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NFT projects are just MLMs for tech elites (every.to/napkin-math)
817 points by dtjb 18 days ago | hide | past | favorite | 658 comments

NFT always felt ridiculous to me, but I though I understood the mechanism: "it's like baseball cards but in the blockchain".

This week I learned it's not.

NFT are Non Fungible Tokens, which means tokens that can't be divided, unlike crypto currencies like Bitcoin that can be divided in Satoshis. So you exchange the totality of it, or not. Basically it's a unique number in the blockchain you change ownership by applying cryptographic signatures during a transaction. Most of the time it's an ethereum smart contract address + a token id.

But wait, where are the pics ? The gifs ? The videos ?

I mean, opensea.io does allow you to mint (the term for magically turning a media into an official NFT backed by the blockchain) up to 100MB of content.

So where is it? Not in the blockchain, obviously, it's already fat enough with tiny transaction data.

Well, it's just stored in the centralized platforms like opensea, rarible, etc.

Basically, the NFT is not even that piece of art, baseball card or whatever, it's just the number linked to the proprietary, centralized, privately own trading platform that hosts the content.

The platform disappears, or bans you, or changes policy, or is blocked, or whatever, and your NFT is back to being a bare-bone blockchain contract number and a token id.

It's even more bullshit that I though! You don't even have control on whatever you make believe to virtually own. It's madness.

But you know what, the week I spent in this weird universe was also so much fun. There is an atmosphere of creative WTF, a mix of scams, community bonding, money laundering and genuine experimentation all bathed in some frenetic craziness that reminds me of the early days of the internet.

Despite all that crap, I kinda like it.

Non-fungible doesn't mean something can't be divided, it means a specific one just can't be substituted for another one.

An example: If I trade oil, one barrel of oil with a certain spec[1] is fungible with another barrel of oil with the same spec. If I sell you some oil you don't care which specific barrel you get as long as it's the same kind of thing. Likewise if you borrow 10 dollars from me you can pay me back with any combination of notes up to the value of 10 dollars, you don't have to give me back the specific bills I gave you.

On the other hand, things like art are not fungible. If I loan a Van Gogh to a gallery I very much want the same piece to be sent back to me after the exhibition is done. It's not ok for them to send me something else. Even if it's "sunflowers" (since Van Gogh painted a few of those and they are quite similar), I want the actual one I loaned to be sent back to me.

Normal bitcoins or ETH are fungible whereas NFTs are non-fungible. The specific one you have matters usually because it represents a digital proof of ownership of some specific resource (a bored ape or whatever).

[1] The spec for oil types standardises particular grades and then people trade a standard barrel size (called a bbl which is short for "blue barrel" because they used to be painted blue). "Brent" and "WTI" are different grades. A barrel of brent is fungible with another barrel of brent but not with a barrel of WTI because that's a different grade.

Thank you for the correction. I particularly appreciate the kind tone, it's rare on the internet.

This answer confused me at first, because I initially thought you were trying to say non-fungible assets can be divided. At least in the case of non-fungible Ethereum tokens, it's the case that they both each can't be substituted for another one and they can't be divided, right?

And in the case of ERC-1155 semi-fungible tokens (SFTs), you can substitute them for others of the same type but they still each can't be divided. They're whole, irreducible units.

For both NFTs and SFTs, I think the non-divisibility is an important component to understanding what they are. There's no "smaller denomination" of each asset in the way that Ethereum can be divided arbitrarily until you reach the minimum "wei" unit.

You're right that non-divisibility isn't a sufficient condition to be non-fungible (as with SFTs), but the way I interpreted your first sentence made it seem like it was an orthogonal condition rather than a necessary and central one. (At least for cryptocurrency assets.)

Just one thing - you can always write a separate contract which subdivides an otherwise indivisible asset on the blockchain.

For example, with NFTs, you could make a DAO that pools together capital to purchase an NFT and can trade their share of ownership of the NFT on the open market.

Divisability is often related to fungibility in that the ability to divide a resource is a way to create fungibility (e.g. the sea of oil is split into barrels)

So you can split NFT tokens and e.g. resell them separately?

Oh do I have a scam for you! So, no, obviously you can't divide an NFT, but what you can do is create a new fungible token (or smart contract not sure about the exact details) that represents partial ownership of the NFT. So you can issue 1000 of these fungible tokens that represent partial ownership of the NFT.

The whole thing feels like some kind of postmodernist performance art about property and ownership.

Actually, come to think of it, maybe that's a great idea. If people ask questions about NFTs, they might start asking more questions about intellectual property as well, and ultimately about property rights in general. In a sense, NFT is the ultimate absentee property - it's impossible to use or occupy. It's a title to itself.

I'm slightly afraid of the asking because of what answers parties might arrive to.

Someone pushing for intellectual property maximalism might see in NFTs a technical counterpart to the legal monopoly on the ownership of digital information. Why not encode the ownership of a copy of the newest game as a NFT, and then have the console check at startup? And similarlines of thought that I don't have the imagination to consider.

I mean, that's basically just DRM, and we already have it - the blockchain adds nothing to the picture.

Well, such validation would continue working for as long as the blockchain on which the tokens are checked is still running, as opposed to when the manufacturer takes down their DRM servers. But that's added convenience to the user; the manufacturer actually loses a degree of control, so I don't see why they'd go for it?

Highly recommend this Matt Levine article on how ludicrous that is


> Imagine writing the investment memo for “20% of a picture of a dog” and being like “the most we should pay is probably about $2 million because the whole picture of the dog sold for $4 million three months ago and it can’t realistically have appreciated more than 150% since then; even if the whole picture of the dog is worth, aggressively, $10 million, this share would be worth $2 milllion.”

> One model here is that everyone on earth wants to pay $4 million for a unique picture of a dog, so if you make one unique picture of a dog and sell it for $4 million you’ll get $4 million but if you cut it into 17 billion slices each one will sell for $4 million?

Fungible doesn't mean divisable. That does not imply non-fungible means something is divisable. I gave an example of somithing fungible which isn't divisable (a barrel of oil) and one which is (dollars). In fact I also gave an example of something non-fungible which is non-divisable (Van Gogh's Sunflowers).

I'm struggling to think of something non-fungible which is divisable, but in any case I'm pretty sure NFTs are not divisable. It might be the case that non-fungible implies non-divisable but fungible things can be divisable or not.

To make a parallel to the social media economy: upvotes are fungible, reshares are not

My favorite description, heard just this week:

“Here’s a receipt for the Mona Lisa that says that you own this receipt of the Mona Lisa”.

"This is a picture of four dogs playing poker, with the words 'Mona Lisa' written on the back in crayon."

"You have a receipt for it, what's the problem?"

"...which says you believe you own this receipt, and at the time of purchase, you believed that the issuer of this receipt believes in your ownership of it too".

So I do wonder whether the NFT divide (between people who get it and people who don’t) might be a generational split, related to a larger societal shift away from ‘owning things’. We’ve definitely passed ‘peak thing ownership’.

For those of us old enough to have grown up with the idea of ‘buying a book’, ‘buying a toy’, ‘buying a CD’ or ‘buying a magazine’ we have a particular mental framework for ‘owning’ stuff.

But people stopped buying those things a while ago (people stopped buying toys? Not completely, but certainly some of that spend now goes on apps right?).

So for people who have grown up in a digital-subscription world, they might just have a fundamentally different mental model of ownership - one which is more compatible with NFTs as a reasonable idea than the paradigm us old ‘thing owners’ have.

Like, consider some of the things you likely have bought recently: a ‘twelve month Netflix subscription’, a ‘Steam library game’, an ‘app’… you bought those things with no expectation you could resell them later because you don’t think of those as ‘things’. And because you haven’t yet adjusted your mental model to the reality that this is what you spend your wealth on now - ephemeral digital rights you won’t be able to pass on to your kids when you’re gone.

But if you grew up digital native and the only things you’ve ever been able to buy are non transferable digital pointers to rights to use something, maybe the idea of a transferable digital rights pointer seems like a crazy innovative new idea that changes everything?

The difference between most[1] NFTs and Netflix/Steam/Apps is with the latter, you are buying access to something. With most of these NFTs that are just a picture, owning the NFT doesn't confer any special right to you. We can all enjoy the Disaster Girl meme, you don't have to have bought the NFT. The owner of the first ever tweet cannot actually do anything with it, edit it, destroy it, put it in a private collection so only they can look at it.

The only thing buying one of these NFTs gives you is I guess "bragging rights" but I think it remains to be seen why anyone should care that you paid money for 0x3B3ee1931Dc30C1957379FAc9aba94D1C48a5405,25046.

[1] The only exception is maybe these NFTs that interact with something on the blockchain like an item or place in a videogame, in that case owning the NFT provides some sort of utility.

Yes, that's definitely the case for a lot of NFTs being minted and sold.

And if an NFT did represent the right to download and play a particular game from Steam (like, you had to present proof of ownership of an NFT to Steam to be allowed to play the game), such that I could sell that NFT outside of Steam to someone else... well, the value of that NFT is only as good as Steam's willingness to abide by the agreement it embodies, which they can unilaterally withdraw at any time, so there's little value in Steam honoring such a thing. If they wanted to permit game resale, they can do that, inside their own database, without any NFT nonsense.

So yeah, it's still a bit of a mystery if or whether this actually adds anything, but I'm just trying to put myself into the mindset of people who are excited by this and trying to figure out what excites them, rather than just assuming they're all dumb because they think buying numbers is going to change the world.

It really shows the dishonesty in crypto "innovation:" they claim "security" and "trustlessness," but it all reduces to simple human/institutional/contractual trust relationships as soon as you need to deal with anything with real-world practical value, whether that be access to games on Steam or tracking a package or whatever.

With all this fancy software and energy spent on mining, what then is the point of all that effort?

I think some of that directly connects to the (intentional) confusion in terms of "smart contracts" and old fashioned "contracts". "Smart contracts" are programs and there's a sense that they are "better" and easier to "trust" than old fashioned "contracts" because computer's enforce them ("fairly and equitably", or so proponents believe [1]) and not people and institutions.

But people don't run "smart contract software" in their own brains and at the end of the day if these things are to be meaningful to people they have to interact with people and institutions and good old fashioned "contracts". It's trying to solve sociological and political problems with code, but we don't have a real world substrate for those "programs", what we instead have millennia of institutional history and contract law and at the end of the day those still matter more than what the computer says even you personally don't trust those institutions for whatever reason.

ETA: [1] Don't forget that it's a common fallacy among tech idealists that computers are unbiased and objective "because math" rather than machines that will reflect the biases and subjective opinions of those that program them.

Yeah I agree, and that's why I'm generally skeptical of any smart contract ideas that have to interface with real life (supply chains, land registry, and so on). I think they make more sense when they are concerned with things entirely contained within the blockchain, like swapping tokens or mapping names to addresses. Frustratingly enough, it's the former type ("let's put cows on the blockchain") that seem to get the most mainstream attention.

I've passed beyond skeptical of smart contracts that try to apply to real life to a concern that much more real contract law needs to apply to smart contracts.

Ethereum is already full of fun stories where "smart" contracts did extremely dumb things because they took a programmer's word extremely literally rather than a programmer's intent.

In a world where programmers are assumed to be ordinary, fallible humans that's a ton of pressure to put on a programmer to never make a single mistake. While there's a lot of active research into trying to bring technical solutions to that human problem such as strict "formal proofs" and such of the programs being made into smart contracts, I'm increasingly of the opinion that would benefit them the most would be political and sociological solutions such as classics like "courts of appeals", "trials by jury of peers" to determine intent over literal substance, and so forth.

Those aren't "fun, technical" solutions, and would require placing trust again in institutions and people, so I absolutely have zero optimism that any smart contracts system would embrace them. I just think that they need such political structures to exist otherwise you left with merely a lowest common denominator tyranny of software bugs (no matter how formally the best contracts mathematically prove their claims/efforts).

Using a court of appeals assumes a shared widespread understanding of the topic of disagreement, often the only people with the expertise on the topic are going to be the parties involved and teaching a 3rd party can be impractical and prone to steering.

I can see smart contracts working with very low volume specialized scenarios for this reason.

Also traditional dispute resolution is expensive plenty of times where both parties would be willing to accept the risk of a bug over paying lawyer fees

The shape of trials in a court of law is built around discovering the topic of disagreement and sourcing enough expertise on the topic to get a judgement from a jury of "peers".

Whether or not that is an expensive process is orthogonal to the question: if a "smart" contract makes a mistake, how do you fix it? Right now there is just zero recourse and everybody shrugs their shoulders at it, "oh well, that's just how software bugs work, sorry about your loss". That's an awfully hard pill to swallow for the average person. Real contracts built up a lot of mechanisms to keep contracts fair and equitable by making sure that when one goes wrong there are ways to deal with it.

Right now with "smart" contracts it's a wild west of whether or not escrow accounts exist and you can maybe, optionally get people (or institutions) involved to fixed something about to go wrong or in the process of going wrong, and there's just about no way in most "smart" contracts to fix things after they've gone wrong. But critically it's a "right" in most contract law-based countries to challenge a contract in a court of law and get a human opinion from a jury of your peers, and I don't see how average citizens can trust a system where that "right" is not given as such and is an "optional" feature that they generally have no idea exists in a specific "smart" contract code (much less if that feature itself is buggy or not).

I realize (per above) that this is often a "feature" and not a "bug" in "smart" contract design today. Most of the designers don't trust institutions (and maybe not even people) and like the "freedom" of "smart" contract platforms with few regulations, few "required features", and few places for instutional/personal intercession. I just don't think that's a good situation for most people to ever trust "smart" contracts in the real world.

Pretty much every profile pic NFT now (hottest form of NFTs right now) comes with some huge list of utility and roadmap behind it (look into BAYC for a good example), if that's the sort of thing you're looking for. Also, "bragging rights" or flexing, it turns out, is a pretty huge part of not only the physical realm but also digital as well if you look at the existing digital skins market.

Skins are an interesting comparison. I feel like that falls under the utility category I mentioned, like when you buy a skin you are really buying the right to use something at a particular place and time (a cool looking gun during a match), and nobody else has the right to use it. In contrast, whenever I see the Disaster Girl meme posted somewhere on the Internet I don't see any indication of who "owns" it.

It has an owner. Its copyright belongs to the photographer who took it - Dave Roth, father of Zoë Roth, the girl in the picture. If you ever see it reproduced in a newspaper article you’ll see him credited.

The NFT Zoë Roth sold doesn’t convey any rights over that image or its use. It’s got the faint frisson of exclusivity to it - kind of like if you had a print of that photograph signed by Zoë Roth. It’s a little bit special that it’s an NFT minted by her in specific reference to the meme; and it has some additional cachet as a historical artifact of being maybe one of the first meme NFTs, so there’s that.

So sure, I can sort of see there being some value in the bragging rights of being able to say “look, I have the private key to the ethereum wallet that has the right to transfer ownership of this binary string to someone else, and look - this cryptographically secure chain of numbers shows that that very same binary string is the one Zoë Roth cryptographically signed with her own private key way back in 2021…”

Just, that’s going to be a lot to explain, for the bragging rights, I think.

Compared to pointing to a picture in a frame and saying “yeah, that’s signed by the person in the picture”.

> It has an owner. Its copyright belongs to the photographer who took it - Dave Roth, father of Zoë Roth, the girl in the picture. If you ever see it reproduced in a newspaper article you’ll see him credited.

Note that we casually may call him the owner, but having certain legal claims such as copyright is not the same thing as the legal concept of ownership.

This is relevant, because pointing to a picture on the wall saying "yeah, that is an original Disaster Girl print" is a very different social flex than saying "I am the artist of this well-known photograph". The latter doesn't really need nor benefit from an authenticated digital print on the creators wall; of course the artist can print dozens of copies and they are all authenticated.

For Dave Roth to sell the the copyright or certain license rights to the image is just such an entirely different transaction that I am not sure why NFT critics keep mixing them up.

Those are good points. The comparison to an autographed photo is actually really fair and puts it in a different light for me. But half a million bucks for an autograph from the girl in that meme? It still sets off my BS detector but I'm open to the possibility that I just don't get it.

Roadmaps! Like those spicy ICOs in 2017! I wonder if 90% of them failed, or is it 95%?

I think 'utility' might be a stretch for the BAYC roadmap.

That model of NFT is very much on the MLM end of the scale.

Not really, because there is still no utility in owning the rights to an NFT.

I've only ever seen two kinds of interest expressed in NFTs.

The first is immensely wealthy people who are looking for a trendy way to flaunt their wealth, because they've exhausted all traditional options. This is what leads someone to pay $3M to "own" the first tweet.

The second is people who aren't immensely wealthy but are hoping they will become so by buying/minting an NFT and selling it for an huge profit, presumably to someone from the first group (or a sucker from the second). This makes up the majority of NFTs by volume, and is where the pyramid scheme similarities become hard to dismiss.

Haven't seen anything resembling a third kind of interest that, under scrutiny, doesn't ultimately fall into one of these two groups.

Maybe. Or maybe it's that people less used to the concept of ownership can be more easily defrauded by "as a Service" businesses and people peddling crypto alike.

> consider some of the things you likely have bought recently: a ‘twelve month Netflix subscription’, a ‘Steam library game’, an ‘app’… you bought those things with no expectation you could resell them later because you don’t think of those as ‘things’

Yes and no. The subscription is very much "a thing". Think of this like a mental jump you've made when you understood functions as first-class values - code that your program can grab and pass around. I may not be able to sell the underlying media library to which I'm granted access, but I can very much sell the access itself. Or borrow it to a friend. Or charge money for it. People are[0], in fact, trading access to subscription services like Netflix.

> if you grew up digital native and the only things you’ve ever been able to buy are non transferable digital pointers to rights to use something, maybe the idea of a transferable digital rights pointer seems like a crazy innovative new idea that changes everything?

That's... a couple decades of dystopia ahead of us. People growing today are still buying food, toys, medicine. Children develop understanding of ownership before they develop understanding of money.


[0] - Or were, last time I checked, which was some 2-3 years ago.

“Look what I found in the loft! Grandma’s old Netflix subscription from 2021!”

It seems to be exactly the opposite. In digital age you can consume stuff without buying anything and people care less about ownership per se, but "people who don't get it" buy stuff like NFT.

I do, in fact, expect to be able to use my paid for Android app at any time in the future.

I'm not counting on updates and new features, I just want the same version I bought to work on the same version of Android it works on right now.

Obviously, that's all in my stubborn old school brain, but it doesn't stop me from hoarding .APK files and Android images.

I had a lot of great very old software on some CDs that I regularly reburned/copied until I lost them over a decade ago and I'm still pissed about that :D

NFTs are all about owning, in fact they are more about owning than almost anything on earth. The ONLY advantage you get from owning an NFT is the knowledge that you own it. Everyone, owner or not, can enjoy looking at the jpeg in the same way. That's not really true for anything else.

So, far from representing the move away from ownership, they are a distillation of the ownership concept.

> I mean, opensea.io does allow you to mint (the term for magically turning a media into an official NFT backed by the blockchain) up to 100MB of content. So where is it? Not in the blockchain, obviously, it's already fat enough with tiny transaction data. Well, it's just stored in the centralized platforms like opensea, rarible, etc.

You’re right that this is the way many have been created so far, but that will not be the case for long. Already people have pointed NFTs to IPFS/Filecoin which will give them much more staying power. And this can be done without using a centralized platform like opensea, check out nft.storage and metaplex (1) as starting points.

1. https://github.com/metaplex-foundation/metaplex

Agreed, and I hope it will become more popular. But right now, since you can't browse IFPS with firefox or chrome, and manual minting is harder than clicking a button on open sea, I wager private platforms will keep their appeal.

Maybe when decentralized service will do all the decentralized hard work for you, take your metamask, upload your content on IFPS, mint it, then let you sell it, it will take on.

I think the key here is that we've already as a society given up a lot of our ownership for the sake of convenience. Most people buy their phones through a mobile carrier, locking them in through the life of their contract. I'm not totally sure about how Google accounts work, but I'd wager that getting your Google drive data back if you're banned is difficult. Kids these days are even purchasing skins for video games with the full knowledge that if they get banned, all of those skins will be gone.

A lot of what we own these days is not "owned" in the traditional sense. Opensea is no different from purchasing a video game that you could be banned from in that both purchase prices aren't ownership, but rather a price to access a product.

Actually this is quickly becoming the standard. Once you mint an NFT on opensea, you have the option to "freeze" the metadata, which transfers the image and everything else to IPFS storage.

Don’t those still rely on the gateway for wherever you mint it on IPFS staying up? The NFT link only points to a gateway which can go down then you’re at the mercy of it being replicated across nodes right?

Correct, it still only exists as long as someone on the IPFS network wants to keep it up. Similar to bittorrent in that way. Still, in the long-term, it seems that having the actual image/video/audio/other data replicated on a decentralized network rather than hosted on a single domain makes more sense to me (but then again, I'm very bullish on the future of IPFS/Filecoin).

It'll be interesting to see because if someone is the only one to pin/replicate the IPFS object an NFT points to it seems like they have some leverage over NFT owners. Is there any way to validate the file without the ipfs object? That's one weakness I've seen pointed out in the NFT idea (beyond the obvious objections about the energy use for what looks a lot like tulips and speculation).

Not quite right.

The assets aren’t necessarily stored on OpenSea. You can see how OpenSea gets the metadata like asset url via the docs:


If you scroll down you’ll see that the assets can be hosted on decentralised networks too like IPFS.

Also, not all NFT projects are built the same. I suggest you check out Pak’s Poets project - it’s a very exciting piece of performance art built around game theory.

Disclaimer: I don’t own any NFTs but that doesn’t mean I’m not excited by what they’re doing.

I agree, you can store it on IPFS. But most people don't, they don't even know it's possible.

I mean, most people could host their own video, but they upload on youtube, and just youtube.

Well, this is the same, only even more niche, so the easy "upload" on open sea is very, very attractive.

I'd wager if one the most popular NFT trading plateform disapear, 99% of all NFT would go poof.

The majority of all NFTs are stored in IPFS; source: I run a platform indexing NFT media files.

Also, the art is the token. Data storage is a orthogonal problem entirely.

> the art is the token

The art is people believing they own more than that.

> The majority of all NFTs are stored in IPFS

Oh, I would never have believed it. Thanks for the info. Most people that I know don't even know what IPFS is. Are those human uploaded, or bot uploaded?

> the art is the token

Yes, but why isn't the token displayed in the centered of the page on most popular platforms?

Because human needs a symbol that represent that token.

For most people, the animation and the number are the same. NFT work because people share a believe about them, after all.

And all the strong believe in humanity are sustained using symbols.

BTW, what's the name of your platform?

I was surprised you could just store the NFT payload in a Dropbox folder... and also swap out the contents whenever you want.

Buyer beware, I guess

There are certainly a chunk of NFTs that the media only exists on one centralized server somewhere. Someone forgets to pay the bill and poof there goes your art. You can download the image but the contract's `tokenUri` function still points to that old location.

Then the next tier up would store their media on IPFS, if you purchase the NFT you're expected to be responsible for pinning that IPFS content somewhere. That's not communicated too well though. The benefit there is if the original minter stops paying for IPFS hosting but you still have yours pinned, it's still available. I think most of the "Mint as a service" platforms will use IPFS by default.

Then there are projects that are storing the images entirely on chain. These are obviously more costly to create but don't require another service/protocol/platform.

Did the early days of the internet have as much scams and money-laundering in the mix? Not in my neck of the early days of the internet woods.

There were a lot less idiots on the internet in the early days of the internet. It was a function of the difficulty of getting on the internet.

Many of the early ISPs played shell games with ad companies. NetZero is one of the most famously documented of the 90s dot-com age promising "free internet" with ads/MLM schemes, but they were one of the pack. The few I can recall today to google on the Bings, including NetZero, surprisingly still exist and survived the dot-com implosion as more traditional ISPs, but NetZero is the most useful example to give as it still bears the scars of its early scam-like history its own brand name. I don't think they've offered actual "zero dollar" service in more than a decade, but that's where their name originated.

I recall so many fly-by-night ads and ads+MLM schemes in the early internet, a lot of which I watched in Slashdot takedowns and teardowns at the time.

The early days of online payments (paypal) maybe. Unless they're talking about usenet selling, in which case I don't remember it being 'thrilling' to get a money order in the mail.

I sold/bought music CDs as well as anime model kits on the usenet (on the .marketplace ones) around the time of "Eternal September".

It was pretty thrilling to get money order in the mail.

There was little to no scamming goin on.

If someone wanted to be a bad actor, they'd be run out of town pretty quickly.

I miss those days.

Your second last paragraph perfectly summed up my feeling about it. :p I don't want to touch it at first, since its scam/money laundering smell is very strong(and also environment impact) also I think overall thing is pretty stupid.

But after some time that I,um, "participate" in it, I can feel the lots of weird creative energy flowing in there, collectively. Not a thing we see often in today's world. It's quite rejuvenating, and crazy.

As stupid as it is, what you describe IS exactly "baseball cards in the blockchain", because each individual card/nft can only be owned by one person at a time.

The difference with baseball cards (apart from not being physical) is that most nft projects are combinatorial, so they make 10000 different cards, constructed from combinations of a much smaller number of "traits". That way the artist only has to draw say 25 faces, 20 hats, 20 eye glasses etc.

With baseball cards you'd instead make 100 different cards, and then print 1000s of copies of each. You could do that with NFTs, but you don't. The reason for that is probably that you can't sell NFTs in sealed packages where 95% of the cards will be uninteresting. I guess you could, but again you don't.

I kinda hate NFTs: But, the analogy to a "certificate of authenticity" for "real pieces of art" or "memorabilia" is reasonable. It's not "actually the art".

the "centralized platform" blocking you is kind of immaterial. The point is that other people can see that the token matches. Though one difference from CoAs is that the "centralized platform" could remove the art. I don't know how opensea works, but one could in theory hash the digital content, drop it onto bittorrent (or whatever, use the bittorrent hash id) and lock that up with the token. Is that how opensea works?

Anyone who buys these things is getting scammed and I feel sorry for them. I have friends who regularly fall for MLMs and other scams like this, and they never seem to learn. Is there any way to get through to them?

This is so wrong, I made an account to comment.

While you are right that the NFT is just an entry to the blockchain with a URI to the actual media file, the file is NOT stored on a centralized platform.

While it is possible to use a regular server to store the media file, it is certainly very bad practice and defeats the whole point of NFTs.

The media files are stored on IPFS, which is a decentralized peer-to-peer storage network. This ensures that the media file that a NFT represents, will always be available, since it is hosted by many people on the network.

> This ensures that the media file that a NFT represents, will always be available, since it is hosted by many people on the network.

I’m pretty sure this is incorrect. IPFS is not permanent storage unless you host the content yourself or pay a pining service to host it. It may be cached on many computers but those caches are finite and get cleared.

Persistence | IPFS Docs https://docs.ipfs.io/concepts/persistence/#long-term-storage

« Long-term storage

Storing data using a personal IPFS node is easy, but it can be inconvenient since you have to manage your own hardware.


[…] paying a pinning service to store data is a convenient workaround, it still requires someone to bear the cost of storing that data.


While IPFS guarantees that any content on the network is discoverable, it doesn't guarantee that any content is persistently available. »

I'm still trying to wrap my head around the NFT thing (I get the base concept, and I know originally it was thought of for digital ownership of home deeds, etc, which makes perfect sense to me, but everything that I'm seeing from it lately just seems like beanie baby collecting, like art and avatars and buying with the sole expectation of selling to a bigger sucker later).

Where are you going to immerse yourself into this universe and seeing the community and experimentation? I don't know where I'd even start with that.

I have a lot of crypto nerds as friends, they have a trading platform, and so they are on all the reddit/discord/telegram important channels.

I wouldn't know where to begin, because I just got dunked into it a few days ago when one my friends asked my help to code a platform to create vanity user pages. I had nothing to do, it came to me :)

Gotcha. I've been into cryptocurrencies for a long time, but I've been feeling like a bit of a luddite when it comes to NFTs, or like most people who call crypto a ponzi scheme (some coins pretty much are, but not all), and that probably means I'm missing something.

I know where to go to find good information about crypto, but not NFTs.

> The platform disappears, or bans you, or changes policy, or is blocked, or whatever, and your NFT is back to being a bare-bone blockchain contract number and a token id.

So what? You can obviously right click to save the JPEG, so if the platform goes down it doesn't really matter. What you're buying is ownership of the NFT of the JPEG, not the JPEG. Even if the platform goes down, you'll still be able to see the name of the piece in the metadata.

No because the nothing link the contract to that jpeg anymore.

You can store a hash in the contract if you really want them to be linked.

I think the best explanation is that NFTs are a very fancy system of provenance (which the art world already takes very seriously).

NFT's doesn't prove anything though. The art world care a lot about originals, but an NFT cannot prove that something is an original. Nothing would prevent the author from just issuing a lot of NFT's pointing to a lot of copies of the same art piece. They are even worse than that, NFT doesn't even represent the piece of art, if the service it is connected to goes down then the NFT points to nothing, you can't even prove that it at one time pointed to a specific image.

Lastly, there is no reason for a service provider to issue NFT's. Service providers earns a ton from taxing the market when people trade items, there is no reason for them to give this away by issuing NFT's. Rather every service I've seen issue NFT's did it to sell items that will never be valuable, but that NFT enthusiasts now think will be valuable thanks to the NFT.

Anyway, best case NFT's are just an untaxed market associated with a game or service content. That is the absolutely best case, in what way does that sound novel?

Edit: The untaxed part probably means that governments will shut it down if it becomes too popular. So even less reasons to invest.

>Nothing would prevent the author from just issuing a lot of NFT's pointing to a lot of copies of the same art piece

Nothing prevents an author from just issuing a lot of duplicate art and claiming they are the original copy.

Except it's fraud and people would likely figure it out over time. That's the exact same scenario as the blockchain except it's even harder for the artist to cheat as everyone can see the blockchain so when the artist makes copies and tries to sell them then everyone can easily see that they are frauds.

>you can't even prove that it at one time pointed to a specific image

Most NFTs use IPFS which uses hashes to uniquely identify files and even if the file disappears from the internet it can be recovered by anyone who still has the original file and be back online.

> community bonding, money laundering and genuine experimentation

To be fair, the real-life art auction world is basically all money laundering, too.

Isn't it more like if you see an image you own anywhere, you can claim ownership based on your NFT?

Could be hilarious if you ask someone to remove it from their site. You own 1% of it? Which pixels do you want recolored? :D

There’s a lot of confusion here about why NFTs are valuable if the buyer doesn’t get to own the image copyright. This should not feel mysterious - NFTs are just like baseball cards.

If you buy a Barry Bonds baseball card for $1,000, you don’t own the artistic rights to the image on the card. All you own is the card itself, which has negligible manufacturing cost. It would be trivial for any card company to produce a million functionally equivalent Barry Bonds cards.

When you buy a Barry Bonds baseball card, you hope that the card company won’t dump a million more on the market. You also hope that if another baseball card company springs up and prints their own Barry Bonds cards, people won’t be as interested in that brand of cards. Attention and scarcity drive value; the nuance is that other speculators must care about scarcity along the same dimension that you possess it (in this case: the brand of the baseball card company and the year the card was made). There are a hundred tokens functionally equivalent to Bitcoin, but none approach Bitcoin’s value - purely because Bitcoin sustains more consumer and media attention. This position is fairly stable because attention has strong positive feedback loops.

There has always been interest in speculative collectibles. A purely digital collectible solves a lot of practical problems related to exchange: you don’t have to wait a week to receive the item in the mail, you don’t have to worry about its condition because it does not degrade with time or use, there is minimal counterparty risk due to online escrow contracts, and counterfeits are harder to fake (along the relevant dimension of scarcity, which is the origin address).

People have been speculating on collectibles for thousands of years. Crypto just makes it easier to trade them back and forth.

NFTs are not like baseball cards.

NFTs are a JSON string on a proprietary entity that point to the image of a baseball card. The image can be viewed by everyone. The bragging rights of owning a JSON string depend heavily on whether or not the proprietary entity will become the dominant player in the I own a JSON string-world.

This also has zero to do with blockchains. The proprietary entity could've used any database they wanted.

It's all a ridiculous scam, but have fun trading JSON strings.

" The bragging rights of owning a JSON string depend heavily on whether or not the proprietary entity will become the dominant player in the I own a JSON string-world." -> as the parent post explains, this particular aspect is exactly like baseball cards; where technically anyone could print other Barry Bonds cards but your bragging rights of owning a rare baseball card depend heavily on whether or not the proprietary entity printing those particular cards will be the dominant player in the baseball card world.

Surely the baseball card’s value does not come from the fact that you can hold a piece of cardboard in your hand.

Whether the data representation is a piece of cardboard or a JSON string replicated on 10,000 Ethereum nodes or a tulip or a Venmo balance is arbitrary; it just matters whether a lot of humans are looking at the same thing. And for the time being, a lot of humans are looking at crypto ledgers!

> Surely the baseball card’s value does not come from the fact that you can hold a piece of cardboard in your hand.

Oh but surely it does.

Cardboard is fragile, and degrades if not looked after. Over time, the average condition of cardboard cards will deteriorate. So, if you own a baseball card in good condition, and can look after it better than the average, over time you will end up with one of an increasingly rare class of pieces of cardboard - an old baseball card that is in good condition.

It’s not hard to imagine that in the distant future there will still be people who place value on the history of baseball who are interested in owning, for example, a collection of mint original baseball cards dating to the original era of each player, for every hall of famer who ever played for the Giants.

So the speculative value of any baseball card includes some expected value estimate based on the possibility that it might, someday, be the last of its kind, and some millionaire needs to buy it to complete a collection.

Can you really tell a similar story to yourself for why the expected future value of any NFT isn’t zero?

But then I come by and scan your card and print a fresh one. This is fairly cheap to do. Why is mine not valuable? Does this process devalue yours?

NFTs posit that the answer is that yours isn’t authentic and the process won’t devalue mine because mine is. And they offer an algorithmic mechanism to enforce and verify authenticity.

In the baseball card world, that ought to be true, but may not be. Maybe my fake is sufficiently good to fool the market.

Then at that point we realize that what is really valuable is that authenticity. We can make cards themselves infinitely cheap to copy flawlessly and the proof of authenticity remains distinct and valuable.

Your copy doesn't just lack 'authenticity', it also lacks something uncopyable, and which is only relvant to physical artifacts: 'age'.

The fact that digital copies can be perfect, and never age or deteriorate due to the inevitable march of entropy, is a fundamental difference and yes that affects how valuable 'owning' a digital artifact is versus owning a physical one.

I think this is basically true. Impermanence is part of what makes possession important. I can totally see the value of all NFTs decaying on long time scales because they're just boring.

But on short time scales all age is similar and authenticity seems to be sufficient to at least toss a bunch of liquidity from place to place.

> The fact that digital copies can be perfect

But you've hit on exact problem the blockchain solved from day 1, you can copy the image (just like you can download hi resolution scans of baseball cards) but the underlying "cardboard" cannot be copied, or copies can be detected with 100% accuracy (depending on how you look at it).

Some day, the last original 1986 Barry Bonds rookie baseball card will disappear, lost in a housefire or an alien invasion or something. There might still be high quality digital images of what that card looked like, in archives of eBay auction pages and the digitized records of the baseball hall of fame and whatever other ephemera wind up in the Svalbard vault.

And in fact, the photo reproduction on that card was already a poor 1980s print quality reproduction of an original photo of Barry Bonds, which probably - no matter how well it was looked after - will have suffered and faded with age as print tends to; and that actual original photo was probably reproduced in a bunch of other places outside of that run of baseball cards - and maybe the original negative of that film exists in some archive somewhere, with a high quality digital copy available - from which you could reproduce an even higher quality picture than was presented on that card.

But you would never be able to replace that card, because the point of the card was its physical connection to the moment in time where a legendary career started.

"Humans preserved this specific lump of matter and kept it safe over a long period of time even though that was difficult and, let's be honest, not very important" is what gives value to antique collectibles.

"Humans preserved the cryptographic chain of custody of this sequence of binary digits that reference a specific widely archived piece of digital media over a long period of time, by creating a distributed computing system that just automatically ensured it would be passed on to posterity whether posterity wanted it or not," doesn't create the same human connection.

I disagree, I think you are putting a lot of importance on the image. Think Runeacape party hats, attachment to digital goods is not theoretical.

No, I’m putting importance on the artifact.

Yes my bad, that’s what I meant

I think placing the value of baseball cards on the fact that they are made out of cardboard is mostly trying to rationalize a preconceived notion that baseball cards make sense whereas NFTs don't. But even then, similar dynamics to the one you mention also apply in the NFT world: people lose the keys to their wallets. In that sense, the NFT completely degraded. This will probably happen to many NFTs as has happened to a significant amount of bitcoins.

This is about where I got to when pondering this with regards to NBA Top Shot:

1. Is it irrational to pay large sums of money to collect NFTs? Yes. 2. Is it irrational to pay large sums of money to collect physical cards? Also yes.

Regardless, we humans are weird and will do it anyway.

Fragileness is not a requirement for rarity, you can just as easily print fewer baseball cards / NFTs to begin with to reach the desired circulating supply.

Beyond that though, keys get lost so NFTs do have a mechanism of leaving circulation.

> Whether the data representation is a piece of cardboard or a JSON string replicated on 10,000 Ethereum nodes or a tulip or a Venmo balance is arbitrary; it just matters whether a lot of humans are looking at the same thing. And for the time being, a lot of humans are looking at crypto ledgers!

But are they really? I mean, are there that many humans waiting in line to have a JSON pointing to a tweet?

There were a few reports of NFTs going on the market for thousands of dollars, but at least the ones I'm aware of sounded an awful lot like people buying their own NFTs and leaving that out from the report.

FWIW, I am personally shocked that anyone wants to buy small pieces of cardboard with photos of baseball players on them at all, much less for any appreciable amount of money just because one happens to be "rare" (whatever the hell that means, as clearly anyone with a printer and some cardboard can make their own)... that doesn't mean that someone else is valuing them for some reason, and they clearly do; that most small pieces of cardboard with pictures on them aren't valuable is kind of irrelevant to the idea that some are.

> FWIW, I am personally shocked that anyone wants to buy small pieces of cardboard (...)

I fail to see the relevance of your personal preferences to the discussion, as my point was that the cases I'm aware of sound an awful lot like shills trying to inflate the value of something with no market value whatsoever.

As a concrete example, there was a HN discussion a couple of months ago on how a kid reported a couple thousands of dollars worth of sales from NFTs, but it all sounded like a mix of straight up fraud and money laundering. A few comments in the discussion point out that the kid's father works in finance and it sounds he is trying to case in on the NFT trend.


> But are they really? I mean, are there that many humans waiting in line to have a JSON pointing to a tweet?

This is just your belief in what people would want to do, and is irrelevant to whether people out there exist, and I am claiming (seemingly successfully, as my comment is resonating with a number of people) the same thing would probably be said with just as much confusion by anyone who really considers how utterly pointless a baseball card is.

"art blocks" had a trading volume of $100M last week [1].

And that's only one of the more notable nft projects.

[1] https://nonfungible.com/market/history

Were those real trades, or just the same few people trading back and forth between themselves as part of a pump-and-dump scam?

To me the more likely use seems not a pump-and-dump scam but rather money laundering - get a plausible and legitimate money trail as "capital gains from digital art investment" from some dirty bitcoins coming in from, for example, a ransomware payout.

Have a look at the sales (lower down the page) of say these:

https://www.larvalabs.com/cryptopunks lowest price available $386k(!)

or more detail on artblocks: https://www.nft-stats.com/collection/art-blocks average price $39k

or these: https://www.nft-stats.com/collection/boredapeyachtclub 90th percentile = $168k

> are there that many humans waiting in line to have a JSON pointing to a tweet

There are a lot of humans waiting in line for other digital assets that don't do anything, like Fortite skins. That's also just a row in some database, what's the difference?

> Surely the baseball card’s value does not come from the fact that you can hold a piece of cardboard in your hand.

That is definitely part of it. We are physical beings, you can't pretend like physical existence is irrelevant.

> Surely the baseball card’s value does not come from the fact that you can hold a piece of cardboard in your hand.

No, but if something physically exists then it's possible for there to be originals and first printings, which can be finite in supply despite the ease of reproduction.

I can understand why some people might prize a 1987 Barry Bonds card over a modern reproduction, even if the reproduction is indistinguishable, because the 1987 version is older or more authentic.

But there is no 'original' of this comment - moving it from my computer to yours (and from your RAM to your screen and so on) inherently makes it a reproduction. There's no authentic-vs-inauthentic distinction to be drawn.

"Surely the baseball card’s value does not come from the fact that you can hold a piece of cardboard in your hand"

Yes, the value of the Baseball Card is derived from the fact that it actually exists.

The fact that someone is arguing that 'The Baseball Card' is not materially different from 'a number' is really an interesting cultural phenom.

It is a small leap. The balance in your bank account is also a number without a physical presence. It has value because you can convert it to physical goods. The same is true of a Bitcoin balance.

Currency is a contract, it's inherently intangible.

Bitcoin is not a currency, and it's not used for anything, so it's a really just a number, that someone may speculatively want to pay money for, due to the fact a small number of other people will pay for it, but unless there's a more broad acceptance of it, the implied value will also fade.

If NFT's implied ownership of the Baseball card itself, I think this would be another thing altogether.

> Bitcoin is not a currency, and it's not used for anything

Is that so? I just tipped bitcoin to a twitter account I enjoy (using lightning network). Keep lying to yourself..

An NFT is a virtual title of ownership on a blockchain, that's it. You don't own neither a string or an image or a JSON.


It's actually simpler than that. It's just an entry in a database with your name attached to it. It's like an autograph.

Why do database entries have value? Well, usually because there are processes attached to them. Often it is as simple as having a court enforce the process.

I don't know why but the whole cryptocurrency space feels like a philosophical parody of the real world. Money without people. Contracts without enforcement. Ownership without property.

They have value because people agree they have value. Trusted third parties (like courts) help people come to that agreement, by providing transparent, objective processes to settle legitimacy and ownership disputes (in the happy case, in the not-happy case they use physical force to reach agreement).

Personally I don't understand the controversy, blockchains are a different kind of trusted third party that also help people come to agreements, by also providing "transparent, objective processes to settle legitimacy and ownership disputes". These third parties aren't mutually exclusive, and the role of blockchains/NFTs aren't fundamentally different, they just use novel means to help people come to agreements, within the same social constructs we've always had.

The problem with using NFTs to verify ownership is that they actually make it much harder to resolve any disputes. An NFT can't be transferred or modified without explicit permission from the owner of the NFT, which means that any dispute is impossible to resolve without bypassing the NFTs entirely.

For example, let's say you have an NFT that represents something tangible (and not just some link to an image download). What happens if the owner of the NFT dies without setting up a way to transfer their NTSs? What if multiple, seemingly valid NFTs point to the same object? What if the NFT was never truly valid in the first place? What if an NFT is stolen?

In all of these situations, a third party (like a court) would have no actual power to fix anything within the NFT space. A hard fork is theoretically possible, but that becomes impractical to do every time someone has an NFT dispute. The only option is to just declare an NFT invalid. But if you have some third party that controls the validity of NFTs, then you might as well cut out the NFTs and just rely on the third party.

I think you're misunderstanding my stance here, I'm not arguing that NFTs are always better than other trusted third parties. I don't know enough about their details to make a claim like that.

In the terms of what you're saying, I'm arguing that the space of scenarios in which people can't come to an agreement is different for NFTs vs. legal systems, because NFTs provide some self-service mechanisms for proving ownership and legitimacy. I'm sure those come with tradeoffs, as you've mentioned. I'm not in a position to weigh those tradeoffs yet, nor claim that one is always better than the other. I think it's too early for that.

More concretely, courts, NFTs, et al are tools for reaching agreements. There's no reason to dogmatically cling to "on-chain" if it's not helping reach an agreement, and there's no inherent reason things can't be mixed between on-chain and off-chain, just as agreements can be made in court vs. out-of-court.

Right! Which is why NFTs are specifically not representing anything physical (despite certain people within the space admittedly pushing this misguided notion). They work because the NFT itself, the ledger entry, is valuable.

>I don't know why but the whole cryptocurrency space feels like a philosophical parody of the real world. Money without people. Contracts without enforcement. Ownership without property.

The common denominator between these being: process without purpose.

And this is why the parody works so well. The world is already like you describe, though it's hard to notice if you view it through the rose-tinted glasses that the ever-shrinking in-group is more than happy to sell to you for good "old" fiat money. (If 50 years ago is old.) Neoliberal "infinite growth" capitalism is already an inter-generational MLM, sanctioned by a global monopoly on violent enforcement. All power grows out of the barrel of a gun, and we have all become so delightfully non-violent... The logical conclusion: Oceania, Eurasia and Eastasia locked in perpetual war upon the background of a collapsed ecosystem?

Well, fuck that. Techno-capitalistic nation-states are an early-stage performance optimization. And since violent uprisings lead nowhere, we're doing the sane thing. We're refactoring 'em the fuck out of existence.

If "having a court enforce [a] process" is "simple", how come so many people already have "avoid courts", "distrust lawyers" as rules of thumb, and "don't side with authority" as a general life principle? For the marginalized majority, every state is a failed state, and every system is hostile and oppressive. The thing everyone's getting out of crypto is the same thing they've been getting out of all the other silly pyramid schemes, from Tupperware to contraband. Which is to say, the same things they've been aggressively denied by the state-sanctioned economic mainstream.

Hope. Opportunity. A voice.

A functioning parody of existing economical processes gives people the hope that there's a better economic system right around the corner. Maybe we just have to collectively sort of stumble into it.

Of course, it's only that simple if you have a simplified view of human creativity. But that's OK, too. Every invention that truly revolutionized our way of life was a somewhat accidental result of thousands upon thousands person-hours of organized research. And that's exactly what we're doing here - about as haphazardly as virtually any other kind of software development, but at the same time crowdfunded on a global scale.

Today, we're offering people the same sort of economic "junk food" that the current system has gotten them addicted to for the better part of the 20th century. Tomorrow, someone finally sneaks distributed consensus technology into the mainstream, and makes the world a little less corrupt.

It's beautiful.

thats too simple, its more than that given some people attach varying value to it.

It’s a very expensive, publicly broadcasted and “socially agreed upon” (by everyone who thinks they are worth money) version of calling “dibs”.

Can you give an example of the proprietary entity you're referring to? I was curious so I took a short course that covered minting NFTs with Solidity, and the way it seemed to work is that the JSON strings (which contain the base64 encoded image) are stored (as an ERC-721 token) on the Ethereum blockchain. Eg. you can see a random such token here: https://rinkeby.etherscan.io/token/0x6b96751051cd25c29cdcea7...

The only proprietary entity involved in that process seems to be Alchemy. My understanding of them is a bit vague but they seem to just help with making miners aware of the new contract and getting it distributed. But that's just the contract, once it's deployed it's nothing to do with them and the NFTs AFAIK don't pass through them at all.

Maybe a stupid question, but where do I find the base64 encoded image in your linked token? The only thing I can see is a transaction moving it from one address to another, the contract bytecode (which I guess might encode an image but its definitely not obvious[1]) and the "extra data" hex in the transaction (that doesn't appear to be an encoded image either, from what I can tell).

I'm probably missing something, so if you could let me know where to look, that'd be nice!

[1] I decompiled it here: https://rinkeby.etherscan.io/bytecode-decompiler?a=0x6b96751...

I'm not sure about that either TBH! If you copy the to address (0x22f542cd394fba213df8d1f6c46f454b74e05503) and paste it into testnets.opensea.io then you can see the collection here: https://testnets.opensea.io/0x22f542cd394fba213df8d1f6c46f45...

The contract has no mention of opensea, so they must be reading it from the blockchain somehow - but I guess etherscan doesn't display these tokens in a similar way for some reason. It's all pretty new to me and I definitely don't have a super joined up understanding of it all!

To query the URI of your tokens through your contract, you need to interact with its ABI through code; alternatively, you can upload the ABI to Etherscan, which will provide a UI to query it.

You can use the URI to store base64 encoded image or svg data, and that is super cool; but will be too expensive for larger images, at which point you will link to an IPFS-hosted url.

Ah thankyou! In that course we did write a web frontend that interacts with the contract ABI to mint the NFTs, but we didn’t do the display side. I’m curious how opensea are doing it, because they can display NFTs from my contract without me ever giving them the ABI. Can you go from decompiled contract (like etherscan can generate) -> ABI maybe?

When you are implementing an NFT, you are likely implementing either the ERC 721 or the ERC 1155 interfaces; as such, certain standard functions will be available using a standard ABI call.

So OpenSea will just try to call `tokenURI`; if you have implemented the interface correctly, that will succeed, if not, OpenSea will not show a placeholder image.

You are wrong. The JSON data is metadata and is optional. Also, you’re still not refuting GP’s explanation. If you can understand why people buy baseball cards, you can understand NFTs

No thats confusing one possible technical implementation with the concept, there are other ways to solve that. Thats like saying a Picasso painting is just a specific canvas with som paint on.

I’ll be honest. I’ve only ever dabbled in crypto to buy things off a certain infamous marketplace a few years ago and have avoided them since.

Hearing NFTs described this way really just makes them sound like fairly transparent money laundering.

> There’s a lot of confusion here about why NFTs are valuable if the buyer doesn’t get to own the image copyright.

Mostly because of two persistent lies around NFTs: 1) That you buy a piece of artwork. 2) Blockchain makes it automatically watertight.

All you get is transfer rights of a single number via a blockchain, optionally (usually) with a URI pointing to some media.

Now, why is owning blockchain transfer rights to that number valuable? Because an artist was involved in creating it, and they stated somewhere that the number refers to a specific artwork.

Outside the blockchain, more things have to be trusted for this to hold up:

- The artist in question must be the seller. Sure, you bought it from "banksy44" on nftgox.com, but is that the artist? There are soft ways to verify it, and you can get all sorts of receipts, promises, or statements from semi-official authorities.

- Whatever links the number or the URI to the artwork must remain up. If it's on a regular URL, the host owner gets to decide when to delete it, or when to replace it an ad for their gambling site. If a IPFS resource goes dead, it's gone. If the number referring to the artwork is stored on a 3rd party ledger you rely on them being honest, online, and correct.

AND NOW you have two weaker links in your trust chain, on the level of "humans trusting humans", rendering the blockchain basically useless. The premise is a lie, intentional or not.

I will not disagree that there is confusion and bad arguments on both sides of the debate, which is why you are essentially arguing within the wrong framing.

At the same time, people buying NFTs are generally quite a bit less confused about what you consider "lies" than you seem to think.

Importantly, the blockchain is not useless because they have to exist within the universe's rules of impermanence. You may want to ponder the differences and shared properties between something like seditionart.com, MASS MoCA's ownership of Sol Le Witt wall paintings, and an NFT on a blockchain.

Finally, let me point out that the URI issue is very much a misunderstanding that is widespread within the NFT community as well. It helps to think of the URI as a convenience feature rather than someone implying anything about the value of the token. There are fascinating experiments with tokens that have no url, tokens that have no visual representation, tokens with changing urls, or arbitrary urls; tokens that point to the same url. There are of course tokens that use data uris, and have the image-representation on-chain, or generate it dynamically; or they do so but not in URL form. There are technical implementations where the database of urls is separate from the ledger of tokens; there are early experiments by artists with blockchains (many years before anyone cared about NFTs) where there is no ability to store a URL in the first place.

Cryptopunks, a really early project, simply stored a hash to a file containing the assembled images, and that is all that is needed.

There are various vague touching points of NFTs and real world collectables like baseball cards, but they are not the same. Artificial scarcity is one of them, e.g. there is no reason why there couldn't be a billion baseball cards of the most expensive kind (which would make them stop being the most expensive). Somebody else could create fake ones, but they would have little value for the fact that they are not genuine, which can be verified. You can make the very same arguments for an NFT, including that they are genuine based on who issued them.

But a baseball card, or a Lego set have value on their own. Their collectable value stems from the fact that they are desired as such, and the scarcity makes the price of a certain type go up. Somebody might buy them just to show off or speculate, but another might be a huge Lego nerd and buy the rarest set just to feel joy by looking at it. But an NFT has no value beyond the scarcity. Nobody feels human joy by looking at an NFT beyond being able to show off that they are able to basically burn money in the "i am rich" app type of way. Thus it can only remain a toy for the rich. A van Gogh painting is most likely just a speculation and a show off object, but I might buy a painting from a local artist for $200 because I like it, and to put it on my wall so it makes me happy because it reminds of something nice. I will not buy a $200 NFT just to say I have one too.

Yeah, I follow Peter Mohrbacher who's a surrealist fantasy artist. I've bought some physical prints from him (not even originals or anything, just normal art prints) because I like his art and wanted to have it on my wall and preferred to pay him for a proper print than print a digital copy myself. He also at some point made some NFT sales and I really tried to find a reason to get excited but just couldn't.

I can understand why he was, though, because on his particular platform, artists get a cut of future resale of their art. So he sells a piece for $100, someone later sells it for $200, and he gets a 5% cut (made-up number, I don't remember what exactly it was) for an extra 10 bucks, and so on (but it's still always just a digital token, not a physical piece).

But that doesn't require NFTs to happen. Since it was a proprietary platform, a plain old database could have done the exact same thing.

> e.g. there is no reason why there couldn't be a billion baseball cards of the most expensive kind (which would make them stop being the most expensive)

This is a hilarious contradiction. You are saying there can be a billion baseball cards of the most expensive kind that are at the same time not the most expensive kind.

> People have been speculating on collectibles for thousands of years.

Have they really? IMHO the whole concept of intentionally creating collectibles as a market started (and IMHO became possible) only after strict IP laws that could prevent anyone from making and distributing large quantities of items that should be rare by design.

My favorite example is the fictional collectible card game Gwent in Witcher 3, where the whole concept of rare/scarce cards is ridiculous in the absence of a single organization being able to enforce a monopoly on issuing Gwent cards; the actual expected result should be like ordinary cards, where everyone gets an ace of spades in their deck or chess where both players get a queen, no questions asked; for human-created marketable collectibles (as opposed to actual collections of butterflies or the like) the scarcity can only happen if artificially enforced.

This is one of my main gripes with MtG. It just feel like a scam, a 90s loot boxes situation. I do not want to contribute to the business model, even if the product is solid.

I will probably sell my collection and print some proxies.

Unlike NFTs there is at least a (physical) product.

(And even in the digital version, you have a limited digital item in a verified/trusted (digital) environment, backed/supervised by an entity (company). In crypto you're backed by a concept (an algorithm))

To me this whole crypto stuff seems like a bigger and better incarnation of the tulip mania (https://en.m.wikipedia.org/wiki/Tulip_mania), very little crypto stuff /coins are backed by anything of intrinsic value. In a way it's the ultimate decadence.

MTG is kind the original lootbox, but I guess at least there is a reasonably good game behind it.

I dumped my MTG in the early 2000s, these days I'll only buy into a card game using the LCG/ECG model. It's not necessarily cheaper but it is less scummy.

If we are going to approach the issue through analogies, here's an alternative one: selling an NFT is like the old scam of selling a bill of goods (this is where the victim thinks he has bought a number of tangible things, but the contract actually says that all he has bought is the document listing the goods.)

The big difference with NFTs, of course, is that the true nature of the transaction is not being disguised. That makes it legal and even ethical, but whether that is enough for you to be a buyer is up to you.

If not for the energy costs NFTs would be just like you describe above - a somewhat pointless but harmless hobby for enthusiasts (what good does speculating on baseball cards do in the world? What good does speculating on art do for that matter? As far as I can tell "little to none" for both of these).

Unfortunately that's not the case.

> If not for the energy costs

Feel free to quote this and laugh at me but by this time next year I doubt this will be a topic

The latest updates for anyone interested: https://blog.ethereum.org/2021/09/28/finalized-no-29/

What will come first though, POS or fusion power dominating power generation?

Every estimate so far has been wrong.

this has been "a few months away" or "later this year" for at least two years now

> If not for the energy costs NFTs

NFTs themselves don't have any energy costs. Depending on what network you're using for buying/minting/trading NFTs, there might be energy cost associated with it, but not all NFTs are equal. NFTs based on Proof-of-Stake networks won't have the same energy cost as NFTs based on Proof-of-Work networks.

Unfortunately, it seems that most NFTs are based on the Ethereum platform, which is currently Proof-of-Work. Fortunately, Ethereum is moving to Proof-of-Stake slowly but surely.

But the point still stands, NFTs themselves have no energy costs, only the transactions on the network where they live have that.

There's no energy cost to spawning a million algorithmic penguins. They have no inherent cost or value.

The sunk costs of obtaining something rare or difficult to get (like titanium) is a factor only for the next person who desires titanium.

Since there is no cost to see or copy a jpg, there is no "extra value" added in an NFT. Not even energy costs. The end product still has zero value.

A simple corrolary is wine. Swill stored expensively doesn't acquire new use values from the storage. The expense of storage doesn't accumulate to the value of the NFT. Whereas the expense of obtaining real goods like metals is exactly what sets their value.

When you have a baseball card, the first sale doctrine means that you at least have the legal right to display and transfer that card. With NFTs, even that is not necessarily the case because displaying the content of the NFT is making a copy, and you may not have a license to do that.

If you own an NFT, you have the ability to write someone else’s address on a socially recognized ledger of ownership. That is all that matters. If the NFT and the ledger have wide interest, this ability to transfer ownership has value regardless of any legal subtleties.

None of this needs NFTs or blockchains though.

We already have a concept of ‘ownership’ in the real world.

If an artist wants to sell a digital work to someone they can do so - just write up a contract, sign it, exchange some value, and you’re done. Selling things is a well understood concept. We have a legal framework for it.

If an NFT represents a transferable sellable set of rights, then those rights have to be expressed in a sale agreement of some sort (implied or explicit).

Sure, the blockchain gives you an easy way to handle the ‘transfer of ownership’ portion of a subsequent sale, but items not some radical new form of ownership - it rests on an underlying legal framework that is indistinguishable from selling deeds to acres on the moon or selling numbered prints of an artwork with a certificate of authenticity.

Exactly, you own a ledger entry. Stop saying that is like baseball cards. I can frame and hang a real baseball card on my wall because I own it and it is real. I can hang a digital frame on the wall and point it at your NFT and have the "real" thing even though I don't own it. It is simply a pyramid scheme. Some people will make a lot of money and some will lose a lot. I do see people who are so convinced that NFTs will be around 20 years from putting their entire net worth into NFTs and planning to HODL.

> If you own an NFT, you have the ability to write someone else’s address on a socially recognized ledger of ownership

If that "socially recognized ledger of ownership" ceases to exist, then what?

Either there remains interest and social consensus around this ledger, in which case it can be rebooted on a different network, for example, or even by a centralized party; or maybe you are the only one with an interest in your NFT collection, in which case you can keep a copy of the ledger yourself.

I'm not convinced. Art galleries are easy to launch, even in 500 years time. What you're describing is hard to do.

I can fork a centralized copy of a chain much more easily than I can start a gallery.

Sure you can do that right now. But my point was more: physical objects can be traded easily in the far future.

We can hardly rebuild stuff from source after 20years time, so I'm pretty sure you will not be able to revive long dead blockchains as easy as renting a space to trade physical objects of collectible value.

My point here was more akin to saying: Sure, if no one cares about your NFT, or the chain it is on, then yes, it's worthless. If you want to be the last one to care, keep a copy of the chain.

The physical equivalent is a worthless painting that no one cares about and your grandchildren throw out.

This is a great explanation. I’ve understood NFTs slightly differently, where they are akin to an _autographed_ baseball card. In that case, regardless of how many copies of that card exist in the world, you have a rendition of that card authorized by a special party (the autographer) that causes it to be unique.

Where any number of digital copies of an asset may exist, the NFT is the “autograph” atop that asset that is unique and therefore adds the value.

(It’s worth noting that anyone can autograph any baseball card. So it’s not the autograph that makes it valuable, but _who_ autographed it. It’s the same with who minted the NFT.)

There's another aspect to this analogy - It's like an autographed baseball card + the person / entity autographing the card has declared (by code) that there won't be another one of these autographed series ever (eg - 10k CryptoPunks series).

They're nothing at all like baseball cards. Very few baseball cards are worth anything at all, and the ones that are don't promise to be rare in some hypothetical future. They're cards that were created decades ago and are actually rare and can't possibly be recreated. If you have a rookie Willie Mays in mint condition, it took half a century for that to become valuable, as all but maybe one or two in the world disappeared and you have the only one left. Nobody mints a brand new baseball card right now, pinky swears it will remain the only of its kind forever, and then sells it for millions immediately.

Baseball cards are exactly what they are and baseball cards were historically viewed as worthless until a craze in the 80’s that in turn caused over production and has made them a pretty poor investment.


NFTs are more like paper products in general. Buying a typical NFT is like owning a single sheet from a standard ream of 500 A4 laser printer sheets.

Thank you. That made it click for me. I get it now.

It's still weird to me, but it's weird in the same way other collectibles are weird to me. It's undeniable that they are valuable to others.

This is partly true, but you are missing one important aspect:

While ownership can be enforced equally well with NFTs and baseball cards, the crucial difference is that with physical cards, owners have a unique way of experiencing the card. Anyone can look at an online reproduction of it, but only if you have a physical copy can you hold it in your hand.

This is not the case for NFTs, anyone can experience the image in exactly the same way.

I think your point on scarcity and attention are well put, but can't apply to NFTs in the way as physical commodities because I think there has to be some notion of originality intertwined.

Like for art pieces, sure people can make copies and put the copies on a wall - but only I have the original to hang up my wall. There is value to most people between having a copy vs the actual thing.

There is obviously a massive disconnect with this and NFTs because anyone can save a copy of a NFT (or the image a NFT represents) and not have its value diminished because all the "copies" of the NFT are the same - since "originally" doesn't apply to digital goods.

It doesn't matter if there is some hash on a blockchain out there saying so-and-so "owns an image", I can still copy the image and get the same value. That is not the case with say having a copy of the Mona Lisa vs the actual Mona Lisa.

NFTs are worthless to me for the above reason aside from the value that other people think they have.

The difference with baseball cards is that nobody ever had the option to just "buy the Barry Bonds card" out of the gate.

The value came from the rarity of people all over buying random packs of cards, collecting them, trading them and the established rarity that came from that massive distribution coupled with holding the cards for a decade or more to see how one of these players career played out. On the off chance that you held onto a rare card of a legendary player, then congratulation...you have something of value. More so if you took good care of it.

There's none of that with NFTs. It's akin to handing out flyers on the street and asking somebody to pay for them on the basis that..."Sir, that flyer belongs only to you now. Congratulations!"

NFT's are just digital proof of an old adage.

"A fool and his money are easily parted." - Thomas Tusser # I bought the rights to the quote from an NFT

The difference between baseball cards and NFTs is that if I'm cold I can make a bonfire from baseball cards, whereas I certainly can't do the same with NFTs.

At this point, of you say crypto is involved with some new fad it's just a clear indicator that silicon snake oil is the real product.

The one thing that gets lots in the card analogy is that 99% of cards will get destroyed and the ones that are left will mostly get damaged.

This increases scarcity in a way that just can't happen for NFT's, what would it mean for an NFT to get damaged corners?

It’s thought that something like 20% of BTC are “lost” (1) (ie, private key is lost). This will certainly happen to NFTs as well since people will inevitably fail to back-up their wallets.

1. https://static1.squarespace.com/static/5d580747908cdc0001e67...

NFT's are not like Baseball Cards, they are more like Pet Rocks.

A Baseball Card has some underlying value and fun, kids get baseball cards. They cannot be diluted as 'reprints' would never be accepted as substitutes.

If some people want to trade those things on the margins, fine.

A 'number' i.e. digital signature is not a collectible.

Digital signatures of any creative work are meaningless, nobody will derive satisfaction out of owning them and they'll probably just lose value over time.

It's an obvious money grab populist grift that really doesn't create net value for anyone.

This is the best explanation of what NFTs are. Everything you said is correct.

I personally don't think baseball cards are a good investment either

Ok, let's see if I'm following the discussion right. let's say you buy an NFT for using a GIF of the Techno Viking, from the Viking himself, and Reddit verifies it. Now you are the only person on Reddit that can have a Techno Viking GIF signature, yippee! Except I can make a new NFT of the same GIF and nothing in the NFT itself betrays that it wasn't issued by the real Techno Viking, so it's up to him, Reddit and you to call me out and reach for old school copyright laws to stop me from using it. Which is no different than me uploading a Techno Viking video to YouTube and getting sued by him or flagged by YouTube, is it?

You're both correct and underestimating how broken NFTs are. If you buy an NFT that gives you nothing except bragging rights that you "own" this NFT. What ownership actually means when devoid of the associated rights is anyones guess. Buying an NFT of a GIF doesn't stop anyone from using that GIF on reddit. No one is going around checking if posted GIFs have a matching NFT out there and enforcing property rights based on that.

When you buy an NFT you're not even buying the GIF, you're buying the receipt proving you bought the GIF. What good that is without owning the GIF isn't exactly obvious to me.

Not that I support NFTs much, but conceptually, how is that different than you buying a Marilyn Monroe from Andy Warhol and him printing the exact same Marilyn Monroe and selling it to someone else ? Hopefully in 2021 everyone would agree that the two are distinct artworks, even if the physical object is exactly the same to the human eye ; that's not what matters when buying art.

Having ownership of the physical print is a pretty big differentiator. I guess you could have always bought that same print from someone who created it illegally rather than Warhol himself, but that is where the vague "supporting the artist" reasoning comes in to play.

Since NFTs don't provide that physical object, all that is left is the "supporting the artist" angle. If that is central to NFTs, why is the secondary market such a big aspect of the community? To extend your analogy, that would be like me buying the Warhol print for $10, turning around and selling it for $100, and claiming that $90 in my pocket is supporting Warhol.

Warhol is dead, yet people still value authorized prints much higher than fakes.

Why would "supporting the artist" be relevant at all? Apart from NFTs whose smart contract gives the minter a share of resales, I have never heard anyone say that.

And definitely not in relation to the $90 profit.

The Marilyn Monroes are still limited by the number that Warhol prints, and you have ownership of the print that you bought. Maybe it’s not as valuable as it would be if there was only 1 Monroe print, but you are paying for a physical object made by Warhol.

If I understand correctly, an NFT is like if someone, not necessarily Warhol himself, sold you a note posted on a wall somewhere that said “You own Andy Warhol’s Marilyn Monroe”, without any rights to the underlying work, or any promise that another person might sell another note on another wall that says “Andy Warhol’s Marilyn Monroe”.

Fun Fact: Rodin was one of the first sculptors to take advantage of reproduction, as he employed craftsmen in his workshop that could build you a custom thinker that was 2 inches tall for a paperweight or another full sized thinker statue for your public park. These statues had his special patina added.

When he died, Rodin destroyed the recipes for his patina but the workshop, run out of an old hotel and eventually becoming the Musee Rodin, continued to make "official" copies. Thus there are 25 full-sized thinkers but only 10 or so have the patina, the rest being made after his death.

> special patina

Sounds like standard trade-secrets.

> If I understand correctly

The funny thing about NFTs. The emperor has no clothes. Confusion is evidence of understanding -- there's that little substance. No Fscking Thing.

> a note posted on a wall somewhere that said “You own Andy Warhol’s Marilyn Monroe”

It's basically a pointer. It's not hard to scrounge the sites that track the ETH blockchain, find where a NFT changed hands, and then find the URI for the full res image that anyone can go download. All that's owned is the pointer.

Does the GIF reside on the blockchain or is it hosted on whatever webserver? What if the webserver is shutdown? Now you "own" a pointer to nothing?

It is hosted on some random webserver or on IPFS. If either goes away, it's gone.

Warhol mass-produced his prints using silk-screen, and verifying them as authentic is damn near impossible.

The real ones may be limited, but he made a lot of them (you can really churn out artwork with silkscreening), and it’s hard to know which ones are the real ones.

They are also much cheaper than a lot of NFTs eg a late one for $18k https://www.artsy.net/artwork/andy-warhol-marilyn-announceme...

> If I understand correctly, an NFT is like if someone, not necessarily Warhol himself.

No, the point is that the NFT is from the artist themselves.

It is not. Nothing about an NFT ensures it is from the artist, and not just from someone random scammer.

I mean, yes, but if you buy a painting you have the exact same issue no ?


... you think counterfeits are not a thing ? People spend inordinate amounts of time and money to ensure that the painting the buy is indeed from the painter it is said to come from

Yes, for very expensive paintings, and it takes incredible amounts of effort do it.

You and I, however, will never encounter any of this. It is the most niche of niche issues.

Correct. This is your job to ensure.

So why do you say that is the point?

Because that's the reason people value the NFT. The fact that someone can take a picture of the Mona Lisa and try to sell it as an NFT is not the point; people don't value that NFT, and NFTs are not designed to prevent that from happening.

It is a simple ledger entry that records the ownership of an edition released by an artist, and people choose to value it because of that.

The problem is that anyone can mint an NFT. Verifying that an NFT is actually minted by the artist would likely require some sort of external certification that you can trust. This is done for paintings and other collectibles as well.

What I don’t understand is: Once you have an external certifying authority, why have blockchain based NFTs at all? Couldn’t you save a lot of energy and complexity by tracking purchases in a database?

It is none of those things. It does not record ownership, there is no guarantee it is released by an artist... And people do not really value them either, other than people speculating or scamming.

Yeah, but what else can you do with digital art? Buy the PC it's sitting on and only share it via webcam of the screen?

The same as with any other intellectual property (books, movies, songs): buy the legally enforceable copyright. As in "right" and "copy".

PS: I'm immensely interested in the process of creating a digital image. It's actually pretty tricky and technical, to apply all those filters in right order and with right settings. I would buy a recording of how the digital art was created.

Except the legally enforceable copyright is just that: legally enforceable. The legal system is what creates a financial incentive to own the rights to something as opposed to just copying it in some way that might constitute IP theft.

With NFTs, there is no legal benefit to actually owning the NFT.

Not a recording but a deconstruction of the process of creating a digital image - https://rjp.is/blogging/posts/deconstructing-an-image-2/

I would say it's not different and it's a great analogy that shows how NFTs are ridiculous. It could be even more extreme than your example. The piece of art could be entirely reproductible by anyone and still only some versions would be considered valuable. See the $150,000 banana.


This is exactly why very little art is valuable until the artist is dead, and even those rare artists who can sell while still alive see the value of their work skyrocket when they die. Andy Warhol definitely can't make a copy of anything you own that he created and he has verifiably been unable to since 1987.

If you buy the Marilyn Monroe print then you can legally put it up on your wall at home and other people can see it.

If you buy an NFT (which is just an URL to somewhere that might have a picture today but might be a 404 tomorrow or an ipfs hash if you're lucky) then you can not (in most cases I've seen) legally put that picture that's behind the link in the NFT up on your website and show it to others. Heck, in some countries this doesn't even grant you the right to store that picture itself on your own computer.

(Most) NFT's don't give the owner of the NFT any rights for the linked art itself - you can't copy it, distribute it, present it etc. You can do all of that with the NFT but _not_ the actual art piece.

Of course there's a difference between the original and a print. An NFT is not an original though. At best an NFT comes with an URL to an image you can use to make a print. But guess what? anyone can make that print.

If you buy an NFT you don't buy an original. You buy proof that you bought the original. It's like buying the receipt to the Mona Lisa. Doing so doesn't gain you anything. It doesn't even gain you the original Mona Lisa.

Unless people are ceding the point that NFTs are art in and of themselves I don't see the point. And I hardly see a receipt as a form of art.

As someone pointed out already in the baseball card example. NFTs do not give you copyright over the images. You may buy a baseball card but that doesn’t let you sell or license the image displayed on the baseball card. NFT is exactly the same in that sense. It is purely a collectible not explicit ownership of a likeness.

I think you underestimate how important bragging rights are. That's the reason people purchase Rolex watches! And because you can't show off your Rolex watch in the online world, instead you'll use an NFT as a profil pic.

I think it's hard for people that don't care about bragging rights / status symbols to understand NFTs. Conversely, I think that status symbols are a very important part of the lives of the people that understand and advocate NFTs.

>That's the reason people purchase Rolex watches

But people can just make fake Rolex watches and wear those too! Watches are a scam /s

I understand bragging rights, but it's pretty hard to brag with something noncorporeal. That profile pic? Anyone can use that, whether or not they own the NFT or not. Makes for some pretty poor bragging material if you ask me.

> That profile pic? Anyone can use that, whether or not they own the NFT or not.

Currently yes, but that's a fixable problem.

For instance Twitter could start preventing users from having profile pics that look similar to NFTs that were minted earlier.

Except copyright and trademark laws exist. The Washington Redskins lost their trademark. You can create as many NFTs of their logo as you want. But you cannot stop me from putting that logo on my website.

Showing NFTs on your website will not increase your status, because nobody will know if you paid for them or not.

Showing NFTs on your profile on a website that only accepts verified NFTs (see my previous message for what I mean by that) will increase your status.

You're married.

You don't own him / her, but people still brag about it and it's a frequent rite.

The NFT equivalent of marriage would be getting married, and your spouse continuing to live with their old roommates, date around, keeping a separate bank account, going on other people's family vacations, and starting multiple families other than yours.

If that's how marriage worked, people wouldn't get married either.

Anybody can own and share the media file (one of the great things about crypto art is that we can all access and view it), but only one wallet owns the token that links back to the original creator’s signature.

To use a print analogue: a print of a photographer’s work likely holds no significant value* unless that artifact is provably signed (or otherwise approved) by the artist. To take it a step further; a convincing photocopy with a fraudulent signature will also hold no value, once it’s determined to not have come from the original creator.

* Here “value” refers to cultural and artistic significance in how it is perceived by an art market. Of course a poor photocopy of a Mona Lisa holds cultural value because of what it signifies, but a museum isn’t about to acquire that artifact from you.

I didn't see this answer and wanted to submit it. So, in order for this NFT to have any authenticity, it has to be made under some sort of "technoviking" name right? Ultimately, this technoviking guy is probably reputed and if someone found his content through NFTs, would probably let him know. You can argue that the chain can't regulate itself, but as it stands it does -- just by virtue of there being one large platform (opensea). I'm not sure that Technoviking could easily get his content pulled from the chain, but it can be delisted entirely from opensea, and probably rigged up so future items of his would be caught and shadowbanned immediately.

Is this a solution that works long term? I'm not sure about that. It's a hard question to answer, but I'm glad someone's going for it. I would personally expect ycombinator to be more open to these kinds of ideas -- Programmatic solutions are something we can all get behind. It's a hard problem to solve but that's what drives a lot of our passion in this field, correct?

Basically yes, you'd be right. Someone has to call him out. But do you expect an automated system to handle that in a fair and ordered manner? We already have a terrible (user-wise) implementation of that -- DMCA. What's important is ascribing ownership for the long-term, even if we have to do it manually and surprise -- that's what NFTs (could) do.

I could be wrong but from what I've seen, I think DAOs could bridge that gap. These 'headless' communities create that manual self-regulation that is needed -- social verification fueled by some sort of financial incentive, driven through a very public system.

This touches upon the main issue with NFTs and tokens in general, that they always have to rely on a centralised authority to connect them to the real world, and except when it comes to derivatives on crypto assets, that real world connection is crucial.

> nothing in the NFT itself betrays that it wasn't issued by the real Techno Viking

This part is incorrect. Every token is signed can be verified against the content creator's public key. You can absolutely verify a "genuine" NFT.

So, are artists suddenly getting in on pgp key-signing parties to establish a web of trust, or is the public key of the artist really just a key claiming to be that of the artist? What is to stop me from buying "bank.se", "banksy.me" and "banksy.io," and actioning off three different NFTs (of three different digital representations of the same street art) to different online art communities? What is to stop someone who MITM's the artist's webpage from selling NFTs on their behalf?

> What is to stop someone who MITM's the artist's webpage from selling NFTs on their behalf?

I guess anti-fraud laws… Also, to my disappointment, someone already got banksy.io :D

You have to first know which public key is genuine.

Well blockchains aren't trying to solve the digital identity problem. Artists can share their public key however they like.

Then its left as an exercise for the user to actually verify the authenticity.

Sure, but if Warhol had each of his prints signed with an unforgeable signature akin to a private key, while we still have to know what is private key was, the Warhol Authentication Board wouldn't have been in the mess that it was in.

>Well blockchains aren't trying to solve the digital identity problem

They are! BrightID and Proof of Humanity are two of the leading projects working on decentralized identity. It's a pretty exciting space!

https://www.brightid.org/ https://www.proofofhumanity.id/

It seems like the digital identity problem is fundamental to actually do what NFTs claim to do, though.

No, you need to think about what you’re buying as a unique address and tokenID pair. The same way someone can recreate a hackernews at a different URL, most people here are going to continue to see https://news.ycombinator.com/ as th real one

It is more like buying a signed baseball card. And with NFTs being digital tokens they can't be forged or duplicated, and the original creator can't stop you from transferring to someone else, and they can be transferred to someone else relatively securely if you have the private key and pay the gas.

Anyone else could print and sign a baseball card, mint an almost identical NFT. But if they come from someone besides the techno viking they won't be worth anything, because anyone could do the same thing. But the techno viking can certainly sell more to others just like a baseball player can sign a lot of cards.

Your NFT’s trade provenance will reveal it was never owned by Technoviking’s key. He won’t need to use copyright law, you simply can’t impersonate him so no one will value your duplicate NFT.

I might be mistaken but I don't think >99% of people who have bought an NFT have verified that the key used to generate the token does in fact belong to the artist that created the piece that's (currently) behind the link that's in the token.

They don't have to, generally speaking. OpenSea does that for them, and issues a blue checkmark to items belonging to the collection of the verified key.

All of this gushing hype for the future of artistry is transparently performative. Nobody in this tech cares about art or artists, any of the useful functions of NFTs have long been possible and many orders of magnitude less expensive using public key cryptography or digital signatures.

Eh I have spent ~100 on smaller stuff on hicetnunc. The majority has been on art made by people that I know, and I've really enjoyed the new artists that I've found.

I'm uninterested in the NFTs with big price tags, and I'm uninterested in pieces that I don't subjectively enjoy the art of.

I care, but I'm guessing you either didn't literally mean nobody cares, or you are going to brush off this counter example for whatever reason.

What's to stop someone from finding a random artist on instagram that produces amazing work and selling it as their own on a website like that?

If the community cares they'll try and find out people that do that and blacklist them. hicetnunc does that, it's the only one I could speak to.

That's generally referred to as copy-minting.

EDIT: here's the hicetnunc community write up for basic steps to minimize the change you buy a copy-mint: https://github.com/hicetnunc2000/hicetnunc/wiki/Beware-copym...!

This is a lot of words to say "there is by design no way to do that".

DeFi systems are all designed around the unspoken (although sometimes spoken, honestly) assumption that rules are bad and that the system should make enforcing them difficult-to-impossible. A fun exercise is to consider, if all businesses went to using *coin overnight and one accidentally overcharged your wallet, how would you get your coins back?

> and one accidentally overcharged your wallet, how would you get your coins back?

Wallets are not “charged” like credit cards. I fail to see how this is possible.

You do realize that replicas are a problem in the real world art world as well right?

In real world art this is resolved by proving providence, in crypto providence from minting is trivial, but you still need to prove providence that the minting was honest.

None of which in any way responds to what I said. NFTs, by design, have no fraud prevention mechanism and no mechanism for getting your money back if you were scammed. They allow for arbitrarily many tokens to be minted of the same thing, with no obvious mechanism for people to realize that's what's happening.

Smart contracts can and do limit the amount which can be minted. And fraud exists everywhere, regardless of institutional controls - this is where community matters.

But you can just make a new smart contract that does the same thing, no? Smart contracts themselves can just be copied.

And saying that the "community" will take care of the fraud issue - isn't this a step backwards?

Sure, but it has a different address...there is no possibility of confusion. Something from the 1950s is not going to be confused with something from the 1980s, especially with a blockchain timestamp.

Funny how community came up in the article as one of the ways NFT is really just MLM...

Community comes up in every facet of life...what's your point here?

In the real art world replicas are... well replicas. Regardless of how good they are, they're not exactly the same, a trained eye can tell them apart.

That's not the case when making a copy of the file. You get a perfect one-to-one replica that nobody can tell apart in any way.

On the other hand, it's trivial to show that an NFT is authentic and not a replica. The difficult part, as always with cryptography, is linking a public key to a know identity.

If you have a trusted channel from the artist (e.g. their twitter feed) it's trivial for them to indicate that a given public key/wallet address is theirs and therefore anything minted on there is authentic and anything minted elsewhere is not.

Determining if a real world piece of art is a replica or authentic can be fairly expensive. Determining if an NFT is authentic is much much cheaper.

I think you are confusing providence for provenance here

Ah yeah edited, thanks!

EDIT: oh the window has passed.

Like anything in life, the value and integrity of something is maintained by the community who uses it, a platform is just a tool for people to use.

I don't think that's an example of something unenforceable, though. So long as you still have courts and bailiffs, they can basically just force someone to make a transfer by threatening or employing violence.

I can see exactly how much I'm being charged when making a tx and I can ask them for a refund the way I would if they overcharge my card..

And when they decide that you were charged correctly and tell you to pound sand? Or when you can't contact them because they closed your account but are still charging you? Sometimes, businesses aren't nice or reasonable.

I'm now genuinely curious, have you never heard of a credit card chargeback? What about a stop payment order for a check?

>And when they decide that you were charged correctly and tell you to pound sand? Or when you can't contact them because they closed your account but are still charging you?

Same as when they won't refund my card I take the loss.

>I'm now genuinely curious, have you never heard of a credit card chargeback?

Last 2 times I tried it (debit card refund) it didn't work and I got no money back. The majority of cases it's the business that issues my refund.

At any rate there's nothing stopping you from having a refund functionality or escrow built into a dapp if that's what users want.

As far as I can see that is the valuable part of the work. But blockchains doesn't help with it at all.

So since it all works by the honour system anyway, why would you need a blockchain? You could just store everything in a regular database.

If they weren't on the blockchain they would just be jpgs. Nobody would pay 100 k for a jpeg of an ape.

I'm an amateur generative artist who just started minting on hic et nunc a month ago. I'm extremely sceptical and even disgusted by the big money NFTs, but minting and collecting on H=N has been a lot of fun, there is a very nice community as well.

Selling my art for ~real money for the first time has been such a motivating experience, even knowing that we are in a strong mania phase now. So I can say that I care too!

One thing to note is that hic et nunc is ran by one guy who doesn't really like to communicate and doesn't believe in paying for stuff like devops work, so I'm not sure if this will be the one site to survive on tezos. The community will eventually decide over time.

Oh some of your stuff is quite nice! If there were still maze pieces for ~3 tez I'd pick one up.

I've really been enjoying the community around hic et nunc. Hopefully if the site collapses the community will mostly stay around, it's been such a breath of fresh air compared to most of the NFT activity on ETH.

Interesting - what is it that makes you care? (Possibly related question: why didn't you just donate ~100 to the artists you found and enjoyed?)

There's a couple things:

I like the fact that it's normal to include royalties on secondary sales, I think that it much better for the artist.

I generally like generative art and there's really been a huge explosion in generative art being produced.

I already followed some of the artists that have minted and was excited to more fully participate by buying some of their NFTs

I don't find NFT ownership that different than high end physical art ownership (high end enough that you simply don't display it, but display a replica instead)

Lastly for the friends I have bought from, donating money and buying something are very different social interactions. IMO donating money creates an implicit power imbalance, there's a connitation of being owed something in return. Instead I am buying something from them, that is a market based interaction & while it has good feelings associated there is no power/reciprocity imbalance there. They aren't doing this for their full time job, just a fun hobby.

Thanks for sharing - I didn't know about the royalties, if that works then that's sensible. I'm afraid I don't quite understand why NFTs would be necessary for the rest though, other than just being a contingent catalyst stimulating the creation of generative art. If it's purely the fact that you're buying something from them, them sending you an autograph, or a video in which they say "thanks X6S1x6Okd1st for buying this video" seem to have the same effect (though with the "downside" of you not being able to resell it to make money off it yourself).

Another property of NFTs I enjoy is that being an early supporter of an artist can yield you sharing in their future success.

Is that not only if you sell the NFT to someone else again, presumably because the artist has become successful? Do you have any insights into why that person would buy it from you - it seems the attractions you listed would no longer apply to them?

The guy who came up with the idea and has been paying me for the last few months to build our NFT auction site is a musician trained at the New England Conservatory, working doing performances in a band and as a music teacher, paying out of his savings, and he definitely cares about artists since he is one. Also these systems do use public/private keypairs and signatures (Algorand). https://gifeconomy.com

Being an artist doesn't mean you care about other artists. There are a looooot of selfish people out there and they'll often use the trappings of helping people to claw their way skyward.

If you think this is about tech, I have bad news for you about art dealers.

Hasn’t Banksy setup a whole pipeline to do just that?

He also created a painting that, upon being sold immediately shredded itself. They pulled the plug halfway through, though. https://www.youtube.com/watch?v=eXKE0nAMmg4

Did they pull the plug? I was under the impression that it was done halfway on purpose.

It apparently malfunctioned. He posted a video on Instagram of it a few days later of practice run that fully shredded it with a caption saying something like "worked in rehearsal"

It’s interesting how the malfunction itself created a very unique work of art depicting a moment suspended in time.

The work is actually back at auction now, with a significantly higher estimate than its original sale price.


How can the battery last so long?

> any of the useful functions of NFTs have long been possible and many orders of magnitude less expensive using public key cryptography or digital signatures.

A major useful function being the ability to buy and sell with purely digital money, was that possible before?

Yes? Even if you're exclusively referring to cryptocurrency when you say "purely digital money", it was already possible before the popularity of NFTs to accept cryptocurrency as payment for anything.

I'm saying you still needed https://eips.ethereum.org/EIPS/eip-721 to appear on the scene to facilitate NFTs, that implementation isn't as omnipresent as the possibility of buying anything with crypto.

But you don’t need NFTs to sell a digitally signed copy of a picture for say Bitcoin.

A cryptographically signed picture may tell you its from a certain artists, but it cannot enforce uniqueness.

There are only two options - tokens, and ledgers. Despite the name, there is no such thing as a digital token, because digital objects cannot move, they only copy.

So you need a ledger, so basically something like a blockchain, to keep track of copies.


But a ledger doesn’t prevent copies of the art or duplicate tokens it just enforces uniqueness of the singular token. So you’re still left with the uniqueness problem. Essentially trying to create scarcity where there is none is a spectacularly silly idea.

1. I am artist X 2. I have an Ethereum wallet and even own the ENS name X.eth 3. I mint an NFT that represents ownership of one of my digital works

That NFT cannot be duplicated, because the Ethereum network enforces unique IDs for each ERC 721 token and prevents the double spend problem. What's more, I can look at the NFT and determined that it was indeed minted by artist X because it was his address that created it.

The artist can later mint duplicate NFTs but everyone will still know which NFT came first.

What's "major" useful for doing it with pure digital money?

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