Random thought dump of observations from someone who's dabbled in the space a bit (but is not a cryptobro by any means) -
Here's a thing about NFTs that I've seen a lot crypto evangelists and haters miss, and a sentiment that I think will grow once the novelty dies out: The "art" is irrelevant. It's no more than a thumbnail or a poster marketing it's utility, and that's exactly the actual important part - what I can do with it. Can I use it as an in-game item? Do I get access to your next podcast episode early in a patreon-like service? Do I unlock your next online course for free or get a 50% discount on your next concert?
This sense of multiple applications is what I think people may or may not mean when they use the term "creator economy", but I think it fits nicely. People argue that interoperability of assets is useless because "no two games would ever want to share an item, developers don't want that". But another angle to this is that creators can give utility to a single asset across a wide variety of applications for their fans.
Regardless, none of this has been realised yet and maybe this is just a pipe dream if the majority of hype in the space continues to revolve around useless, ugly ass monkeys that are shown off on twitter for some ego-inflating sense of elitism. It could go either way I guess
I don't know why people are so obsessed with this idea of in game items as NFTs. It's a terrible idea.
Games have no reason to be decentralized. All of the information can be stored on the company's servers, like an MMO, or if it's not critical to maintain scarcity, locally on devices without the whole network, like pokemon (the pokemon themselves, which can be traded and such).
You can't reasonably expect games from other companies to implement the same NFT scheme. That's just not how games work. A longsword in dnd is not a longsword in final fantasy, nor is it a longsword in dark souls, nor is it a longsword in minecraft. And even if it were, why the fuck would you want scarcity on longswords? 99% of all items in any game are typically very easy to obtain, with a few rare things standing out, and with a natural progression built in. What would it even mean to bring your 50 hour investment in a top tier perfectly slotted jrpg omni magic blue elemental Atk+++ Spd+++ Crt+++ Mag--- weapon to a game like call of duty?
Even if we're just talking about a single game universe, like a dnd setting. Maybe there's now 3 baldurs gate games, for some reason not designed by the same company, but all willing to share the same exact item spec. Where is this concept useful, still? Can I bring my +10 longsword (a big deal) to the beginning of the game and just trivialize the singleplayer mode? Is it more of a multiplayer thing so we want real world wealth and status to be the primary driver of character strength?
Wait, you are making this much too complicated. I think if you take a step back and realize that the industry of hats in games that have zero effect except being cosmetic is enormous. Don't ask me why - I think anyone who pays actual money for an in-game cosmetic item is a fool, but that's beside the point.
But now imagine if 10 different AAA game studios realize that they can create a market in which people instead of paying $5 for a hat or $1 for a loot box with 10% chance of finding a hat-they pay $100 for a hat NFT and $10 of that is a transaction fee to the studio. They pay $100 for it, because a) it will work across games and b) it might be worth $10k tomorrow. The studios can take a cut on each transfer, instead of just one fee! So these studios just scaled up their hat business a lot and all they had to do was agree to honor the hat ledger which says that only the hat's rightful owners can wear the hats.
There is obviously no problem moving the hats between different games (A purely cosmetic thing is pretty easy to implement).
The fact that the honoring of the NFTs is still voluntary from the studios, that it's just as centralized as ever, and that it might disappear the day the studios no longer make money from this is of course lost on the hat buyers. The tokens are extremely fungible.
1. With NFTs games can take a cut of resales. With something like cs:go there was a substantial secondary resale market for things like skins, which valve wasn’t able to capture but with NFTs they could have taken say 10% of each resale.
2. Because the data is public it’s possible for other games to bootstrap off the data (we have seen this with “airdrops” in the crypto land). Meaning a game which is coming out can give some perk to people who own X in fortnite because they think their game is similar and want to entice people to try their game, especially people who they know like fortnite.
In the tech world we are always talking about how valuable data is. The blockchain makes that data public so secondary products can exist to serve needs the game doesn’t care about. And provides the ability for the original game to capture part of that market if they wish because they own the initial contract. But because the data is public, other games can also use that data how they want.
There's a couple points: low- vs high-trust, and distributed vs centralized. Blockchains have in turn two mechanisms to match: proof-of-work to handle low-trust environments, and public cryptographic ledgers to handle distributed work. In this case, games are high-trust, centralized services. There is a single controller that authoritatively owns the current game state. So this does not seem a good match for blockchain technology.
If you're not in a low-trust environment, you don't need proof-of-X. You just a public cryptographic ledger written to by a set of trusted keys. Any party can extend the blockchain by just creating and signing the next block. (Would need some contention resolution for simultaneous write attempts -- could be as simple as whoever got the lower signature hash wins.)
I think Minecraft is an interesting game to bring up since multiplayer in this game exists in a very decentralized way. Anybody can host a server and your possessions (etc) on that sever are completely unrelated to other servers.
One could imagine some sort of opt-in system that servers could enable that would allow for cosmetic items to travel with a player from server to server using NFTs as proof of ownership of the cosmetics.
There isn't a real reason for this to be done with NFTs vs some centralized database, but it does make more sense than the vast majority of games with are hosted on centralized systems already.
I'd argue that Nintendo kind of does this already with Amiibo. You own a figurine you purchased and by scanning it you verify the ownership, which yields a reward exclusive to owners, the tech behind it is different but the concept is very similar, including the fact that you can resell figurines and that some can get to be very expensive because of supply and demand.
I'd also argue that this feature is lackluster and I don't think it would have had any success at all if it wasn't for the fact that you also get a figurine.
For indie games however, it could make sense. Hear me out.
It's true that items are unique to games. But if you want to allow some kind of trading, you will have to implement it yourself (next to programming, art, marketing, etc.). Linking this to crypto-tokens could have the benefit that you outsource the trading part. Your players "own" their items through crypto tokens, and can trade them on crypto exchanges.
You can implement it yourself in a centralised way of course. But the question is if you want to spend the resources on that.
This is close but not quite how I expect they'll come to be used. I think they'll become a lot more important if companies like Meta are successful in creating virtual connected spaces based on open standards. In that scenario, with public buy in, ownership of a digital work shifts meaning slightly to one where NFTs suddenly make more sense.
> That's just not how games work. A longsword in dnd is not a longsword in final fantasy, nor is it a longsword in dark souls, nor is it a longsword in minecraft.
That's not a terrible idea. Crossovers between games. Good gimmick.
And a lot of what you're talking about is culturally constructed, it doesn't have to be that way.
Yes, that is another debate. My comment was more of a response to the many others I've seen debating whether NFT implies ownership of the art or what happens if the server hosting the image goes down (less of a problem if IPFS is utilised). My point is, it's irrelevant. And it never implied ownership of the art, so people who try to pass it off as such are woefully misunderstanding the technology and are probably scammers, and the people buying them are idiots. Cryptokitties, cryptopunks etc. are only valuable because they were the first ones doing these things, sort of like the "million dollar webpage" back in the day. There is literally no point in making an NFT without utility now, unless the minter is someone popular and in that case the NFT is a bet on their fame rising in the future and becomes a speculative asset (just like regular celebrity art).
IMO the benefit to users is the ability of self custody and the benefit to businesses is that you can easily plug in to an existing ecosystem. Do you really want to spend time developing your own version of various things like marketplaces and trading for your platform or do you want to just make an NFT and utilize the existing ecosystem around them.
To build a detailed example for the "creator economy", something that would be profitable for creators and video game studios is cross-game items, not for game play like in the twitter thread, but content creators could have in-game cosmetic items that identify a player as part of their clan/guild.
There is a huge market for content creators having large fan bases that literally pay them money via subscriptions, merch, etc. while they broadcast their gaming sessions live online. The entire business model for Epic's Fortnite is all cosmetic items via season passes, in-game transactions, etc. The game is free to play.
If content creators were to issue NFT's that represented a cosmetic item badge/emblem, which could be bought/sold/traded on an independent marketplace and each game studio was pressured to allow these emblems/badges across games then the content creator would profit on transactions and possibly the game studios could profit - maybe they get a cut via smart contracts if that's possible.
It wasn't very long ago that cross-platform play was not allowed by Sony and Microsoft and the game studios and players pushed for it. Major games have cross-platform play now, its expected in multi-player console games. Cross-game cosmetic items could be a huge thing for studios, indie content creators and and an opportunity for always online game platforms to get income from marketing/advertising. When there's a new comic book hero movie coming out, the movie studio could release cross-game cosmetic items (i.e. look like spidey) that players could then sell/trade later on. I would agree you don't need the tech from crypto or NFT's to accomplish this but it sounds like that tech has the features needed.
I agree. Interoperability of digital goods would allow the creator economy to grow in very cools ways.
NFTs only solve one part of the problem though - rights management. You still need a good way for a cosmetic designed for game X to work in game Y. That's similar to any multi-platform development challenge. There are many other economic decisions that will have to be experimented with, including tax collection, platform fees, creator fees on resale, etc. It needs to work for everyone or it won't get the reach it needs to really empower users.
Whether or not NFT actually add anything here comes down to the remaining technical challenge of interoperability. Is it common for parties to agree on a common asset definition but not a common rights management platform? That's the situation where NFT help.
I wonder if parsing NFTs (especially with smart contracts) could be turned into a new attack vector for something like stealing accounts in online games. In most games people can't get other clients to run their code without forcing them to download some mod or hack. With NFTs it might be enough to join the same server as them.
edit: To clarify, I'm not talking about regular NFTs as currently added by game developers where they're basically just a ticket to an ID referencing something created by the game developers and hosted on the game servers. I'm talking about trying to create a system for NFTs shared between games from different developers.
> This sense of multiple applications is what I think people may or may not mean when they use the term "creator economy", but I think it fits nicely. People argue that interoperability of assets is useless because "no two games would ever want to share an item, developers don't want that". But another angle to this is that creators can give utility to a single asset across a wide variety of applications for their fans.
All 5 parts (more focused on the metaverse topic than NFT, but applicable to both) show exactly why interoperability is a pipe dream by non-game developers and has zero basis in reality. Not just because game developers don't want decentralization but because even simple stuff is hard, and even if you could solve the technical aspects you can't solve the game design aspects of it.
How my logic has been evolving, extrapolating to, is Epic with Unreal Engine - and Fortnite as prime example - creating all game mechanics that can interact with eachother, so if you develop your game with Unreal you have access to "all" game mechanics in your game, with the option to allow users to freely import all their Fortnite skins or perhaps for a reasonable/acceptable fee per skin (if the skin copyright holder allows it; so likely not free, but then that will create the category of buy/license options of "For Fortnite only", "For up to 3 games", "Unlimited use").
A while ago Ninja (top earning game streamer) mentioned he sees Fortnite becoming the Ready Player One universe, something I'd seen myself as they're by far the best positioned to do so.
This is an absolutely terrible idea that combines the drawbacks of existing non-blockchain based systems with the downsides of blockchain.
The problems of centralized control:
The game dev can decide that your skin should not be in the game for any reason - now you have a broken link
The game dev can suddenly make 1000 more of your limited series skin - now the value has deflated
The game dev can shut down the game permanently - what is your NFT worth now?
This is combined with typical blockchain issues, like if you get scammed, or somebody hacks your account and transfers out your items, there are no backsies - no support person can help you.
I just want to say that interoperability of assets makes me think of Nintendo's Amiibo system. They're little statuettes with RFID tags in the base which can be scanned by various consoles and unlocks a lot of rewards. These rewards are often tied to the specific character in question.
As an example, I have the Twilight Princess Link Amiibo. In most games it gives some reward related to The Legend of Zelda in general. When I scanned it in "Yoshi's Woolly World" for the Wii U it unlocked a Yoshi looking like Link, as would any Zelda themed Amiibo. When I scanned it in The Legend of Zelda: Breath of the Wild for the Switch it instead unlocked Epona, Link's horse featured in many games, including Twilight Princess. Which can only be unlocked by that specific Amiibo and no other Zelda ones.
Of course, these tags are not unique and can quite easily be cloned.
There's a number of reasons why amiibo are not like NFTs:
* Nintendo chooses what amiibos are made. Centralized.
* There are many copies of a small number of amiibo types.
Fungible.
* You get a physical thing. Not a token
* Only nintendo games may use amiibos
* The data on the amiibo is uniquely interpreted for each game. It's not a generic interface. Not all amiibos will do anything to every game.
Amiibo, and pokemon (trading the pokemon) are great examples of how to trade and scale information exchanges in the real world without needing an NFT blockchain. Blockchains are terrible ideas for games.
And like Amiibos, support across games is almost always "you get a small non-unique bonus" because implementing specific content for each amiibo is time consuming. So you end up with a complex matrix of which games actually have real support for which amiibos, and realize they aren't as interoperable as they are advertised.
Recently cryptobros are obsessed with backporting scarcity into the "creative economy", but NFTs don't provide any primitive to do that. Its immensley amusing to see the same people who were railing against DRM in the Zune era, are now saying how brilliant NFTs are. All the while advocating for DRM but with cool glasses.
> what I can do with it. Can I use it as an in-game item? Do I get access to your next podcast episode early in a patreon-like service? Do I unlock your next online course for free or get a 50% discount on your next concert?
Yes. But apart from some specific edge cases (cryptocurrencies, specific name registries where the ledger is actually the store-of-value) how would that even work?
For an NFT to somehow be a proof-of-ownership it has to provide the owner of the token with some value. Access to some material, for example, like you mention. But where dooes NFTs come in? The provider of the service or product would need to agree to honor the NFT! And by that, magically, it's just like any gift card or rebate code!
There is a massive divide between on the one hand a tiny number of systems where the ledger is central (E.g. a cryptocurrency) because the users have already agreed that the value is stored on the ledger.
But why would a seller of hot dogs or concert tickets agree to that? And more importantly, how is it ever guaranteed? It can't be! So it's just a gift card!
What is the difference of a company using an NFT for tracking ownership accross multiple applications, instead of just maintaining it in their database? The NFT will still have to reference something internal to the company, and the minting costs will make this NFT prohibitive
Why wouldn't a company just try to do something like steam marketplace?
I would agree with you - and this is what I fear will happen. There will be gatekeeping across resources in the future that we previously didn't have formal gatekeeping (ie had different ways to monetize) and that NFTs + Crypto end up serving a gatekeeping functionality. Enough of a function that people HAVE to buy into crypto which would then raise the valuations even though it doesn't have large scale functionality.
This use case isn't an appealing use case FWIW - it is a use case though. Already seen coffee with NFTs being sold (mind you its marketing BS trying to signal its modernity, no function).
If this does happen in the future, I doubt it will be driven by large corporations looking for new ways to make money because the incentives aren't aligned. Example: Valve banning games on Steam that use crypto assets. It posed a threat to their own market of digital game items and trading cards where they enjoy a hefty cut of all transactions and maintain complete control. There is no difference between an NFT and a CSGO skin except for the fact that one is stored on a decentralized database and the other isn't.
Here's an example of an NFT use in the real world. The NFL (football league) has started fazing out selling real paper tickets to fans. You buy a ticket digitally and the barcode is scanned on your phone. Back in the days, fans liked to have a paper ticket they could have to remember the event, maybe their birthday or some record breaking play happened. The NFL is now selling commemorative paper tickets for a specific game to fans that is essentially an NFT. The fan had to have purchased the actual ticket and attended in order to buy the commemorative ticket.
What part of that requires a blockchain NFT? I just took a flight this weekend and had a ticket on my phone that let me on the plane. Is that different?
Yes, but what if the podcasters wanted to give you a special episode or discount for, let's say, buying their latest course on Udemy? You can set up a flow using private posts on both platforms by figuring a way of giving out promo codes or gift cards, but the implementation basically comes down to "Show me a receipt" - and that's exactly what NFTs happen to be.
> Here's a thing about NFTs that I've seen a lot crypto evangelists and haters miss, and a sentiment that I think will grow once the novelty dies out: The "art" is irrelevant. It's no more than a thumbnail or a poster marketing it's utility, and that's exactly the actual important part - what I can do with it. Can I use it as an in-game item? <snip>
Thinking of it in terms of utility vs ownership is useful because ownership is a social/regulatory concept.
The problem with utility is that that utility is still bound to the seller/market. Can I use it as a decoration in my Meta VR home if it was bought outside Meta's marketplace? Does the utility actually transfer with sale?
As such, it looks like a purchase receipt of a DRM-protected good in a single centralized ecosystem, regardless if it that receipt is represented in a third party or decentralized system.
I agree. NFTs are currently useless, but interoperability would change that. One of the big drawbacks of current DRM tools is that they're centralized within a single vendor. If there are multiple vendors for a digital item, you can't carry your ownership of that item between vendors.
There are a few existing solutions to this. Movies Anywhere[0] consolidates your video purchases across 8 vendors[1]. It mostly works ok. The problem is that I still have to trust those vendors, and this industry consortia, to manage the property rights for me. I can't prove that I own a particular movie outside of that ecosystem. I want to download the movie and transcode it for personal use, and prove that I legally own the right to that movie file outside of their system. If I own a copy of the movie, I should be able to take that copy of the movie anywhere.
Music is similar. Remember a few years ago when a bunch of music services added "upload your offline library and we'll make it available on the cloud" services? That was basically using the files on your computer (ostensibly obtained by ripping a physical CD you bought at a store) as a DRM key to unlock new features within the platform. Personally, I got burned by this when Google Music got shut down and took my uploaded music with it (backups, yes). It would make a lot more sense to have a wallet of licenses that I could present to any of these services.
Finally, the BIG thing with interoperability is freedom of exchange. I want to be able to sell my digital stuff to somebody else. Or lend it to them. Or present it to a new vendor / media player / device.
MOST importantly, I want to use the media myself wherever and for whatever I want, without worrying that I'm somehow breaking the law. I want to make mashups. I want to self-host. I want to dump everything in a new hosted service and see how it works. And I want to do all that knowing that it's all above board and the creator's are compensated fairly for their work. The current system works for Disney. I'm much more interested in the artisan digital economy.
NFTs do not deliver on this vision today. Additional technology is needed. Content-addressed, distributed storage like IPFS would be helpful. We might even need opinionated regulation to get the big players on board. Just look at the difference between electronic bank transfers in Europe and the state of US electronic medical records to see what I'm talking about.
Friend of mine wanted to know what a NFT is and I wrote down a URL and gave it to him on a piece of paper. That's an NFT. You can sell that paper, use it if you want but what ever is at the other end of the URL isn't yours and you can't guarantee it will be there or be consistent between the times you go. But by god you have a piece of paper.
This isn't what an NFT is. To be complete, at least, there should also be a distributed and secure worldwide ledger to which anybody can access that says that you gave this exact piece of paper to your friend on that date.
that. Plus you can add a secret to the paper that allows unlocking the content at the URL, which normal users would not have. That secret can only be decrypted by the owner of the paper.
You're doing everyone, including us who are against NFTs in general, a huge disservice by explaining it that way, as that's not what NFTs are...
Edit: I should have added my own explanation as it's not as obvious to everyone else what an NFT is. If we continue the analogy with paper, then a NFT is a piece of paper with a unique identifier that cannot be copied. If you have that piece of paper you know that A) No one can have the same piece of paper without having that actual paper and B) no one can fool someone else they have that same paper (based on the ID). NFTs have nothing to do with URLs (although some NFTs do have URLs inside of them), the main point is to have something with a unique ID that is unique within that specific blockchain.
> No one can have the same piece of paper without having that actual paper
You seem to have missed what the analogy is: The piece of paper is the blockchain record, the thing that can be exchanged with other people, not the art or whatever at the end of it (hence why a URL on the paper was mentioned).
It's a great explanation for non-technical people.
Are you hinting at the fact that we're missing a giant ledger in which the paper is documented as being Really Really The Really Most Real And Authentic Paper? Since that ledger isn't rooted in anything else than a bunch of people's feelings about it, I think it's fine to leave it out of the analogy.
So yeah, NFTs are like the parent comment explains. Plus that ledger that has no actual meaning.
Edit: I'm not underestimating that giant ledger's technical solution for verifying the piece of paper. All I'm saying is that it doesn't fucking matter.
1. The paper has an authenticated watermark which cannot he forged by any known technology
2. The paper can teleport a shadow copy of itself anywhere in the world: it can be inspected by practically anyone in the world, without the shadow copy being traded as the real thing
Legally speaking, notarization doesn't count for much or provide any ironclad guarantees. For real estate titles what counts is the centralized county registry.
It's a great way to highlight that you don't actually understand NFTs. If you're actually against NFTs (like many of us), then please don't use that explanation, it'll make it look like you don't actually understand NFTs.
Most NFTs are like a title to a house. Like a title to a house, you can:
1. Prove you own it;
2. Sell it to someone.
Unlike the title to a house:
1. The party certifying your ownership is not the government, but the consensus rules of a blockchain;
2. The thing you own is not physical, but digital in nature;
3. Your ownership does not prevent anyone from copying the file itself for their own uses.
Regarding your point that the object you own might not be consistent: because of the cost relative of storing data on a blockchain, the actual digital thing you own isn't usually stored on the blockchain, but a hash of that file (e.g. [1]). Unless hashing is broken, this is cryptographic proof that the object does remain consistent.
Ah but the government will enforce my claim on the house if I’m holding (rightfully) the title. And if someone steals the title, it doesn’t mean they own my house.
Whether title to a house, or entry ticket to a concert, those give you a practical, real world ability to do something. You can live in the house (or allow someone else to and charge them rent), and the government will defend this right for you. You can do neither things if you don't own the house. (well maybe you can live in it if you pay rent to someone who does) You can attend the concert if you have a ticket.
If you own an NFT, you get no practical real world benefits.
You're taking a lot of flak here, but I think you're basically correct. (Even if cross-game NFTs never become a thing.)
The debate reminds me of when Napster looked, to many, like it would end the sales of pre-recorded music, since music can be copied identically for free. Obviously such predictions turned out to be wrong.
I think they would have turned out to be right if there was no such thing as copyright law. But there is. People were prosecuted, and over time the prosecutions made a difference. They helped it make sense to invest money in creating well-designed, easy-to-use streaming services. And in the end, for most people, it was more convenient and risk-free to get music from such services than to pirate it. It was worth the cost.
Over time, if people spend real money on NFTs, the legal system will evolve to better protect people's purchases. For now, if two people claim to be the creator of a given artwork which is the subject of an NFT, and create two NFTs, only one of them will have the actual copyright. That should provide a basis for legal action.
As I said, I'm not sure cross-game NFTs will ever get past the hype stage. But I have been to a museum where truly beautiful NFT art was on display. I haven't bought any art in many years but I can certainly imagine that my next art purchase could be that kind of NFT. By purchasing it, I am helping the creator in "1000 True Fans"[1] manner, and I am, in the creator's view, which is the only one with any legitimacy when it comes to digital art, the "owner". (Even if I am the second or third purchaser of an NFT, the fact that the original purchaser knew he could sell it to someone like me is part of why he purchased it, so I have helped create the environment where that original purchase could happen.)
While it's true that people can make copies that are identical, people can also make copies of the Mona Lisa that can't be distinguished by anyone but specialists. To the normal person, they would appear to be identical. It isn't what they look like that matters. It's the legitimacy: which is the legitimate Leonardo Da Vinci? It's the one he personally made (and/or was made in his studio by other people under his direction). It has nothing to do with how it looks to the average person.
To one degree or another, these issues of legitimacy and helping the artist will have an affect and give value to NFTs of real art.
I'd also be willing to bet that there will be a long-term market for "collectibles" for the same reason there is for baseball cards. If someone were to make an identical copy of an original Mickey Mantle baseball card, it would have no value. Only the original does, and only because the purchasers believes it is the original, and therefore legitimate, card. The mechanism for NFT legitimacy is different, but there is no reason to assume that that mechanism will not create persistent value over time. It is unclear now how much value it will create. But it would be wrong to just dismiss it at this early stage.
The only use case that is unambiguously present and difficult to achieve by other means is having access to cryptographic proof of point-in-time association with piece of data.
The Bored Ape Yacht Club is an example of this -- you "own" an ape. What that means is that you have the ability to access a restricted section of the website, that only ape owners can access. This membership is transferable without the consent or interaction with the issuer.
HOWEVER -- this membership is not irrevocable. The hash that you "own" is listed on their website as a substring of the concatenated hashes of all apes, which is in turn hashed to make a master hash. That hash can be changed at any time, as can the associated access to the restricted area. New apes can be issued that grant access; old apes can have their access revoked at will.
If you sell your ape to the Supreme Leader of Iran, then the government can force the BAYC to revoke the ape, and they can reissue another one to replace it. I can make my own website that accepts only apes with mustaches into my site's private area.
So really the only thing you get is that the tokens can be traded on third party services.
The real use case of NFT is that you could have a token that you can trade. We'll call the token a "coin" (and since it's digital, a "bit"coin) and you can trade it with other people.
I get where you're going, but unfortunately this is not apt -- the fungibility of coins was specific design point for Bitcoin (and for money in general, which is where the analogy surfaces). NFTs are by design and intention not fungible; they are not divisible nor combineable nor substitutable.
An NFT is permission to record your name in a public ledger in exchange for money, with the only utility being the pleasure of conspicuous consumption.
They are strong evidence of a huge surplus of wealth in certain pockets of society.
Why do so many here seem to be so proud of their lack of understanding of the value of NFTs?
If you have an NFT, you get to do things others cannot. That's the value right there. At the very least, holding an NFT gives you the ability to transfer it to someone else and make them the holder. Anyone can confirm that you did in fact transfer it and made the other person the holder.
In addition, you potentially get access to other benefits, such as acceptance of some alternate meaning in the NFT social circle as well as potential benefits in software written that respects the NFT.
What seems to have taken off most is that the NFT social circle will accept ownership of some linked item within the NFTs data. They see the NFT record as a register of provenance that they're willing to recognize.
Do NFTs signal legal ownership? I imagine we're going to find out that it probably depends. But even where they don't, they certainly signify something akin to ownership or possession. And that ownership of scarce goods is precisely something that is valued by certain communities, especially the art trade community.
That you can mint your own NFT with the same data, or that a link in an NFT stops working don't really change the nature of the kind of ownership. What NFTs offer sort of mimics the 'realness' of a piece of art. I can make a picture of the Mona Lisa too, but no one will respect that picture as the real Mona Lisa. While you might lose out on the pretty physical object, you gain in cryptographic provability and potential software integration
> Why do so many here seem to be so proud of their lack of understanding of the value of NFTs?
We have codified our lack of understanding into a digital token and attached it to an entry in a crypto ledger such that no one else can claim ownership of said lack until we transfer it to them. Thus we have created something not just prideworthy but also scarce and valuable.
I like your comment. Basically it reads to me as "hype is real and has value".
It may not have any material objective truth or spiritual meaning but it has a perceptive effect on the world.
I appreciate the honesty but shudder a little at the implications. But I suppose it's one of the ways the world works. It's what we think has value that matters, that makes matter.
Well that's economy 101 - something has value if someone will pay for it. In that sense, an entry to a ponzi scheme is also valuable - many people do pay to enter ponzi schemes.
But looking at more concrete ways of value: technical merit, anesthetics, practical uses... It's falling short. So people call it for what it is - all hype, nothing else .
At least with crypto coins you can actually send it to people in a decentralized manner - that's valuable! Too bad it's slow, expensive and bad for the environment.
> If you have an NFT, you get to do things others cannot.
That's the definition of property, yes, but with many real NFTs, aside from transferring the NFT, there’s not much you get the exclusive right to do.
> At the very least, holding an NFT gives you the ability to transfer it to someone else and make them the holder.
And with many concrete NFTs, that's also the very most they give you.
> Do NFTs signal legal ownership? I imagine we're going to find out that it probably depends.
As if it were a mystery how legal ownership was determined. It's very clear that:
(1) It is possible to construct and use NFTs in a way where they would be at least compelling evidence of legal ownership of certain rights, and
(2) Most NFTs in existence don't even begin to try to do this.
> I can make a picture of the Mona Lisa too, but no one will respect that picture as the real Mona Lisa.
Yes, and you can make an NFT that points to a URL that points to a low-effort drawing of an ape, and outside of a small cult no one will equate the NFT with the original artwork (or, for that matter, care much about the original artwork.)
Nothing you're saying disagrees with the posted Twitter thread. Without the IRL arcade prize counter agreeing to turn ownership of a token into a tangible privilege the NFT is worthless. And if you already have the prize counter then you don't really need the NFT since you have a central trusted authority. You could maybe argue that using an NFT is easier than minting your own system for arcade coins but binding goods to and transferring them between "accounts" (which you have to have already to access your goods) has worked for decades. The auction house in WoW, and the Steam marketplace has been doing digital marketplaces long enough to prove it works just fine.
> Why do so many here seem to be so proud of their lack of understanding of the value of NFTs?
I think most people are proud of their very concrete understanding of the value of NFTs -- which is zero to anyone not trying to make money on them.
> Anyone can confirm that you did in fact transfer it and made the other person the holder.
Are you saying if you wanted to sell me Hacker News, there would be a record that dan_mctree sold HN to criddell? I always thought it was just from one mostly anonymous wallet to another mostly anonymous wallet.
I think it's because at their core they're built around garbage, much like the packaged and repackaged derivatives that had A+ rating but at the bottom of the pile were a bunch of garbage investments that did a lot to help with the market crash in 2008. We would just like to warn people to not spend more on them than they can afford to pitch in the fireplace and burn.
Here we go again. NFTs is a technology that goes hand in hand with a social contract to abide by the ledger. People disregard that social contract as if it wasn't here, but it IS there. Just like patents are written to some database but are enforced by a social contract, NFTs are written to some database but are enforced by a social contract.
Patents are enforced by governments that have massive amounts of guns and can shut down any company that violates them. I promise you nobody in the tech industry respects patents because of any "social contract".
This is perhaps my confusion around the whole NFT thing. How is it in /any/ way different than a boiler plate contract around "ownership".
I.e. when my photographer took photos at my wedding I signed a contract that I "own" those photos and all those rights. I can move then, alter them, back them up, sell them to getty, or whatever.
If I draw a piece of art, even digitally I own the copyright. I sell it to someone and now they own it and inherit all those rights...
Is NFT just simply creating a "Block Chain" for this? and if so... is it even needed? What value do I gain from using a NFT over you know a signed PDF that would actually be backed up in court if it came to it?
Is the vision that there is some hot market place for art and other assets that are traded so frequently that we need a live 24/7 market and exchange for them?
It's been my understanding that the blockchain is precisely an experiment in what can be accomplished without laws and enforcement, albeit on top of a mountain of conventional infrastructure. Arbitraging energy prices, and laundering money, are only two possible uses. NFT's are another. A decentralized patent system without enforcement was previously something we could only imagine, but now we can try it out.
At the end of the day every thing that is truly "enforced" is ultimately enforced by violence.
I can promise that if patents where enforced only by social contract they would be meaningless. Larger corporations do not care about their social relations, but do care if you can have the legal authority to punish them for infringement.
You can write your contract on a napkin and if someone is willing to hurt someone else (materially, physically or otherwise) for violating that, that contract will be enforced.
This is just one of the many cases where the block chain, while interesting technology, has very few uses because there are very few cases were we have a problem with the media the contract is written in rather than the overall enforcement of the contract.
Yes, but the point of blockchain tech is to enable such social contracts to be formed, and over time, strengthened. Isn't that the point of decentralized anything? You can decentralized tech all you want, but without a social contract to use it...
I am glad NFTs exist: they have provided another pressure-relief valve for the massive money printing by the Fed, so that money doesn't all go into real-estate and commodity speculation, which really harms normal people.
It isn't a huge market, but every little bit helps.
Doesn’t the NFT and crypto bubble hurt normal people when it bursts?
At least with commodity speculation, you potentially have some overpriced goods, here you literally have some nothing.
I really like the efficiency and utility of cryptocurrency but I suspect it will all be set back decades, there will likely be efforts to outright ban/outlaw it after the crash.
> , and they can reissue another one to replace it. I can make my own website that accepts only apes with mustaches into my site's private area.
What's not obvious to you? If you pick up a unique stone off the street with an art printed on it and value that at 50K USD (remember anybody can pickup a stone and it's not difficult to put art on a stone). And then you have a group of people trading that at 50K isn't it obvious the value will go to 0$ when their interest dries up?
Yeah we all the market will crash eventually because that is the nature of markets and of humanity, but people claiming prescience about it are either using inevitability or "taking a chance and calling it", neither of which proves anything unless they can give a precise date and relative "size" of said crash. Otherwise it's just saying "I bet the sun will come up tomorrow"
I do know with existential certainty[1] and I know exactly when (in human terms) as well, but I am not going to say... Do your own astral projection research.
I've come to terms that people are gonna people and trade in anything that can be traded. Especially if there's some scarcity involved.
The Million Dollar Homepage is still up. Coincidentally, I just clicked on one of the banners there, and it opened to some website advertising some crypto token.
So, in a way, NFTs are just the latest instance of the same phenomenon.
Readit News
Here's a thing about NFTs that I've seen a lot crypto evangelists and haters miss, and a sentiment that I think will grow once the novelty dies out: The "art" is irrelevant. It's no more than a thumbnail or a poster marketing it's utility, and that's exactly the actual important part - what I can do with it. Can I use it as an in-game item? Do I get access to your next podcast episode early in a patreon-like service? Do I unlock your next online course for free or get a 50% discount on your next concert?
This sense of multiple applications is what I think people may or may not mean when they use the term "creator economy", but I think it fits nicely. People argue that interoperability of assets is useless because "no two games would ever want to share an item, developers don't want that". But another angle to this is that creators can give utility to a single asset across a wide variety of applications for their fans.
Regardless, none of this has been realised yet and maybe this is just a pipe dream if the majority of hype in the space continues to revolve around useless, ugly ass monkeys that are shown off on twitter for some ego-inflating sense of elitism. It could go either way I guess
I don't know why people are so obsessed with this idea of in game items as NFTs. It's a terrible idea.
Games have no reason to be decentralized. All of the information can be stored on the company's servers, like an MMO, or if it's not critical to maintain scarcity, locally on devices without the whole network, like pokemon (the pokemon themselves, which can be traded and such).
You can't reasonably expect games from other companies to implement the same NFT scheme. That's just not how games work. A longsword in dnd is not a longsword in final fantasy, nor is it a longsword in dark souls, nor is it a longsword in minecraft. And even if it were, why the fuck would you want scarcity on longswords? 99% of all items in any game are typically very easy to obtain, with a few rare things standing out, and with a natural progression built in. What would it even mean to bring your 50 hour investment in a top tier perfectly slotted jrpg omni magic blue elemental Atk+++ Spd+++ Crt+++ Mag--- weapon to a game like call of duty?
Even if we're just talking about a single game universe, like a dnd setting. Maybe there's now 3 baldurs gate games, for some reason not designed by the same company, but all willing to share the same exact item spec. Where is this concept useful, still? Can I bring my +10 longsword (a big deal) to the beginning of the game and just trivialize the singleplayer mode? Is it more of a multiplayer thing so we want real world wealth and status to be the primary driver of character strength?
But now imagine if 10 different AAA game studios realize that they can create a market in which people instead of paying $5 for a hat or $1 for a loot box with 10% chance of finding a hat-they pay $100 for a hat NFT and $10 of that is a transaction fee to the studio. They pay $100 for it, because a) it will work across games and b) it might be worth $10k tomorrow. The studios can take a cut on each transfer, instead of just one fee! So these studios just scaled up their hat business a lot and all they had to do was agree to honor the hat ledger which says that only the hat's rightful owners can wear the hats.
There is obviously no problem moving the hats between different games (A purely cosmetic thing is pretty easy to implement).
The fact that the honoring of the NFTs is still voluntary from the studios, that it's just as centralized as ever, and that it might disappear the day the studios no longer make money from this is of course lost on the hat buyers. The tokens are extremely fungible.
1. With NFTs games can take a cut of resales. With something like cs:go there was a substantial secondary resale market for things like skins, which valve wasn’t able to capture but with NFTs they could have taken say 10% of each resale.
2. Because the data is public it’s possible for other games to bootstrap off the data (we have seen this with “airdrops” in the crypto land). Meaning a game which is coming out can give some perk to people who own X in fortnite because they think their game is similar and want to entice people to try their game, especially people who they know like fortnite.
In the tech world we are always talking about how valuable data is. The blockchain makes that data public so secondary products can exist to serve needs the game doesn’t care about. And provides the ability for the original game to capture part of that market if they wish because they own the initial contract. But because the data is public, other games can also use that data how they want.
You would want scarcity on longswords if your business model included selling loot crates that may contain longswords.
There's a couple points: low- vs high-trust, and distributed vs centralized. Blockchains have in turn two mechanisms to match: proof-of-work to handle low-trust environments, and public cryptographic ledgers to handle distributed work. In this case, games are high-trust, centralized services. There is a single controller that authoritatively owns the current game state. So this does not seem a good match for blockchain technology.
If you're not in a low-trust environment, you don't need proof-of-X. You just a public cryptographic ledger written to by a set of trusted keys. Any party can extend the blockchain by just creating and signing the next block. (Would need some contention resolution for simultaneous write attempts -- could be as simple as whoever got the lower signature hash wins.)
One could imagine some sort of opt-in system that servers could enable that would allow for cosmetic items to travel with a player from server to server using NFTs as proof of ownership of the cosmetics.
There isn't a real reason for this to be done with NFTs vs some centralized database, but it does make more sense than the vast majority of games with are hosted on centralized systems already.
I'd also argue that this feature is lackluster and I don't think it would have had any success at all if it wasn't for the fact that you also get a figurine.
It's true that items are unique to games. But if you want to allow some kind of trading, you will have to implement it yourself (next to programming, art, marketing, etc.). Linking this to crypto-tokens could have the benefit that you outsource the trading part. Your players "own" their items through crypto tokens, and can trade them on crypto exchanges.
You can implement it yourself in a centralised way of course. But the question is if you want to spend the resources on that.
That's not a terrible idea. Crossovers between games. Good gimmick.
And a lot of what you're talking about is culturally constructed, it doesn't have to be that way.
There is a huge market for content creators having large fan bases that literally pay them money via subscriptions, merch, etc. while they broadcast their gaming sessions live online. The entire business model for Epic's Fortnite is all cosmetic items via season passes, in-game transactions, etc. The game is free to play.
If content creators were to issue NFT's that represented a cosmetic item badge/emblem, which could be bought/sold/traded on an independent marketplace and each game studio was pressured to allow these emblems/badges across games then the content creator would profit on transactions and possibly the game studios could profit - maybe they get a cut via smart contracts if that's possible.
It wasn't very long ago that cross-platform play was not allowed by Sony and Microsoft and the game studios and players pushed for it. Major games have cross-platform play now, its expected in multi-player console games. Cross-game cosmetic items could be a huge thing for studios, indie content creators and and an opportunity for always online game platforms to get income from marketing/advertising. When there's a new comic book hero movie coming out, the movie studio could release cross-game cosmetic items (i.e. look like spidey) that players could then sell/trade later on. I would agree you don't need the tech from crypto or NFT's to accomplish this but it sounds like that tech has the features needed.
NFTs only solve one part of the problem though - rights management. You still need a good way for a cosmetic designed for game X to work in game Y. That's similar to any multi-platform development challenge. There are many other economic decisions that will have to be experimented with, including tax collection, platform fees, creator fees on resale, etc. It needs to work for everyone or it won't get the reach it needs to really empower users.
Whether or not NFT actually add anything here comes down to the remaining technical challenge of interoperability. Is it common for parties to agree on a common asset definition but not a common rights management platform? That's the situation where NFT help.
edit: To clarify, I'm not talking about regular NFTs as currently added by game developers where they're basically just a ticket to an ID referencing something created by the game developers and hosted on the game servers. I'm talking about trying to create a system for NFTs shared between games from different developers.
I suggest you read "How Virtual Worlds work" by Raph: https://www.playableworlds.com/news/riffs-by-raph:-how-virtu...
All 5 parts (more focused on the metaverse topic than NFT, but applicable to both) show exactly why interoperability is a pipe dream by non-game developers and has zero basis in reality. Not just because game developers don't want decentralization but because even simple stuff is hard, and even if you could solve the technical aspects you can't solve the game design aspects of it.
A while ago Ninja (top earning game streamer) mentioned he sees Fortnite becoming the Ready Player One universe, something I'd seen myself as they're by far the best positioned to do so.
The problems of centralized control:
The game dev can decide that your skin should not be in the game for any reason - now you have a broken link
The game dev can suddenly make 1000 more of your limited series skin - now the value has deflated
The game dev can shut down the game permanently - what is your NFT worth now?
This is combined with typical blockchain issues, like if you get scammed, or somebody hacks your account and transfers out your items, there are no backsies - no support person can help you.
As an example, I have the Twilight Princess Link Amiibo. In most games it gives some reward related to The Legend of Zelda in general. When I scanned it in "Yoshi's Woolly World" for the Wii U it unlocked a Yoshi looking like Link, as would any Zelda themed Amiibo. When I scanned it in The Legend of Zelda: Breath of the Wild for the Switch it instead unlocked Epona, Link's horse featured in many games, including Twilight Princess. Which can only be unlocked by that specific Amiibo and no other Zelda ones.
Of course, these tags are not unique and can quite easily be cloned.
* Nintendo chooses what amiibos are made. Centralized.
* There are many copies of a small number of amiibo types. Fungible.
* You get a physical thing. Not a token
* Only nintendo games may use amiibos
* The data on the amiibo is uniquely interpreted for each game. It's not a generic interface. Not all amiibos will do anything to every game.
Amiibo, and pokemon (trading the pokemon) are great examples of how to trade and scale information exchanges in the real world without needing an NFT blockchain. Blockchains are terrible ideas for games.
its just a URL. an expensive one.
Recently cryptobros are obsessed with backporting scarcity into the "creative economy", but NFTs don't provide any primitive to do that. Its immensley amusing to see the same people who were railing against DRM in the Zune era, are now saying how brilliant NFTs are. All the while advocating for DRM but with cool glasses.
Yes. But apart from some specific edge cases (cryptocurrencies, specific name registries where the ledger is actually the store-of-value) how would that even work?
For an NFT to somehow be a proof-of-ownership it has to provide the owner of the token with some value. Access to some material, for example, like you mention. But where dooes NFTs come in? The provider of the service or product would need to agree to honor the NFT! And by that, magically, it's just like any gift card or rebate code!
There is a massive divide between on the one hand a tiny number of systems where the ledger is central (E.g. a cryptocurrency) because the users have already agreed that the value is stored on the ledger.
But why would a seller of hot dogs or concert tickets agree to that? And more importantly, how is it ever guaranteed? It can't be! So it's just a gift card!
What am I missing?
Why wouldn't a company just try to do something like steam marketplace?
We already do all of those things you listed just fine with databases. All NFTs would add are transaction fees and massive power wastage.
This use case isn't an appealing use case FWIW - it is a use case though. Already seen coffee with NFTs being sold (mind you its marketing BS trying to signal its modernity, no function).
Thinking of it in terms of utility vs ownership is useful because ownership is a social/regulatory concept.
The problem with utility is that that utility is still bound to the seller/market. Can I use it as a decoration in my Meta VR home if it was bought outside Meta's marketplace? Does the utility actually transfer with sale?
As such, it looks like a purchase receipt of a DRM-protected good in a single centralized ecosystem, regardless if it that receipt is represented in a third party or decentralized system.
Convince me that the "decentralised web" isn't just selling something and you might start to convince the average person.
There are a few existing solutions to this. Movies Anywhere[0] consolidates your video purchases across 8 vendors[1]. It mostly works ok. The problem is that I still have to trust those vendors, and this industry consortia, to manage the property rights for me. I can't prove that I own a particular movie outside of that ecosystem. I want to download the movie and transcode it for personal use, and prove that I legally own the right to that movie file outside of their system. If I own a copy of the movie, I should be able to take that copy of the movie anywhere.
Music is similar. Remember a few years ago when a bunch of music services added "upload your offline library and we'll make it available on the cloud" services? That was basically using the files on your computer (ostensibly obtained by ripping a physical CD you bought at a store) as a DRM key to unlock new features within the platform. Personally, I got burned by this when Google Music got shut down and took my uploaded music with it (backups, yes). It would make a lot more sense to have a wallet of licenses that I could present to any of these services.
Finally, the BIG thing with interoperability is freedom of exchange. I want to be able to sell my digital stuff to somebody else. Or lend it to them. Or present it to a new vendor / media player / device.
MOST importantly, I want to use the media myself wherever and for whatever I want, without worrying that I'm somehow breaking the law. I want to make mashups. I want to self-host. I want to dump everything in a new hosted service and see how it works. And I want to do all that knowing that it's all above board and the creator's are compensated fairly for their work. The current system works for Disney. I'm much more interested in the artisan digital economy.
NFTs do not deliver on this vision today. Additional technology is needed. Content-addressed, distributed storage like IPFS would be helpful. We might even need opinionated regulation to get the big players on board. Just look at the difference between electronic bank transfers in Europe and the state of US electronic medical records to see what I'm talking about.
[0] https://moviesanywhere.com/welcome
[1] AppleTV/iTunes, Amazon Prime Video, Fandango/Vudu, Google Play/YouTube, Microsoft Movies & TV, Xfinity, Verizon and DirectTV
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Edit: I should have added my own explanation as it's not as obvious to everyone else what an NFT is. If we continue the analogy with paper, then a NFT is a piece of paper with a unique identifier that cannot be copied. If you have that piece of paper you know that A) No one can have the same piece of paper without having that actual paper and B) no one can fool someone else they have that same paper (based on the ID). NFTs have nothing to do with URLs (although some NFTs do have URLs inside of them), the main point is to have something with a unique ID that is unique within that specific blockchain.
(To be fair, a better analogy would involve OP setting fire to a rainforest somewhere as part of the process.)
The technical mechanism of 'Blockchain' might be a novel artifact of the definition of an NFT - but it does not matter.
You're talking about the 'type of paper the deed to the house was written on'.
We don't care about the 'technology used to make the deed' - we care about the implications, i.e. ownership of what, how, when etc..
An NFT is indirectly implied to be 'ownership' of something, but in reality, it's simply 'ownership of the NFT' itself really.
Any legal or popular control over the 'digital content' has nothing to do with NFTs, it's just 'by implication' and has no real social or legal basis.
As such, the 'piece of paper' is a decent analogy.
"It's a record, that references something; you own the record itself, but it means absolutely nothing beyond that".
If you want to think you're cool from owning that, that's cool, or not, or whatever.
It's a good analogy.
You seem to have missed what the analogy is: The piece of paper is the blockchain record, the thing that can be exchanged with other people, not the art or whatever at the end of it (hence why a URL on the paper was mentioned).
It's a great explanation for non-technical people.
So yeah, NFTs are like the parent comment explains. Plus that ledger that has no actual meaning.
Edit: I'm not underestimating that giant ledger's technical solution for verifying the piece of paper. All I'm saying is that it doesn't fucking matter.
a) they have a serial number making each unique b) they are purposefully designed to make it easy to identify forgeries
To the detractors: can you explain what an NFT is without saying blockchain or distributed ledger? An NFT doesn't need those to be an NFT.
1. The paper has an authenticated watermark which cannot he forged by any known technology
2. The paper can teleport a shadow copy of itself anywhere in the world: it can be inspected by practically anyone in the world, without the shadow copy being traded as the real thing
You know, like titles.
Most NFTs are like a title to a house. Like a title to a house, you can: 1. Prove you own it; 2. Sell it to someone.
Unlike the title to a house: 1. The party certifying your ownership is not the government, but the consensus rules of a blockchain; 2. The thing you own is not physical, but digital in nature; 3. Your ownership does not prevent anyone from copying the file itself for their own uses.
Regarding your point that the object you own might not be consistent: because of the cost relative of storing data on a blockchain, the actual digital thing you own isn't usually stored on the blockchain, but a hash of that file (e.g. [1]). Unless hashing is broken, this is cryptographic proof that the object does remain consistent.
[1] https://github.com/larvalabs/cryptopunks/blob/master/contrac...
Edit: perhaps the notion of an entry ticket to a concert would have been a better analogy than a title to a house.
* Live there
* Remodel it
* Landscape it
* Rent it out
* Etc.
What, beyond selling it, can I do with my new NFT? What does it even mean to own it, if my right to copy is no greater or less than anyone else's?
They are the opposite of a title to a house.
The most important function of the 'Title To the House' is that you own the house.
That's the whole point of the title.
An NFT is a homeless person selling you a 'certificate' that gives you 'ownership' of the 'Brooklyn Bridge'.
NFTs are like a title to a house that you wrote with a crayon.
There is no legal grounds for ownership, its just bunch of people claiming they own something and some other saying they agree.
You can convince whole china + india that you are king of england, but goodluck with actually sitting on the english throne.
If you own an NFT, you get no practical real world benefits.
The debate reminds me of when Napster looked, to many, like it would end the sales of pre-recorded music, since music can be copied identically for free. Obviously such predictions turned out to be wrong.
I think they would have turned out to be right if there was no such thing as copyright law. But there is. People were prosecuted, and over time the prosecutions made a difference. They helped it make sense to invest money in creating well-designed, easy-to-use streaming services. And in the end, for most people, it was more convenient and risk-free to get music from such services than to pirate it. It was worth the cost.
Over time, if people spend real money on NFTs, the legal system will evolve to better protect people's purchases. For now, if two people claim to be the creator of a given artwork which is the subject of an NFT, and create two NFTs, only one of them will have the actual copyright. That should provide a basis for legal action.
As I said, I'm not sure cross-game NFTs will ever get past the hype stage. But I have been to a museum where truly beautiful NFT art was on display. I haven't bought any art in many years but I can certainly imagine that my next art purchase could be that kind of NFT. By purchasing it, I am helping the creator in "1000 True Fans"[1] manner, and I am, in the creator's view, which is the only one with any legitimacy when it comes to digital art, the "owner". (Even if I am the second or third purchaser of an NFT, the fact that the original purchaser knew he could sell it to someone like me is part of why he purchased it, so I have helped create the environment where that original purchase could happen.)
While it's true that people can make copies that are identical, people can also make copies of the Mona Lisa that can't be distinguished by anyone but specialists. To the normal person, they would appear to be identical. It isn't what they look like that matters. It's the legitimacy: which is the legitimate Leonardo Da Vinci? It's the one he personally made (and/or was made in his studio by other people under his direction). It has nothing to do with how it looks to the average person.
To one degree or another, these issues of legitimacy and helping the artist will have an affect and give value to NFTs of real art.
I'd also be willing to bet that there will be a long-term market for "collectibles" for the same reason there is for baseball cards. If someone were to make an identical copy of an original Mickey Mantle baseball card, it would have no value. Only the original does, and only because the purchasers believes it is the original, and therefore legitimate, card. The mechanism for NFT legitimacy is different, but there is no reason to assume that that mechanism will not create persistent value over time. It is unclear now how much value it will create. But it would be wrong to just dismiss it at this early stage.
[1] https://kk.org/thetechnium/1000-true-fans/; see also https://future.a16z.com/1000-true-fans-try-100/
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The Bored Ape Yacht Club is an example of this -- you "own" an ape. What that means is that you have the ability to access a restricted section of the website, that only ape owners can access. This membership is transferable without the consent or interaction with the issuer.
HOWEVER -- this membership is not irrevocable. The hash that you "own" is listed on their website as a substring of the concatenated hashes of all apes, which is in turn hashed to make a master hash. That hash can be changed at any time, as can the associated access to the restricted area. New apes can be issued that grant access; old apes can have their access revoked at will.
If you sell your ape to the Supreme Leader of Iran, then the government can force the BAYC to revoke the ape, and they can reissue another one to replace it. I can make my own website that accepts only apes with mustaches into my site's private area.
So really the only thing you get is that the tokens can be traded on third party services.
They are strong evidence of a huge surplus of wealth in certain pockets of society.
Why do so many here seem to be so proud of their lack of understanding of the value of NFTs?
If you have an NFT, you get to do things others cannot. That's the value right there. At the very least, holding an NFT gives you the ability to transfer it to someone else and make them the holder. Anyone can confirm that you did in fact transfer it and made the other person the holder.
In addition, you potentially get access to other benefits, such as acceptance of some alternate meaning in the NFT social circle as well as potential benefits in software written that respects the NFT.
What seems to have taken off most is that the NFT social circle will accept ownership of some linked item within the NFTs data. They see the NFT record as a register of provenance that they're willing to recognize.
Do NFTs signal legal ownership? I imagine we're going to find out that it probably depends. But even where they don't, they certainly signify something akin to ownership or possession. And that ownership of scarce goods is precisely something that is valued by certain communities, especially the art trade community.
That you can mint your own NFT with the same data, or that a link in an NFT stops working don't really change the nature of the kind of ownership. What NFTs offer sort of mimics the 'realness' of a piece of art. I can make a picture of the Mona Lisa too, but no one will respect that picture as the real Mona Lisa. While you might lose out on the pretty physical object, you gain in cryptographic provability and potential software integration
We have codified our lack of understanding into a digital token and attached it to an entry in a crypto ledger such that no one else can claim ownership of said lack until we transfer it to them. Thus we have created something not just prideworthy but also scarce and valuable.
It may not have any material objective truth or spiritual meaning but it has a perceptive effect on the world.
I appreciate the honesty but shudder a little at the implications. But I suppose it's one of the ways the world works. It's what we think has value that matters, that makes matter.
But looking at more concrete ways of value: technical merit, anesthetics, practical uses... It's falling short. So people call it for what it is - all hype, nothing else .
At least with crypto coins you can actually send it to people in a decentralized manner - that's valuable! Too bad it's slow, expensive and bad for the environment.
That's the definition of property, yes, but with many real NFTs, aside from transferring the NFT, there’s not much you get the exclusive right to do.
> At the very least, holding an NFT gives you the ability to transfer it to someone else and make them the holder.
And with many concrete NFTs, that's also the very most they give you.
> Do NFTs signal legal ownership? I imagine we're going to find out that it probably depends.
As if it were a mystery how legal ownership was determined. It's very clear that:
(1) It is possible to construct and use NFTs in a way where they would be at least compelling evidence of legal ownership of certain rights, and
(2) Most NFTs in existence don't even begin to try to do this.
> I can make a picture of the Mona Lisa too, but no one will respect that picture as the real Mona Lisa.
Yes, and you can make an NFT that points to a URL that points to a low-effort drawing of an ape, and outside of a small cult no one will equate the NFT with the original artwork (or, for that matter, care much about the original artwork.)
> Why do so many here seem to be so proud of their lack of understanding of the value of NFTs?
I think most people are proud of their very concrete understanding of the value of NFTs -- which is zero to anyone not trying to make money on them.
Are you saying if you wanted to sell me Hacker News, there would be a record that dan_mctree sold HN to criddell? I always thought it was just from one mostly anonymous wallet to another mostly anonymous wallet.
I.e. when my photographer took photos at my wedding I signed a contract that I "own" those photos and all those rights. I can move then, alter them, back them up, sell them to getty, or whatever.
If I draw a piece of art, even digitally I own the copyright. I sell it to someone and now they own it and inherit all those rights...
Is NFT just simply creating a "Block Chain" for this? and if so... is it even needed? What value do I gain from using a NFT over you know a signed PDF that would actually be backed up in court if it came to it?
Is the vision that there is some hot market place for art and other assets that are traded so frequently that we need a live 24/7 market and exchange for them?
At the end of the day every thing that is truly "enforced" is ultimately enforced by violence.
I can promise that if patents where enforced only by social contract they would be meaningless. Larger corporations do not care about their social relations, but do care if you can have the legal authority to punish them for infringement.
You can write your contract on a napkin and if someone is willing to hurt someone else (materially, physically or otherwise) for violating that, that contract will be enforced.
This is just one of the many cases where the block chain, while interesting technology, has very few uses because there are very few cases were we have a problem with the media the contract is written in rather than the overall enforcement of the contract.
Perhaps they seek to hype it up to become the operators of the monopoly of violence in this frontier?
When someone inevitably hacks the shitty solidity code and steals your stuff you don't get to cry to twitter or the police
Five of my friends agreeing to share a dirt bike is a social contract after all.
I thought the social contract is what people do. :) Is it there if it's disregarded?
Or rather what is the social contract supposed to be around NFTs?
It isn't a huge market, but every little bit helps.
The crash will be biblical, obviously.
At least with commodity speculation, you potentially have some overpriced goods, here you literally have some nothing.
I really like the efficiency and utility of cryptocurrency but I suspect it will all be set back decades, there will likely be efforts to outright ban/outlaw it after the crash.
You don't know that and you especially don't know when. So please don't use words like "obviously" for things that aren't obvious at all.
What's not obvious to you? If you pick up a unique stone off the street with an art printed on it and value that at 50K USD (remember anybody can pickup a stone and it's not difficult to put art on a stone). And then you have a group of people trading that at 50K isn't it obvious the value will go to 0$ when their interest dries up?
[1] - it was revealed to me in a dream
The Million Dollar Homepage is still up. Coincidentally, I just clicked on one of the banners there, and it opened to some website advertising some crypto token.
So, in a way, NFTs are just the latest instance of the same phenomenon.