NFTs make perfect sense for representing a claim on things that can be used, like event tickets or in-game virtual goods. But as certificates layered on top of collectibles... I'm not so sure.
With something like CryptoKitties, you can do something with the tokens (play a virtual pet game). But with something like CryptoPunks you're essentially paying for digital beanie babies, which are worse than real ones since anyone can display and enjoy the image you paid for.
You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set. When a set's popularity wanes, so does your token's value, and your ability to show it off.
I'm always happy to see artists being paid for their work, and if they can make some money during this craze - more power to them. Beyond a few creators being rewarded, it seems like this is going to be 90% bubble (with plenty of hucksters), and 10% real use cases that stand the test of time.
> NFTs make perfect sense for representing a claim on things that can be used, like event tickets or in-game virtual goods.
There’s absolutely no reason for that to be decentralized, only one party can honor the tokens anyways. Like most things crypto they don’t actually make sense for anything.
What does the tokens even mean anyway? It doesn't mean "I'm the owner of this one in five paper canvas art", it just means "I'm the owner of this one number, which someone decided is related to that digital piece of art for which there can exist infinitely many copies that are perfectly identical".
What does it even mean? Let's say I buy a NTF $1000 and get a digital copy, what prevents me (barring legalities) to perfectly duplicate it and massively redistribute it (not the token, the distributed supposedly high quality file) for a fraction of $$$ and turn a profit (because since it had such a high price it must be in high demand)? The question is not about the legal consequences but about the thing you own: of you have one original painting you have only one, it's quite hard to exactly duplicate it for resale.
I may be naive (the dropbox-is-just-rsync kind) but I've yet to see a tangible explanation of a use† of CryptoArt/NFT that could not be done with `xxd -l 128 -p /dev/random` and PGP[0].
† No. "being in the blockchain" brings absolutely nothing (except burning watts). If the author wants to reissue anything he readily can. You. Just. Own. A. Number. I also hear some picture the author getting a cut of resales of the token, which is even more crazy when you manage to entertain the thought while trying to keep a straight face.
> Let's say I buy a NTF $1000 and get a digital copy, what prevents me (barring legalities) to perfectly duplicate it and massively redistribute it (not the token, the distributed supposedly high quality file) for a fraction of $$$ and turn a profit
The file is usually publicly accessible, why would anyone give you money for something they can just download?
Some rich dude has bought the "first tweet" for $2.5 million, despite the fact that it's publicly accessible [0]. I imagine it's about showing off how rich they are. They could achieve the same result by throwing $2.5 million into a furnace.
It's not just some "rich dude". The highest bidder [1] (so far) is Justin Sun, creator of TRON crypto [2]. I see this as a big publicity stunt for his personal branding.
Not too different than paying $4.5M to have a dinner with Warren Buffett [3].
What rights do you get with ‘owning’ the first tweet? Who could you buy those rights from? Do you get any responsibilities along with that? Like if UNESCO declare the first tweet a culturally significant artifact, could you be held liable for allowing it to fall into disrepair?
And what does the existence of an NFT allow you to do with respect to that bundle fo rights you bought that couldn’t already be done by having someone write down a rights assignment on a piece of paper, sign it and hand it over to you in exchange for some consideration?
The buyer gets to own not the tweet but a "digital certificate of the tweet" which is the actual NFT thing. So what they buy is a certificate although I'm not sure what it certifies.
But this would only make it unique on the CENT blockchain, no? What if another blockchain becomes the standard offerer, wouldn't that devalue everything on the CENT blockchain? Further, wouldn't we expect multiple blockchains to be competing to become the "primary" chain in which these items are deemed valuable, i.e. CENT and blockchain A & B & C trying to be the medium which holds a unique cert to Jack's first tweet. Jack's first tweet has a unique copy on each blockchain, but being that each chain has it's own NFT of jack's tweet, the digital certificate of the tweet is not necessarily unique. Or is twitter supposed to maintain their own blockchain that creates NFTs for each of their tweets and users are going to assign the most value to this chain since it's maintained by the company itself?
Further, I don't understand how this works in music/art. Grimes' copy of her music is issued on Nifty Gateway, but isn't that art only valuable as long as users assign value to the Nifty Gateway platform? What stops another art blockchain from becoming more desirable/valuable and creating a NFT of Grimes' art there? Doesn't that erode the value of the original NFTs?
This is the argument that gets me applied to bitcoin. It's first mover advantage. And the "gold2.0" market value is this perceived incorrectly if there is no other moat. That's why today we are announcing ... Bitquan!
That's correct. Which makes it all even more absurd. Although the smart contracts are there forever, so at least it can't "go bust" (although the web front-end certainly could).
> Also, how is "there will never be another certificate for the same thing, from the same brand of certificates" technically enforced?
A Merkle chain[0] append-only ledger contains a transaction minting the certificate, and the consistency rules for that Merkle chain mean that any extension of the chain which mints another such certificate is not valid (the same as a extension that spends money from a account with no money in it is not valid).
0: technically a blockchain specifically, but that's not actually relevant
Correct. Although there is only one brand that has sold a Tweet NFT for $3mil.
The enforcement, interestingly, is more traditional; the owners of the "Valuables by CENT" trademark can use existing legal structures to prevent anyone else using that name.
Meanwhile the NFT is digitally linked to the Valuables by CENT smart contract on Ethereum, which will presumably have an 'author' property attached to it, set to the string "Valuables by CENT".
Sotheby's was founded in 1744 (1). They have a track record, a _brand_ to maintain.
Your average blockchain was founded recently, and have a lot less to lose taking the money and running, or popping up again under a new name, for a second go at the same shtick.
But when you buy a baseball card you get a card. Here it seems that you only get a receipt stating that you have paid (aka the certificate) AND NOTHING ELSE.
If I understand it correctly, that receipt in conjunction with your keys allows you to prove you own the NFT and can control it on the blockchain(sell it, trade it, etc).
But the NFT is the receipt, if I understand correctly. You own a receipt (the NFT), and you can trade it, but why are people buying and selling receipts? You make a payment, you get a receipt, and nothing else, which makes absolutely no sense. Usually, when you buy something you get a receipt for free and then the actual thing that you have bought.
I think at that point the platform upon which the receipt resides will prevent people from making duplicates on their chain, and the owner of the receipt have control over buying/selling it.
> If I understand it correctly, that receipt in conjunction with your keys allows you to prove you own the NFT and can control it on the blockchain(sell it, trade it, etc).
And one should be happy to control the receipt of their purchase of imaginary goods? Ok.
If you have essentially bought a jpeg image, you have as much control over it as anyone else: Anyone can view, transmit or edit it, etc. Your "proven purchase" grants you exactly nothing extra.
There's no social validation in throwing $2.5 million into a furnace. Spending $2.5 million on a tweet means you are validating everyone who believes that NFT's are real and an industry with a promising future. Especially in an environment where these objects are so hyped and driving a lot of venture capital investment, participating has large social benefits.
I don't think that's the question. That guy paid for the exclusive NFT thing, but no one else is going to make a profit selling cheap copies of that tweet.
> "I'm the owner of this one number, which someone decided is related to that digital piece of art for which there can exist infinitely many copies that are perfectly identical".
Which the ARTIST has decided is a digital certificate for the price of art.
Just I could make a duplicate of the supreme brick, my duplicate wouldn't have as nearly much value if I tell people it is a duplicate. Supreme could sell bricks again but they probably won't. There's nothing physical that's stops them but there's still an implicit agreement between artist and buyer.
I may not wish to buy own a supreme brick, but I can at least understand why people find it valuable.
Jesus Christ Mary and Joesph, what is the name of all things pure and holy...
Look, I get it outside of the money laundering scheme to modern art, throwing around how rich you are by buying "stuff". I get it. Tiny pecker syndrome. But let's stop and remember that Rockefeller and Carnegie, the OG capitalist titans, were dick measuring by donating their money. Sure "to the arts"... at least they were building halls and museums. They participated in some solid currency velocity that helped pay the wages to construction contractors. Still, they were assholes, but a lot better than just shoveling money between other rich cunts as a form of showing off.
Personally I think these should have a legal license associated with them. Like if the author transfers NFT it transfers the creative license as well (so the purchaser actually owns the art). For instance, Nayan Cat beanie babies can now only be manufactured by owner of said token, and whenever the new owner transfers the token the license goes with it. Etc.
Basically, if Token == Intellectual Property ownership then it makes sense.
This would mean if a creator, say a musician wrote a song and transferred the NFT and it became a wild success in the future, the owner would earn profits from the investment, but so too would the content creator receive the mentioned dividends proportional to the value.
There is a reason. Just not a technical one. It becomes obvious when you ask the simple question: why hasn't it already been done? The answer is that it's in no actor's local incentives to create the public commons.
Why is there no global market place for reselling digital event tickets? Certainly Ticket master and the other retailers could agree on an open standard protocol, pay for a centralized clearing house, and create a digital market place. But they don't. And they don't because it isn't in any of their local interests to maintain such a thing.
This problem, which is fundamentally social and economic in nature, is what is solved by smart contracts. It allows the creation of a public commons, not one that technically couldn't exist, just one that no private actor is ever incentivized to create.
The example you give - reselling tickets, is actually something that is directly something ticket sellers want to discourage, crypto doesn’t solve that.
And there's always a necessary third party to a p2p ticket exchange anyway: the entity that actually puts on the event the ticket gives entry to. Where they want ticket exchange (or at least refunds) to be possible they can do so in a centralised manner and when they don't, they're not a middleman that can be cut out.
One could imagine it being a kind of emergent community-organized event, somewhat modeling a decentralized peer-to-peer network itself. There will still technically be at least one intermediary of a sort, but hypothetically the only real intermediary could be restricted to the single person or group who initially proposes the event and issues the batch of ticket NFTs.
There are plenty of major concerns here, like how security and access are physically enforced if there are no official organizers or designated volunteers, but in theory you could maybe distribute a phone app so everyone is automatically scanning for unauthorized people, and just rely on physically capable attendees and police to deal with potential security incidents. Still probably a recipe for utter Fyre Festival-esque disaster and lawsuits in many cases, but feasible in theory.
Scalping is also selling tickets at market price - after first making sure the market price is a big multiple of what it was before scalpers got to work.
I like the idea of building in a percent cut taken out of the resell price and given to the venue/artist. It taxes scalpers and allows artists to benefit from secondary markets if they mispriced their initial offering. Its also easy to do in a contract
If I’m in ticket selling business, if I can maintain a level of control with crypto I can, but back tickets and resell them, but most importantly I can capture any upside I missed by selling the tickets for too low of a price, and the purchaser resells the tickets for a profit given I get a cut of each and every transaction
They can verify ownership by signing something with the wallet that the token is associated to (signing is free). They're only able to do so if they own the private keys of the wallet.
It should be noted that private keys can be shared if the owner wishes. In the case of using NFTs as event entry the event organizer would still need to keep a record of which NFTs have been used already for a given event because the wallet can be shared. Third party services will almost certainly pop up to fill this need.
Exactly. It'll have to be like a software license key: in theory you can share your key, but the service can just authorize and lock in the first device/entity that presented the license key. This kind of DRM is often annoying for regular customers since you may have to manually contact customer support in order to request a transfer of the license to another device you own, but it does help mitigate non-paid use to an extent.
This could be enforced for real-life events by handing out a wristband with a GUID QR code to the first person to demonstrate they possess the private key that owns a particular ticket token, then never handing anything out for that token again, and also triggering an alert if the same QR code is ever seen on more than one person (to mitigate "pirates" who might offer identical or similar-looking wristband material and "replay attack" with an existing assigned QR code).
There are probably other attacks I'm missing (including obvious existing stuff like people just sneaking in and evading wristband checks), and there are lots of questions about whether an NFT or decentralized blockchain is a smart idea for a given live event, but from a security perspective I think it should probably be feasible if an event organizer does decide they want to do it for whatever reason.
However, there are other analogues that I think are much less feasible or perhaps totally infeasible. There are some NFT... apps? platforms? companies? DAOs? that are providing some service where an NFT grants you access to something like a restricted Discord server. Even aside from how valuable or sensible that may or may not be, there's absolutely nothing stopping a token-holder from just sharing their Discord account email and password with as many people as they want. The platform and the Discord servers would have no idea if anyone's doing this and how many people could be sharing any given account. (Discord employees could potentially detect some cases but I doubt they'd play any part in this.)
For a real-life physical event, someone can't just copy your body and make it a shared proxy for pirating, but any NFT ticket use case short of in-person events is probably often just going to rely solely on the goodwill of people to not abuse/pirate things, and we all know how that goes - especially in anonymous online communities.
The rubber-meets-the-road real-world crossover part is where NFTs and "Web 3.0" in general tends to become really shaky. I'm still mildly optimistic about it in the long-term, but I think a large percentage of existing use cases are going to fizzle as pointless dead ends that are surviving purely based on flavor-of-the-year hype and fad waves. Things are obviously stuck in one such fad right now.
> This could be enforced for real-life events by handing out a wristband with a GUID QR code to the first person to demonstrate they possess the private key that owns a particular ticket token, then never handing anything out for that token again, and also triggering an alert if the same QR code is ever seen on more than one person
This is quite close to what unlock-protocol[1] did for several conferences pre-covid. Overall it worked, though there are some key difficulties: gas prices make interesting on-chain things too expensive for most people, and wallet ergonomics aren’t great for this sort of thing.
When it comes to in game items... why should one game honor another game's items? EVE Online and World of Warcraft dont exist in the same context. Even if you did it between Guild Wars, Elder Scrolls online and WoW, you still cant interchange the items due to stats, style and general game mechanics let alone the coding rework to have these items function the same way between games.
If there was an mmo framework that is shared between different games, I guess. But even then, why have a universal currency instead of just making it framework/platform specific? It's less work and is all handled in a fast centralized DB. At that why create the extra work of PoW or PoS or whatever algorithm solving process it'll use. currencyAmount += tradedAmount is way easier and makes more sense on the game dev side.
All these anti NFT arguments amount to is, "This is solutionism at its finest, but people already bought koolaid in bulk...so enjoy the show."
In my opinion, it only has the possibility of making any sense if a game itself is (largely or entirely) an Ethereum dapp. I think a WoW NFT would make zero sense (and I think Blizzard would agree, barring the hypothetical potential of trying to exploit a fad purely for extra profit), but an NFT representing an asset in your Ethereum-based Second Life "d-game" could possibly make some sense. I know some dapp games exist and more will be made, but I'm not sure how practical or fun they are or can be.
Even then, there are still a lot of questions: what makes the d-game actually interesting/novel/unique/fun and an appropriate, creative, and clever use of a decentralized blockchain.
And although I mostly agree with this essay and the Medium essay it's referencing about environmental impact, I do think NFTs have some potential use cases outside of games, art, and bilking greedy people. I think those use cases just have to be a little further along the "blockchain from end-to-end" spectrum.
Remember that crowdfunded, over engineered juicer? It was some $400 and claimed to do like 100 pounds of force on a pre-juiced juice packet to squeeze into a glass for you. Some other article showed you can just squeeze these packs by hand into your glass with barely any force. This was "the Keurig" of juicing.
Total shit show of over engineering and solutionism.
I see the same thing with crypto and NFTs currently. Everytime I have this discussion in person, I always say that I do believe there will be a viable digital currency of some sort in the near future. The current gen of tech has proved the want, which is important, but now a real how is needed along with commonsense.
Like, theres a real want for an easy to go, healthy juice. Just bottle it and sell it that way. Why go through the extra step of a juicer if the shit is already juiced. I won't doubt their drinks were good. But they got caught up in solutionism gimmicks. Digital currencies are caught up in the blockchain gimmick.
But of course there’s only one place you can redeem them. That means either that party is ok with transfers (in which case your point is moot because they can offer that themselves like Ticketmaster does) - or they’re not ok with the transfer in which case they won’t honor the token, making your point moot.
So how does the party best offer a trading infrastructure when they are OK with it? Implement it? Good luck. Easiest right now is to offer an ETH based token, and you can trade it for anything you want.
It is funny: there are essays in this thread, authors clearly breathless to explain the utility or lack thereof of NFTs.
Yet your two sentence explanation is the most comprehensive.
NFTs enable the possibility of a market that is orthogonal to the channel that distributed the token.
The viability or existence of such a market is not guaranteed, but the likelihood that one could emerge at all has gone up thanks to the novel properties of NFTs.
Yes it does because within the token, you can program that the token creator gets a share of the profit.
Mark Cuban talks about this regarding dallas mavericks tickets. Suddenly the ticket creator can still benefit from scalpers buying everything. Or, you can set the next sell price to be limited to only 10 percent more. etc.
There is a reason for artists and musicians to move to NFTs as well, as royalty is built in. See kings of leon releasing their album as an NFT.
There is a collectible card game under development which i think is similar to Magic The Gathering. https://coa.se/ In this case it makes perfectly sense. It will be released on the Tezos blockchain which is already LPoS. https://tezos.com/
> If that’s what you want throw a “transfer” button on your site.
Well when you buy a ticket from ticketmaster you can’t exactly dictate what features they offer through their platform...not to mention ticket master is a 3rd party service that they take a massive cut.
blockchain is cutting these 3rd parties out in these use cases, allowing the event holders to easily mint the admission tickets and users take advantage of peer to peer open source technology. Meaning easily trace the tickets and buy/trade/sell without relying on Ticketmaster.
The thing that makes ticketing difficult is not minting and selling unique items of inventory - that's a well understood problem with many viable solutions. Nor is verifying at any given moment if a single piece of inventory is valid and who owns it - again, that's a solved problem.
The secondary markets in ticketing exist because there's an excess of demand and entities who can exploit access, speed, or technical know-how for arbitrage. Blockchain ticketing companies don't fundamentally change that statement - they enable it.
No one likes Ticketmaster - but to call them a 3rd party service that takes a massive cut is inaccurate. Ticketmaster is owned by Live Nation, which usually owns both the venue and the artist's tour schedule. And owns the primary and secondary ticketing sales. So Ticketmaster is usually the first, second, and third-party in ticketing.
Blockchain doesn't magically fix this. It doesn't change the deep relationship Live Nation has with labels and artists, their fodness for excluding artists who play at rival and independent venues, their habit of defining contract requirements that can only be fulfilled by Ticketmaster software...
Blockchain is solving all of the wrong problems in ticketing. I don't need a distributed, trustless ledger of who owns a ticket when all of them are issued by and redeemed at the same location. The only real reason to push for blockchain in ticketing is to help scalpers hide what they're doing.
> The secondary markets in ticketing exist because there's an excess of demand
I don't buy "excess of demand" as being fundamental, though, except in the most technical sense. Imagine a super niche event, where the organizers know there are exactly 200 fans on the entire planet, and they offer that many tickets on sale. It still makes sense for a random scalper to take a loan, buy all 200 tickets, and resell them with a markup. It would still make sense if the organizers offered 300 tickets, i.e. greater supply than demand in terms of heacount! A scalper could still come ahead buying all 300, selling 200 at a high enough markup, and feed the remaining 100 tickets to a cat.
I think scalping (arbitrage) can occur in any situation in which the supplier isn't charging the maximum the market can bear (perhaps that's what is meant by "excess of demand" and I'm missing some technical definitions here).
>Well when you buy a ticket from ticketmaster you can’t exactly dictate what features they offer through their platform...not to mention ticket master is a 3rd party service that they take a massive cut.
Is this an argument? We're talking about ticketmaster moving to a chain, why can't we talk about them moving to a cheaper better service that isn't based on crypto?
And besides, crypto isn't free. The network takes a cut. Doesn't it cost like $20 to perform a transaction right now?
Agreed. I still think there's some charm to the idea that it can be supported passively but as you say the fulfilment is ultimately not passive, so it doesn't really gain you all that much.
It serves the token holder if said party just declares the ticket or other item a forgery or otherwise invalid, and doesn't let you in the venue or locks your account. It also serves the holder if they want a safe secondary market to resell or trade tokens.
So basically, decentralisation doesn't serve the vendor, only the consumer.
This assumes that the centralized minter (and ultimately redeemer) of the, say, tickets, is both willing and able to run a secondary marketplace for them.
How would you resell a stadium event ticket with a centralized setup? You'd need the event organiser to run the marketplace, which isn't always desirable.
Why is a secondary market in stadium tickets a desirable thing?
If you want to use your ticket to go see the event, use it. If you don't, simply do not go. If you do not want to go and want to recover your costs, sell it back to the venue at the purchase price.
The blockchain is only infrastructure. It is an open decentralized cloud for financial services/contracts. Sure vendors could also have their own service and marketplace but why should they. This way they just print and sell some NFTs and that's it.
NFTs are nonsense and just as much a pyramid scheme as everything else crypto. People will get left holding the bag at the top just like with CryptoKitties. I have several hand painted reproductions of famous paintings (impressionist). I get just as much enjoyment looking at them on my wall as I have at the museums looking at the real ones. I don't need to have $100M. I'm glad that content creators are getting paid now but remember that most "artists" end up penniless and their art is only highly valued posthumously.
I’m skeptical about NFTs too but trying to keep an open mind, because at the end of the day, while you or I personally don’t need the 100M to enjoy the impressionist art, you can’t ignore the fact that someone out there is in fact willing to pay that for the original. And that’s kind of the same weird authenticity bragging rights situation.
while you or I personally don’t need the 100M to enjoy the impressionist art, you can’t ignore the fact that someone out there is in fact willing to pay that for the original.
There are people who happily pay $10,000+ for an Italian purse. There are people who are happy with a $10 Chinese knock-off.
There are people who happily pay $2,000 for an Apple laptop. There are people who are happy with Linux on a $100 machine from Goodwill.
There are people who go outside to feel the breeze. There are people who are happy with a fan.
I don't understand NFTs at all. But I have to remind myself that often value is subjective.
You should also account for how early NFTs are. If you've been following blockchains for a while, you may recall that in 2012 and 2013 there were an ocean of Bitcoin knock offs that distinguished themselves by changing things like the difficulty adjustment algorithm, or the hashing function, or the total coin supply. All of these "altcoins" to experts seemed to be completely useless and many chalked the entire category up as worthless. Eventually of course a lot more interesting altcoins were invented, and it turned out to be a great source of innovation, it just had a hurdle to cross first.
I feel like NFTs today are roughly where altcoins were in 2012. Lots of good fundamentals to the ideas, but most of the implementations are really missing the mark. Whatever the NFT equivalent of Ethereum, Zcash, Sia, etc is... it's not here yet. And it may yet be a year or two until it first appears.
I feel your take is the correct one. I'm old enough to remember when home video recorders were criticized because porn, but porn was just the kick off to the wider world of video uses and purposes.
At the time, people were buying video players and recorders just to watch porn because people hadn't figured out and weren't in the habit of time shifting their video viewing. Porn was really the only thing they seemed good for. That was my point.
> There are people who happily pay $2,000 for an Apple laptop. There are people who are happy with Linux on a $100 machine from Goodwill.
This is the weirdest sentiment that I see all the time on HN, but enough people express it that I have to accept it as both widespread and genuine.
However, I think that if you think $2000 US for an Apple laptop isn't the best value for money you can get on the laptop market, then you're either very good at finding bargains or completely bonkers.
Yes, macOS is no longer for developers. Yes, for extreme workloads I use my linux ryzen7/2080ti or the cloud rather than the MBP. Yes, they had a strange couple of years with the keyboards.
But honestly, they're the best hardware hands down. Not just the best absolutely, but the best per dollar. And personally I love macOS, but I'm just a manager these days so I guess I would, right?
I have a sager (Taiwanese) laptop i7-9750 9th gen intel 4.5ghz, RTX 2060 with full on CUDA support for deep learning, 1Tb NVMe SSD, 32 GB ddr ram, and a 16" 144hz screen that cost me about $1300 a year ago. It also has plenty of IO connections (3 USB type-a ports, a single type-c USB port, smart card reader).
It's rock solid running win 10 pro, has extremely low DPC/ISR latency for ASIO music recording with Ableton, can chew through blender modeling with cycles, and I can do all my dev work in vs2019 and intellij with zero hiccups.
I challenge your assertion that you can't find equivalent if not superior hardware per dollar as what apple offers. Maybe you're just not looking hard enough.
I'm not disputing that a Mac laptop is the best hardware out there. I'm stating that not everyone needs it. They're happy with a $100 Goodwill laptop. I've always been someone who believes in using the best tool for the job at hand.
FWIW, I used my Trump Bumps to buy a new MacBook for my wife, and I plan to use my Biden Bonus for a new MacBook for me. (Assuming Apple releases one with a large enough screen in the next six months.)
I worry about the weird effect on society of massive lopsided wealth encouraging hucksterism (from all levels of wealth) just because people don't know what to spend their too-much-money on.
There's a big practical difference between owning an original and owning a print. People have discovered secrets behind paint or canvas before. New technologies often allow us to introspect qualities of the art that we previously didn't know (chemicals used, techniques, tools, lifestyles, etc.). An original is a snapshot of history that includes tons of unique information that is simply not available in prints or nfts.
Well there's also the allure of the physical object that the artist created by hand. People done go see the Mona Lisa rather than a replica for bragging rights. That's not there with digital goods.
I think art is different in some ways though. Far be it from me to tell others how to spend their money, but at least with physical art it is preserved. The art may mostly be traded by the ultra-wealthy, but at least it still exists for the good of society.
An NFT is really just a digital autograph. Not even really an autograph, isn't it a cryptographic signature? Which would surely need to be random by nature, so the artist can't even do something unique with that. It's external to the work itself.
>NFTs are nonsense and just as much a pyramid scheme as everything else crypto. People will get left holding the bag at the top just like with CryptoKitties.
You can say this about literally every non-productive asset, including NFT's real-life counterparts eg. painting or trading cards.
The entire point of NFTs is that you can attach a verifiably limited supply to a set of collectables. Just like with their real world counterparts, you can have knock-offs and reproductions that people collect, but the owner of the actual original one knows they have something of a limited set.
How is digital not affected by physics ? It's all relying on electricity and thermodynamics to begin with.
Furthermore digital assets undergo similar attrition to physical goods through people losing access to their goods. The BTC block chain is notorious for its forgotten wallets.
Physical goods have a counterfeiting risk. Is it possible to use NFTs to prevent counterfeiting by verifying that a product is genuine? If not then they really have no use. Physical goods need verification but digital goods can be replicated perfectly. A "bootleg" is just as good as the original so no verification is needed.
>Physical goods need verification but digital goods can be replicated perfectly. A "bootleg" is just as good as the original so no verification is needed.
The same can be applied to physical goods as well. Why do people pay millions for the original painting, even though they could probably get a replica that's identical to the naked eye for much less? Clearly they're interested in more than it being "as good as the original".
> NFTs are nonsense and just as much a pyramid scheme
What scares me is that there are artists who I don't think understand how scammy this is. They've drunk the kool-aid and accepted the handwaving "you don't need to know how it works, just that it exists" explanations. Creators who wanted to make an honest dollar but ignorantly perpetuated the scam could find them themselves in hot water.
> Creators who wanted to make an honest dollar but ignorantly perpetuated the scam
To be fair, if they're doing it honestly the value proposition is "Support the artist and get bragging rights for having done so!", which doesn't become a scam (or at least any more of scam, depending on your view of bragging rights) just because there's a scammy secondary market that the patron doesn't necessarily have to participate in.
It seems like there should be a better way to "Support the artist and get bragging rights for having done so!" that doesn't involve the scammy other part. You see this with Patreon all the time where certain tiers get a shout-out.
Oh certainly, and we should encourage such methods where practical. But if we're going to condemn people for using the same financial tools that can be (and are) also used for scams, I have some bad news about that global economy of yours...
Not sure if it's just me but it sounds like you're sort of making an argument in favor of NFTs here. The main argument against NFTs I hear is that what is being certified can just as easily be enjoyed by people who are not the certified owner. And you're saying that that's actually the case for regular art as well - but still someone ends up willing to pay $100M for the original!
I think there is a case to be made for NFTs, but would also not be surprised if you're right that it ends up with mostly bag holders.
I think the real issue is that NFTs are really a secondary to the data they're certifying (i.e. the art). In the same sense that "stealing" means something different in the digital world, "ownership" also means something very different. Ownership of physical goods precludes other people owning them. There is only one original. Ownership of a digital good does not preclude other people "owning" it in the sense that they have one they can use/view/whatever.
The only thing you "own" in the physical goods sense of precluding other people from using it, is the NFT itself. It is exclusively assigned to you, other people can't conceptually say they own it.
Another example of how that divide manifests is how would someone show off their NFTs? Art is easy, hang it on the wall conspicuously with canister lights. You could do the same with an NFT piece, or you could put it on your profile or something, but anybody can do that. You're not showing off your NFT, you're showing off the art. Your NFT is just a jumble of cryptographic data. It has to be random for functional reasons, I presume, so it's not like the author can make your NFT a piece of art in and of itself.
What's nonsense is dismissing the idea and the work that's been done because there are people looking for a cash grab. Following from that logic, you should throw your routeur in the garbage dump. After all, the early days of the Internet were filled with shady companies selling buzzwords. So the Internet is by essence trash, right ?
NFTs are revolutionary for digital assets and allow for something beyond the world of licences as well as much greater scaling.
I think you have my comments out of context but to each their own. Do you believe in NFTs enough to put your entire net worth in them? I don't see this current pump and dump ending any better than CryptoKitties but I guess time will tell for sure.
I wouldn't put my wealth into NFTs any more than I would into Magic The Gathering cards, sports memorabilia or any other collectibles. But that's the point. If you do put your money into it, it's dissociated from central control, online services that might go belly up at any moment and so on. It completely solves the problem of never really owning anything online (software licences, items in video games and so on).
Fads like CryptoKitties are completely irrelevant to the core tech, just like Bitcoin is in the grand scheme of things irrelevant to the potential of block chains.
Worth noting that NFTs aren’t just cryptokitties; there is a lot more you can do with them.
ETH NFT refers to the smart contracts that you would use to digitize ownership of a house or any other (physical or financial) unique asset that you might trade.
You can nest an NFT under an ERC20 token, too, so that you can sell partial ownership tokens in your NFT.
Of all the use-cases in crypto, I think digitizing ownership is the one that seems most likely to be actually used for a non-trivial volume of non-speculative trading.
I don’t really get your point. What happens when a judge says “you don’t own your house any more, the government owns it now”? Well, what happens is you lose your house. The fact that the government can circumvent any notion of property ownership isn’t really a criticism of any particular notion of property ownership.
NFTs are the digital equivalent of a vehicle title, that's the strongest usecase (proof of ownership), IMO. I'm not too keen on the collectibles/art usecases, they're probably the easiest/low-effort ones.
My point is, that states have monopolized property transfers and there's all sorts of weird and arcane laws and practice around how you transfer property- especially real estate- and convincing the state to recognize an NFT as evidence of anything is going to be a real challenge.
ex, if the law requires an actual notarized handwritten signature to transfer ownership, what you and I do on the blockchain will simply not count when it comes down to it.
If I accidentally burn the NFT that represents ownership of my house I'm definitely still the owner of the house, there's no world where a government would shrug and say "I guess nobody owns it anymore, oops"
Blockchains are a shortcut to social consensus, not the final word. There is substantial value in the state giving credibility to a blockchain, allowing an NFT title for a house to be transferred digitally.
That value does not disappear if the state + courts also build in processes for over-ruling the on-chain owner of an object and forcibly transferring it to someone else. The core value here comes from how much easier it is to clear all of the red tape in a fully programmatic world.
So now you have two ledgers: one on a blockchain and another one that's just "the court said X". They will diverge over time, and eventually everyone will just use the latter one, because that's the one that counts.
Before I buy an NFT, I'll have to check the GovLedger anyway to make sure that NFT is actually that person's to sell, and hasn't got a lien on it or something else that means they can't actually sell it.
If the idea is the blockchain is permissioned and the state can choose which transfers to allow and can forcibly recover NFTs, why not just use a database?
The court, in making their ruling, could forcibly transfer the NFT, as it would make sense that they would give themselves admin status in the smart contract. So there's no reason the blockchain would need to diverge.
Regarding liens, it seems simple enough to say that if someone does not own an NFT "free and clear", then they cannot transfer it "free and clear". It might even be a different NFT entirely (a "liened NFT," where the original un-liened NFT is held in trust by yet another smart contract, with limited or conditional ownership rights given to the lien holder.)
The reason not to use a database is interoperability. Any smart contract can transfer these NFTs according to infinitely nuanced scenarios, and only during disputes would a court need to get involved and forcibly transfer the NFT according to a judgement.
I’d add on the “why not use a database” - in general you should always prefer a database to a blockchain/DLT, all else being equal.
The typical case where all is not equal in finance is where currently parties transact via a trusted intermediary like a clearinghouse (who might take a 1% fee, say), and a startup wants to allow parties to transact directly, thereby capturing the fee as upside. Large financial institutions don’t tend to trust small startups that might implode any month, but they can (sometimes, it seems) be persuaded to trust a distributed ledger.
It seems to me that there's going to be an unbridgeable gap when it comes to physical property. If someone hacks my wallet containing my "house NFT" and transfers it to themselves and I can't hunt them down and force them to return it, who owns the house? How do I sell it, if I don't have the NFT? Can I go get another NFT minted, and who from? How does the buyer know that this newly minted NFT represents the true ownership and the old one doesn't?
Suppose I die taking my wallet keys with me; how do my heirs inherit my NFT-ized house?
If the government is minting these NFTs and deciding which transfers are legitimate and which aren't, why are we bothering with all this?
Basically: at some point, an NFT will become separated from the ownership as recognized by the people who count (banks, governments, etc). Without a mechanism to reunite them, the NFT is not very useful; but if there is some sort of mechanism, it's really that mechanism that determines ownership, not the NFT and you might as well use a centralized ledger.
One easy way to resolve all of these problems is to build an escape hatch in the contract so that in the case of theft, loss, or other special circumstance you can invoke arbitration and mint a new token if needed.
It’s important to understand that these tokens aren’t going to replace the existing legal system (much though the anarchist/libertarian wing of the crypto community might wish it). They just enable certain transactions to occur with lower overhead and time delay. This is about improving friction in the happy path, not providing new solutions for every conflict case.
Personally I don’t think there is a reason to put your primary residence one the blockchain (you don’t trade it that often). But it’s interesting for places where you might want to trade assets at higher frequency (eg micro loans, supply chain finance, etc) and maybe there is a real-estate trust angle too.
When I read about smart legal contracts, all I can imagine is Google's live-staff customer support combined with government flexibility. Is this the future we want?
So, let me get this straight: you have an NFT that represents the deed for a vehicle, but the law does not recognize the NFT as the deed for the vehicle... if you don't see any problems with that, boy do I have a bridge to sell you.
You have a piece of paper that represents the deed for a vehicle, but the law doesn't recognize the "paper" as the deed for the vehicle...(this during the time of clay tablets)
Was that clear? or do you still have that bridge for sale?
You're missing the point. A deed is only as good as the legal framework that enforces it as a representation of ownership rights. The thing that matters is that framework, not the technology use to implement it.
There are people who sell deeds to land on the moon (https://lunarland.com/), but they're worth little more than the paper they're printed on, because they have some of the same deficits in legal recognition that NFTs have. Those people have no more ability to will their certificates into having legal force than NFT advocates have.
In short, an NFT is little more than a trading card (representing only itself) unless a court would side with the possessor of an NFT against competing claims for whatever property it's suppose to represent (e.g. transferring ownership of the property/rights to party A using traditional means AND transferring the NFT to party B). If the court picks party A, the NFT meant nothing.
As a sibling mentions, you can't digitize a house. The state has already done that. The whole point of crypto is decentralized trust. You don't need that when the state is the system of trust, whether you like it or not.
The underlying thing has to be already considered valuable. Consider tokenized single cask scotch.
So, it's made, and costs 150 a bottle. Why? Ostensibly, it's good scotch whiskey, and it's a limited run, 10 years in the making.
So why tokenize it?
Gamification.
Only people with the actual bottle can play.
Open it, scan the qr under the cap, then you can share the official tweet from posh-makers whisky announcing the opening of the bottle.... "that was us last night, good times all around!" maybe you get a 25 dollar certificate for your next limited run bottle. It's a social flex, and it's great publicity for the brand.
...and the remaining 237 bottles just went up in price. Fast forward a few years, and somebody has one of the last three bottles.... Which is mostly because he can actually prove he has one of the last three. Now its worth 270k.
As mentioned in the thread, there are different qualities but a couple of hundred will get you something pretty nice that is hand painted. Usually framing will cost more. Impressionist paintings tend to have some thick paint that can't be captured in a print. Large prints can also be just as expensive as real paint on real canvas. I know it isn't as good but I don't sit and stare at it for hours from 6 inches away. It is also a beautiful reminder of a nice trip to the museum.
>I get just as much enjoyment looking at them on my wall as I have at the museums looking at the real ones.
I'm sorry, but I simply don't. Not trying to be contrarian, but reproductions bring me a very different joy and appreciation than provable originals. I agree some things in crypto are scams, but NFTs, in my opinion, have a really important function in some domains.
The equivalent of painting reproductions with unique IDs on the back.
The whole things feels like a scam to me. Taking the best part about digital goods (that they’re non-rival) and attempting to hack on scarcity for the purpose of exploiting a psychological flaw.
I used to hate veblen goods, until I learned to appreciate the "fool and his money" aspect. Now when I see some $100k handbag I'm glad that person gave away a bunch of actual societal influence (money) for a bit of temporary status.
The most charitable interpretation is that it's a way to reward artists for creating digital art in a new way.
The HN article for this comment thread shows the risk here though. If the monetary incentives become pushing these tokens, then the most successful 'creators' will be the people that can maximize getting people to pay for these dumb tokens. The incentives are bad and you end up with the 'artists' being mostly ICO style scammers.
It's like the corrupting influence of ads on media, tokens value will be a similar but different corrupting influence.
You could argue how is this different than monetizing anything? I think it's because of the pseudo-value/speculation driving people to spend more on the hope of a future return. That's the psychological hack of fake scarcity.
Pokemon cards, collectors card, Fortnite skins, art, watches and I could go on. All these and many many more things are thing people pay money for without any conspiracy behind.
These tokens are already diversified beyond anyones control.
Arguably in app purchases have already corrupted a lot of the game space into slot machines.
Tokens take that a step further and make it worse.
Incentives create the world. On one side you have Apple Arcade trying to align incentives for a better global outcome/end state. On the other you have in-app purchases, loot boxes, and NFTs - trying to maximize profit for the house.
again you cant take the human minds tendency to attach value to things in their life and to operate in hierarchies. NFTs were inevitable as tokens of value because they function as physical objects. You can say thats a scam but all ypu are saying is that you dont yet attach value to NFTs. Anecdotes are not the way to validate your claim though.
> You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set. When a set's popularity wanes, so does your token's value, and your ability to show it off.
And only as long as people recognize your NFT claim to ownership as even being valid. Other people may view that brag as being as sad as someone bragging about their land holdings on the moon: https://lunarland.com/.
What rights do you have in a tweet that you made in your capacity as an employee of a company?
What rights do twitter as a company have with respect to tweets? Or to impose restrictions on the ability of people to transfer rights with respect to tweets?
Right. This is an example of the dumbest kind of NFT. It's not even a signed original, it's just a token that says "You own the thing!" but for a resource that anyone could download anyway and ownership isn't tied to use or display. It's about what I expect from Jack.
At least with cryptokitties, love em or hate em, the NFT was the character and the permission, so while anyone could admire your cat nobody but you could publish actions from it.
> But with something like CryptoPunks you're essentially paying for digital beanie babies, which are worse than real ones since anyone can display and enjoy the image you paid for.
It seems like the obvious counterpoint is that perhaps all of these “collectible” scarce physical things which are bought and sold for huge amounts of money (art, coins, relics, etc.) are in fact being used simply as a way to identify a unique “token” that is good for generating hype among a group of people and exchanging value among that group because it has a story attached to it and isn’t easily counterfeitable. It’s pretty obvious that a decent reproduction of most of these things would deliver the raw surface aesthetic experience to the vast majority of interested people and would cost much less. For many famous paintings it’s easy to understand why someone would want a reproduction in their house for decoration. It’s less obvious to me why someone would want a reproduction of an old coin with a minting flaw, but perhaps that’s just me.
It is permissionless. You can transfer BTC without a bank or eBay or the postal service being involved. It is the best way to buy LSD from a stranger. So it has some value because of that. Similar to rare wine, most of the price is due today to speculation and asset diversification, and rich hobbiests.
You can transfer an NFT to someone else exactly the same. It's just that someone has made a real world distinction between 2 distinct NFTs, like if someone found that a particular coin's hash spelled out "Jesus will rise again" in base64.
I agree re: rare wine and rich hobbyists. Bitcoin's value is much the same, although without the wine.
Everything Seth is saying about NFTs is true for every crypto coin.
You're not wrong, but there can be more than one thing playing such a role. Bitcoin is Beanie Babies, Ethereum is a varied ecosystem of pet rocks, Monero is Pokemon cards with traces of white powder. Can't hurt to diversify your speculation.
But there's no limited supply of digital coins. I could make one right now, and owning Bitcoin is no different from owning my one except that speculators place more value on Bitcoin than my unknown currency. Everything Seth said about NFTs is true for all crypto coins.
Cryptopunks will always have mindshare as an early mover. In the collectible world it will maintain decent value. More than the original purchase prices.
In many worlds, image NFTs you own are displayed with special indicators that they are yours. You can print out a picture of the Mona Lisa, but its not going to have the same impression as the real painting.
Original Beanie Babies are worth a fortune.
This craze is happening because many people realize that at the least, there is sustained value in first-mover NFTs of various types. Before dismissing this as yet another craze or bubble, consider that a digital world where 90% of NFTs are worthless is no different than real life with commoditized art.
I believe the rarepepewallet project is considerably older (on the crypto time scale) than cryptopunks, maybe the first fully functional NFT market, and operating before the term was even in use. but its less polished and much of the content is laced with various racist smells.
It seems like your argument is more agains collectibles in general. I also can go online and look at the art for various rare Pokémon cards for example. I think you underestimate the psychological component of ‘ownership’ and the extra satisfaction that might bring a collector.
An anecdote,
I am an avid jazz record collector (vinyl). Every record I own is available to me on Spotify and I actually frequently find new records to purchase on Spotify (they have a great jazz selection).
Interestingly, or maybe not, I find that I listen to the records I own more than those I don’t even though I have access to so many more.
I also find myself having significantly more patience with the records I buy blindly than I would a random thing that comes on algorithm radio.
The point being, ownership creates psychological attachment which in turn creates some intangible form of value that I can’t quite put a number on but I definitely feel.
You're correct, though if I understand correctly, some NFT platforms do provide some (centralized) feature for "unlocking" content. For example, you could upload a full resolution art piece to an NFT platform or any other place and have the server serve the content to any request that proves ownership of the token.
This is a pretty terrible system, though, as it's completely off-chain and not "Web 3.0" or decentralized in the slightest. The server has to store the "private" content in a private centralized database, so the server owners also can access the content, and any hacker could access the database and publicly dump all of the supposedly token-walled content.
It's just taking advantage of the fact that any computer can determine the Ethereum address that owns a particular token and can check to see if a message was signed by that address's private key.
I could imagine a future standard that could maybe integrate this into Ethereum proper, though I'm not sure if it's technologically possible.
There's no way to prevent someone from just publicly releasing the art, but one could imagine some system like the full resolution piece stored as a public key-encrypted blob in the blockchain which can only be decrypted by a token holder.
Maybe upon token ownership transfers the key could be encrypted with the token buyer's Ethereum address public key, though I'm not sure how or if it could work since I think the original content key would have to stored on the network in some fashion in order to later encrypt the key for token owners. So it might not be possible even in theory, though I don't know nearly enough about Ethereum and cryptography to say with any certainty.
Except it is different in a way. Owning a physical autograph is different from owning a picture of one; the physical autograph can't be reproduced and has value due to its uniqueness and to its physical existence.
It would instead be like owning a unique piece of paper with a unique number on it, which somehow corresponded to a picture of the autograph. Now the autograph portion is identical between you and anyone else (neither of you has a physical autograph); the only differentiator is your piece of paper. Where is the value?
The NFT is cryptographically signed by the author. You can't forge it, and it's publicly, verifiably linked to the author. It's even better than a physical autograph.
So you'd place value in a cryptographic signature from the author that ties the piece of paper in my analogy above to the photo of their real life signature? How much would you value that at, given that anyone else can acquire and enjoy the exact same photo of the signature that you enjoy, just without the piece of paper saying "this photo that everyone can see and enjoy is owned by andypants"? If the value you'd place on that piece of paper is above zero, why? (Genuinely curious).
You're missing the point completely and you have to take some time to think about it and let it roll around in your brain to start making sense of it. It took me a long time but now I fully believe. Including cryptopunks.
In real life, people wear rolexes. Why? You and I both know that a casio can tell time just as well as a Rolex. I don't know the difference between one model of Rolex from another, but some may cost 10k and some may cost 20k.
To those deep in the Rolex world, the difference is huge. They can tell right away.
Why do people wear rolexes? A casio is lighter and easier to tell time. But a Rolex. That's status. You're not SAYING you're rich, but you signal you're rich. Big difference. The former, people will scoff at. The latter, people may be impressed. And if you're in the Rolex world and you own the top of the line Rolex? Those in the know are even more impressed.
How does this translate online? How can you signal status online? In centralized systems like twitter, you just look at followers. But what if... you just now made a twitter account to talk about something you love, and you have no followers? How can you signal status to people you talk to that you deserve some clout?
Enter something like cryptopunks. People in the cryptospace use cryptopunks as their twitter pic. Those in the know realize that one cryptopunk does not equal another cryptopunk. Maybe yours has red hair and only 2 percent of cryptopunks have red hair. Maybe you know all red hair cryptopunks command a huge premium and cost tens of thousands of dollars.
They can verify in your wallet that you own that crypto punk.
You can move from one platform to another, with no followers, and suddenly, you have digital clout.
> in-game virtual goods. But as certificates layered on top of collectibles... I'm not so sure.
I agree - the problem with most NFTs at the moment is that you can't actually do anything with them, apart from trade them.
There are games coming out now (e.g. Goal Revolution[0]) where your NFTs' properties (and, by extension, value) change based on what you do with them (how you use them). If the NFT thing is going to have any future, it needs to follow this example.
> the problem with most ~NFTs~ art at the moment is that you can't actually do anything with them, apart from trade them.
I dot agree with this statement but perhaps it'll help you expand why you think this way. As the article says, you don't have to own the Mona Lisa to appreciate it's beauty.
what is the use-case for an NFT for an in-game virtual good? A sword from World of Warcraft (WoW) can already be traded between players within WoW, since the environment in which it appears is already centralized and that's already provided by the environment. Trading a WoW sword outside of WoW has ambiguous logic. Let's say you sold your WoW sword to a Destiny player. Ok, does the sword still exist in WoW or not? What if the WoW servers just say that it does? Do all players verify that other players have the items the server says they have? If the player uses the sword and the server says "they did 9000 damage because that's how big the sword is", what difference does it make if your client say "NO! Nooo! They don't -HAVE- that sword"? You can't just wave your hand and say "but we'll just make the games peer to peer and that fixes it". P2P lockstep protocols were extremely widespread but fell out of favor due to performance and anticheat issues inherent in lockstep protocols. Most gamedevs would prefer the luxury of not having to run any servers. How do you make a purely P2P multiplayer game protocol that is cheat-resistant and allows more than a very small number of players to witness one another simultaneously? If everyone needs to establish a network connection to everyone near them inside the virtual world, how do you handle crowded spaces?
When the sword is sold -outside of WoW-, how does it have value in another context? Can a Destiny character equip a WoW sword? (No.) Ok but what if the Destiny devs made an in-game Destiny item that was pegged to that WoW sword, and then the games all checked your inventory at login? You'd have to check the ledger -every time the item is used- or the player can just login, trade it away, and then stay logged in and continue to use it (use after sell, essentially).
If players can -already- trade items within the simulation where they were created, but we're not defining what it actually means to move an asset -between simulations-, what is the actual use-case here? That you can trade non-functional skins outside of the game? That's it? Why is that good?
First, I don't think the big use case is for items being traded between different games. However, a system like that is possible. Blizzard would be a good example here, since their games have a high degree of cross-pollination, and they frequently offer promotions that unlock similar items in several of their games at once. So, owning a Blizzard "magic sword" token might give you a sword item in WoW, another one in Diablo, and a sword card in Hearthstone, each adapted for its own game. This is a small use case, in my opinion.
I imagine that the big use case is for any game developer (indies especially) to leverage the marketplace without having to build one, or be locked into one provided by a single publisher/distributor. The game itself does not have to be p2p as you're suggesting. Game architecture would remain centralized, and would communicate with a blockchain where the tokens are stored.
The process might look like this:
1) A player purchases an NFT representing an in-game item issued by a wallet owned by the game developer.
2) The player sends that token to a smart-contract address, also owned by the developer, with a memo that identifies their player account.
3) The smart contract notifies a centralized game server, then sends the token back to the player's wallet.
4) The in-game item appears in the player's inventory, within the game.
There could be any number of steps involved, and the contracts could operate however you'd like. The token could be destroyed after a single use (like purchasing keys for loot crates in CS:GO) or used and traded any number of times. The game server would have to keep track of which player account controlled which token, and update players' inventories whenever the token changed hands.
One more thing - NFTs can be programmed such that creators receive an automatic royalty (a percentage of the sale lands in the creator's wallet address) whenever the item is sold on the blockchain, no matter who is selling to whom. This could be huge for indie developers, who would benefit not only from selling the original items up front, but also from the long-tail resale of such items between their players.
You have to look at the bottom line. The only benefit of decentralization is cross publisher items. If it's through the same publisher it can be done in a centralized way. Publishers care about their profits. If NFT can increase their profits they will do it, but if someone buys a WoW sword on Etherum and uses it in Destiny (I haven't played either so please don't nitpick that Destiny has no swords).
Why would the publisher behind Destiny care? Blizzard is the one profiting off the items. Each publisher would create their own mutually incompatible smart contract to maximize profits. Companies absolutely hate the existence of secondary markets. They want cash shop items to be tied to accounts so that every player has to rebuy the same items over and over again. It simply won't work except as an easter egg.
Totally agree - this will only happen if it makes economic sense for the developer. Big companies like Blizzard won't bother since they can build and manage their own marketplace, but smaller developers who can't afford to do that will still be able to unlock value by participating in an open market.
Players re-buying the same item is definitely profitable, but it may turn out to be more profitable in the long-term to allow players to freely trade items while taking a cut of each transaction as royalties. Also, as mentioned before, NFTs allow for single-use items. A game could provide all sorts of different items with different rules.
> So, owning a Blizzard "magic sword" token might give you a sword item in WoW, another one in Diablo, and a sword card in Hearthstone, each adapted for its own game. This is a small use case, in my opinion.
I'm like 90% certain that there are cross-game item unlocks in Blizzard games already.
> NFTs can be programmed such that creators receive an automatic royalty (a percentage of the sale lands in the creator's wallet address) whenever the item is sold on the blockchain, no matter who is selling to whom.
Why is that good? Who is it good for? Why would a game developer sign up for this? You seem to be under the impression that I have no concept at all of what NFTs do. The problem is that a multiplayer game server is fundamentally already a trusted third party and the incentives for gamedevs to use them are poor, while the complexities enormous. Boiling the oceans to produce a trustless ecosystem for asset transfer is a fruitless endeavor if those assets can only be reified inside of environments that fundamentally require trusted third parties.
You already need to have a trusted third party (the game server) in order to give any functionality to the assets. Once you've added that trusted third party, you've thrown away the key benefit of blockchains.
The trusted third party is effectively required to moderate custom assets in games; untrusted asset creation is an unchecked liability in general, and is expressly prohibited by the terms of many game platforms. If a player creates content that is hateful, then another player that is a child can download it, and if their parent sees that, the kid will say "I'm playing $your_game", and then the parent will raise a stink about how $your_game has $hateful content in it and $your_game exposed their children to that content. That sort of thing will certainly get your game delisted from the Nintendo or Sony stores. Even if you're only concerned with an unregulated PC market, it's going to be a hit to your sales.
If a child wanders onto a hateful website, the parent is going to say "the web exposed my child to $extremism", and then use parental controls to control what their kid can access on the web, but you cannot do that in a game. Sorry, you can't bring your $valuable_item in here because $other_player has it disabled in their content settings. You'd better believe parents are going to say "$video_game exposed my child to hate speech" and it's going to harm your sales.
Beyond hate speech, assets have to be verified by the game dev to verify their integrity; the asset has to be loadable and working without errors and without breaking the game. That's assuming there are zero vulns in the asset pipeline. Beyond merely being loadable, it should also conform to some guidelines so that the asset doesn't perform well for players with fast machines, but make the game unplayable for players with slow machines.
As for royalties: Steam Workshop already gives royalties to people who create assets (albeit at poor rates) and people already play that game. Why would I, a game developer, sign up for something that makes all of this worse, reduces my revenues, is massively more complicated, requires me to verify data against a blockchain constantly, AND increases liabilities? This is assuming you even -can- verify the data against the blockchain frequently. Even assuming you're using a blockchain with a read latency of zero, you're still performing i/o. You want to perform blocking i/o to an external datastore every single time a player wants to use an item? The only away around that would be to write a lock into the blockchain to prevent transfer with a contract and cache the ownership semantics, at which point you have completely duffed every single advantage a blockchain is giving you.
Let's say, hypothetically, that we ignored all extant games and ONLY considered new games. Again: if you're not moving an item between simulations, it's all for naught because the game dev can just implement a traditional inventory system more easily, and if you -are- moving an item between simulations, the spawning simulation and the target simulation need to be in agreement about what an item spawned in one simulation means in the other simulation. That alone is a terrifically difficult problem that NFTs do nothing to address. Few game devs would sign up for this, because it would mean that the -other- gamedev would be able to affect the balance of the economy in -their- game, potentially to catastrophic effect. It effectively ties the game economies together, but different games have fundamentally different economies with different mechanics. Who is in control of the spawn rate of assets? "You just make the asset be some random thing whose nonce is some thing that's made on the blockchain at a fixed rate determined by the blockchain itself" like CryptoKitties or whatever. Ok, fine. How do you issue a patch to alter spawn rates, balance the relative frequencies of different items appearing, or change their properties? If you -can't- do that, you can't balance your game. Balancing live game economies is -incredibly- difficult, you can't just hope to get it right on the first shot.
That's right, Blizzard does cross-game unlocks already, through their own platform. I don't expect that companies like Activision/EA/Valve would be the ones to use NFTs for this kind of thing, since it's better for them to build and operate their own marketplaces, which gives them total control.
I completely agree with you on the boiling of the oceans. It's a problem that cryptos will have to solve in the long-term to be viable as any part of a green economy. There are a few projects that are energy efficient, but Ethereum and others have work to do. In any case, NFTs aren't specific to any one blockchain.
I think content creation and limitation is a separate issue, and not implicitly part of NFTs. You can issue a token representing a particular game object, with no ability for the player to customize or modify it. You bring up an interesting point though - there could be a limited, controllable level of customization available to players. Consider a smart contract that mints NFTs and allows certain attributes to be modified, which could affect the cosmetic or functional details of the in-game item they represent. You could sell a class of NFTs representing a certain sword, and players could pay extra for a golden version, or a version with infinite durability.
For Steam Workshop, I think you've identified exactly the issue. They control the marketplace, and set the rates. If it's more profitable for a developer to set their own rates/royalties, and it's easy enough to implement, and there are enough players willing to use NFTs (or a platform that manages NFTs for them) then we'll start to see developers use them. Marketplaces aren't mutually exclusive, so you could have some items on Steam, and others on blockchain. You could make certain desirable items exclusive to the platform that nets you the most profit.
I agree regarding difficulty of implementation - this is something that most developers won't bother with at the moment since it doesn't make economic sense, but as the ecosystem develops we'll likely see companies that provide a simpler abstraction layer for NFTs (perhaps even specializing in games). As the implementation costs drop, we'll start seeing adoption. This might take several years.
Regarding blocking I/O, I don't think it would work like that, just like it wouldn't work as p2p. A game server could poll the history of its smart contracts (or the abstraction layer provided by a service platform) every few seconds or minutes, and update its centralized database of items to match whatever transactions have occurred. All reads within the game would still be to its own database, and not directly from a blockchain.
CryptoPunks will be in the MoMA one day. They are a pioneer — and will be valued as such. Derivative works and obvious cash grabs are a bubble and low effort art will trend back to $0.
Most contemporary art has a lot more effort put into it than you think. It’s perfectly okay to not value that effort, but things like those “black squares” or whatever actually aren’t just that. If you see them in person, you can see how the different brush strokes overlap and theoretically signify different things.
The example you're using isn't contemporary, it's over a century old, and it's a design for a stage curtain. It's not valuable for the effort put in * (it's literally just a solid black painted square), it's valuable because of the point in time it represents w/r/t art history
* edit for clarity: what would be commonly considered technical artistic effort, although a large % of graphic designers would disagree with that as composition is a skill, and conceptual artists would disagree due to the thought put in (which imo feels post-hoc but hey ho)
Just to expand on that, I love Malevich as an artist. I've travelled specifically to see exhibitions of his and his contemporaries' works. If I had large amounts of spare cash and I were in a position to buy an original, I probably would. From an artistic pov, I feel the ideas he introduced are extremely important. From a technical pov, I think his colour and composition are superb. From a conceptual pov his art is a pretty laser-sharp distillation of the ideas he had regarding what art means or can mean. From a personal, professional point of view, I'm trained as a designer, and worked as a designer and illustrator. The tenets of constructivism and suprematism have been formational to much of my approach to design.
So, it's not that being technically spectacular in some arbitrary "really accurately painted or drawn picture of reality, like a photo" way makes art valuable (photography effectively destroyed that a long time ago, sorry!). It's that it has some special significance. If that significance is more than personal, as in it has some historical/cultural significance, then it becomes valuable. There's no point to it, it's art. So w/r/t original subject, above reasons make me think twice about any knee-jerk cynicism I have toward it (which I do have, I just have to have an open mind)
Art is what people say it is. Its appreciation is what probably separates us from the animals and certainly separates us from the AIs.
We say "Beauty is in the Eye of the Beholder", because it's true. There will be no accounting for a persons own taste or for what society finds fashionable today or over time.
If what you personally call Art and its story speaks to you then it is valuable. If others share that feeling then it is even more valuable. It's just that simple.
I personally like the idea of commissioning art like what big families did back in the Renaissance, but use Social P2P networks like what is already happening with customized digital Avatar makers/artists. NFTs have a role to play here equivalent to an old Renaissance painter signing the bottom of the painting, only now it's with the owner(s) and all future owner(s) signatures there for all to see.
I'll give you the Animals as your likely right and it's more a turn of phrase than a logical argument, however I have to respectfully disagree with regards to AI. A thing that is trained to recognize and prefer is exhibiting behavior - it is not experiencing 'appreciation' with all that implies at the human level. A machine may pick good art out of a line up but that art will not improve its mood or inspire it to take up painting or make it want to write a poem to an old lover it was reminded of. AI can be useful in creating art perhaps, but I don't see it ever as an end user consumer of art's appreciation.
But how good are they going to be at laundering money? I can't imagine they're going to be in the class that contemporary art is in, so they aren't really comparable.
This always comes down to how you understand value.
How valuable is Jimmy Hendrix guitar pick? How valuable is a lok of Justin Biebers hair? How valuable is a book owned by Charles Darwin?
Of course NFT is a bubble just like about every other thing humans create, but humans will always attach value and meaning to dead things even digital ones.
And so NFTs can be used for many things including allowing people to buy something overhyped that will depreciate in value.
Only in this case the value is stored in “digital gold”. Unlike gold, which is chemically stable, I’m far from convinced the digital format itself will end up sticking around long term.
Right, but unlike TCP/IP, which is a stateless protocol, the validation of an NFT requires a specific blockchain. While Bitcoin and Ethereum seem to be “here to stay”, they both seem under constant competitive pressure from other blockchains.
NFTs also suffer from the same attribution issues as traditional certificates for collectibles. You still have to validate that whichever account 'minted' the NFT was actually controlled by the creator of the collectible at that time.
> it seems like this is going to be 90% bubble (with plenty of hucksters), and 10% real use cases that stand the test of time
All the most interesting developments in computing start like this. This is good. The future is being born now and not without the required creative destruction.
> “You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set.”
I think that’s the whole point. An enduring aspect of human culture is that we praise and confer social status on owners or stewards of rare curiosities. You aren’t buying NFTs for tangible value, you’re buying a speculative investment in social status. And people feel very confident that the market cap and liquidity for buying and trading this type of social status will go way up, and that unique, verifiable digital ownership allows the pay-for-status desires to take place untethered to physical goods.
With something like CryptoKitties, you can do something with the tokens (play a virtual pet game). But with something like CryptoPunks you're essentially paying for digital beanie babies, which are worse than real ones since anyone can display and enjoy the image you paid for.
You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set. When a set's popularity wanes, so does your token's value, and your ability to show it off.
I'm always happy to see artists being paid for their work, and if they can make some money during this craze - more power to them. Beyond a few creators being rewarded, it seems like this is going to be 90% bubble (with plenty of hucksters), and 10% real use cases that stand the test of time.