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.
https://www.larvalabs.com/cryptopunks lowest price available $386k(!)
or more detail on artblocks: https://www.nft-stats.com/collection/art-blocks average price $39k
or these: https://www.nft-stats.com/collection/boredapeyachtclub 90th percentile = $168k
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.
It's beautiful.
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!
[1] 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.
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.
(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.
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: https://blog.ethereum.org/2021/09/28/finalized-no-29/
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.)
https://www.quora.com/Why-did-the-baseball-card-market-colla...
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?
1. https://static1.squarespace.com/static/5d580747908cdc0001e67...
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.
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.