This week I learned it's not.
NFT are Non Fungible Tokens, which means tokens that can't be divided, unlike crypto currencies like Bitcoin that can be divided in Satoshis. So you exchange the totality of it, or not. Basically it's a unique number in the blockchain you change ownership by applying cryptographic signatures during a transaction. Most of the time it's an ethereum smart contract address + a token id.
But wait, where are the pics ? The gifs ? The videos ?
I mean, opensea.io does allow you to mint (the term for magically turning a media into an official NFT backed by the blockchain) up to 100MB of content.
So where is it? Not in the blockchain, obviously, it's already fat enough with tiny transaction data.
Well, it's just stored in the centralized platforms like opensea, rarible, etc.
Basically, the NFT is not even that piece of art, baseball card or whatever, it's just the number linked to the proprietary, centralized, privately own trading platform that hosts the content.
The platform disappears, or bans you, or changes policy, or is blocked, or whatever, and your NFT is back to being a bare-bone blockchain contract number and a token id.
It's even more bullshit that I though! You don't even have control on whatever you make believe to virtually own. It's madness.
But you know what, the week I spent in this weird universe was also so much fun. There is an atmosphere of creative WTF, a mix of scams, community bonding, money laundering and genuine experimentation all bathed in some frenetic craziness that reminds me of the early days of the internet.
Despite all that crap, I kinda like it.
An example: If I trade oil, one barrel of oil with a certain spec 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).
 The spec for oil types standardises particular grades and then people trade a standard barrel size (called a bbl which is short for "blue barrel" because they used to be painted blue). "Brent" and "WTI" are different grades. A barrel of brent is fungible with another barrel of brent but not with a barrel of WTI because that's a different grade.
And in the case of ERC-1155 semi-fungible tokens (SFTs), you can substitute them for others of the same type but they still each can't be divided. They're whole, irreducible units.
For both NFTs and SFTs, I think the non-divisibility is an important component to understanding what they are. There's no "smaller denomination" of each asset in the way that Ethereum can be divided arbitrarily until you reach the minimum "wei" unit.
You're right that non-divisibility isn't a sufficient condition to be non-fungible (as with SFTs), but the way I interpreted your first sentence made it seem like it was an orthogonal condition rather than a necessary and central one. (At least for cryptocurrency assets.)
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.
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.
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.
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?
> 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?
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.
“Here’s a receipt for the Mona Lisa that says that you own this receipt of the Mona Lisa”.
"You have a receipt for it, what's the problem?"
For those of us old enough to have grown up with the idea of ‘buying a book’, ‘buying a toy’, ‘buying a CD’ or ‘buying a magazine’ we have a particular mental framework for ‘owning’ stuff.
But people stopped buying those things a while ago (people stopped buying toys? Not completely, but certainly some of that spend now goes on apps right?).
So for people who have grown up in a digital-subscription world, they might just have a fundamentally different mental model of ownership - one which is more compatible with NFTs as a reasonable idea than the paradigm us old ‘thing owners’ have.
Like, consider some of the things you likely have bought recently: a ‘twelve month Netflix subscription’, a ‘Steam library game’, an ‘app’… you bought those things with no expectation you could resell them later because you don’t think of those as ‘things’. And because you haven’t yet adjusted your mental model to the reality that this is what you spend your wealth on now - ephemeral digital rights you won’t be able to pass on to your kids when you’re gone.
But if you grew up digital native and the only things you’ve ever been able to buy are non transferable digital pointers to rights to use something, maybe the idea of a transferable digital rights pointer seems like a crazy innovative new idea that changes everything?
The only thing buying one of these NFTs gives you is I guess "bragging rights" but I think it remains to be seen why anyone should care that you paid money for 0x3B3ee1931Dc30C1957379FAc9aba94D1C48a5405,25046.
 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.
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.
With all this fancy software and energy spent on mining, what then is the point of all that effort?
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:  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.
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).
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
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.
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”.
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.
That model of NFT is very much on the MLM end of the scale.
I've only ever seen two kinds of interest expressed in NFTs.
The first is immensely wealthy people who are looking for a trendy way to flaunt their wealth, because they've exhausted all traditional options. This is what leads someone to pay $3M to "own" the first tweet.
The second is people who aren't immensely wealthy but are hoping they will become so by buying/minting an NFT and selling it for an huge profit, presumably to someone from the first group (or a sucker from the second). This makes up the majority of NFTs by volume, and is where the pyramid scheme similarities become hard to dismiss.
Haven't seen anything resembling a third kind of interest that, under scrutiny, doesn't ultimately fall into one of these two groups.
> consider some of the things you likely have bought recently: a ‘twelve month Netflix subscription’, a ‘Steam library game’, an ‘app’… you bought those things with no expectation you could resell them later because you don’t think of those as ‘things’
Yes and no. The subscription is very much "a thing". Think of this like a mental jump you've made when you understood functions as first-class values - code that your program can grab and pass around. I may not be able to sell the underlying media library to which I'm granted access, but I can very much sell the access itself. Or borrow it to a friend. Or charge money for it. People are, 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.
 - Or were, last time I checked, which was some 2-3 years ago.
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
So, far from representing the move away from ownership, they are a distillation of the ownership concept.
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.
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.
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.
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 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.
Also, the art is the token. Data storage is a orthogonal problem entirely.
The art is people believing they own more than that.
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?
Buyer beware, I guess
Then the next tier up would store their media on IPFS, if you purchase the NFT you're expected to be responsible for pinning that IPFS content somewhere. That's not communicated too well though. The benefit there is if the original minter stops paying for IPFS hosting but you still have yours pinned, it's still available. I think most of the "Mint as a service" platforms will use IPFS by default.
Then there are projects that are storing the images entirely on chain. These are obviously more costly to create but don't require another service/protocol/platform.
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.
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.
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.
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.
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?
While you are right that the NFT is just an entry to the blockchain with a URI to the actual media file, the file is NOT stored on a centralized platform.
While it is possible to use a regular server to store the media file, it is certainly very bad practice and defeats the whole point of NFTs.
The media files are stored on IPFS, which is a decentralized peer-to-peer storage network. This ensures that the media file that a NFT represents, will always be available, since it is hosted by many people on the network.
I’m pretty sure this is incorrect. IPFS is not permanent storage unless you host the content yourself or pay a pining service to host it. It may be cached on many computers but those caches are finite and get cleared.
Persistence | IPFS Docs
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.
Where are you going to immerse yourself into this universe and seeing the community and experimentation? I don't know where I'd even start with that.
I wouldn't know where to begin, because I just got dunked into it a few days ago when one my friends asked my help to code a platform to create vanity user pages. I had nothing to do, it came to me :)
I know where to go to find good information about crypto, but not NFTs.
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.
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 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.
To be fair, the real-life art auction world is basically all money laundering, too.
Could be hilarious if you ask someone to remove it from their site. You own 1% of it? Which pixels do you want recolored? :D
If you buy a Barry Bonds baseball card for $1,000, you don’t own the artistic rights to the image on the card. All you own is the card itself, which has negligible manufacturing cost. It would be trivial for any card company to produce a million functionally equivalent Barry Bonds cards.
When you buy a Barry Bonds baseball card, you hope that the card company won’t dump a million more on the market. You also hope that if another baseball card company springs up and prints their own Barry Bonds cards, people won’t be as interested in that brand of cards. Attention and scarcity drive value; the nuance is that other speculators must care about scarcity along the same dimension that you possess it (in this case: the brand of the baseball card company and the year the card was made). There are a hundred tokens functionally equivalent to Bitcoin, but none approach Bitcoin’s value - purely because Bitcoin sustains more consumer and media attention. This position is fairly stable because attention has strong positive feedback loops.
There has always been interest in speculative collectibles. A purely digital collectible solves a lot of practical problems related to exchange: you don’t have to wait a week to receive the item in the mail, you don’t have to worry about its condition because it does not degrade with time or use, there is minimal counterparty risk due to online escrow contracts, and counterfeits are harder to fake (along the relevant dimension of scarcity, which is the origin address).
People have been speculating on collectibles for thousands of years. Crypto just makes it easier to trade them back and forth.
NFTs are a JSON string on a proprietary entity that point to the image of a baseball card. The image can be viewed by everyone. The bragging rights of owning a JSON string depend heavily on whether or not the proprietary entity will become the dominant player in the I own a JSON string-world.
This also has zero to do with blockchains. The proprietary entity could've used any database they wanted.
It's all a ridiculous scam, but have fun trading JSON strings.
Whether the data representation is a piece of cardboard or a JSON string replicated on 10,000 Ethereum nodes or a tulip or a Venmo balance is arbitrary; it just matters whether a lot of humans are looking at the same thing. And for the time being, a lot of humans are looking at crypto ledgers!
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?
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.
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.
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.
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).
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.
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.
Beyond that though, keys get lost so NFTs do have a mechanism of leaving circulation.
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.
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.
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.
And that's only one of the more notable nft projects.
lowest price available $386k(!)
or more detail on artblocks:
average price $39k
90th percentile = $168k
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?
That is definitely part of it. We are physical beings, you can't pretend like physical existence is irrelevant.
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.
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.
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.
Is that so? I just tipped bitcoin to a twitter account I enjoy (using lightning network). Keep lying to yourself..
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.
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.
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.
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.
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.
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.
I'm probably missing something, so if you could let me know where to look, that'd be nice!
 I decompiled it here: https://rinkeby.etherscan.io/bytecode-decompiler?a=0x6b96751...
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!
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.
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.
Hearing NFTs described this way really just makes them sound like fairly transparent money laundering.
Mostly because of two persistent lies around NFTs: 1) That you buy a piece of artwork. 2) Blockchain makes it automatically watertight.
All you get is transfer rights of a single number via a blockchain, optionally (usually) with a URI pointing to some media.
Now, why is owning blockchain transfer rights to that number valuable? Because an artist was involved in creating it, and they stated somewhere that the number refers to a specific artwork.
Outside the blockchain, more things have to be trusted for this to hold up:
- The artist in question must be the seller. Sure, you bought it from "banksy44" on nftgox.com, but is that the artist? There are soft ways to verify it, and you can get all sorts of receipts, promises, or statements from semi-official authorities.
- Whatever links the number or the URI to the artwork must remain up. If it's on a regular URL, the host owner gets to decide when to delete it, or when to replace it an ad for their gambling site. If a IPFS resource goes dead, it's gone. If the number referring to the artwork is stored on a 3rd party ledger you rely on them being honest, online, and correct.
AND NOW you have two weaker links in your trust chain, on the level of "humans trusting humans", rendering the blockchain basically useless. The premise is a lie, intentional or not.
At the same time, people buying NFTs are generally quite a bit less confused about what you consider "lies" than you seem to think.
Importantly, the blockchain is not useless because they have to exist within the universe's rules of impermanence. You may want to ponder the differences and shared properties between something like seditionart.com, MASS MoCA's ownership of Sol Le Witt wall paintings, and an NFT on a blockchain.
Finally, let me point out that the URI issue is very much a misunderstanding that is widespread within the NFT community as well. It helps to think of the URI as a convenience feature rather than someone implying anything about the value of the token. There are fascinating experiments with tokens that have no url, tokens that have no visual representation, tokens with changing urls, or arbitrary urls; tokens that point to the same url. There are of course tokens that use data uris, and have the image-representation on-chain, or generate it dynamically; or they do so but not in URL form. There are technical implementations where the database of urls is separate from the ledger of tokens; there are early experiments by artists with blockchains (many years before anyone cared about NFTs) where there is no ability to store a URL in the first place.
Cryptopunks, a really early project, simply stored a hash to a file containing the assembled images, and that is all that is needed.
But a baseball card, or a Lego set have value on their own. Their collectable value stems from the fact that they are desired as such, and the scarcity makes the price of a certain type go up. Somebody might buy them just to show off or speculate, but another might be a huge Lego nerd and buy the rarest set just to feel joy by looking at it. But an NFT has no value beyond the scarcity. Nobody feels human joy by looking at an NFT beyond being able to show off that they are able to basically burn money in the "i am rich" app type of way. Thus it can only remain a toy for the rich. A van Gogh painting is most likely just a speculation and a show off object, but I might buy a painting from a local artist for $200 because I like it, and to put it on my wall so it makes me happy because it reminds of something nice. I will not buy a $200 NFT just to say I have one too.
I can understand why he was, though, because on his particular platform, artists get a cut of future resale of their art. So he sells a piece for $100, someone later sells it for $200, and he gets a 5% cut (made-up number, I don't remember what exactly it was) for an extra 10 bucks, and so on (but it's still always just a digital token, not a physical piece).
But that doesn't require NFTs to happen. Since it was a proprietary platform, a plain old database could have done the exact same thing.
This is a hilarious contradiction. You are saying there can be a billion baseball cards of the most expensive kind that are at the same time not the most expensive kind.
Have they really? IMHO the whole concept of intentionally creating collectibles as a market started (and IMHO became possible) only after strict IP laws that could prevent anyone from making and distributing large quantities of items that should be rare by design.
My favorite example is the fictional collectible card game Gwent in Witcher 3, where the whole concept of rare/scarce cards is ridiculous in the absence of a single organization being able to enforce a monopoly on issuing Gwent cards; the actual expected result should be like ordinary cards, where everyone gets an ace of spades in their deck or chess where both players get a queen, no questions asked; for human-created marketable collectibles (as opposed to actual collections of butterflies or the like) the scarcity can only happen if artificially enforced.
I will probably sell my collection and print some proxies.
(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.
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.
The big difference with NFTs, of course, is that the true nature of the transaction is not being disguised. That makes it legal and even ethical, but whether that is enough for you to be a buyer is up to you.
Unfortunately that's not the case.
Feel free to quote this and laugh at me but by this time next year I doubt this will be a topic
The latest updates for anyone interested:
Every estimate so far has been wrong.
NFTs themselves don't have any energy costs. Depending on what network you're using for buying/minting/trading NFTs, there might be energy cost associated with it, but not all NFTs are equal. NFTs based on Proof-of-Stake networks won't have the same energy cost as NFTs based on Proof-of-Work networks.
Unfortunately, it seems that most NFTs are based on the Ethereum platform, which is currently Proof-of-Work. Fortunately, Ethereum is moving to Proof-of-Stake slowly but surely.
But the point still stands, NFTs themselves have no energy costs, only the transactions on the network where they live have that.
The sunk costs of obtaining something rare or difficult to get (like titanium) is a factor only for the next person who desires titanium.
Since there is no cost to see or copy a jpg, there is no "extra value" added in an NFT. Not even energy costs. The end product still has zero value.
A simple corrolary is wine. Swill stored expensively doesn't acquire new use values from the storage. The expense of storage doesn't accumulate to the value of the NFT. Whereas the expense of obtaining real goods like metals is exactly what sets their value.
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.
If that "socially recognized ledger of ownership" ceases to exist, then what?
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.
The physical equivalent is a worthless painting that no one cares about and your grandchildren throw out.
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.)
It's still weird to me, but it's weird in the same way other collectibles are weird to me. It's undeniable that they are valuable to others.
While ownership can be enforced equally well with NFTs and baseball cards, the crucial difference is that with physical cards, owners have a unique way of experiencing the card. Anyone can look at an online reproduction of it, but only if you have a physical copy can you hold it in your hand.
This is not the case for NFTs, anyone can experience the image in exactly the same way.
Like for art pieces, sure people can make copies and put the copies on a wall - but only I have the original to hang up my wall. There is value to most people between having a copy vs the actual thing.
There is obviously a massive disconnect with this and NFTs because anyone can save a copy of a NFT (or the image a NFT represents) and not have its value diminished because all the "copies" of the NFT are the same - since "originally" doesn't apply to digital goods.
It doesn't matter if there is some hash on a blockchain out there saying so-and-so "owns an image", I can still copy the image and get the same value. That is not the case with say having a copy of the Mona Lisa vs the actual Mona Lisa.
NFTs are worthless to me for the above reason aside from the value that other people think they have.
The value came from the rarity of people all over buying random packs of cards, collecting them, trading them and the established rarity that came from that massive distribution coupled with holding the cards for a decade or more to see how one of these players career played out. On the off chance that you held onto a rare card of a legendary player, then congratulation...you have something of value. More so if you took good care of it.
There's none of that with NFTs. It's akin to handing out flyers on the street and asking somebody to pay for them on the basis that..."Sir, that flyer belongs only to you now. Congratulations!"
NFT's are just digital proof of an old adage.
"A fool and his money are easily parted." - Thomas Tusser
# I bought the rights to the quote from an NFT
At this point, of you say crypto is involved with some new fad it's just a clear indicator that silicon snake oil is the real product.
This increases scarcity in a way that just can't happen for NFT's, what would it mean for an NFT to get damaged corners?
A Baseball Card has some underlying value and fun, kids get baseball cards. They cannot be diluted as 'reprints' would never be accepted as substitutes.
If some people want to trade those things on the margins, fine.
A 'number' i.e. digital signature is not a collectible.
Digital signatures of any creative work are meaningless, nobody will derive satisfaction out of owning them and they'll probably just lose value over time.
It's an obvious money grab populist grift that really doesn't create net value for anyone.
When you buy an NFT you're not even buying the GIF, you're buying the receipt proving you bought the GIF. What good that is without owning the GIF isn't exactly obvious to me.
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.
And definitely not in relation to the $90 profit.
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”.
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.
Sounds like standard trade-secrets.
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.
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.
No, the point is that the NFT is from the artist themselves.
You and I, however, will never encounter any of this. It is the most niche of niche issues.
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.
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?
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.
With NFTs, there is no legal benefit to actually owning the NFT.
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.
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.
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.
But people can just make fake Rolex watches and wear those too! Watches are a scam /s
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.
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 don't own him / her, but people still brag about it and it's a frequent rite.
If that's how marriage worked, people wouldn't get married either.
To use a print analogue: a print of a photographer’s work likely holds no significant value* unless that artifact is provably signed (or otherwise approved) by the artist. To take it a step further; a convincing photocopy with a fraudulent signature will also hold no value, once it’s determined to not have come from the original creator.
* Here “value” refers to cultural and artistic significance in how it is perceived by an art market. Of course a poor photocopy of a Mona Lisa holds cultural value because of what it signifies, but a museum isn’t about to acquire that artifact from you.
Is this a solution that works long term? I'm not sure about that. It's a hard question to answer, but I'm glad someone's going for it. I would personally expect ycombinator to be more open to these kinds of ideas -- Programmatic solutions are something we can all get behind. It's a hard problem to solve but that's what drives a lot of our passion in this field, correct?
Basically yes, you'd be right. Someone has to call him out. But do you expect an automated system to handle that in a fair and ordered manner? We already have a terrible (user-wise) implementation of that -- DMCA. What's important is ascribing ownership for the long-term, even if we have to do it manually and surprise -- that's what NFTs (could) do.
I could be wrong but from what I've seen, I think DAOs could bridge that gap. These 'headless' communities create that manual self-regulation that is needed -- social verification fueled by some sort of financial incentive, driven through a very public system.
This part is incorrect. Every token is signed can be verified against the content creator's public key. You can absolutely verify a "genuine" NFT.
I guess anti-fraud laws… Also, to my disappointment, someone already got banksy.io :D
They are! BrightID and Proof of Humanity are two of the leading projects working on decentralized identity. It's a pretty exciting space!
Anyone else could print and sign a baseball card, mint an almost identical NFT. But if they come from someone besides the techno viking they won't be worth anything, because anyone could do the same thing. But the techno viking can certainly sell more to others just like a baseball player can sign a lot of cards.
I'm uninterested in the NFTs with big price tags, and I'm uninterested in pieces that I don't subjectively enjoy the art of.
I care, but I'm guessing you either didn't literally mean nobody cares, or you are going to brush off this counter example for whatever reason.
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...!
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?
Wallets are not “charged” like credit cards. I fail to see how this is possible.
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.
And saying that the "community" will take care of the fraud issue - isn't this a step backwards?
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.
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.
EDIT: oh the window has passed.
I'm now genuinely curious, have you never heard of a credit card chargeback? What about a stop payment order for a check?
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.
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.
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.
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.
A major useful function being the ability to buy and sell with purely digital money, was that possible before?
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.
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.