NFT always felt ridiculous to me, but I though I understood the mechanism: "it's like baseball cards but in the blockchain".
This week I learned it's not.
NFT are Non Fungible Tokens, which means tokens that can't be divided, unlike crypto currencies like Bitcoin that can be divided in Satoshis. So you exchange the totality of it, or not. Basically it's a unique number in the blockchain you change ownership by applying cryptographic signatures during a transaction. Most of the time it's an ethereum smart contract address + a token id.
But wait, where are the pics ? The gifs ? The videos ?
I mean, opensea.io does allow you to mint (the term for magically turning a media into an official NFT backed by the blockchain) up to 100MB of content.
So where is it? Not in the blockchain, obviously, it's already fat enough with tiny transaction data.
Well, it's just stored in the centralized platforms like opensea, rarible, etc.
Basically, the NFT is not even that piece of art, baseball card or whatever, it's just the number linked to the proprietary, centralized, privately own trading platform that hosts the content.
The platform disappears, or bans you, or changes policy, or is blocked, or whatever, and your NFT is back to being a bare-bone blockchain contract number and a token id.
It's even more bullshit that I though! You don't even have control on whatever you make believe to virtually own. It's madness.
But you know what, the week I spent in this weird universe was also so much fun. There is an atmosphere of creative WTF, a mix of scams, community bonding, money laundering and genuine experimentation all bathed in some frenetic craziness that reminds me of the early days of the internet.
Non-fungible doesn't mean something can't be divided, it means a specific one just can't be substituted for another one.
An example: If I trade oil, one barrel of oil with a certain spec[1] is fungible with another barrel of oil with the same spec. If I sell you some oil you don't care which specific barrel you get as long as it's the same kind of thing. Likewise if you borrow 10 dollars from me you can pay me back with any combination of notes up to the value of 10 dollars, you don't have to give me back the specific bills I gave you.
On the other hand, things like art are not fungible. If I loan a Van Gogh to a gallery I very much want the same piece to be sent back to me after the exhibition is done. It's not ok for them to send me something else. Even if it's "sunflowers" (since Van Gogh painted a few of those and they are quite similar), I want the actual one I loaned to be sent back to me.
Normal bitcoins or ETH are fungible whereas NFTs are non-fungible. The specific one you have matters usually because it represents a digital proof of ownership of some specific resource (a bored ape or whatever).
[1] The spec for oil types standardises particular grades and then people trade a standard barrel size (called a bbl which is short for "blue barrel" because they used to be painted blue). "Brent" and "WTI" are different grades. A barrel of brent is fungible with another barrel of brent but not with a barrel of WTI because that's a different grade.
This answer confused me at first, because I initially thought you were trying to say non-fungible assets can be divided. At least in the case of non-fungible Ethereum tokens, it's the case that they both each can't be substituted for another one and they can't be divided, right?
And in the case of ERC-1155 semi-fungible tokens (SFTs), you can substitute them for others of the same type but they still each can't be divided. They're whole, irreducible units.
For both NFTs and SFTs, I think the non-divisibility is an important component to understanding what they are. There's no "smaller denomination" of each asset in the way that Ethereum can be divided arbitrarily until you reach the minimum "wei" unit.
You're right that non-divisibility isn't a sufficient condition to be non-fungible (as with SFTs), but the way I interpreted your first sentence made it seem like it was an orthogonal condition rather than a necessary and central one. (At least for cryptocurrency assets.)
Divisability is often related to fungibility in that the ability to divide a resource is a way to create fungibility (e.g. the sea of oil is split into barrels)
"...which says you believe you own this receipt, and at the time of purchase, you believed that the issuer of this receipt believes in your ownership of it too".
So I do wonder whether the NFT divide (between people who get it and people who don’t) might be a generational split, related to a larger societal shift away from ‘owning things’. We’ve definitely passed ‘peak thing ownership’.
For those of us old enough to have grown up with the idea of ‘buying a book’, ‘buying a toy’, ‘buying a CD’ or ‘buying a magazine’ we have a particular mental framework for ‘owning’ stuff.
But people stopped buying those things a while ago (people stopped buying toys? Not completely, but certainly some of that spend now goes on apps right?).
So for people who have grown up in a digital-subscription world, they might just have a fundamentally different mental model of ownership - one which is more compatible with NFTs as a reasonable idea than the paradigm us old ‘thing owners’ have.
Like, consider some of the things you likely have bought recently: a ‘twelve month Netflix subscription’, a ‘Steam library game’, an ‘app’… you bought those things with no expectation you could resell them later because you don’t think of those as ‘things’. And because you haven’t yet adjusted your mental model to the reality that this is what you spend your wealth on now - ephemeral digital rights you won’t be able to pass on to your kids when you’re gone.
But if you grew up digital native and the only things you’ve ever been able to buy are non transferable digital pointers to rights to use something, maybe the idea of a transferable digital rights pointer seems like a crazy innovative new idea that changes everything?
The difference between most[1] NFTs and Netflix/Steam/Apps is with the latter, you are buying access to something. With most of these NFTs that are just a picture, owning the NFT doesn't confer any special right to you. We can all enjoy the Disaster Girl meme, you don't have to have bought the NFT. The owner of the first ever tweet cannot actually do anything with it, edit it, destroy it, put it in a private collection so only they can look at it.
The only thing buying one of these NFTs gives you is I guess "bragging rights" but I think it remains to be seen why anyone should care that you paid money for 0x3B3ee1931Dc30C1957379FAc9aba94D1C48a5405,25046.
[1] The only exception is maybe these NFTs that interact with something on the blockchain like an item or place in a videogame, in that case owning the NFT provides some sort of utility.
Not really, because there is still no utility in owning the rights to an NFT.
I've only ever seen two kinds of interest expressed in NFTs.
The first is immensely wealthy people who are looking for a trendy way to flaunt their wealth, because they've exhausted all traditional options. This is what leads someone to pay $3M to "own" the first tweet.
The second is people who aren't immensely wealthy but are hoping they will become so by buying/minting an NFT and selling it for an huge profit, presumably to someone from the first group (or a sucker from the second). This makes up the majority of NFTs by volume, and is where the pyramid scheme similarities become hard to dismiss.
Haven't seen anything resembling a third kind of interest that, under scrutiny, doesn't ultimately fall into one of these two groups.
It seems to be exactly the opposite. In digital age you can consume stuff without buying anything and people care less about ownership per se, but "people who don't get it" buy stuff like NFT.
Maybe. Or maybe it's that people less used to the concept of ownership can be more easily defrauded by "as a Service" businesses and people peddling crypto alike.
> consider some of the things you likely have bought recently: a ‘twelve month Netflix subscription’, a ‘Steam library game’, an ‘app’… you bought those things with no expectation you could resell them later because you don’t think of those as ‘things’
Yes and no. The subscription is very much "a thing". Think of this like a mental jump you've made when you understood functions as first-class values - code that your program can grab and pass around. I may not be able to sell the underlying media library to which I'm granted access, but I can very much sell the access itself. Or borrow it to a friend. Or charge money for it. People are[0], in fact, trading access to subscription services like Netflix.
> if you grew up digital native and the only things you’ve ever been able to buy are non transferable digital pointers to rights to use something, maybe the idea of a transferable digital rights pointer seems like a crazy innovative new idea that changes everything?
That's... a couple decades of dystopia ahead of us. People growing today are still buying food, toys, medicine. Children develop understanding of ownership before they develop understanding of money.
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[0] - Or were, last time I checked, which was some 2-3 years ago.
NFTs are all about owning, in fact they are more about owning than almost anything on earth. The ONLY advantage you get from owning an NFT is the knowledge that you own it. Everyone, owner or not, can enjoy looking at the jpeg in the same way. That's not really true for anything else.
So, far from representing the move away from ownership, they are a distillation of the ownership concept.
I do, in fact, expect to be able to use my paid for Android app at any time in the future.
I'm not counting on updates and new features, I just want the same version I bought to work on the same version of Android it works on right now.
Obviously, that's all in my stubborn old school brain, but it doesn't stop me from hoarding .APK files and Android images.
I had a lot of great very old software on some CDs that I regularly reburned/copied until I lost them over a decade ago and I'm still pissed about that :D
> I mean, opensea.io does allow you to mint (the term for magically turning a media into an official NFT backed by the blockchain) up to 100MB of content.
So where is it? Not in the blockchain, obviously, it's already fat enough with tiny transaction data.
Well, it's just stored in the centralized platforms like opensea, rarible, etc.
You’re right that this is the way many have been created so far, but that will not be the case for long. Already people have pointed NFTs to IPFS/Filecoin which will give them much more staying power. And this can be done without using a centralized platform like opensea, check out nft.storage and metaplex (1) as starting points.
Agreed, and I hope it will become more popular. But right now, since you can't browse IFPS with firefox or chrome, and manual minting is harder than clicking a button on open sea, I wager private platforms will keep their appeal.
Maybe when decentralized service will do all the decentralized hard work for you, take your metamask, upload your content on IFPS, mint it, then let you sell it, it will take on.
Don’t those still rely on the gateway for wherever you mint it on IPFS staying up? The NFT link only points to a gateway which can go down then you’re at the mercy of it being replicated across nodes right?
If you scroll down you’ll see that the assets can be hosted on decentralised networks too like IPFS.
Also, not all NFT projects are built the same. I suggest you check out Pak’s Poets project - it’s a very exciting piece of performance art built around game theory.
Disclaimer: I don’t own any NFTs but that doesn’t mean I’m not excited by what they’re doing.
There are certainly a chunk of NFTs that the media only exists on one centralized server somewhere. Someone forgets to pay the bill and poof there goes your art. You can download the image but the contract's `tokenUri` function still points to that old location.
Then the next tier up would store their media on IPFS, if you purchase the NFT you're expected to be responsible for pinning that IPFS content somewhere. That's not communicated too well though. The benefit there is if the original minter stops paying for IPFS hosting but you still have yours pinned, it's still available. I think most of the "Mint as a service" platforms will use IPFS by default.
Then there are projects that are storing the images entirely on chain. These are obviously more costly to create but don't require another service/protocol/platform.
Anyone who buys these things is getting scammed and I feel sorry for them. I have friends who regularly fall for MLMs and other scams like this, and they never seem to learn. Is there any way to get through to them?
As stupid as it is, what you describe IS exactly "baseball cards in the blockchain", because each individual card/nft can only be owned by one person at a time.
The difference with baseball cards (apart from not being physical) is that most nft projects are combinatorial, so they make 10000 different cards, constructed from combinations of a much smaller number of "traits". That way the artist only has to draw say 25 faces, 20 hats, 20 eye glasses etc.
With baseball cards you'd instead make 100 different cards, and then print 1000s of copies of each. You could do that with NFTs, but you don't. The reason for that is probably that you can't sell NFTs in sealed packages where 95% of the cards will be uninteresting. I guess you could, but again you don't.
Many of the early ISPs played shell games with ad companies. NetZero is one of the most famously documented of the 90s dot-com age promising "free internet" with ads/MLM schemes, but they were one of the pack. The few I can recall today to google on the Bings, including NetZero, surprisingly still exist and survived the dot-com implosion as more traditional ISPs, but NetZero is the most useful example to give as it still bears the scars of its early scam-like history its own brand name. I don't think they've offered actual "zero dollar" service in more than a decade, but that's where their name originated.
I recall so many fly-by-night ads and ads+MLM schemes in the early internet, a lot of which I watched in Slashdot takedowns and teardowns at the time.
The early days of online payments (paypal) maybe. Unless they're talking about usenet selling, in which case I don't remember it being 'thrilling' to get a money order in the mail.
I kinda hate NFTs: But, the analogy to a "certificate of authenticity" for "real pieces of art" or "memorabilia" is reasonable. It's not "actually the art".
the "centralized platform" blocking you is kind of immaterial. The point is that other people can see that the token matches. Though one difference from CoAs is that the "centralized platform" could remove the art. I don't know how opensea works, but one could in theory hash the digital content, drop it onto bittorrent (or whatever, use the bittorrent hash id) and lock that up with the token. Is that how opensea works?
I'm still trying to wrap my head around the NFT thing (I get the base concept, and I know originally it was thought of for digital ownership of home deeds, etc, which makes perfect sense to me, but everything that I'm seeing from it lately just seems like beanie baby collecting, like art and avatars and buying with the sole expectation of selling to a bigger sucker later).
Where are you going to immerse yourself into this universe and seeing the community and experimentation? I don't know where I'd even start with that.
I have a lot of crypto nerds as friends, they have a trading platform, and so they are on all the reddit/discord/telegram important channels.
I wouldn't know where to begin, because I just got dunked into it a few days ago when one my friends asked my help to code a platform to create vanity user pages. I had nothing to do, it came to me :)
Your second last paragraph perfectly summed up my feeling about it. :p I don't want to touch it at first, since its scam/money laundering smell is very strong(and also environment impact) also I think overall thing is pretty stupid.
But after some time that I,um, "participate" in it, I can feel the lots of weird creative energy flowing in there, collectively. Not a thing we see often in today's world. It's quite rejuvenating, and crazy.
While you are right that the NFT is just an entry to the blockchain with a URI to the actual media file, the file is NOT stored on a centralized platform.
While it is possible to use a regular server to store the media file, it is certainly very bad practice and defeats the whole point of NFTs.
The media files are stored on IPFS, which is a decentralized peer-to-peer storage network. This ensures that the media file that a NFT represents, will always be available, since it is hosted by many people on the network.
> This ensures that the media file that a NFT represents, will always be available, since it is hosted by many people on the network.
I’m pretty sure this is incorrect. IPFS is not permanent storage unless you host the content yourself or pay a pining service to host it. It may be cached on many computers but those caches are finite and get cleared.
> The platform disappears, or bans you, or changes policy, or is blocked, or whatever, and your NFT is back to being a bare-bone blockchain contract number and a token id.
So what? You can obviously right click to save the JPEG, so if the platform goes down it doesn't really matter. What you're buying is ownership of the NFT of the JPEG, not the JPEG. Even if the platform goes down, you'll still be able to see the name of the piece in the metadata.
NFT's doesn't prove anything though. The art world care a lot about originals, but an NFT cannot prove that something is an original. Nothing would prevent the author from just issuing a lot of NFT's pointing to a lot of copies of the same art piece. They are even worse than that, NFT doesn't even represent the piece of art, if the service it is connected to goes down then the NFT points to nothing, you can't even prove that it at one time pointed to a specific image.
Lastly, there is no reason for a service provider to issue NFT's. Service providers earns a ton from taxing the market when people trade items, there is no reason for them to give this away by issuing NFT's. Rather every service I've seen issue NFT's did it to sell items that will never be valuable, but that NFT enthusiasts now think will be valuable thanks to the NFT.
Anyway, best case NFT's are just an untaxed market associated with a game or service content. That is the absolutely best case, in what way does that sound novel?
Edit: The untaxed part probably means that governments will shut it down if it becomes too popular. So even less reasons to invest.
There’s a lot of confusion here about why NFTs are valuable if the buyer doesn’t get to own the image copyright. This should not feel mysterious - NFTs are just like baseball cards.
If you buy a Barry Bonds baseball card for $1,000, you don’t own the artistic rights to the image on the card. All you own is the card itself, which has negligible manufacturing cost. It would be trivial for any card company to produce a million functionally equivalent Barry Bonds cards.
When you buy a Barry Bonds baseball card, you hope that the card company won’t dump a million more on the market. You also hope that if another baseball card company springs up and prints their own Barry Bonds cards, people won’t be as interested in that brand of cards. Attention and scarcity drive value; the nuance is that other speculators must care about scarcity along the same dimension that you possess it (in this case: the brand of the baseball card company and the year the card was made). There are a hundred tokens functionally equivalent to Bitcoin, but none approach Bitcoin’s value - purely because Bitcoin sustains more consumer and media attention. This position is fairly stable because attention has strong positive feedback loops.
There has always been interest in speculative collectibles. A purely digital collectible solves a lot of practical problems related to exchange: you don’t have to wait a week to receive the item in the mail, you don’t have to worry about its condition because it does not degrade with time or use, there is minimal counterparty risk due to online escrow contracts, and counterfeits are harder to fake (along the relevant dimension of scarcity, which is the origin address).
People have been speculating on collectibles for thousands of years. Crypto just makes it easier to trade them back and forth.
NFTs are a JSON string on a proprietary entity that point to the image of a baseball card. The image can be viewed by everyone. The bragging rights of owning a JSON string depend heavily on whether or not the proprietary entity will become the dominant player in the I own a JSON string-world.
This also has zero to do with blockchains. The proprietary entity could've used any database they wanted.
It's all a ridiculous scam, but have fun trading JSON strings.
" The bragging rights of owning a JSON string depend heavily on whether or not the proprietary entity will become the dominant player in the I own a JSON string-world." -> as the parent post explains, this particular aspect is exactly like baseball cards; where technically anyone could print other Barry Bonds cards but your bragging rights of owning a rare baseball card depend heavily on whether or not the proprietary entity printing those particular cards will be the dominant player in the baseball card world.
Surely the baseball card’s value does not come from the fact that you can hold a piece of cardboard in your hand.
Whether the data representation is a piece of cardboard or a JSON string replicated on 10,000 Ethereum nodes or a tulip or a Venmo balance is arbitrary; it just matters whether a lot of humans are looking at the same thing. And for the time being, a lot of humans are looking at crypto ledgers!
Can you give an example of the proprietary entity you're referring to? I was curious so I took a short course that covered minting NFTs with Solidity, and the way it seemed to work is that the JSON strings (which contain the base64 encoded image) are stored (as an ERC-721 token) on the Ethereum blockchain. Eg. you can see a random such token here: https://rinkeby.etherscan.io/token/0x6b96751051cd25c29cdcea7...
The only proprietary entity involved in that process seems to be Alchemy. My understanding of them is a bit vague but they seem to just help with making miners aware of the new contract and getting it distributed. But that's just the contract, once it's deployed it's nothing to do with them and the NFTs AFAIK don't pass through them at all.
No thats confusing one possible technical implementation with the concept, there are other ways to solve that. Thats like saying a Picasso painting is just a specific canvas with som paint on.
You are wrong. The JSON data is metadata and is optional. Also, you’re still not refuting GP’s explanation. If you can understand why people buy baseball cards, you can understand NFTs
> There’s a lot of confusion here about why NFTs are valuable if the buyer doesn’t get to own the image copyright.
Mostly because of two persistent lies around NFTs: 1) That you buy a piece of artwork. 2) Blockchain makes it automatically watertight.
All you get is transfer rights of a single number via a blockchain, optionally (usually) with a URI pointing to some media.
Now, why is owning blockchain transfer rights to that number valuable? Because an artist was involved in creating it, and they stated somewhere that the number refers to a specific artwork.
Outside the blockchain, more things have to be trusted for this to hold up:
- The artist in question must be the seller. Sure, you bought it from "banksy44" on nftgox.com, but is that the artist? There are soft ways to verify it, and you can get all sorts of receipts, promises, or statements from semi-official authorities.
- Whatever links the number or the URI to the artwork must remain up. If it's on a regular URL, the host owner gets to decide when to delete it, or when to replace it an ad for their gambling site. If a IPFS resource goes dead, it's gone. If the number referring to the artwork is stored on a 3rd party ledger you rely on them being honest, online, and correct.
AND NOW you have two weaker links in your trust chain, on the level of "humans trusting humans", rendering the blockchain basically useless. The premise is a lie, intentional or not.
I will not disagree that there is confusion and bad arguments on both sides of the debate, which is why you are essentially arguing within the wrong framing.
At the same time, people buying NFTs are generally quite a bit less confused about what you consider "lies" than you seem to think.
Importantly, the blockchain is not useless because they have to exist within the universe's rules of impermanence. You may want to ponder the differences and shared properties between something like seditionart.com, MASS MoCA's ownership of Sol Le Witt wall paintings, and an NFT on a blockchain.
Finally, let me point out that the URI issue is very much a misunderstanding that is widespread within the NFT community as well. It helps to think of the URI as a convenience feature rather than someone implying anything about the value of the token. There are fascinating experiments with tokens that have no url, tokens that have no visual representation, tokens with changing urls, or arbitrary urls; tokens that point to the same url. There are of course tokens that use data uris, and have the image-representation on-chain, or generate it dynamically; or they do so but not in URL form. There are technical implementations where the database of urls is separate from the ledger of tokens; there are early experiments by artists with blockchains (many years before anyone cared about NFTs) where there is no ability to store a URL in the first place.
Cryptopunks, a really early project, simply stored a hash to a file containing the assembled images, and that is all that is needed.
There are various vague touching points of NFTs and real world collectables like baseball cards, but they are not the same. Artificial scarcity is one of them, e.g. there is no reason why there couldn't be a billion baseball cards of the most expensive kind (which would make them stop being the most expensive). Somebody else could create fake ones, but they would have little value for the fact that they are not genuine, which can be verified. You can make the very same arguments for an NFT, including that they are genuine based on who issued them.
But a baseball card, or a Lego set have value on their own. Their collectable value stems from the fact that they are desired as such, and the scarcity makes the price of a certain type go up. Somebody might buy them just to show off or speculate, but another might be a huge Lego nerd and buy the rarest set just to feel joy by looking at it. But an NFT has no value beyond the scarcity. Nobody feels human joy by looking at an NFT beyond being able to show off that they are able to basically burn money in the "i am rich" app type of way. Thus it can only remain a toy for the rich. A van Gogh painting is most likely just a speculation and a show off object, but I might buy a painting from a local artist for $200 because I like it, and to put it on my wall so it makes me happy because it reminds of something nice. I will not buy a $200 NFT just to say I have one too.
Yeah, I follow Peter Mohrbacher who's a surrealist fantasy artist. I've bought some physical prints from him (not even originals or anything, just normal art prints) because I like his art and wanted to have it on my wall and preferred to pay him for a proper print than print a digital copy myself. He also at some point made some NFT sales and I really tried to find a reason to get excited but just couldn't.
I can understand why he was, though, because on his particular platform, artists get a cut of future resale of their art. So he sells a piece for $100, someone later sells it for $200, and he gets a 5% cut (made-up number, I don't remember what exactly it was) for an extra 10 bucks, and so on (but it's still always just a digital token, not a physical piece).
But that doesn't require NFTs to happen. Since it was a proprietary platform, a plain old database could have done the exact same thing.
> e.g. there is no reason why there couldn't be a billion baseball cards of the most expensive kind (which would make them stop being the most expensive)
This is a hilarious contradiction. You are saying there can be a billion baseball cards of the most expensive kind that are at the same time not the most expensive kind.
> People have been speculating on collectibles for thousands of years.
Have they really? IMHO the whole concept of intentionally creating collectibles as a market started (and IMHO became possible) only after strict IP laws that could prevent anyone from making and distributing large quantities of items that should be rare by design.
My favorite example is the fictional collectible card game Gwent in Witcher 3, where the whole concept of rare/scarce cards is ridiculous in the absence of a single organization being able to enforce a monopoly on issuing Gwent cards; the actual expected result should be like ordinary cards, where everyone gets an ace of spades in their deck or chess where both players get a queen, no questions asked; for human-created marketable collectibles (as opposed to actual collections of butterflies or the like) the scarcity can only happen if artificially enforced.
This is one of my main gripes with MtG. It just feel like a scam, a 90s loot boxes situation. I do not want to contribute to the business model, even if the product is solid.
I will probably sell my collection and print some proxies.
If we are going to approach the issue through analogies, here's an alternative one: selling an NFT is like the old scam of selling a bill of goods (this is where the victim thinks he has bought a number of tangible things, but the contract actually says that all he has bought is the document listing the goods.)
The big difference with NFTs, of course, is that the true nature of the transaction is not being disguised. That makes it legal and even ethical, but whether that is enough for you to be a buyer is up to you.
If not for the energy costs NFTs would be just like you describe above - a somewhat pointless but harmless hobby for enthusiasts (what good does speculating on baseball cards do in the world? What good does speculating on art do for that matter? As far as I can tell "little to none" for both of these).
NFTs themselves don't have any energy costs. Depending on what network you're using for buying/minting/trading NFTs, there might be energy cost associated with it, but not all NFTs are equal. NFTs based on Proof-of-Stake networks won't have the same energy cost as NFTs based on Proof-of-Work networks.
Unfortunately, it seems that most NFTs are based on the Ethereum platform, which is currently Proof-of-Work. Fortunately, Ethereum is moving to Proof-of-Stake slowly but surely.
But the point still stands, NFTs themselves have no energy costs, only the transactions on the network where they live have that.
There's no energy cost to spawning a million algorithmic penguins. They have no inherent cost or value.
The sunk costs of obtaining something rare or difficult to get (like titanium) is a factor only for the next person who desires titanium.
Since there is no cost to see or copy a jpg, there is no "extra value" added in an NFT. Not even energy costs. The end product still has zero value.
A simple corrolary is wine. Swill stored expensively doesn't acquire new use values from the storage. The expense of storage doesn't accumulate to the value of the NFT. Whereas the expense of obtaining real goods like metals is exactly what sets their value.
When you have a baseball card, the first sale doctrine means that you at least have the legal right to display and transfer that card. With NFTs, even that is not necessarily the case because displaying the content of the NFT is making a copy, and you may not have a license to do that.
If you own an NFT, you have the ability to write someone else’s address on a socially recognized ledger of ownership. That is all that matters. If the NFT and the ledger have wide interest, this ability to transfer ownership has value regardless of any legal subtleties.
This is a great explanation. I’ve understood NFTs slightly differently, where they are akin to an _autographed_ baseball card. In that case, regardless of how many copies of that card exist in the world, you have a rendition of that card authorized by a special party (the autographer) that causes it to be unique.
Where any number of digital copies of an asset may exist, the NFT is the “autograph” atop that asset that is unique and therefore adds the value.
(It’s worth noting that anyone can autograph any baseball card. So it’s not the autograph that makes it valuable, but _who_ autographed it. It’s the same with who minted the NFT.)
There's another aspect to this analogy - It's like an autographed baseball card + the person / entity autographing the card has declared (by code) that there won't be another one of these autographed series ever (eg - 10k CryptoPunks series).
They're nothing at all like baseball cards. Very few baseball cards are worth anything at all, and the ones that are don't promise to be rare in some hypothetical future. They're cards that were created decades ago and are actually rare and can't possibly be recreated. If you have a rookie Willie Mays in mint condition, it took half a century for that to become valuable, as all but maybe one or two in the world disappeared and you have the only one left. Nobody mints a brand new baseball card right now, pinky swears it will remain the only of its kind forever, and then sells it for millions immediately.
Baseball cards are exactly what they are and baseball cards were historically viewed as worthless until a craze in the 80’s that in turn caused over production and has made them a pretty poor investment.
This is partly true, but you are missing one important aspect:
While ownership can be enforced equally well with NFTs and baseball cards, the crucial difference is that with physical cards, owners have a unique way of experiencing the card. Anyone can look at an online reproduction of it, but only if you have a physical copy can you hold it in your hand.
This is not the case for NFTs, anyone can experience the image in exactly the same way.
I think your point on scarcity and attention are well put, but can't apply to NFTs in the way as physical commodities because I think there has to be some notion of originality intertwined.
Like for art pieces, sure people can make copies and put the copies on a wall - but only I have the original to hang up my wall. There is value to most people between having a copy vs the actual thing.
There is obviously a massive disconnect with this and NFTs because anyone can save a copy of a NFT (or the image a NFT represents) and not have its value diminished because all the "copies" of the NFT are the same - since "originally" doesn't apply to digital goods.
It doesn't matter if there is some hash on a blockchain out there saying so-and-so "owns an image", I can still copy the image and get the same value. That is not the case with say having a copy of the Mona Lisa vs the actual Mona Lisa.
NFTs are worthless to me for the above reason aside from the value that other people think they have.
The difference with baseball cards is that nobody ever had the option to just "buy the Barry Bonds card" out of the gate.
The value came from the rarity of people all over buying random packs of cards, collecting them, trading them and the established rarity that came from that massive distribution coupled with holding the cards for a decade or more to see how one of these players career played out. On the off chance that you held onto a rare card of a legendary player, then congratulation...you have something of value. More so if you took good care of it.
There's none of that with NFTs. It's akin to handing out flyers on the street and asking somebody to pay for them on the basis that..."Sir, that flyer belongs only to you now. Congratulations!"
NFT's are just digital proof of an old adage.
"A fool and his money are easily parted." - Thomas Tusser
# I bought the rights to the quote from an NFT
The difference between baseball cards and NFTs is that if I'm cold I can make a bonfire from baseball cards, whereas I certainly can't do the same with NFTs.
At this point, of you say crypto is involved with some new fad it's just a clear indicator that silicon snake oil is the real product.
It’s thought that something like 20% of BTC are “lost” (1) (ie, private key is lost). This will certainly happen to NFTs as well since people will inevitably fail to back-up their wallets.
NFT's are not like Baseball Cards, they are more like Pet Rocks.
A Baseball Card has some underlying value and fun, kids get baseball cards. They cannot be diluted as 'reprints' would never be accepted as substitutes.
If some people want to trade those things on the margins, fine.
A 'number' i.e. digital signature is not a collectible.
Digital signatures of any creative work are meaningless, nobody will derive satisfaction out of owning them and they'll probably just lose value over time.
It's an obvious money grab populist grift that really doesn't create net value for anyone.
Ok, let's see if I'm following the discussion right. let's say you buy an NFT for using a GIF of the Techno Viking, from the Viking himself, and Reddit verifies it. Now you are the only person on Reddit that can have a Techno Viking GIF signature, yippee! Except I can make a new NFT of the same GIF and nothing in the NFT itself betrays that it wasn't issued by the real Techno Viking, so it's up to him, Reddit and you to call me out and reach for old school copyright laws to stop me from using it. Which is no different than me uploading a Techno Viking video to YouTube and getting sued by him or flagged by YouTube, is it?
You're both correct and underestimating how broken NFTs are. If you buy an NFT that gives you nothing except bragging rights that you "own" this NFT. What ownership actually means when devoid of the associated rights is anyones guess. Buying an NFT of a GIF doesn't stop anyone from using that GIF on reddit. No one is going around checking if posted GIFs have a matching NFT out there and enforcing property rights based on that.
When you buy an NFT you're not even buying the GIF, you're buying the receipt proving you bought the GIF. What good that is without owning the GIF isn't exactly obvious to me.
Not that I support NFTs much, but conceptually, how is that different than you buying a Marilyn Monroe from Andy Warhol and him printing the exact same Marilyn Monroe and selling it to someone else ? Hopefully in 2021 everyone would agree that the two are distinct artworks, even if the physical object is exactly the same to the human eye ; that's not what matters when buying art.
As someone pointed out already in the baseball card example. NFTs do not give you copyright over the images. You may buy a baseball card but that doesn’t let you sell or license the image displayed on the baseball card. NFT is exactly the same in that sense. It is purely a collectible not explicit ownership of a likeness.
I think you underestimate how important bragging rights are.
That's the reason people purchase Rolex watches! And because you can't show off your Rolex watch in the online world, instead you'll use an NFT as a profil pic.
I think it's hard for people that don't care about bragging rights / status symbols to understand NFTs.
Conversely, I think that status symbols are a very important part of the lives of the people that understand and advocate NFTs.
Anybody can own and share the media file (one of the great things about crypto art is that we can all access and view it), but only one wallet owns the token that links back to the original creator’s signature.
To use a print analogue: a print of a photographer’s work likely holds no significant value* unless that artifact is provably signed (or otherwise approved) by the artist. To take it a step further; a convincing photocopy with a fraudulent signature will also hold no value, once it’s determined to not have come from the original creator.
* Here “value” refers to cultural and artistic significance in how it is perceived by an art market. Of course a poor photocopy of a Mona Lisa holds cultural value because of what it signifies, but a museum isn’t about to acquire that artifact from you.
I didn't see this answer and wanted to submit it. So, in order for this NFT to have any authenticity, it has to be made under some sort of "technoviking" name right? Ultimately, this technoviking guy is probably reputed and if someone found his content through NFTs, would probably let him know. You can argue that the chain can't regulate itself, but as it stands it does -- just by virtue of there being one large platform (opensea). I'm not sure that Technoviking could easily get his content pulled from the chain, but it can be delisted entirely from opensea, and probably rigged up so future items of his would be caught and shadowbanned immediately.
Is this a solution that works long term? I'm not sure about that. It's a hard question to answer, but I'm glad someone's going for it. I would personally expect ycombinator to be more open to these kinds of ideas -- Programmatic solutions are something we can all get behind. It's a hard problem to solve but that's what drives a lot of our passion in this field, correct?
Basically yes, you'd be right. Someone has to call him out. But do you expect an automated system to handle that in a fair and ordered manner? We already have a terrible (user-wise) implementation of that -- DMCA. What's important is ascribing ownership for the long-term, even if we have to do it manually and surprise -- that's what NFTs (could) do.
I could be wrong but from what I've seen, I think DAOs could bridge that gap. These 'headless' communities create that manual self-regulation that is needed -- social verification fueled by some sort of financial incentive, driven through a very public system.
This touches upon the main issue with NFTs and tokens in general, that they always have to rely on a centralised authority to connect them to the real world, and except when it comes to derivatives on crypto assets, that real world connection is crucial.
So, are artists suddenly getting in on pgp key-signing parties to establish a web of trust, or is the public key of the artist really just a key claiming to be that of the artist? What is to stop me from buying "bank.se", "banksy.me" and "banksy.io," and actioning off three different NFTs (of three different digital representations of the same street art) to different online art communities? What is to stop someone who MITM's the artist's webpage from selling NFTs on their behalf?
No, you need to think about what you’re buying as a unique address and tokenID pair. The same way someone can recreate a hackernews at a different URL, most people here are going to continue to see https://news.ycombinator.com/ as th real one
It is more like buying a signed baseball card. And with NFTs being digital tokens they can't be forged or duplicated, and the original creator can't stop you from transferring to someone else, and they can be transferred to someone else relatively securely if you have the private key and pay the gas.
Anyone else could print and sign a baseball card, mint an almost identical NFT. But if they come from someone besides the techno viking they won't be worth anything, because anyone could do the same thing. But the techno viking can certainly sell more to others just like a baseball player can sign a lot of cards.
Your NFT’s trade provenance will reveal it was never owned by Technoviking’s key. He won’t need to use copyright law, you simply can’t impersonate him so no one will value your duplicate NFT.
I might be mistaken but I don't think >99% of people who have bought an NFT have verified that the key used to generate the token does in fact belong to the artist that created the piece that's (currently) behind the link that's in the token.
All of this gushing hype for the future of artistry is transparently performative. Nobody in this tech cares about art or artists, any of the useful functions of NFTs have long been possible and many orders of magnitude less expensive using public key cryptography or digital signatures.
Eh I have spent ~100 on smaller stuff on hicetnunc. The majority has been on art made by people that I know, and I've really enjoyed the new artists that I've found.
I'm uninterested in the NFTs with big price tags, and I'm uninterested in pieces that I don't subjectively enjoy the art of.
I care, but I'm guessing you either didn't literally mean nobody cares, or you are going to brush off this counter example for whatever reason.
I'm an amateur generative artist who just started minting on hic et nunc a month ago. I'm extremely sceptical and even disgusted by the big money NFTs, but minting and collecting on H=N has been a lot of fun, there is a very nice community as well.
Selling my art for ~real money for the first time has been such a motivating experience, even knowing that we are in a strong mania phase now. So I can say that I care too!
One thing to note is that hic et nunc is ran by one guy who doesn't really like to communicate and doesn't believe in paying for stuff like devops work, so I'm not sure if this will be the one site to survive on tezos. The community will eventually decide over time.
The guy who came up with the idea and has been paying me for the last few months to build our NFT auction site is a musician trained at the New England Conservatory, working doing performances in a band and as a music teacher, paying out of his savings, and he definitely cares about artists since he is one. Also these systems do use public/private keypairs and signatures (Algorand). https://gifeconomy.com
Being an artist doesn't mean you care about other artists. There are a looooot of selfish people out there and they'll often use the trappings of helping people to claw their way skyward.
> any of the useful functions of NFTs have long been possible and many orders of magnitude less expensive using public key cryptography or digital signatures.
A major useful function being the ability to buy and sell with purely digital money, was that possible before?
Yes? Even if you're exclusively referring to cryptocurrency when you say "purely digital money", it was already possible before the popularity of NFTs to accept cryptocurrency as payment for anything.
This would have been more interesting if the author had traced where all the money being plowed into NFTs is coming from.
I suspect that most of it does not come from outside of the current ETH (or whatever) ecosystem. I'd bet that most of the volume comes from people who are either treating it as play money, or trying to pump the NFT scam for their own benefit (real or imagined).
> This would have been more interesting if the author had traced where all the money being plowed into NFTs is coming from.
Not possible to trace where the money is coming from.
In fact, someone can "sell" an NFT to themself in a wash trade between two wallets they control. The last trade price of the NFT is now recorded as the transaction price, but it's possible that money never actually changed hands.
Want to have an expensive NFT? Just trade it to yourself for as much money as you have in your crypto wallet. You keep the money, you keep the NFT, but now everyone can see that someone "paid" a certain amount for it.
> In fact, someone can "sell" an NFT to themself in a wash trade between two wallets they control. The last trade price of the NFT is now recorded as the transaction price, but it's possible that money never actually changed hands.
I heard rumors this is what happened with the Beeple nft
Youtube suggested a video to me about what's going on in the collectable video game market. The claim was that there's some collusion between a major auction site and a grader, and some of those players were running a pump and dump.
Unless you know who the buyers and sellers are or transaction fees are high (like an auction at Christie's), you have no idea if the sales are real, so it's pretty easy to make it look like the asset is appreciating when it's really just manufactured hype.
Yup, Karl Jobst's expose I bet. It was a really good piece of journalism, maybe not something you'd expect from a YouTuber who mostly vlogs about speedrunners.
"Ecosystem" is a word that I believe sprung to life in the 70s, referring to the entire collection of organisms inhabiting a 'place', along with the weather conditions etc. in that place. The term was coined because without it, you need (or rather, I needed) 16 words to express it.
So it bothers me when people use the term to refer to collections of stuff that's never been alive: the Java ecosystem, the cryptocurrency ecosystem. These are not "ecosystems" - they're called "systems".
See also "epicentre".
Upvoted - I appreciate the observation about where the NFT volume comes from.
"system" denotes something which was designed to work as a whole. Pieces are connected together by a manufacturer to build a system. The operating system is a kernel, UI, tools, etc taken by a creator and put together into a packaged tool that people can use on their computers.
"ecosystem" denotes an environment created by some kind of vessel e.g. Earth, the ocean, Ethereum, etc where independent entities can be created, develop, and compete for resources, attention, space, etc provided by that environment. The entities have no real connection to their environment besides just living within it and interacting with the other entities.
Ethereum is just as much of an environment as the Earth is. It provides the foundation which the entities live on top of (security), the resources the entity needs to exist (data availability), and the gathering point where complex interactions can happen (smart contracts and end users). Ethereum doesn't build any of the ecosystem, it simply provides the marketplace where life happens.
sorry to be pedantic, but it's literally not multi-level-marketing? Specifically, it's missing the multi-level part. Your upline isn't getting $$$ when you sell a NFT. I suppose you can make the argument that if you then take the money and buy more stuff, then your upline gets paid, but that describes most distributor arrangements. Come to think of it, there isn't really even an upline. It's just a network of artists and traders with no set hierarchy.
I agree. I kinda dislike when people throw around terms like pyramid scheme and MLM. And specifically calling crypto a ponzi. Yes there has been ponzi schemes done with crypto. But speculative bubble itself is not a ponzi scheme.
Pyramid and MLM are related concepts, and usually MLM is pyramid. That doesn't mean all pyramids are MLMs though. Same applies for other types of scams or structures.
Who convinces people to buy Herbalife? People who have spent a bunch of money on Herbalife.
Who convinces people that NFTs aren't just a fad, they're really innovative and you should consider adding them to your portfolio? Not people who don't own any.
When an NFT project proposes a value share and airdrops amongst token owners, and also has a royalty fee paid on every transfer [1], I think the “up line” and MLM aspect come more into play. There is value for you to inflate the price of the NFT as it benefits you and the other owners directly as sale prices get higher.
> I think you could argue that the 'upline' acrues value even if they aren't paid directly. Greater interest in an NFT drives the value up.
right, but uplines getting paid in a necessary but not sufficient condition for MLM. In a MLM it's usually derived through their downlines. The mechanism described is a general benefit to all participants in the system which isn't very MLM-like. platforms (eg. youtube) tend to have the same "general interest drives the value of the ecosystem up" (ie. creators convincing other creators to join your youtube clone increases your site's catalog, which boosts the quality of recommended content you can show to your user to get them to stay on longer, making it easier for creators to get views), but you wouldn't call that a MLM.
> In short, the minute you connect your blockchain to an app frontend you now have a degraded blockchain, one that cannot even in principle guarantee immutability, trustlessness, and decentralization – at least not for assets that the app's customers actually care about.
Scratch the surface on almost any NFT ecosystem or blockchain application and I find I'm still relying on trust, or a centralized service, or a service that's more mutable than it advertises. So if I don't get the purported benefits of blockchain anyways, what was the point of getting a blockchain involved?
EDIT: Getting a lot of responses that I don’t have time to reply to. My more involved thoughts on the entire space are here:
This isn't true - sure there are projects that use IPFS to host token assets too big to store on-chain (3d assets, photos, etc.), but those assets can be assured to be perfectly correlated with their hashes. Not to mention many projects are fully on-chain, like CryptoPunks and AutoGlyphs.
Ah, so in some cases you’re able to stuff an entire JPEG into the blockchain itself, I’ll grant that. In which case we move on to all the other problems. But For NFTs that are meant to be used in applications, I think my argument still holds.
For fully disembodied NFTs where you just stuff a jpeg or it’s hash into a blockchain, my other complaint is that you’re just creating a speculative instrument that doesn’t really do anything except hope someone else will pay more for it. And I still have to rely on trust outside the blockchain that the artist approved these NFTs in the first place (there are many done with unauthorized art)
Yeah this is one of the reasons I love hicetnunc and am suspicious of most of the NFTs hyped on Ethereum, so many that I checked are hosted on some random host, I even saw a very $$$ one hosted on heroku...
This has to be elephant in in room right? There is so much cryptographic potential and none it is realized by most NFTs currently sold. Signing an http link to an existing .jpeg has to be the least imaginative way to implement this concept.
How about: Sign the image and generate a MAC. Then use steganography to include that information in the file. For the NFT sign create a certificate with the same key and include the MAC information. Publish that together with an IPFS link to a blockchain.
Then we can have discussions about IP law, art and what art ownership means.
Complete sidenote, but I loved your "So You Want to Compete With Roblox" article a while back, it was a pleasant surprise to click on this link and end up back at your blog.
The benefits of the blockchain are simple. To drive the pyramid scheme to profitability. It helps obfuscate the scam from people who don't know any better.
Car/bag/cloth/jewelry/art - these type of things are sometime considered status symbol. It help people convey certain “message” to other.
NFT might could be the same in the ever more virtual world.
I might not be be the target audience; but it does not meant that it hold no value to other.
People spent lots of money on game skins, rare weapon.
So there is a market.
When one goes to a physical conference: flair/badges serves similar purpose. NFT could be that in zoom/team/slack.
My naive way of looking at NFT: Maybe it can be used to help fund open source free software. Instead piece of art; a flair/pin/badge for showing your support for your favor projects.
When it comes to luxury cars and clothes, you force others to see that you’ve spent for status. That doesn’t exist for NFTs. There’s no public forum I can go to where others are forced to observe my status signals.
High end art is more about investing, money laundering, and tax havens then status.
Readit News
This week I learned it's not.
NFT are Non Fungible Tokens, which means tokens that can't be divided, unlike crypto currencies like Bitcoin that can be divided in Satoshis. So you exchange the totality of it, or not. Basically it's a unique number in the blockchain you change ownership by applying cryptographic signatures during a transaction. Most of the time it's an ethereum smart contract address + a token id.
But wait, where are the pics ? The gifs ? The videos ?
I mean, opensea.io does allow you to mint (the term for magically turning a media into an official NFT backed by the blockchain) up to 100MB of content.
So where is it? Not in the blockchain, obviously, it's already fat enough with tiny transaction data.
Well, it's just stored in the centralized platforms like opensea, rarible, etc.
Basically, the NFT is not even that piece of art, baseball card or whatever, it's just the number linked to the proprietary, centralized, privately own trading platform that hosts the content.
The platform disappears, or bans you, or changes policy, or is blocked, or whatever, and your NFT is back to being a bare-bone blockchain contract number and a token id.
It's even more bullshit that I though! You don't even have control on whatever you make believe to virtually own. It's madness.
But you know what, the week I spent in this weird universe was also so much fun. There is an atmosphere of creative WTF, a mix of scams, community bonding, money laundering and genuine experimentation all bathed in some frenetic craziness that reminds me of the early days of the internet.
Despite all that crap, I kinda like it.
An example: If I trade oil, one barrel of oil with a certain spec[1] is fungible with another barrel of oil with the same spec. If I sell you some oil you don't care which specific barrel you get as long as it's the same kind of thing. Likewise if you borrow 10 dollars from me you can pay me back with any combination of notes up to the value of 10 dollars, you don't have to give me back the specific bills I gave you.
On the other hand, things like art are not fungible. If I loan a Van Gogh to a gallery I very much want the same piece to be sent back to me after the exhibition is done. It's not ok for them to send me something else. Even if it's "sunflowers" (since Van Gogh painted a few of those and they are quite similar), I want the actual one I loaned to be sent back to me.
Normal bitcoins or ETH are fungible whereas NFTs are non-fungible. The specific one you have matters usually because it represents a digital proof of ownership of some specific resource (a bored ape or whatever).
[1] The spec for oil types standardises particular grades and then people trade a standard barrel size (called a bbl which is short for "blue barrel" because they used to be painted blue). "Brent" and "WTI" are different grades. A barrel of brent is fungible with another barrel of brent but not with a barrel of WTI because that's a different grade.
And in the case of ERC-1155 semi-fungible tokens (SFTs), you can substitute them for others of the same type but they still each can't be divided. They're whole, irreducible units.
For both NFTs and SFTs, I think the non-divisibility is an important component to understanding what they are. There's no "smaller denomination" of each asset in the way that Ethereum can be divided arbitrarily until you reach the minimum "wei" unit.
You're right that non-divisibility isn't a sufficient condition to be non-fungible (as with SFTs), but the way I interpreted your first sentence made it seem like it was an orthogonal condition rather than a necessary and central one. (At least for cryptocurrency assets.)
“Here’s a receipt for the Mona Lisa that says that you own this receipt of the Mona Lisa”.
"You have a receipt for it, what's the problem?"
For those of us old enough to have grown up with the idea of ‘buying a book’, ‘buying a toy’, ‘buying a CD’ or ‘buying a magazine’ we have a particular mental framework for ‘owning’ stuff.
But people stopped buying those things a while ago (people stopped buying toys? Not completely, but certainly some of that spend now goes on apps right?).
So for people who have grown up in a digital-subscription world, they might just have a fundamentally different mental model of ownership - one which is more compatible with NFTs as a reasonable idea than the paradigm us old ‘thing owners’ have.
Like, consider some of the things you likely have bought recently: a ‘twelve month Netflix subscription’, a ‘Steam library game’, an ‘app’… you bought those things with no expectation you could resell them later because you don’t think of those as ‘things’. And because you haven’t yet adjusted your mental model to the reality that this is what you spend your wealth on now - ephemeral digital rights you won’t be able to pass on to your kids when you’re gone.
But if you grew up digital native and the only things you’ve ever been able to buy are non transferable digital pointers to rights to use something, maybe the idea of a transferable digital rights pointer seems like a crazy innovative new idea that changes everything?
The only thing buying one of these NFTs gives you is I guess "bragging rights" but I think it remains to be seen why anyone should care that you paid money for 0x3B3ee1931Dc30C1957379FAc9aba94D1C48a5405,25046.
[1] The only exception is maybe these NFTs that interact with something on the blockchain like an item or place in a videogame, in that case owning the NFT provides some sort of utility.
I've only ever seen two kinds of interest expressed in NFTs.
The first is immensely wealthy people who are looking for a trendy way to flaunt their wealth, because they've exhausted all traditional options. This is what leads someone to pay $3M to "own" the first tweet.
The second is people who aren't immensely wealthy but are hoping they will become so by buying/minting an NFT and selling it for an huge profit, presumably to someone from the first group (or a sucker from the second). This makes up the majority of NFTs by volume, and is where the pyramid scheme similarities become hard to dismiss.
Haven't seen anything resembling a third kind of interest that, under scrutiny, doesn't ultimately fall into one of these two groups.
> consider some of the things you likely have bought recently: a ‘twelve month Netflix subscription’, a ‘Steam library game’, an ‘app’… you bought those things with no expectation you could resell them later because you don’t think of those as ‘things’
Yes and no. The subscription is very much "a thing". Think of this like a mental jump you've made when you understood functions as first-class values - code that your program can grab and pass around. I may not be able to sell the underlying media library to which I'm granted access, but I can very much sell the access itself. Or borrow it to a friend. Or charge money for it. People are[0], in fact, trading access to subscription services like Netflix.
> if you grew up digital native and the only things you’ve ever been able to buy are non transferable digital pointers to rights to use something, maybe the idea of a transferable digital rights pointer seems like a crazy innovative new idea that changes everything?
That's... a couple decades of dystopia ahead of us. People growing today are still buying food, toys, medicine. Children develop understanding of ownership before they develop understanding of money.
--
[0] - Or were, last time I checked, which was some 2-3 years ago.
So, far from representing the move away from ownership, they are a distillation of the ownership concept.
I'm not counting on updates and new features, I just want the same version I bought to work on the same version of Android it works on right now.
Obviously, that's all in my stubborn old school brain, but it doesn't stop me from hoarding .APK files and Android images.
I had a lot of great very old software on some CDs that I regularly reburned/copied until I lost them over a decade ago and I'm still pissed about that :D
You’re right that this is the way many have been created so far, but that will not be the case for long. Already people have pointed NFTs to IPFS/Filecoin which will give them much more staying power. And this can be done without using a centralized platform like opensea, check out nft.storage and metaplex (1) as starting points.
1. https://github.com/metaplex-foundation/metaplex
Maybe when decentralized service will do all the decentralized hard work for you, take your metamask, upload your content on IFPS, mint it, then let you sell it, it will take on.
The assets aren’t necessarily stored on OpenSea. You can see how OpenSea gets the metadata like asset url via the docs:
https://docs.opensea.io/docs/metadata-standards
If you scroll down you’ll see that the assets can be hosted on decentralised networks too like IPFS.
Also, not all NFT projects are built the same. I suggest you check out Pak’s Poets project - it’s a very exciting piece of performance art built around game theory.
Disclaimer: I don’t own any NFTs but that doesn’t mean I’m not excited by what they’re doing.
I mean, most people could host their own video, but they upload on youtube, and just youtube.
Well, this is the same, only even more niche, so the easy "upload" on open sea is very, very attractive.
I'd wager if one the most popular NFT trading plateform disapear, 99% of all NFT would go poof.
Buyer beware, I guess
Then the next tier up would store their media on IPFS, if you purchase the NFT you're expected to be responsible for pinning that IPFS content somewhere. That's not communicated too well though. The benefit there is if the original minter stops paying for IPFS hosting but you still have yours pinned, it's still available. I think most of the "Mint as a service" platforms will use IPFS by default.
Then there are projects that are storing the images entirely on chain. These are obviously more costly to create but don't require another service/protocol/platform.
The difference with baseball cards (apart from not being physical) is that most nft projects are combinatorial, so they make 10000 different cards, constructed from combinations of a much smaller number of "traits". That way the artist only has to draw say 25 faces, 20 hats, 20 eye glasses etc.
With baseball cards you'd instead make 100 different cards, and then print 1000s of copies of each. You could do that with NFTs, but you don't. The reason for that is probably that you can't sell NFTs in sealed packages where 95% of the cards will be uninteresting. I guess you could, but again you don't.
I recall so many fly-by-night ads and ads+MLM schemes in the early internet, a lot of which I watched in Slashdot takedowns and teardowns at the time.
the "centralized platform" blocking you is kind of immaterial. The point is that other people can see that the token matches. Though one difference from CoAs is that the "centralized platform" could remove the art. I don't know how opensea works, but one could in theory hash the digital content, drop it onto bittorrent (or whatever, use the bittorrent hash id) and lock that up with the token. Is that how opensea works?
Where are you going to immerse yourself into this universe and seeing the community and experimentation? I don't know where I'd even start with that.
I wouldn't know where to begin, because I just got dunked into it a few days ago when one my friends asked my help to code a platform to create vanity user pages. I had nothing to do, it came to me :)
But after some time that I,um, "participate" in it, I can feel the lots of weird creative energy flowing in there, collectively. Not a thing we see often in today's world. It's quite rejuvenating, and crazy.
While you are right that the NFT is just an entry to the blockchain with a URI to the actual media file, the file is NOT stored on a centralized platform.
While it is possible to use a regular server to store the media file, it is certainly very bad practice and defeats the whole point of NFTs.
The media files are stored on IPFS, which is a decentralized peer-to-peer storage network. This ensures that the media file that a NFT represents, will always be available, since it is hosted by many people on the network.
I’m pretty sure this is incorrect. IPFS is not permanent storage unless you host the content yourself or pay a pining service to host it. It may be cached on many computers but those caches are finite and get cleared.
Persistence | IPFS Docs https://docs.ipfs.io/concepts/persistence/#long-term-storage
« Long-term storage
Storing data using a personal IPFS node is easy, but it can be inconvenient since you have to manage your own hardware.
[…]
[…] paying a pinning service to store data is a convenient workaround, it still requires someone to bear the cost of storing that data.
[…]
While IPFS guarantees that any content on the network is discoverable, it doesn't guarantee that any content is persistently available.
»So what? You can obviously right click to save the JPEG, so if the platform goes down it doesn't really matter. What you're buying is ownership of the NFT of the JPEG, not the JPEG. Even if the platform goes down, you'll still be able to see the name of the piece in the metadata.
To be fair, the real-life art auction world is basically all money laundering, too.
Lastly, there is no reason for a service provider to issue NFT's. Service providers earns a ton from taxing the market when people trade items, there is no reason for them to give this away by issuing NFT's. Rather every service I've seen issue NFT's did it to sell items that will never be valuable, but that NFT enthusiasts now think will be valuable thanks to the NFT.
Anyway, best case NFT's are just an untaxed market associated with a game or service content. That is the absolutely best case, in what way does that sound novel?
Edit: The untaxed part probably means that governments will shut it down if it becomes too popular. So even less reasons to invest.
Could be hilarious if you ask someone to remove it from their site. You own 1% of it? Which pixels do you want recolored? :D
If you buy a Barry Bonds baseball card for $1,000, you don’t own the artistic rights to the image on the card. All you own is the card itself, which has negligible manufacturing cost. It would be trivial for any card company to produce a million functionally equivalent Barry Bonds cards.
When you buy a Barry Bonds baseball card, you hope that the card company won’t dump a million more on the market. You also hope that if another baseball card company springs up and prints their own Barry Bonds cards, people won’t be as interested in that brand of cards. Attention and scarcity drive value; the nuance is that other speculators must care about scarcity along the same dimension that you possess it (in this case: the brand of the baseball card company and the year the card was made). There are a hundred tokens functionally equivalent to Bitcoin, but none approach Bitcoin’s value - purely because Bitcoin sustains more consumer and media attention. This position is fairly stable because attention has strong positive feedback loops.
There has always been interest in speculative collectibles. A purely digital collectible solves a lot of practical problems related to exchange: you don’t have to wait a week to receive the item in the mail, you don’t have to worry about its condition because it does not degrade with time or use, there is minimal counterparty risk due to online escrow contracts, and counterfeits are harder to fake (along the relevant dimension of scarcity, which is the origin address).
People have been speculating on collectibles for thousands of years. Crypto just makes it easier to trade them back and forth.
NFTs are a JSON string on a proprietary entity that point to the image of a baseball card. The image can be viewed by everyone. The bragging rights of owning a JSON string depend heavily on whether or not the proprietary entity will become the dominant player in the I own a JSON string-world.
This also has zero to do with blockchains. The proprietary entity could've used any database they wanted.
It's all a ridiculous scam, but have fun trading JSON strings.
Whether the data representation is a piece of cardboard or a JSON string replicated on 10,000 Ethereum nodes or a tulip or a Venmo balance is arbitrary; it just matters whether a lot of humans are looking at the same thing. And for the time being, a lot of humans are looking at crypto ledgers!
https://eips.ethereum.org/EIPS/eip-721
The only proprietary entity involved in that process seems to be Alchemy. My understanding of them is a bit vague but they seem to just help with making miners aware of the new contract and getting it distributed. But that's just the contract, once it's deployed it's nothing to do with them and the NFTs AFAIK don't pass through them at all.
Hearing NFTs described this way really just makes them sound like fairly transparent money laundering.
Mostly because of two persistent lies around NFTs: 1) That you buy a piece of artwork. 2) Blockchain makes it automatically watertight.
All you get is transfer rights of a single number via a blockchain, optionally (usually) with a URI pointing to some media.
Now, why is owning blockchain transfer rights to that number valuable? Because an artist was involved in creating it, and they stated somewhere that the number refers to a specific artwork.
Outside the blockchain, more things have to be trusted for this to hold up:
- The artist in question must be the seller. Sure, you bought it from "banksy44" on nftgox.com, but is that the artist? There are soft ways to verify it, and you can get all sorts of receipts, promises, or statements from semi-official authorities.
- Whatever links the number or the URI to the artwork must remain up. If it's on a regular URL, the host owner gets to decide when to delete it, or when to replace it an ad for their gambling site. If a IPFS resource goes dead, it's gone. If the number referring to the artwork is stored on a 3rd party ledger you rely on them being honest, online, and correct.
AND NOW you have two weaker links in your trust chain, on the level of "humans trusting humans", rendering the blockchain basically useless. The premise is a lie, intentional or not.
At the same time, people buying NFTs are generally quite a bit less confused about what you consider "lies" than you seem to think.
Importantly, the blockchain is not useless because they have to exist within the universe's rules of impermanence. You may want to ponder the differences and shared properties between something like seditionart.com, MASS MoCA's ownership of Sol Le Witt wall paintings, and an NFT on a blockchain.
Finally, let me point out that the URI issue is very much a misunderstanding that is widespread within the NFT community as well. It helps to think of the URI as a convenience feature rather than someone implying anything about the value of the token. There are fascinating experiments with tokens that have no url, tokens that have no visual representation, tokens with changing urls, or arbitrary urls; tokens that point to the same url. There are of course tokens that use data uris, and have the image-representation on-chain, or generate it dynamically; or they do so but not in URL form. There are technical implementations where the database of urls is separate from the ledger of tokens; there are early experiments by artists with blockchains (many years before anyone cared about NFTs) where there is no ability to store a URL in the first place.
Cryptopunks, a really early project, simply stored a hash to a file containing the assembled images, and that is all that is needed.
But a baseball card, or a Lego set have value on their own. Their collectable value stems from the fact that they are desired as such, and the scarcity makes the price of a certain type go up. Somebody might buy them just to show off or speculate, but another might be a huge Lego nerd and buy the rarest set just to feel joy by looking at it. But an NFT has no value beyond the scarcity. Nobody feels human joy by looking at an NFT beyond being able to show off that they are able to basically burn money in the "i am rich" app type of way. Thus it can only remain a toy for the rich. A van Gogh painting is most likely just a speculation and a show off object, but I might buy a painting from a local artist for $200 because I like it, and to put it on my wall so it makes me happy because it reminds of something nice. I will not buy a $200 NFT just to say I have one too.
I can understand why he was, though, because on his particular platform, artists get a cut of future resale of their art. So he sells a piece for $100, someone later sells it for $200, and he gets a 5% cut (made-up number, I don't remember what exactly it was) for an extra 10 bucks, and so on (but it's still always just a digital token, not a physical piece).
But that doesn't require NFTs to happen. Since it was a proprietary platform, a plain old database could have done the exact same thing.
This is a hilarious contradiction. You are saying there can be a billion baseball cards of the most expensive kind that are at the same time not the most expensive kind.
Have they really? IMHO the whole concept of intentionally creating collectibles as a market started (and IMHO became possible) only after strict IP laws that could prevent anyone from making and distributing large quantities of items that should be rare by design.
My favorite example is the fictional collectible card game Gwent in Witcher 3, where the whole concept of rare/scarce cards is ridiculous in the absence of a single organization being able to enforce a monopoly on issuing Gwent cards; the actual expected result should be like ordinary cards, where everyone gets an ace of spades in their deck or chess where both players get a queen, no questions asked; for human-created marketable collectibles (as opposed to actual collections of butterflies or the like) the scarcity can only happen if artificially enforced.
I will probably sell my collection and print some proxies.
The big difference with NFTs, of course, is that the true nature of the transaction is not being disguised. That makes it legal and even ethical, but whether that is enough for you to be a buyer is up to you.
Unfortunately that's not the case.
Feel free to quote this and laugh at me but by this time next year I doubt this will be a topic
The latest updates for anyone interested: https://blog.ethereum.org/2021/09/28/finalized-no-29/
NFTs themselves don't have any energy costs. Depending on what network you're using for buying/minting/trading NFTs, there might be energy cost associated with it, but not all NFTs are equal. NFTs based on Proof-of-Stake networks won't have the same energy cost as NFTs based on Proof-of-Work networks.
Unfortunately, it seems that most NFTs are based on the Ethereum platform, which is currently Proof-of-Work. Fortunately, Ethereum is moving to Proof-of-Stake slowly but surely.
But the point still stands, NFTs themselves have no energy costs, only the transactions on the network where they live have that.
The sunk costs of obtaining something rare or difficult to get (like titanium) is a factor only for the next person who desires titanium.
Since there is no cost to see or copy a jpg, there is no "extra value" added in an NFT. Not even energy costs. The end product still has zero value.
A simple corrolary is wine. Swill stored expensively doesn't acquire new use values from the storage. The expense of storage doesn't accumulate to the value of the NFT. Whereas the expense of obtaining real goods like metals is exactly what sets their value.
Where any number of digital copies of an asset may exist, the NFT is the “autograph” atop that asset that is unique and therefore adds the value.
(It’s worth noting that anyone can autograph any baseball card. So it’s not the autograph that makes it valuable, but _who_ autographed it. It’s the same with who minted the NFT.)
https://www.quora.com/Why-did-the-baseball-card-market-colla...
It's still weird to me, but it's weird in the same way other collectibles are weird to me. It's undeniable that they are valuable to others.
While ownership can be enforced equally well with NFTs and baseball cards, the crucial difference is that with physical cards, owners have a unique way of experiencing the card. Anyone can look at an online reproduction of it, but only if you have a physical copy can you hold it in your hand.
This is not the case for NFTs, anyone can experience the image in exactly the same way.
Like for art pieces, sure people can make copies and put the copies on a wall - but only I have the original to hang up my wall. There is value to most people between having a copy vs the actual thing.
There is obviously a massive disconnect with this and NFTs because anyone can save a copy of a NFT (or the image a NFT represents) and not have its value diminished because all the "copies" of the NFT are the same - since "originally" doesn't apply to digital goods.
It doesn't matter if there is some hash on a blockchain out there saying so-and-so "owns an image", I can still copy the image and get the same value. That is not the case with say having a copy of the Mona Lisa vs the actual Mona Lisa.
NFTs are worthless to me for the above reason aside from the value that other people think they have.
The value came from the rarity of people all over buying random packs of cards, collecting them, trading them and the established rarity that came from that massive distribution coupled with holding the cards for a decade or more to see how one of these players career played out. On the off chance that you held onto a rare card of a legendary player, then congratulation...you have something of value. More so if you took good care of it.
There's none of that with NFTs. It's akin to handing out flyers on the street and asking somebody to pay for them on the basis that..."Sir, that flyer belongs only to you now. Congratulations!"
NFT's are just digital proof of an old adage.
"A fool and his money are easily parted." - Thomas Tusser # I bought the rights to the quote from an NFT
At this point, of you say crypto is involved with some new fad it's just a clear indicator that silicon snake oil is the real product.
This increases scarcity in a way that just can't happen for NFT's, what would it mean for an NFT to get damaged corners?
1. https://static1.squarespace.com/static/5d580747908cdc0001e67...
A Baseball Card has some underlying value and fun, kids get baseball cards. They cannot be diluted as 'reprints' would never be accepted as substitutes.
If some people want to trade those things on the margins, fine.
A 'number' i.e. digital signature is not a collectible.
Digital signatures of any creative work are meaningless, nobody will derive satisfaction out of owning them and they'll probably just lose value over time.
It's an obvious money grab populist grift that really doesn't create net value for anyone.
When you buy an NFT you're not even buying the GIF, you're buying the receipt proving you bought the GIF. What good that is without owning the GIF isn't exactly obvious to me.
I think it's hard for people that don't care about bragging rights / status symbols to understand NFTs. Conversely, I think that status symbols are a very important part of the lives of the people that understand and advocate NFTs.
You don't own him / her, but people still brag about it and it's a frequent rite.
To use a print analogue: a print of a photographer’s work likely holds no significant value* unless that artifact is provably signed (or otherwise approved) by the artist. To take it a step further; a convincing photocopy with a fraudulent signature will also hold no value, once it’s determined to not have come from the original creator.
* Here “value” refers to cultural and artistic significance in how it is perceived by an art market. Of course a poor photocopy of a Mona Lisa holds cultural value because of what it signifies, but a museum isn’t about to acquire that artifact from you.
Is this a solution that works long term? I'm not sure about that. It's a hard question to answer, but I'm glad someone's going for it. I would personally expect ycombinator to be more open to these kinds of ideas -- Programmatic solutions are something we can all get behind. It's a hard problem to solve but that's what drives a lot of our passion in this field, correct?
Basically yes, you'd be right. Someone has to call him out. But do you expect an automated system to handle that in a fair and ordered manner? We already have a terrible (user-wise) implementation of that -- DMCA. What's important is ascribing ownership for the long-term, even if we have to do it manually and surprise -- that's what NFTs (could) do.
I could be wrong but from what I've seen, I think DAOs could bridge that gap. These 'headless' communities create that manual self-regulation that is needed -- social verification fueled by some sort of financial incentive, driven through a very public system.
This part is incorrect. Every token is signed can be verified against the content creator's public key. You can absolutely verify a "genuine" NFT.
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Anyone else could print and sign a baseball card, mint an almost identical NFT. But if they come from someone besides the techno viking they won't be worth anything, because anyone could do the same thing. But the techno viking can certainly sell more to others just like a baseball player can sign a lot of cards.
I'm uninterested in the NFTs with big price tags, and I'm uninterested in pieces that I don't subjectively enjoy the art of.
I care, but I'm guessing you either didn't literally mean nobody cares, or you are going to brush off this counter example for whatever reason.
Selling my art for ~real money for the first time has been such a motivating experience, even knowing that we are in a strong mania phase now. So I can say that I care too!
One thing to note is that hic et nunc is ran by one guy who doesn't really like to communicate and doesn't believe in paying for stuff like devops work, so I'm not sure if this will be the one site to survive on tezos. The community will eventually decide over time.
A major useful function being the ability to buy and sell with purely digital money, was that possible before?
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I suspect that most of it does not come from outside of the current ETH (or whatever) ecosystem. I'd bet that most of the volume comes from people who are either treating it as play money, or trying to pump the NFT scam for their own benefit (real or imagined).
Not possible to trace where the money is coming from.
In fact, someone can "sell" an NFT to themself in a wash trade between two wallets they control. The last trade price of the NFT is now recorded as the transaction price, but it's possible that money never actually changed hands.
Want to have an expensive NFT? Just trade it to yourself for as much money as you have in your crypto wallet. You keep the money, you keep the NFT, but now everyone can see that someone "paid" a certain amount for it.
Chain analysis is certainly something you can do.
I heard rumors this is what happened with the Beeple nft
Unless you know who the buyers and sellers are or transaction fees are high (like an auction at Christie's), you have no idea if the sales are real, so it's pretty easy to make it look like the asset is appreciating when it's really just manufactured hype.
Probably 1/2 money laundering and 1/2 rich people that have too much cash and ran out of ideas.
"Ecosystem" is a word that I believe sprung to life in the 70s, referring to the entire collection of organisms inhabiting a 'place', along with the weather conditions etc. in that place. The term was coined because without it, you need (or rather, I needed) 16 words to express it.
So it bothers me when people use the term to refer to collections of stuff that's never been alive: the Java ecosystem, the cryptocurrency ecosystem. These are not "ecosystems" - they're called "systems".
See also "epicentre".
Upvoted - I appreciate the observation about where the NFT volume comes from.
"ecosystem" denotes an environment created by some kind of vessel e.g. Earth, the ocean, Ethereum, etc where independent entities can be created, develop, and compete for resources, attention, space, etc provided by that environment. The entities have no real connection to their environment besides just living within it and interacting with the other entities.
Ethereum is just as much of an environment as the Earth is. It provides the foundation which the entities live on top of (security), the resources the entity needs to exist (data availability), and the gathering point where complex interactions can happen (smart contracts and end users). Ethereum doesn't build any of the ecosystem, it simply provides the marketplace where life happens.
Pyramid and MLM are related concepts, and usually MLM is pyramid. That doesn't mean all pyramids are MLMs though. Same applies for other types of scams or structures.
Who convinces people that NFTs aren't just a fad, they're really innovative and you should consider adding them to your portfolio? Not people who don't own any.
Honest question though: how long does it have to go on until it stops being a pump and dump in your mind?
[1] https://support.opensea.io/hc/en-us/articles/1500009575482-H...
As with everything NFT crypto, the value is all probabilistic anyways /s
right, but uplines getting paid in a necessary but not sufficient condition for MLM. In a MLM it's usually derived through their downlines. The mechanism described is a general benefit to all participants in the system which isn't very MLM-like. platforms (eg. youtube) tend to have the same "general interest drives the value of the ecosystem up" (ie. creators convincing other creators to join your youtube clone increases your site's catalog, which boosts the quality of recommended content you can show to your user to get them to stay on longer, making it easier for creators to get views), but you wouldn't call that a MLM.
https://www.fortressofdoors.com/the-degraded-blockchain-prob...
> In short, the minute you connect your blockchain to an app frontend you now have a degraded blockchain, one that cannot even in principle guarantee immutability, trustlessness, and decentralization – at least not for assets that the app's customers actually care about.
Scratch the surface on almost any NFT ecosystem or blockchain application and I find I'm still relying on trust, or a centralized service, or a service that's more mutable than it advertises. So if I don't get the purported benefits of blockchain anyways, what was the point of getting a blockchain involved?
EDIT: Getting a lot of responses that I don’t have time to reply to. My more involved thoughts on the entire space are here:
https://m.youtube.com/watch?v=fZBIYjsXT_s
For fully disembodied NFTs where you just stuff a jpeg or it’s hash into a blockchain, my other complaint is that you’re just creating a speculative instrument that doesn’t really do anything except hope someone else will pay more for it. And I still have to rely on trust outside the blockchain that the artist approved these NFTs in the first place (there are many done with unauthorized art)
How about: Sign the image and generate a MAC. Then use steganography to include that information in the file. For the NFT sign create a certificate with the same key and include the MAC information. Publish that together with an IPFS link to a blockchain.
Then we can have discussions about IP law, art and what art ownership means.
People spent lots of money on game skins, rare weapon. So there is a market.
When one goes to a physical conference: flair/badges serves similar purpose. NFT could be that in zoom/team/slack.
My naive way of looking at NFT: Maybe it can be used to help fund open source free software. Instead piece of art; a flair/pin/badge for showing your support for your favor projects.
do not underestimate people's vanity.
[0] https://en.wikipedia.org/wiki/Veblen_good
High end art is more about investing, money laundering, and tax havens then status.
https://twitter.com/af_mada/status/1443243702156206089?s=20
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https://central.ppsspp.org/whygold
I will literally crawl on the floor to laugh at that stupidity.