I tend to view the NFT craze as just that, a craze. It started as a massive and intriguing stunt that spread far and wide because of how absurd it all seems. It’s the perfect storm of “I don’t get this at all” combined with “you just don’t understand how revolutionary this is”. You also have the appeal of “why don’t I just make a few of these NFT things and make some money too?”

Additionally, I’ve read that the supposed $69 million dollars worth of ethereum used to purchase that famous NFT isn’t actually a transaction on the Ethereum blockchain. So there’s a good chance this whole thing was a farce to jumpstart interest in the NFT market itself.

Ultimately a few whales, famous people, and early adopters have already made out like bandits while the vast majority of people are barely going to make any money in the NFT market and it will sizzle out rapidly.

You're missing an important use case here: Money laundry. While regular cryptocurrency is quite useful for this, it comes with the drawback of having a well-defined market value at any given point in time, making it harder to cook the books since there is some "ground truth" to get audited against. NFTs don't have that limitation - the price at any moment can be as high or as low as you need it to be to shift any amount of money, instantly, from anywhere in the world to anywhere else in the world. Regular art has historically been used for this too, as has high-end real estate (basically anything where rich "eccentrics" can pay whatever they want for something), but these come with the hassle of needing to also move a physical good, sign deeds, set up companies - plus there is a limited supply of these, limiting the bandwidth with which you can shift money around. NFTs overcome all these limitations, it's an entirely digital, global, endless supply of goods with no fixed marked value and a plausible cover story of why it's worth millions. If you're in charge of bookkeeping at a cartel, NFTs are probably the most exciting thing that has happened this decade if not longer.

I have no problem believing this. Nonetheless, I'd like to see a good hypothetical example to really understand how it would work. Would the seller have to be in on the deal? Probably, or not?

One hypothetical where the seller _is_ in on the deal:

Let's say I want to send you money for something illegal. You, however, don't want the government getting suspicious about how you're spending $large_amount on $small_salary.

I could gift you the money, but if we don't have an existing relationship or reason to do so that looks mighty suspicious, and additionally gift tax can end up being more than income tax.

The next option is for me to "buy" something from you. This needs to be something you can obtain for a low price but sell for a high price. You could sell me a loaf of bread for $1million, but that's going to look equally (if not more) suspicious than the gift.

Enter art: Art can be produced for extremely low cost, but sold at massive markups (and often is so). The value of art is almost entirely subjective (i.e. "what is someone willing to pay for this"), so unlike with a piece of bread it's not obvious that I'm paying for something I consider near worthless. Each piece of original artwork is unique, so there's no market to prove that nobody else would be willing to pay such a sum for your art.

Therefore, with art you can receive the money, pay taxes on it, and claim to the government it's totally legit. NFTs have similar properties to art: they're unique, can be minted at very low cost, people are willing to pay large sums for them, and nobody really has any way of determining their "true" value.

Yup, that's NFTs in a nutshell.

And there is almost certainly a large real world contingent salivating at the thought that they can soon launder huge amounts of money, based on infinite products, that are impossible to value and trivial to create.

And as usual there will be a handful of technology people afterwards standing around shocked, saying they had no idea they enabled the 21st century's money laundering platform, and

Just like the cliche "I just wanted to make an anarchist digital currency, I didn't think it would impact society in negative ways we can't control!"

Kinda reminds me of steem (steemit.com), when it first caught on in the media, there were (still are?) some huge whales on the platform, and some people made some serious money doing not much. But now a few years later, profits have leveled out allot.

If he did that, it would be hard to then sell it in the future because now you have to verify if the signature is real or fake. The frequency of art forgeries demonstrates the issue.

With an NFT, Jack just has to say that this one NFT is the original. Every subsequent transaction can verify the NFT's validity just using math.

There's a basic problem with that argument. There is no telling whether you're actually buying an NFT from Jack himself. In fact the NFT world already seems to have a fake and forgery issue of people who claim to have rights or be authors of creations they aren't even affiliated with.[1] Crypto just shifts the goalpost of what's being faked. Which is why the Beeple NFT sale didn't happen somewhere in the nether of the internet, but through Christie's, a 300 year old seller of art, after buyer and seller had communicated personally. They buyer didn't just fork over millions to a pseudonymous wallet-address. The actual verification of the transaction happened in the real world.

Also as a sidenote, you have actually no idea whether this particular blockchain will still be around in the future. In fact given the volatility of tech that's not really that likely to be honest.

[1]https://www.theverge.com/2021/3/20/22334527/nft-scams-artist...

> There is no telling whether you're actually buying an NFT from Jack himself

It's fairly easy to verify the origins of statements here, especially since Jack is on Twitter announcing his NFT on his timeline. What more than that do you need?

Same as you verify any celebrities selling movie props on ebay or whatever, if they haven't announced the sale via some other channel where they are already verified, don't trust that it's the real deal in the marketplace.

> Which is why the Beeple NFT sale didn't happen somewhere in the nether of the internet, but through Christie's, a 300 year old seller of art, after buyer and seller had communicated personally.

This is a feature, not a drawback. You can make the sale however you want, via bank transfer, cash in hand or actually transfer Eth to a wallet. What matters in the end is who stands as the owner in the blockchain, but how it gets there, is irrelevant.

> Also as a sidenote, you have actually no idea whether this particular blockchain will still be around in the future. In fact given the volatility of tech that's not really that likely to be honest.

This is a separate issue from NFTs and applies to the whole cryptocurrency space. For now, the $1.5 trillion market is disagreeing with you that it can disappear in the future, as otherwise people wouldn't put so much money into the ecosystem.

> It's fairly easy to verify the origins of statements here, especially since Jack is on Twitter announcing his NFT on his timeline. What more than that do you need?

Now you rely on a tweet being durable. The entire blockchain history is based on something not on the blockchain that can be edited by people with root at Twitter.

Easy to solve by storing inter-chain links, signatures, immutable data structures and content addressing

And if Jack doesn't want to bother with that? Clearly he didn't do any of that this time.

Is not needed for him to do anything, most of mainstream internet is already archived via Archive.org and similar efforts

Doesn't that mean that in the future Jack can just mint a new NFT and say that the new one is in fact the canonical NFT for his first tweet? The only way to do it would be for NFTs to support non-repudation, but they don't.

The trust layer is in the physical world either based on hearsay or a physical contract with two parties. In any case, it's off-chain.

I can sell Jack's tweet right now.

That's a bigger issue than Jack being able to sell it multiple times.

You can. Is it the same? No.

Just as it's not the same if a random person tries to sell movie props from famous movies, compared to if the person actually being in that production in the first place.

What? If they sell verifiably the same physical prop, then what's the difference?

Jack's tweet doesn't become counterfeit if Hjfrf sells it, it's non-figuratively and verifiably the same exact tweet.

The NFT representing Jack's tweet is a pointer to the tweet. It's possible to create an unlimited number of pointers to the same thing.

It’s the creator certifying that this file is the definitive copy, and having an instance of it to get paid for.

In an age of trivial copying, editing, recompressing, and other alterations, “original” can get lost. This gives means to identify, transfer, and prove originality.