comment
Humans seem to be in this perpetual fight to artificially reestablish scarcity from the physical world in the digital world. DRM. Invite-only apps. And now NFTs.
The thing that's wonderful about digital is that it should make everything MORE accessible to all, not less.
It will interesting to consider the effect of randomness on our minds in the coming decades. It has always been possible to become wealthy through luck, but in this current context it has intensified to a different level altogether. Every minute you spend doing something else could have been the minute that would have let you discover the next get-rich-quick bullshit/random fluctuation/new bubble/new craze etc. Hard work over long periods of time can be rendered meaningless in an instant. Creating actual value to be rewarded by a small quantity of inflation-prone currency each month is a sucker's game in comparison.
This is reflected in modern investing strategies. It's now all about throwing money and hoping some of it sticks to a unicorn.
[1]: https://en.wikipedia.org/wiki/Tulip_mania
Dead Comment
Beeple is a cult digital artist who has been making digital art, releasing an asset per day, for 13 years straight. Yes, you read that right. One asset per day for 13 years. Most of his works were free. So, $6.6M is not just an overnight luck. It's the return for what he has been investing in for 13 years.
Or possibly, the transaction between one collector interested in news of the $6.6M transaction.
The $6.6M video itself: https://odysee.com/WvmIn9XyiNHMn3Tc:2
Edit: right-click on the video and select 'loop'. couldn't find the option before.
Kind of seems like dogecoin or other meme/shitcoins? You own a digital asset that you think will go up in value. Coins are currency while NFTs are more like.. rights to a song?
I'm wondering why we don't get rid of the digital asset itself and replace it with a 1x1 pixel gif... it would accelerate the bubble since one doesn't have to spend time creating fake 'art'.
https://foundation.app/osiris/low-effort-nft-1319
My take is that most of the bigger collectors are probably wealthy folks that have $xsx,xxx - $x,xxx,xxx budgets in "investing" in this emerging economy of NFTs. They are creating the market by collecting. That's all fine, but the really promising piece of all of this is that it acts as a type of "patreon" for artists, especially digital artists.
Not sure I even touched on answering your question, but I think it's great that people of means suddenly have an easy way to support artists far and wide, instead of say buying from a gallery, or buying from the guy you walk by on the street when you're on vacation.
This new space has allowed folks to feel like artists, and some of the more talented people that got attention early have even been able to remove themselves from poverty.
People spend money to buy things for many reasons. I think that anyone collecting NFT art because they are "investing" is walking a dangerous tightrope, but it's a great way to support artists you like, especially if you believe "digital ownership" is something that will be moving forward in our culture.
It's obviously a bit tenuous because of the digital only nature. A real Banksy that physically exists with proof of originality affords control and exclusivity over it's access. A digital Banksy is provably yours as an NFT, but doesn't actually prevent others from viewing it trivially and perfect copies obfuscate the nature of "original". So you own it, and assumedly have exclusive rights to sell it, but it's also very easy to copy and distribute.
I'd be very interested to see if the recent push to artificially inflate the price of NFT's in order to set a precedence for what people should expect as their innate value works.
And this is also questionable. I mean, anyone can make a perfect copy and sell it. They cannot get that sale recorded on some blockchain, but who cares? There are no legal ramifications, because the legal system does not recognize some random blockchain as authoritative regarding ownership, instead most jurisdictions have their own (central) database about registered/copyrighted works.
TL;DR - NFTs help prove ownership without needing a central authority (which is a big deal) e.g. have you ever been misled and bought a fake concert ticket? It's also huge for the collectibles market which is plagued with high-levels of fraud (which is a billion dollar industry).
- NFTs can also make fractionalized ownership more accessible. So using your analogy, as an artist I release a song but I sell fractions of my song as NFTs to my audience and when I receive royalties it automatically gets distributed to all the nft song owners.
There will be meme NFTs of course (the cat that got sold for $600k), it is a speculative asset that people are experimenting with but I think eventually things will reset and the useful NFTs will remain. They can have real utility whether for a virtual or physical world.
The same artwork or membership card or movie ticket can be wrapped in multiple NFT, each living on a different blockchain or on the same blockchain but in different contracts.
Hence you still need the central authority saying which chain is the true one. For example if the NFT represent a plot of virtual land, the game or software managing that land acts as the central authority.
Youtube has its content-id system.
And the library of congress has a copyright system for digital books as well.
A big difference is that NFTs do not come with any legal rights, outside of “owning” the NFT itself. You don’t own the underlying asset or the copyright, just the NFT of the asset.
But who honestly wants to own a digital copy (without underlying rights) of something that can't be consumed like a movie or book? We're supposed to now pay for an image I can view freely? Where's the benefit in owning the NFT of an asset? Perhaps if a device manufacturer comes out with a device to display ultra-high resolution art images in an attractive frame and you can only obtain a compatible copy of the ultra high-res image if you buy the corresponding NFT, this could be an attractive offering if executed properly but I'm not aware of any devices that create such value for NFTs.
NFTs are somewhat interesting but I strongly suspect there is market manipulation (most likely by players with investments in NFT-adjacent entities) going on with some of these NFT sales.
It doesn't prove that. It proves no one else owns that particular copy of the work. The author or anyone else can create another NFT in a different collectible contract from another copy of the same work.
Think of it as the certificate you get when someone sells you a star.