If you look at the art, it's all just derivative permutation based animal nonsense, self referential crypto memes, or stolen intellectual property. There's nothing of value there.
If you look at the "smart contracts", you find that the majority of NFTs are just links to urls hosted on a server somewhere else. So what you are actually buying is akin to a pamphlet advertising where the Louvre is, when what you thought you've bought was the Mona Lisa. The content behind the URL can change at a moment's notice. Want to put the full content on the blockchain or even a hash of the content? Look at the gas fees for ethereum and tell me it's worth it.
I subscribe to the theory that this is a money laundering scheme. Create a crypto with "art rules" for the value of every asset and now you've got things whose valuation is completely arbitrary and, oh look, some anonymous wallet wants to give me 2 million dollars for the blinking led asset! Yes, IRS, I got my money from this art auction!
Anyone falling for a "legitimate" reason these things exist is a fool.
I'm saying that NFTs are the worst aspects of the art industry in a form that can be exploited by single individuals without producing a physical item. In short, they allow for ultrafast laundering because you don't have to go to art auctions, or generate paper trails, or whatever. Hell, you don't even need valid URLs (though it'd probably look a little fishy if all of your URLs pointed to the 404 collection).
_If_ it's a money laundering scheme (I also believe a good portion of it is), then reason dictates it'll probably never go to zero (at least until it ceases to be a viable option, eg banned in the countries you use it). Which means NFTs would be here to stay, and probably grow year over year?
It is absolutely not widespread knowledge. It is not even generally known as a theory. Even among posts I read that are deeply crypto-skeptical, only a handful claim that NFTs are primarily or intentionally a money laundering scheme, as opposed to that merely being a useful side effect for the crypto-wealthy.
A push for technology that protects privacy by design does not just address money laundering.
The fact that zk-STARKs can bootstrap on blockchains, in part because of the funding, and in part because of the blockchain's capability to be a global source of truth (which we admittedly then use for URLs to GIFs, speculate about lolcoins, and buy drugs online with).
Overall, you're right, though I have seen a few legit, established artists dip their toes into the NFT space (eg, James Jean, Phil Hale). My partner used to run a gallery for new media and digital-focused art. That community has always had the problem that artists working in those media haven't been able to just sell a painting or sculpture the same way that artists working in traditional media. Anything that would actually make it straightforward for artists working in digital media to make a living would be welcome and there was some hope that NFTs might be that. From what I've seen, a few have made a bunch of money, but mostly that community has rejected NFTs. Some because of environmental concerns, some because of all the usual reasons that come up in NFT/crypto discussions, and some because of the backlash itself (you might make some money minting an NFT, but you're also likely to lose a lot of your existing fans). The result is that most of what's left in NFTs now is the scammy, ponzi-scheme-y, low creativity generative ape type stuff and it's looking like that's going to become a self-fulfilling prophecy.
I recommend following Kyle McDonald on twitter (@kcimc) if you want some deep dives on exactly why a lot of artists are skeptical about crypto/web3/NFT stuff.
I agree it's all flim flam, the random NFTs I've investigated linked to image files on Cloudfront and such. Pure bullshit.
I don't agree on going to Zero though, in the medium term anyway, it's likely to stay up in the clouds and possibly for a very long time. Crypto generally has utterly failed as currency for actual economic use, outside tax evasion and money laundering, but in aggregate is still worth silly $billions.
As someone who is pro-crypto and has been working in the space for 5-6 years, I have never felt so embarrassed and disillusioned as the past few months. I wish the market had stayed quiet and NFTs had never entered the mainstream. Now it's 99.9% scams and ponzi schemes. It's even worse than the ICO bubble and the whole thing will come crashing down again soon. You'd think people learn, but the get rich quick pitches are just too attractive to the average American who doesn't understand technology or finance.
NFTs are just an extension to what happened to bitcoin years ago, when it failed to scale but nobody in charge cared. The main interest in cryptocurrency is not in "A Peer-to-Peer Electronic Cash System", but in a global game of greater fool. Lack of scaling isn't important, because the people in control are perfectly happy with paying once to buy in, then selling once to cash out. If your expectation is that you'll make extremely infrequent transactions worth in the tens of thousands of USD, that you had to pay $50 to get it processed reasonably quickly is a rounding error.
Overall it'd been interesting to see how the supposed decentralized system didn't really last. Things got centralized anyway in that there's a very small team that develops the software and a small amount of groups that form an unelected governance systems, and the small contributors to the network effectively don't matter.
Yes, there was a period of time, mostly after the ICO crash, where the market was relatively quiet and most people in the space worked on interesting technological problems. I don't want to get into arguments about the usefulness of blockchains and web3, but the intention of developers was not to scam consumers, at least not explicitly or from the outset. Now the intention of most projects is explicitly to rug pull and scam people, mostly due to the NFT craze.
Just cycles repeating. Remember 2013 then it was all kinds of shitcoins when the term shitcoin was most used, happened. Peercoin, FeatherCoin, AmsterdamCoin, TitsAndAssCoin. They all pumped and dumped. Somebody looking into crypto late 2013 would have found 99% scam coins. Same thing in 2017, 99% scam ICOs. Today its 99% NFT and token scams.
To be clear though, any kind of investing into items with no practical value is fundamentally a ponzi scheme. For someone that buys low and sells high there's always someone that buys high. Be it on the stock market, forex, crypto exchanges or whatever the NFT scene is doing these days.
How do you differentiate a crypto rugpull or a company going bankrupt after all the funding has been drained out by its owner? Or fiat devalued by inflation? In principle it's all different sides of the same coin, pun intended.
1) Stocks in companies have value not just because people buy and sell them to each other at higher and higher prices, but because companies add value to the world, and generate income.
2) the difference between a crypto rug pull and a company being drained of its resources is that the second one would result in a police investigation, and fraud charges. It would be illegal, because of the laws that protect investors from exactly that situation.
If "It's all the same" then why invest in crypto at all? It's way riskier, and had a lot more negative externalities.
1) That's debatable. Companies are after all just people doing stuff. You don't own the people and they could all just quit one day. Maybe you own a part of the company assets, but these days with remote work and internet companies that can be close to nothing. I don't see many stocks paying out dividends, but I suppose that's a thing.
2) Illegal's never stopped anyone from doing anything, and I don't see how the crypto version isn't fraud too. But in both these cases you can fly to a non extradition country with your newfound fuck-you-money, leaving the investors up shit creek without damages.
Crypto has some benefits over the stock market, it's open 24/7 so it doesn't discriminate against anyone, and it's more volatile so one can get higher returns (well, or losses) with less of an investment without having to resort to options or margin which are just as risky. It also has more defined and predictable bull/bear markets in relation to bitcoin halvings.
I don't really see the two markets as too different though. One has just had more time to become more rigged for wall street.
But people do do stuff. At the very least, every day the company is changed in some small way by employees innovating. One share of apple is not the same thing it was ten years ago because apple is not the same thing.
BTC on the other hand is not a productive asset. It’s value cannot change by the underlying thing changing. Instead it’s value can only change in regards to how much people want it.
The fundamental issue is a complete lack of any financial literacy education in the United States. The average person has zero to negative logic running in their heads how finance and the financial world operate. So, of course, every manner of magic fairy dust logic is a possible explanation given the black hole void most people have when it comes to how financial logic operates.
> but the get rich quick pitches are just too attractive to the average American who doesn't understand technology or finance.
This is the real reason there's such a backlash; it doesn't actually matter what the underlying merits or otherwise are, the ubiquitous sales tactics, cultishness, and arrogance of the advocates have enraged people.
I'm reminded of Russ Alberry's epic rant from 24 years ago about spam destroying one of the original internet decentralized communities, USENET: https://www.eyrie.org/~eagle/writing/rant.html
I compare it to the dot com bubble. This is simply what happens when you introduce large amounts of stupid money to a very immature sector. The average American doesn't exist. But of course a lot of amateur investors with dollar signs that lost their money 20 years ago, are the same kind of gullible fools lining up for a repeat of that. So, I'm happy it is happening and it can't happen fast enough for me. In fact, it's long overdue.
Back in the day, if you even hinted at "we might get a domain name and a website", you'd be getting funding. People were dumping millions in some pretty moronic and misguided notions. A lot of those companies failed for quite obvious reasons. But not without making several people very rich. Investors have a way with money where they manage to not lose when things go bad and win a lot when that fails to happen. That's one of the perks of playing with other people's money. Worst case you just take your cut and then you wash your hands of the whole thing. Best case it was all you and your genius insights. Sometimes stupid money is tempting for smart investors. When it's on offer, there will be people taking it.
And of course few companies actually had some good ideas and got a little more funding than they would have otherwise gotten and used that to become amazingly successful. Amazon, Google, Ebay, and a few others survived the bursting of the bubble and survived and thrived.
The same is happening with crypto and blockchain companies. Most of them are obviously empty shells run by charlatans operating out of dodgy jurisdictions. But those are actually pretty easy to spot. If it looks dodgy, it more than likely is super dodgy. If it looks to good to be true, it probably is. So, people losing their money are mostly just fools. The exact same kind of fools that lost their money 20 years ago. When some of those fools are institutional investors betting with your pension money, you'd be right to be a bit concerned about that though. That too happened 20 years ago.
More interesting is to look for the things that just aren't that dodgy at a first glance. Some of these companies are looking pretty serious actually. Solid investors, actual customers, working products, etc. It's not all scams and pyramid schemes and those might be the possible survivors of the crypto bubble bursting. Some of the tech is actually quite impressive and looks like it might be used to solve some real problems.
There are probably more than few very good tech companies just putting their heads down and getting some real work done right now. Those are the interesting ones to follow.
> So, people losing their money are mostly just fools. The exact same kind of fools that lost their money 20 years ago. When some of those fools are institutional investors betting with your pension money, you'd be right to be a bit concerned about that though.
Why can't I be concerned about the thousands and thousands of fools that are losing money they can't afford? Yes, they are fools but are they deserving to suffer for being fools and getting carried away by con-men?
I know some poor, desperate people in Brazil who got caught in cryptocurrencies and NFTs out of desperation, they are fools but I believe they do deserve empathy when their families go hungry because of a predator with confidence was able to scam them. Not feeling concerned that thousands of individuals like that exist and are being tricked is a bit concerning for me...
> So, people losing their money are mostly just fools. The exact same kind of fools that lost their money 20 years ago. When some of those fools are institutional investors betting with your pension money, you'd be right to be a bit concerned about that though. That too happened 20 years ago.
That last part is my primary concern: there's a good argument that the real-estate bubble was in part caused by big investors seeking returns high enough to make up for their bad dotcom calls, and the cryptocurrency world seems to have a much higher risk of returns being at or close to zero — pets.com at least had some assets which could be sold to Petsmart but there's no value in random hashes.
> More interesting is to look for the things that just aren't that dodgy at a first glance. Some of these companies are looking pretty serious actually. Solid investors, actual customers, working products, etc. It's not all scams and pyramid schemes and those might be the possible survivors of the crypto bubble bursting. Some of the tech is actually quite impressive and looks like it might be used to solve some real problems.
Do you have any examples? In the dotcom era it was pretty obvious at the time which companies had a real chance: some were losing money on every transaction but others were actually doing something real (e.g. Amazon was a popular punching bag but if you looked at the financials it was clear that there was a solid business there). That last part has been missing so far in the cryptocurrency world — the only companies which seem to have a real business are the ones which seem to have pivoted away from the blockchain world where they got their early funding to do things like supply chain management using more conventional technology.
A lot of stuff in the Stellar ecosystem is pretty OK. Quite a few companies operating under out of e.g. Germany or other countries doing e.g. remittance networks using simple stable coins. Not that glamorous but looks real enough. In general, that ecosystem seems to be generally designed to be fintech friendly. Meaning people are working with financial authorities and generally are trying to do the right thing. E.g. Bitbond is a German company doing an investment products on top of Stellar. They've been working with the German financial authorities (Bafin) and are also partnering with a few big banks.
There are also plenty of traditional enterprise consultancy companies that have been working with various customers to implement e.g. blockchain based schemes for carbon trading, or solutions related to logistics or sourcing materials. Not all of that might succeed but it seems that trading/inventing some new crypto currency is not a goal with these projects.
During the dot com era, it all looked like a bunch of hippies going on about digital highways and crazy stuff like that.
> E.g. Bitbond is a German company doing an investment products on top of Stellar. They've been working with the German financial authorities (Bafin) and are also partnering with a few big banks.
That's interesting, not being German I hadn't heard about them.
> There are also plenty of traditional enterprise consultancy companies that have been working with various customers to implement e.g. blockchain based schemes for carbon trading, or solutions related to logistics or sourcing materials. Not all of that might succeed but it seems that trading/inventing some new crypto currency is not a goal with these projects.
That last part seems to fit with what I've seen in the companies I've looked at: they were pivoting away from what the cryptocurrency people call a blockchain to a ledger restricted to known parties since they're tracking existing business relationships anyway and things like efficiency or offline/low-connectivity support are important.
> During the dot com era, it all looked like a bunch of hippies going on about digital highways and crazy stuff like that.
That was definitely present, but it wasn't anywhere close to a majority position by at least the middle of the decade. You definitely had the hippies but also a ton of distilled capitalism: companies seeing new businesses which weren't previously viable, companies seeing advantages from moving their business online, selling services to the previous groups, etc. The Wired crowd got a certain amount of publicity but there were an awful lot of boring companies spending considerably more money.
I don't see the similarity. Yes, the stocks were overpriced, and people who didn't understand venture capital were effectively providing venture capital. But the dot com era produced some major corporations: Google, Amazon, eBay, Netflix, and many more. Those companies have real economic value because they create products that people want to pay for.
Web3 hasn't produced anything comparable. The space is now polluted enough that I doubt it will.
Yet; each of those companies burned through quite a bit of investment before they became profitable. You need to look at this space in ten years again. Web3 is just a marketing term that some people came up with in the last year or so. It takes longer than that for companies to become successful.
And BTW., that's your connection to the dot com bubble right there. That was web 1.0. This is web3. The tech is different. The investment behavior is the same level of idiocy.
I say it can be very well all three. Just the groups involved are different.
It clearly is bubble with insane valuations for nothing on expectation of growth.
It is scam, due to wash trading and all other fun stuff. And fundamental way of trying to sell something worthless with implication that it will go up in value with rest of the bubble.
And yeah, point three is back to wash trading and laudering.
There's a lot of evidence that the inflows to NFTs are extremely small, and that the VAST majority of NFT sales are wash trades.
Why would anyone do this when the fees to trade are so high? Everyone thinks the end goal is to fake it until you make it, and sell the wash-traded pumped up tokens to an unsuspecting victim.
It's not.
The goal is to create fake wealth from nothing. There are banks now that will lend using NFTs as collateral.
You get millions of dollars in loans, then you spend millions, then you go bankrupt. Oopsie.
Step 3. Put ill gotten gains in the wallet in step 2.
Step 4. Purchase your own asset with money from step 3.
Step 5. Cash out.
Because there appears to be no reason behind the valuation of NFTs, it's pretty hard for the tax man to determine that "Oh hey, this doesn't look above board!". Because wallets are pretty easy to create and fund from all over the place, it makes the perfect mode to turn anonymous money into real money.
Oh, and bonus points, you still have the NFT, so see if you can't unload it on a rube for less money.
You mean, you didn't feel embarrassed in 2020 when people were all trying to find the next "food coin" advertising 10,000% APY to ape into?
Because no matter how many times misinformed critics call NFTs a "scam": there is something inherently honest about them: pay money, get a collectible. There are no financial instruments here that can be misunderstood.
> Because no matter how many times misinformed critics call NFTs a "scam": there is something inherently honest about them: pay money, get a collectible. There are no financial instruments here that can be misunderstood.
It can absolutely still be a scam. Wash trading is trivially employed to inflate the price of the "bid money" step, fraudulently suggesting the existence of demand when there is none.
I have yet to see any evidence that someone successfully wash traded their NFT project to success, but lots of people claiming that it is common place.
Just have patience and don't sell your crypto just yet. Peoples moods are so temporary and forgetful there for sure will be another bubble within months again.
So ignore blockchain; take it out of the picture, and what do you have left with crypto?
People inventing/printing an endless supply of money for their own benefit. In what way is this *not* a scam?
But, but, but central banks do the same? Yes, they do --- but with a very different purpose and understanding. They try to maximize the positive effects on the entire, overall economy --- realizing this is the best way to maximize their own. If they fail in this, they can be replaced. Checks and balances.
"Digital" currency is a good idea that can and will eventually happen. But "crypto" currency is really just a system of misguided and misplaced trust --- you trust that unregulated "exchanges" are fair and honest and reasonable and acting in the public interest without any checks and balances.
I used to think the good parts of crypto could be salvaged. I now don't. The people joining at this point are either naive or corrupt. I don't think people like Vitalik would join today because the entire scene has changed. There are no limit to the number of these coins. If the Bitcoin maximalists had won out, maybe there would be a different future where the world could standardize on a single protocol, but they didn't win out. So whether it's new coins, new NFTs, new this or that. It doesn't matter.
It's a pump and dump. And once the marks get wise to one type of pump and dump, you change it around a bit and pump and dump something else. Real problems are not being solved by crypto.
I'm curious if people like Vitalik feel trapped, or worse yet, that they have created a monster?
If they don't feel bad, I wonder how they justify the cognitive dissonance.
The right thing for Vitalik would be to recognize that this is not going to turn into what he imagined it to be, and to publicly speak out against it. Instead, he's trying to justify everything and secretly hopes that he somehow can still turn it around.
Well, I think it's a combination of things. First, you kinda have to be an optimist to create something like Etherium in the first place. I met the founders out in Toronto before the coin was even off the ground and while there were some sketchy drug dealers at their meetups, the crowd seemed mostly kind-techno-optimist.
So the creator of the coin is more likely to see continued upsides once the coin is off the ground and a bit of cognitive dissonance comes in and he donates some of the gains to good causes here and there and gets praised by people like pg so it creates a kinda shield against what would have been obvious to him if he were introduced to the scene as it exists now.
Tech initiatives are almost never led by someone that's simultaneously honest and a clear eye'd realist.
Has anyone ever created an MDMA IV drip? If I was a billionaire and was sad about how I came by my billion(s), I suppose that would be worth a shot. After the trips to space and a couple private island purchases obviously.
> People inventing/printing an endless supply of money for their own benefit.
This is odd because Bitcoin, despite is ecological problem, was created to precisely not have an unlimited supply. There are only ever going to be 21 millions Bitcoin and the free market was supposed to decide was one Bitcoin was worth (offer and demand: nobody was coerced into buying any).
I don't like Bitcoin's carbon footprint but I can see how Bitcoin maximalists may be disgusted by all the shitcoins and by NFTs.
I don't think "Satoshi Nakamoto" (whatever that means), if he/they is/are still alive, planned on creating an unlimited supply of money just for the sake of getting rich.
To me Bitcoin seemed more like some kind of an anarchist cyberpunk statement than a ponzi/scam.
The internet is a globally-accessible system controlled by no single authority, too, with an awful lot of Turing-complete systems using it. The smarter question to ask is what problems require a global append-only database with code execution capabilities, and how much value there is in that approach relative to the much cheaper alternatives. Using a blockchain locks in significant costs relative to everything else so there has to be a really compelling answer to that question to be worth the extra cost and risk.
> > The smarter question to ask is what problems require a global append-only database with code execution capabilities
> Global financial systems?
Clearly not since those have functioned for centuries without one. You can argue it could be more efficient than the status quo but it can’t possibly be a requirement to use more compute capacity than the entire world had only a few years earlier.
> Somehow I sense that you're not compelled. That's okay.
Well, I do tend to require something in the way of evidence.
Also ask whether the entire system can live on the blockchain. If it needs trusted third-parties to provide data, broker deals, etc. all of the overhead isn’t giving you much.
I'm very much not into cryptocurrencies and I constantly bash them and their communities but... The same argument could be used for the internet, or cars, or phones, or any other technology. The world survived but it definitely wasn't the same before.
Blockchain and crypto are interdependent and as such, are not really analogous to the technologies you mentioned. In other words, take away the crypto and blockchain is largely a solution looking for a problem.
Don't take my word for it, just ask Microsoft and IBM.
Those who run the banks, who own and are regulated by the Fed, get rich. September 2019 repo problems, like Deutsche Bank and others, demonstrates how the Fed bails out even foreigners.
Crypto is a vibrant growing space and like any growing space there will be problems along the way. I have no interest in Tether, though some find it useful and they can use their free will to choose it as a place to park funds. I think people would be better served with DAI or USDP when parking funds, but that is just me.
Pitiful excuse. Tether should interest you in the same way (and for the same reason) the Federal Reserve does.
It is involved in more than half of all crypto trades and provides much of what passes for stability in the crypto marketplace. And Tether is based on debt-is-now-money --- only worse because the debit is unsecured IOUs at best and at worst may be totally non-existent.
The fact that no one really knows if Tether is backed at all, yet it easily maintains it's 1 USD peg points to possible/likely widespread collusion and fraud.
Whether you choose to use it or not, Tether infiltrates and affects the overall crypto market in the same way the Fed affects fiat.
Strange that you are obviously concerned about one and completely dismissive of the other. I guess it just doesn't fit the narrative you've bought into.
I am forced by threat of government violence to use private central bank debt "notes" to pay taxes.
The government does not force people to use Tether. My only concern with Tether may be that it quickly collapses and that chapter can close. Hopefully your interest and attention on Tether will help kick it into history. And if you don't like Tether or brothels or MJ or tobacco then simply opt out of those.
Exactly. It's the most secure and reliable accounting system imaginable.
Anyone who believes that this degree of reliability and security is not required is naive and doesn't understand human nature and doesn't understand how capitalism shapes human nature.
This kind of accounting system is absolutely essential. History shows over and over that the means of power can be corrupted will be corrupted. If you haven't figured this out by now, you haven't been paying attention... You don't even need to look at history to see this. Just open your eyes to what's happening right now.
I match your accusation of misunderstanding human nature, and raise it an accusation of profound naivety. If blockchains actually start being used for economically or socially productive or valuable functions then they will be regulated.
Suppose you sell something and the transaction is logged on a blockchain, that's immutable right? It's right there in the ledger, nothing anyone can do about it. It's immune from governmental interference right?
Say a court invalidates the transaction, maybe they think you lied to the counter-party, nothing they can do, right? The blockchain doesn't lie. Except they can prosecute you, fine you, imprison you, confiscate your property, pursue you to the ends of the earth and even kill you. If the transaction was an NFT, they can just directly modify the resource the NFT refers to. If it's bitcoin, they can fine you equivalent value in real world money and assets, or if they can be bothered to care about the bitcoin at all they can legally coerce you into transferring the bitcoin back.
It's like the scene in Game of Thrones where Little Finger tells Cersei that knowledge is power and only barely survives at her pleasure because presumably she was in a good mood. No. Power is power.
But the thing is that any movement of tokens on the blockchain is public for all to see. It removes a government's ability to do things in secret. With centralized systems, shady stuff is happening all over the place. Systems get hacked all the time, funds are stolen by ex-employees without anybody noticing.
It's naive to not see how corrupted and hacked the majority of modern centralized systems have become... Big companies are constantly paying off hackers to avoid DDoS attacks. All this stuff is happening silently and constantly behind the scenes. Adding a layer of transparency to money transfers can go a long way.
> It removes a government's ability to do things in secret.
I don’t get it. How does you using a black chain stop a government doing things in secret? I mean, all they have to do is not use the blockchain. And anyway, isn’t the point of the blockchain supposed to be that it’s anonymous? Confused.
... naive and doesn't understand human nature and doesn't understand how capitalism shapes human nature.
You do understand that the crypto "exchanges" are effectively the gatekeepers to this "most secure and reliable accounting system"?
And appreciating how "capitalism shapes human nature", only a naive fool would ever expect them to do anything but promote their own interests above others.
In other words, "trust" is still inherent to crypto/blockchain. Ever hear of a "rug pull"?
Anyone can move their tokens on-chain so nobody is forced to trust an exchange. Exchanges aren't gate keepers. You don't even exchanges to acquire Bitcoin; many deals are done OTC or salaries can be paid directly on-chain. Also, most whales only keep a fraction of their total holdings on the exchanges.
The backlash might be booming but there are still enough stories out there about people minting millions to sustain the hysteria. Today the New York Times ran a story - "They Made Millions on Luna, Solana and Polygon: Crypto’s Boom Beyond Bitcoin" [0] - that will probably prompt some people to invest in obscure cryptocurrencies in the "if they can do I can do it too" belief. This is eerily similar to the stories run by numerous print and online publications in the early 2000's highlighting the massive amounts of money that people were making day trading.
Backlash? Wait till the bubble pops and witness the meltdown. Just go into see the discussions by self described degens. People putting paycheck by paycheck into NFTs.
Once again and as predicted, we have another 'web3 is a ponzi' article. The creators of web3, and everyone else knows it is a giant scam, just like how ICOs where in 2017. All thanks to and started by Ethereum.
Not sure why this article presents this as a great surprise or a new discovery. Sure, the majority of NFTs (Especially the JPEGs) are a pump-n-dump ponzi scam selling images to each other. When the NFT craze runs out of steam, 90% of all the image/audio/video types of NFTs will collapse. 10% of the other NFTs will survive with a valid use case.
I don't see how the whole 'web3' narrative should apply to every single cryptocurrency and project in existence, like how this article has done. Just look at this sentence and the quote:
> A person investing in crypto or a shared future on the blockchain is said to hate Earth and support the “hyperfinancialization of all human existence.”
How does that apply to every single cryptocurrency as the author of this tweet has just generalized? [0]
More likely - some legitimate use cases will emerge, as I am yet to see anything to date that would fit into that category, but there is still room for the solution that is crypto to find itself a problem to fix.
ENS alone should be more than 10% of the market. Using NFTs for decentralized identity and authn is big. Unlock Protocol's is going for authz.
There is a strong selection bias for those that report on crypto for clicks or those that want to create a narrative that we can not live without some big central authority controlling our lives.
Have you ever thought about closing your Google Account and got discouraged when you realized that there are so many other services that depend on it? Worse, have you ever had your Google/Facebook/Apple/Outlook/Twitter account closed without knowing why?
Centralized systems are amazing, until they aren't.
Have you ever had your credentials to a decentralized service stolen by a keylogger and realized that you will never, ever, under any circumstances regain control and there's no one you can talk to and nothing you can do about it?
Decentralized systems are amazing, until they aren't
(Even if you wanted to have a decentralized account recovery like saying you can have 3 friends band together and help you recover your account if you lose access, what happens when those 3 friends decide that don't like you as much as they like the idea of banding together to take over your identity and all your money?...)
You know what annoys me the most about these discussions about crypto and systems in general? It's the fact that people can only argue in the extremes. Decentralization is a spectrum. (https://twitter.com/rlullis/status/1307420668372430848)
> Decentralized systems are amazing, until they aren't
No, they are not. They are expensive, they require responsibility. The UX is complicated. Most people shouldn't use it and will be better off delegating all this to someone else.
Thing is, it's not because something is good enough for most people that everyone should stick to it.
> what happens when those 3 friends decide that don't like you as much as they like the idea of banding together to take over your identity and all your money?
This argument is stupid. With decentralization, there is no reason for your identity to be something singular. There is even less reason for people to think that one wallet should hold "all your money".
A keylogger can’t steal your key if you use even the most basic security that this space advises.
If you don’t have any friends you trust (which is probably a pretty common thing), then you can choose any other people/entities you do trust. If you want to rely on the government or financial institutions, you can request that they be part of your social recovery wallet process.
This isn’t common yet, but you can also build your wallet so it’s very difficult to steal funds even if someone recovers your private key. Building challenge periods into your transactions is trivial and lets you know if an attacker has compromised your key. You can then transfer all of your assets out with your recovery key.
So having your own blockchain domain and even using it as a method of login is illegal and centralised now? [0] ENS is a good existing example and concept 'so-far' of a valid use case, even when I disagree with it being implemented on Ethereum.
As for payments, cryptocurrencies that have blockchains like Bitcoin should be dismissed in the long term. Regulated stablecoins seem better for that purpose these days.
Another use case would be protection from inflation - if you're in a country which prints money carelessly or for political reasons.
Of course you could say that Bitcoin is worthless and not proved as store of value, but that's not for me or you to decide, it's what's decided by the market.
That was because, whether you agree with it or not, the US government deemed their behaviour to be illegal.
And so the issue you have is not with Paypal, Visa etc unless you think that those payment companies should tolerate illegal parties transacting money. Because that is a very slippery slope especially given how much wealth in the world comes from the despair of the very poor and helpless.
> That was because, whether you agree with it or not, the US government deemed their behaviour to be illegal.
There are, and should be real-world limits on the ability of the US government to stop things from happening by deeming them illegal.
In the case of Wikileaks, one such limitation is the relatively decentralized nature of the internet. The US government was able to pressure Amazon to refuse to host it, but was unsuccessful in pressuring OVH, so Wikileaks remains online. There is no Great Firewall of America, so it remains accessible within the US.
Another limitation is that while the US government can and did pressure Paypal to refuse service to Wikileaks, there's no equivalent for preventing transfers of cryptocurrencies.
I'm not American and neither is Wikileaks. My country is not an enemy of America but neither is our support unconditional. I think it's great that Wikileaks drops American dirt. I think it's not great that America tries to cutoff donations to cover up its dirt. I think it's great that alternative payment systems circumvent that.
Notice a major keyword you used there - “Bitcoin”. Which we all know has a real world use case (several countries have made it their national currency for crying out loud), just as the example you gave with Wikileaks. Nobody could stop people sending it, period.
Everything else (and yes I’m even referring to ETH) is crap. It’s not truly decentralized, doesn’t have a REAL world use case (get real and be honest please), and don’t have anyone (or entity) “in charge” of it. Those are the major (among other) things that a real crypto is supposed to have by very definition.
Everything else is worthless (a “get rich scam”), and we all know it. And shame on those creating that crap, along with those gullible enough to buy them. Seriously, wake up. It’s just the hard cold truth, and we all know it.
Sorry to break it to most people, but apparently most don’t understand this “common sense” concept that is stupidly obvious in my opinion.
Even in the case of ETH (the undoubted #2 crypto), what would happen if Putin decided to go after Vitalik with all his might and the supper of the entire Russian government? You really think he’d stand a chance (and that’s assuming he’s a saint as well)? Again, wake up everyone. There’s a very good reason BTC has no “admins” or “chair board”, because nobody can corrupt it. Even the creator(s) of BTC were smart enough to not use their real names and lock themselves out of the system, and then disappear. They know what was coming. And now so should you. It’s really not complicated. There’s so many extremely powerful , rich, and ruthless people out there that stand to lose everything if this succeeds. You really Think they aren’t going to put up a fight?!? Get real. But that’s only if they know who to go after….
How much Bitcoin do you own? Why should I listen to a user who was created 26 minutes ago, with this as their only post, telling me about how amazing Bitcoin in particular is?
That’s the best part - YOU DON’T! Makes no difference to me bud. Seriously. I’m not asking you to trust “me”, I’m asking you to look at the cold hard facts, that’s all. And if you don’t want to, that’s cool too. I’ll still be fine, just FYI.
Oh and by the way, I’m a publisher for 2600 magazine. I’ve written articles about Bitcoin (among others). The big feature Bitcoin article was in the past “Winter” edition. Don’t believe me? Send an email to the email address in the article…
What else is there to the narrative? This stuff is predominately solutions in search of problems and they are not innovative except for trying to financialize and/or securitize every conceivable digital artifact imaginable. It sucks comprehensively like at the ideological origin points.
> Not sure why this article presents this as a great surprise or a new discovery.
Because even if the circles you move in are all very well aware that NFTs are a massive scam, very obviously many people haven't yet realized that—after all, it's still working.
> Its a little bit disingenuous to blame etherium for NFT, its like blaming email for nigerian prince spam.
Except that the law and regulations are always behind once the early technology has been introduced, with early adopters getting themselves burned, sued or encountering significant losses - Hence the DAO hack of 2016. That is the reason why ICOs are now regulated.
Did you really think that the SEC would do nothing and sit there and let the 2017 carnage continue? NFTs are no different and that technology (like tokens) will be subject to regulations. The same with email and electricity but by other regulatory standards.
> Except that the law and regulations are always behind once the early technology has been introduced, with early adopters getting themselves burned, sued or encountering significant losses - Hence the DAO hack of 2016. That is the reason why ICOs are now regulated.
How does this has anything to do with how technology was implemented?
I am not defending NFTs nor fighting regulation. I am saying that you cannot blame ether's smart contracts for creation of NFT.
Totally bro! Edison and Tesla were SO concerned about “scamming” money out of you (over a 100 years ago). That makes total sense….lol. Mind you they were rich AF too. That’s absolutely hilarious, I’m sorry.
But you’re right about NFT’s not being ETH’s fault by the way, on that I agree with you. But it still happened. By the way, why (like in all reality if being brutally honest) did we need to have NFT’s to begin with? The answer is we didn’t. People saw a “get rich quick opportunity” (even though very wrong), and went after it. That does not make it right or give it a real world use case, sorry, it really doesn’t.
Yet, on the flip side, I pay my rent, most of my utility bills, and basically all purchases (Amazon, eBay, Uber/Uber Eats, Airbnb, American Airlines, and about ten others that compromise about 90% of all them) with Bitcoin (BTC). And that takes me about 5 minutes. Is that not real world? If not, please enlighten me, what is then?
I am not defending NFTs, just saying that you cannot blame technology for what it was used for.
Nuclear fission was the idea/tech, it was used to create A-bombs, and clean nuclear energy. Nuclear fission like smart contract is an idea, how its used it up to people.
I absolutely hate, hate this NFT scam. I even hate all the metaverse talk. I've been watching every iteration of VR since the early 90s, and it still looks like a gimmick. But how is vaccine tracking, with temperature information, lot numbers, location, etc, being logged to a secure, fast, carbon-neutral DLT not a good use case? Maybe not any better than a regular database owned by the vaccine buyer, but I can see quite a few benefits (many different buyers, each with their own quirky, sometimes less robust database, for an example). A lot of people are losing money with this moon propert...NFT fad, but I'm seeing quite a few use cases of real value popping up here and there. The example above is not my area of expertise, so I might be wrong, and would really like to hear a good rebuttal, but it's difficult. People seem to eithe love crypto/DLT too much or hate it too much to even bother discussing beyond "The whole entire planet will use crypto for everything" or "There's not a single use for this crap".
Append-only, cryptographically verified, distributed databases are a good idea with some useful applications, and I'm sure they'll spread as tech infrastructure just like e.g. stream processing has in the last few years. But that seems barely related to the whole crypto phenomenon which inherently relies on destructive proof-of-work (maybe proof-of-stake will turn out to work at scale but I'm dubious) which in turn requires everything to have financial value and be pumped and presumably eventually dumped.
Oh, I agree with you, I can't even read discussion on crypto online, it's 99.9% about which or coin will value the fastest. However, I will still keep an open mind. For example, Silvio Micali works on proof-of-stake and he says his stuff already works at scale. The guy won a Turing and a Gödel award. I'll keep an open mind.
Proof of Stake is already working at scale. Ethereum has been running Proof of Stake in parallel to Proof of Work since December 2020, with plans to do away with Proof of Work in the upcoming eth 2.0 merge this year. Not to mention all the other chains running live on Proof of Stake (eg. Polygon, Harmony, Avalanche, Fantom, etc) with billions in TVL.
You can do it without blockchains. This is roughly what Certificate Transparency achieved. The only difference is that you cannot access a consistent state at any given moment.
> But how is vaccine tracking, with temperature information, lot numbers, location, etc, being logged to a secure, fast, carbon-neutral DLT not a good use case?
Trust isn't an issue; a conventional database will be perfectly fine. Like, if you wanted to sell a product for tracking vaccines (assuming, for a moment, that health services and other large vaccine buyers don't have decades-old systems for this which everyone already knows how to use, which, if course, they do) why would you bring The Almighty Blockchain into it?
Around eight years ago, there was a power failure in my town (a small town in a third world country). The freezer that stored the local health facility's vaccines stopped working for two days because the backup generator was broken. After some investigation, it was found that when power was restored, the health officials altered the temperatures on the database to show that everything was fine and the vaccines kept their temperature in proper range for those two days. If it had been logged to a DLT with an immutable ledger, this wouldn't have happened.
That's the reason I'm particularly interested in this use case (something that was done in the UK recently), because kids ended up taking these expired vaccines.
I agree, but what I'm asking is if it isn't easier and cheaper to have a robust logging system with a public DLT. I'll give you a real example of how bad some of the database systems are in my country: a study on police gun and ammunition control found that many police stations keep track of ammunition by logging the numbers on a.... ready... a chalkboard. So I don't trust the cops who sell bullets to drug gangs if tomorrow they tell me they are not doing it anymore because they are using a computerized database to keep track of their equipment.
We don't need a blockchain to solve this problem. It would be enough to make the database public and allow third parties to make backups and subscribe/log all updates.
Agree with you, there are many systems like this. What I'd like to know is if a system using public and decentralized distributed ledger wouldn't be cheaper and/or easier to implement effectively (on a poor, corrupt country). Because you're adding more steps, like having third parties. How many? What if said third-party decide to quit checking after one year. Which database supplier do I trust to make the database public and final? To me, it seems more complicated and less transparent.
Yes, the first temperature times were typed onto a laptop, while it was still running. They were the correct temperature (unsuitable for the vaccines). I think they did temperature logs twice a day, don't remember well. Then it was found that afterwards they altered those first times and added the ones that were missing.
Sure, the temperature should just be logged automatically to the database, and the value shouldn't be allowed to change. However, it isn't. And I can see clearly how a database supplied by some vendor would yield to pressure from a government to 'tweak' some value, just this once, so that they'd be sure to get a nod on the next contract. I would trust a public ledger on its immutability more than a government run database. Or a maintainer of a database that relies on government money to exist.
This is definitely a backlash. I see a lot of specious arguments and strong statements that are usually generationizations focused on the negative. Like everything about crypto is a scam or money laundering, or that NFTs can never work in any way, definitely not interoperable metaverse assets, and all are destorying the environment.
People don't think clearly about this any more.
It feels how many committed Democrats talk about Republicans and vice-versa -- all nuance is lost and the other side is evil and there is no middle ground or understanding at all.
If you slam crypto or NFTs on Twitter, you will get tons of likes.
If you mention that there is a lot of work towards more environmentally friendly NFTs via L2 and other environmentally friendly blockchains that by definition means that it also has low fees and this addresses one of the core criticisms, I find that people just shift towards a different anti-NFT argument, or call me a name.
I think that a lot of people are anti-NFT because they hate them and all these explanations for the exact reason why they suck shift once you start talking to these NFT haters and engaging them.
It is okay, you are allowed to hate NFTs, but the core technology is actually really powerful and I expect it to completely explode within the gaming community when these low and no-fee blockchains take over from the very inefficient Ethereum L1 NFTs. Although in the later versions of NFTs and cryptos they will more and more resemble the traditional banking institutions (often real-names, hosted key accounts, fully audited, and probably at least somewhat reversible transactions and various limits to prevent fraud), rather than the Wild West they currently are.
> I think that a lot of people are anti-NFT because they hate them and all these explanations for the exact reason why they suck shift once you start talking to these NFT haters and engaging them.
As one of the terrible nocoin haters, possibly I can explain what's going on here.
People dislike NFTs for _multiple reasons_:
- They're typically hideously wasteful of energy.
- They are typically scams
- Even if not explicitly scams, they represent a pointless and inefficient financialisation of bloody everything that no-one except crypto enthusiasts seems to be at all interested in
- The art is weirdly universally alarmingly bad
- As applied to games, they incentivise bad (pay to win) design dynamics
I could go on. It is not inconsistent to dislike something for multiple reasons.
What do you think of Immutable X, which has pledged to make all transactions on its blockchain carbon neutral? https://www.immutable.com
> They are typically scams
There is definitely a lot of scams. First most of the ICOs a few years back were scams, and then a lot/most? of DeFi schemes are scams. But I am not scared off of an area just because there are scammers in the vicinity. I think there is a lot of opportunity for what I would term gentrification of what are otherwise lawless areas.
> Even if not explicitly scams, they represent a pointless and inefficient financialisation of bloody everything that no-one except crypto enthusiasts seems to be at all interested in
I think that it will become less "inefficient" over time. I think that what can be sold will be sold if there is a market. There will be a series of fads, just like in real-life. I think this sorts itself out. If you want to believe Beanie Babies are a good thing to sell and speculate on, go for it. I won't stop you. But I probably won't speculate on those.
> The art is weirdly universally alarmingly bad
A lot of NFT art is derivative. But there are tens of thousands of artists who have made NFTs, and many are talented. I think you are cherry picking the copycats and the grifters work.
> As applied to games, they incentivise bad (pay to win) design dynamics
Games for me already went deep into the "pay to win" territory once they landed on mobile. That made a lot of companies quite rich. Thus you may disagree with the dynamics, but they are the main way that mobile games make money.
> I could go on. It is not inconsistent to dislike something for multiple reasons.
Of course it isn't. I don't like NFTs but it's dangerous to assume all NFTs fit in the above reasons. You can still have the following:
> - They're typically hideously wasteful of energy.
NFTs that are economically friendly: NFTs on Solana, Algorand, Avalanche, etc.
> - Even if not explicitly scams, they represent a pointless and inefficient financialisation of bloody everything that no-one except crypto enthusiasts seems to be at all interested in
NFTs that are useful: Blockchain Domain Names for identities. ENS [0], Solana Name Service, etc.
We still pay for blockchain domains in order to renew them, just like we do for domains on ICANN expect that for the latter, the registrar can seize your domain and hike the prices up [1], for any reason where as the former is owned by you on the blockchain and no one can take it away.
So which one is the true scam?
All the other reasons such as NFT jpegs, NFT games, etc are all valid criticisms and demonstrate limited or no usefulness. But not all NFTs are like that. ENS (which is a blockchain domains service) is a great example of utility in NFTs.
The energy argument is a bad argument because it's an obvious ploy by the terrible nocoin haters to latch on to broader environmental politics by a superficial analogy equating PoW to Fossil Fuel Power Plants and CO2. The reality is that there is plenty of zero-carbon energy to power our global economy -- it's called the Sun, and it's been working pretty well for a long time now. If we accept the ploy, then everything that isn't strictly necessary needs to go: Netflix, Google, computers in general, cars, trains; and we all need to return to living in harmony with nature and subsistence farming.
Instead of being fooled by feels good thinking, let's work on the real problem: decarbonizing the electrical grid.
> If we accept the ploy, then everything that isn't strictly necessary needs to go: Netflix, Google, computers in general, cars, trains; and we all need to return to living in harmony with nature and subsistence farming.
All these things have a value returned to society in some shape or form, even if just as entertainment.
Being more mindful about our resources' usage is not a ploy, it's simply the mindset we need to have if we plan on having a comfortable future, it's pretty basic thinking: we need to be more efficient and mindful of where we spend our limited resources because the wake up call has come.
This complete reductionist take on the environmental effects of PoW is absurd... Much more absurd than the argument that energy is better spent somewhere else than mining coins. Yeah, we have plenty of energy, do something more useful with it then, not consume a whole medium-sized country of energy to support an immutable ledger.
> All these things have a value returned to society in some shape or form, even if just as entertainment.
If other people find crypto mining fun, valuable, or meaningful, then how are you able to claim they are wrong when you're relying on 'entertainment' to justify Netflix, etc?
> Being more mindful about our resources' usage is not a ploy, it's simply the mindset we need to have if we plan on having a comfortable future, it's pretty basic thinking: we need to be more efficient and mindful of where we spend our limited resources because the wake up call has come.
I agree with this sentiment in general. I think you could be more precise in your condemnation of cryptocurrency while justifying Netflix.
> If other people find crypto mining fun, valuable, or meaningful, then how are you able to claim they are wrong when you're relying on 'entertainment' to justify Netflix, etc?
They’re using orders of magnitude more power for one thing, but also they clearly do not consider this as entertaining as watching Netflix because if they did they’d be talking about that. Nobody says they love random hashes, it’s always about how much money you can make selling them to someone else. NFTs theoretically could get closer to that but most of the salespeople never mention the artists’ names, much less give a reason why the aesthetic merits justify a high valuation: it always comes down to “buy high, sell higher”. Twitter’s NFT integration is a great example: they’re not linking to them because anyone cares about the artwork, it’s not new that you commission art, but it’s highlighted on profile pictures because people want to say “I spent a lot of money on this receipt. You can buy it from me!”
Contrast this with the early days of the web or smartphones: yes, lots of people talked about money but that was because a much larger group of people were having fun doing things that they couldn’t have done before. The point was to actually build something, not just put up a sign saying you spent a lot of money on something you didn’t have to.
> They’re using orders of magnitude more power for one thing.
It's not clear whether this statement is true. Do you have sources? I'm serious, do you know how much infrastructure is required to deliver Netflix streams globally? How much investment went into building that infrastructure on top of all of the supporting infrastructure and its energy costs?
> Nobody says they love [NFTs]... [it's not] as entertaining as watching Netflix.
These people like making money and they derive pleasure from it. How's that any different from 'watches TV and derives pleasure from it'? It's not. This isn't a logically consistent position to take. Your claim here reduces to "Making money != entertainment Therefore Crypto is Bad". It's nonsensical.
Estimates vary about Bitcoin's exact cost but they generally come in on the order of kilograms per transaction, and because far, far more actual people use Netflix than use Bitcoin for real activity a fair fraction of those transactions are overhead rather than a single economic transaction.
> > Nobody says they love [NFTs]... [it's not] as entertaining as watching Netflix.
> These people like making money and they derive pleasure from it. How's that any different from 'watches TV and derives pleasure from it'? It's not.
This was explained in the parts you elided. If people were doing this out of some aesthetic appreciation for random hashes, we'd know because they would be talking about that. Instead the sales pitch is always about the things they can do after cashing out into hard currency. There are almost certainly some people who define themselves on making a number go up but they're not represented at all in the marketing material.
> I think that a lot of people are anti-NFT because they hate them and all these explanations for the exact reason why they suck shift once you start talking to these NFT haters and engaging them.
This seems like you’re arguing against the weakest form of the argument rather than engaging with the specific criticisms offered by people who understand the technology at least as well as most proponents. For example, most of the criticism I’ve seen of NFTs in gaming isn’t just about the high cost or environmental but rather more the fundamental business questions about what problems the companies who make games have which are best solved this way. If it’s something a company could trivially do now but has chosen not to, it’s unlikely to have a technological fix.
> This seems like you’re arguing against the weakest form of the argument rather than engaging with the specific criticisms offered by people who understand the technology at least as well as most proponents.
> Interoperability isn't juat a technical problem. It's also an economic and game balance problem.
>
> All three problems are insurmountable. It's just a monumentally stupid idea.
When I refer to people who seem to not really understand nuance but rather view it in stark contrast I am specifically speaking of comments such as the above.
What happens if I want to bring in visual only avatar configuration? Does doesn't affect game balance. What happens if I wanted to tie my officially licensed sports game to assets that are being sold by sports teams in the leagues I have licensed? Or Nike or Adidas ensure that NFT shoes you buy online work in Fortnite or Roblox by giving these games some money to enable that?
Maybe the game is part of a series and some of the top in-game purchase are transferable to the next game in the series, even if it is created by a different company using different tech?
Maybe I want to be able to bring my WoW sword and carry it around in Decentraland where you don't really die and thus its stats don't matter because I like it?
Maybe I am a game publisher who has a few different genres of games and I make some special items which can go between the various games and result in really weird effects/bonuses? Cross promoting my properties.
I think there will be a lot of cool things happening if people start to see the potential here.
> I see a lot of specious arguments and strong statements that are usually generationizations focused on the negative.
Doesn't this go both ways? People hear the loudest voices in the room, both for and against crypto. As a personal anecdote, I asked an acquaintance who is really into Internet Computer[1] how apps that implement the Matrix protocol[2] compare to something like OpenChat[3]. Their response was unconvincing, mainly because it was more like generalized marketing hype for Internet Computer and not actually addressing my question directly.
So I think while there are plenty of folks who blindly hate on the crypto/web3 ecosystem, there are also a lot of people trying to engage constructively and getting pro-crypto memes thrown back in their face. Where's the space for nuanced answers to these nuanced criticisms?
Supporting efficient blockchains for in-game assets, those blockchains with near zero fees, enable (1) robust secondary markets as well as (1) interchangeable assets when desired (such as avatar customizations.) Right now the game industry tends to offer walled garden and fractured solutions here.
In other words, blockchains don’t help at all. The game industry has walled gardens now because that’s what they want and people keep giving them billions of dollars, not because nobody has heard of databases and APIs.
> In other words, blockchains don’t help at all. The game industry has walled gardens now because that’s what they want and people keep giving them billions of dollars, not because nobody has heard of databases and APIs.
I think that offering interoperability will be a benefit for new entrants. Existing players tend to not change their ways very easily.
But I think the potential for game microtransaction revenue can be even larger with robust NFT marketplaces, secondary markets and the potential for interoperability of metaverse assets. There is more money here down this path and thus I think it will happen.
Isn't the main benefit (for the operator) of a walled garden specifically that it keeps new entrants out? Why would any of the big players let some startup NFT company offer interoperable NFTs when they could just as easily do it themselves within the same user database that already exists?
More generally, why would you use a blockchain for such an application at all? If some group of big gaming companies were interested in having in-game assets be transferable between their games, why not start a joint venture that manages the shared database instead of giving all the power away to some group of blockchain devs? That seems like it would have a lot of downsides (exposure to rugpulls, difficult onboarding for users that don't have a wallet yet, etc etc etc) for very little upside, and thus not a thing that company executives would be interested in.
The two big concerns I’d have are the companies’ desires to build up captive audiences (e.g. Ubisoft’s NFT restricted to their system) and the challenges of bootstrapping a marketplace on the idea of interoperability which doesn’t benefit the consumer until multiple companies actually implement it and their fees are known.
It’s a tough sell to pay more upfront in the hopes that it’ll yield results later, and that applies both to the consumers being asked to buy these NFTs and the companies being pitched on implementing them without clear demand.
> It’s a tough sell to pay more upfront in the hopes that it’ll yield results later, and that applies both to the consumers being asked to buy these NFTs and the companies being pitched on implementing them without clear demand.
Integrating third party blockchain microtransaction engines I think will be cheaper than implementing a custom solution for new games. I think it will in the future be viewed akin to adopting Auth0 for authentication rather than rolling your own - it seems cheaper to do it yourself until you want to get for ISO compliance or deal with JWT or SAML or OAuth or 2FA integration, and then you need your own people dealing with bugs, features, and UX designs distracting you from pushing your product's unique features forward.
If you're just treating it as a micropayment system, a hypothetical far more efficient blockchain service could potentially be cheaper than building a pure-custom system but it's unlikely to be easier than Steam/Apple/Google/Stripe/etc. and there's a limited margin for how much cheaper it could be (those players have plenty of room to lower their fees before becoming unprofitable). The problems with micro-transactions aren't really the overhead of processing charges.
The deeper question about this concept is about the idea of interoperability. Payments or authentication are comparatively simple problems which are well-understood. If I use Autho0, I'm cutting out the most expensive part of that problem and my app change are minimal — before I verified that you could receive email at you@example.org myself, now I get that as an attribute from the SSO service, but it's always been my unique identifier.
In contrast, integrating assets into games is a much harder problem without a turnkey solution. Putting an asset into a game requires the artwork, sound, etc. to be adjusted for the game engine (this is far more complicated than just resizing a JPEG since they need to adjust things like 3D meshes, lighting, etc.), custom behaviors implemented (does anything light up or respond to conditions?), if does anything which affects gameplay that has to be implemented and balanced against the rest of the game (you're going to regret paying extra if your favorite weapon is weak; nobody else will want to play if it's over-powered), and while those are substantial amounts of work they're not even the hardest part: the game developer needs to have a license to do any of that. You're not going to see Mario in Call of Duty because Nintendo doesn't want their billion-dollar franchise used that way. Gamers can't even resist advanced purchases for games of unknown quality, there's no chance that they're going to stop buying games until the publishers grant general access to assets or do so at less than usurious rates.
Now, look at it from the perspective of the implementer: if you want to take an asset from game A, you already spent the money buying it in that game. I can spend a lot of time and money licensing & developing support for that asset in my game in the hopes that it'll make you more likely to buy my game but that's a big upfront cost which limits my returns to the person or, hopefully, people who hold that particular NFT — or I can spend that time and money on things which I can sell to everyone, and don't require ongoing licensing fees to the developers of game A.
Ah yeah what a boon to new entrants to have to design games that can accept an infinite number of arbitrary game assets that they will receive no revenue from!
They wouldn't have to give up any major channels of revenue. This would just be an improved architecture for their existing micro transactions, that also enables a secondary market.
Remember that NFT contracts can be written such that the original issuer can get a piece of secondary sales. That is a new revenue stream for the content owners.
I think that interoperability will not be universal, but maybe you can buy NFL gear on an NFL website and then it happens to also work in the licensed NFL games -- stuff like that. Or Nike negotiates with Fortnite and Roblox and Minecraft so that Nike NFTs that you buy from Nike.com work as avatar customizations in these games. I think this is how it starts -- limited and negotiated interoperability between non-competitors. Maybe it gets to where competitor games have interoperability, but that is definitely not where it starts.
I think that interoperability of functional items, rather than apparence items, needs to be careful considered on almost a per-item basis.
There will not be universal interoperability of functional items across disparate games, and only limited interoperability of functional items within game families/series.
Can someone point me to a proposal for how this is even supposed to work, by someone who is familiar with game development? There is no standard for 3D asset development between game studios. Even games made within the same studio don't have interchangeable assets.
This is not interesting or worthy of an article, The Atlantic must be having a slow day. Everything popular always has its most ardent haters, just look at any big tech company like Google, Facebook or popstar like Justin Bieber, Drake, etc. This is not unique to crypto. Anything that attracts such enormous wealth is naturally going to attract the get-rich-quick schemers, scammers, charlatans, moonbois, etc. Any bold new concepts and grandiose claims like web3 and NFTs will be met with skepticism just like anytime a popular tech platform redesigns its UI or algorithm.
Virtually all of the extreme vitriol is pure nonsense and entirely misplaced. People bashing NFTs because jpegs of apes are selling for millions are completely missing the point. It's equivalent to bashing the email protocol because of the existence of spammers, or hating tech in 2001 because of pets.com. A grammy-winning artist yesterday wrote a nice thread about how NFTs have changed his life by enabling him to better monetize his work [1]
Not to excuse scammers/spammers and charlatans because obviously that stuff is irritating. I personally despite the crappy NFT art collections selling for millions, NFT profile pictures, Ponzi-like play-to-earn crypto games as much as any hater. But I'm also aware that nobody is forcing me to buy a digital ape or play Axie Infinity, and that stuff is only a tiny fraction of what NFTs and crypto enable.
It's important to realize that we're still in very very early stages, not even the first inning of the web3 decentralized future, so at this point much of the talk is just prophecy. But there's no doubt in my mind that crypto, smart contracts, and decentralized technology (eg. IPFS) enable a ton of applications that were not possible before. Rather than fixating on bored apes, I'd rather focus on the real innovation (eg. with defi, zero knowledge proofs, DAOs, NFTs with real application, IPFS) and join in on building the future.
Say you are a game developer and you are creating a game like WoW or EVE online where items can be traded via an in-game market. You can design the whole system from scratch yourself or plug in to the various blockchains and use the dev cycles elsewhere. You could represent each item with a 32byte id and each player’s inventory with a wallet.
Bonus: say a new WoW private server spawns up (there are tons of these around). You can offer the option to a player to “migrate” from another server and keep all their items. All they have to do is provide a digital signature from the original server to show that they own the items.
Typically in game need systems of control in place to prevent cheaters, if the inventories are stored externally this might present an issue? Also I don't think that trading system itself is that huge of an investment so much as the management and interface of it all which would still need to be developed so... seems dubious to say the least.
Even the simple ability to send crypto to/from anywhere in the world at a fixed fee without having to rely on centralized institutions is huge. For countries like Argentina with hyperinflating currencies, strict capital controls, distrust of banks is so high (due to a bank run 20 years ago) people buy houses with cash, the advantage is obvious. Even in first world countries however it's advantageous to be able to transact without being at the mercy of a few payment providers that shut down your account and blacklist you on a whim, and there's nothing you can do about it [1]
Decentralized finance is huge. Borrowing/lending without having to rely on a central intermediary. Insurance without any central intermediary [2]. The ability to trade tokens without any central intermediary.
Tokenization itself enables decentralized governance in the form of DAOs (decentralized autonomous organizations), and to for example fundraise without having to give 5+% to private companies like Kickstarter, Patreon, or whoever. There's an attempt to create a universal basic income [3] Tokens themselves enable communities to have a vested financial interest in their own success, which sure could be a bunch of people holding apes and attending yacht parties, but could also be ENS [4] or MakerDAO managing a decentralized stablecoin with billions in value.
NFTs enable creators more opportunity to monetize their work such as via selling NFTs with exclusive privileges where the creator can even obtain royalties upon retrading, decentralized marketplaces for digital or even real life goods like ticketing or real estate, the ability to reuse digital assets across different applications/games. People here love to fixate on the stupid jpegs and the fact that the URL often points to a centralized server, but that's really not the point. NFT again is just digital scarcity (see the Twitter thread I linked in the parent comment [5])
Decentralization and users owning their own data is huge. Imagine owning your own content, and being able to utilize various frontends and/or build on top of the data. This means having a digital identity that can be reused across different platforms (eg. keeping your posts + followers). Don't like Youtube's algorithm? Use a different one. And of course there's censorship resistance. The modular nature of all this would enable enormous innovation, just like it already has in defi (for example look up dex aggregators like 1inch and matcha, or Curve and Convex finance)
Zero knowledge proofs in addition to enabling privacy and scaled computing also enable trustless anonymous voting. Meaning that an election can be run in a decentralized manner that's mathematically proven to be legitimate without revealing anyone's individual votes. This is massive.
I could go on all day but then I might as well write a damn article. This slide deck is a nice summary [6], as well as these threads from Chris Dixon [7] [8]. It seems most commenters here would rather just complain about bored apes and scammers, but there actually is a lot of cool stuff going on if one actually takes the time to do their research.
Sorry but they don't need to talk about the technology to uncover that its implementation is a scam. It's like saying you have to talk in depth about the workings of phrenology or homeopathy before you can say its bullshit.
i still do not like the entire concept of cryptocurrency and the blockchain. it's no more decentralised than the internet and the idea of unrestricted currency is bad. we have banking regulations for a reason.
We have many of the current banking regulations because, as it turns out, the same organization claiming to securely store other peoples' money and wishing to gamble using that money is a conflict of interest. Someone has probably invented fractional reserve banking for crypto, but most crypto users don't want to deposit their crypto into such a system. Many banking regulations exist to mitigate the impact of that conflict.
The other major class of banking regulation has to do with governments monitoring transfers of money. I'm not entirely convinced a weakening of their ability to do so would be a bad thing.
Since there has been tax introduced for crypto, why couldn't the government do it for crypto as well?
Most crypto I am aware of is as public as can be, if you were forced to verify your identity then they could directly track your transactions as well. And any somewhat anonymous crypto could just be made illegal, you could theoretically still use it, but you'd still have a log that says you got money from nowhere, which I think could warrant an audit if done a lot.
> Someone has probably invented fractional reserve banking for crypto, but most crypto users don't want to deposit their crypto into such a system.
Actually, by many accounts, Tether (USDT) has been based on some kind of fractional reserve (nobody can prove that or disprove that), and USDT happens to be the top (?) stablecoin in use.
I think the hope of Bitcoin is for countries where regulation and corruption impact one's ability to transfer and manage their money through banks, they have a separate, isolated system not vulnerable to that.
But cryptocurrency doesn't fix this, it just pretends to by throwing everything out of the window. I think what would ultimately work is a global 'bank' that implements all the safeguards the current system has without governments being able to touch them. That means it has to work within their legal frameworks, but also have high integrity and security to avoid the corruption... Which is probably fanciful, much like the idea crypto will fix it.
Much, much less so, really. Good luck pulling something like the big Ethereum shift that produced Ethereum Classic with the internet... We still aren't even on ipv6.
Have you ever studied the undersea cables running throughout the world for telecommunications (ie the internet)??
Do you have ANY idea how many there are in almost every country in the world (with backup links going to other areas)? What in the world are you talking about?? The internet is decentralized, plain and simple. Put it to you this way, let’s say you wanted to “take the internet down”, please (short of EMP attacking the entire planet - in which case we have way bigger problems than the internet obviously), how exactly would you do that. Seriously I’d love to know. See, I happen to have worked at major internet hubs throughout the world, and you would have to simultaneously take out hundred (again across the planets) in order to even slow down the internet.
Same principle goes for “truly” decentralized crypto (ie Bitcoin is the obvious example). Tell me, how exactly (even if you were the ruler of a major nation power) would you take either down? I’m dying to know…..
It’s impressive how ignorance spreads like wildfire. Do your homework people. Read. Do the actual math. Use your heads. What’s wrong with all you!?!?
Just fyi, for the crypto builders in this thread. A lot of people here mined like 100 Bitcoin early then never got it and sold for $3 and turned bitter and grumpy.
You can disregard their bitterness and continue solving and building interesting things.
If you look at the "smart contracts", you find that the majority of NFTs are just links to urls hosted on a server somewhere else. So what you are actually buying is akin to a pamphlet advertising where the Louvre is, when what you thought you've bought was the Mona Lisa. The content behind the URL can change at a moment's notice. Want to put the full content on the blockchain or even a hash of the content? Look at the gas fees for ethereum and tell me it's worth it.
Everything in the NFT space is going to zero.