There's likely no museum backstop for most NFTs. (By which I mean that rich people buy art, sell it amongst themselves/have inflated art appraisals to raise the price, and donate to museums and claim as a tax writeoff.) See https://www.latimes.com/local/la-me-irs2mar02-story.html
NFT as a concept will live - I can see them as placed alongside offline art as an online component that doubles as proof of ownership and lineage, and in the long run could be a major anti-counterfitting strategy.
That said, yeah regular art markets don't really make sense wrt value either.
I think we just need to wait until the first NFTs start disappearing because of the servers hosting the images shutting down. The actual images aren't stored in the blockchain, it's just a URL.
Money laundering?
High sale prices are one way to inspire confidence in others.
Whether that person thinks the sale price is a legitimate indication of value, or they think at least someone else down the line will believe that, is not always clear. Because of the nature of crypto anonymity, there's always at least some percent chance any given sale is a legitimate transaction between two unique and non-colluding parties, and vice versa.
The NFT is also not the work in question. While there are some proof of concept works that have their binary data stored directly in the blockchain, the vast majority are just URLs to some other site, URLs that could die or change at any time. And there is no recourse within the blockchain itself to adjudicate the breach of trust that would represent. Which means, again, we have to fall back on the traditional system of legal contracts and courts to resolve disputes.
In other words, the decentralized, "zero-trust" nature of NFTs completely undermines any concept of ownership that isn't a post-hoc rationalization designed to part fools from dollars.
There are a lot of fools in this market that don't understand the tech or its specific guarantees and non-guarantees, sure, but that doesn't mean NFTs aren't bringing anything new at all to the table.
You can't say that NFTs are a trustless system when the origin of the NFT requires trust. You might as well assume the "+ C" term in all integrals equals zero. It's just factually incorrect.
No, as long as it's known that the address that created the NFT is owned by whichever public figure created the artwork, you're good to go.
> You can't say that NFTs are a trustless system when the origin of the NFT requires trust.
That's like saying PGP is not a trustless encryption scheme because you still have to trust that the person you're exchanging encrypted information with is who they say they are. Nobody (who is informed anyway) has made any sort of claim about PGP fixing that problem. It is entirely irrelevant to the value-add.
Now, whether you believe the value-add actually matters given the caveats is another topic of discussion, of course.
Nobody--who is informed--has given me any coherent description of what value add NFTs provide, period. These ever shifting sands of never-enumerated benefits.
What, exactly, did you mean when you said "the value-add of NFTs... is namely that there's a trustless, verifiable record of transfer"? You responded to my assertion that NFT ownership is not trustless by saying that wasn't the value-add, the value-add was that they were trustless.
It means you're criticizing something for the wrong reason. Criticizing PGP for not doing something it ever claimed to do is akin to criticizing NFTs for not doing something it ever claimed to do.
> Nobody--who is informed--has given me any coherent description of what value add NFTs provide, period.
Since I assume you're intelligent enough to understand, I can only assume that means you don't want to understand.
> What, exactly, did you mean when you said "the value-add of NFTs... is namely that there's a trustless, verifiable record of transfer"?
Meaning that so long as you can verify that the NFT was minted by who you think it was minted by, you don't have to trust any of the intermediaries that it passed through. It's like buying something that comes with a physical certificate of authenticity. In real life, you have to trust that the certificate itself was not forged by any of the people in the supply chain before it got to you. That's the part that an NFT solves.
The trust issues that an NFT does not solve (that also exists in real life):
1. Some rando Bob prints out their own certificate of authenticity and calls it "Bob's Certificate of Authenticity that This Painting is a Picasso." It's up to you to verify that Bob is someone whose opinion is worth respecting and trusting.
2. The physical product (if there is one) that the certificate of authenticity comes with is in fact the same physical product it originally came with. Not so much a problem with digital goods.
> You responded to my assertion that NFT ownership is not trustless by saying that wasn't the value-add, the value-add was that they were trustless.
Yes, because there are obviously multiple dimensions to the concept of trust, and for some reason you're conflating all of them.
I mean, it's really not a hard concept to wrap your mind around. Unless, of course, you'd prefer to keep looking down on NFTs as a form of status signaling, in which case do keep on pretending not to understand.
Those people should stay away from NFTs, because theft is rampant[1].
> How is spending $1 000 000 on a "virtual image" (NFT) any different than spending it on a Picasso?
You own the Picasso but you don’t own the NFT image. Not in any way that matters. Your “ownership” of the virtual image via an NFT isn’t legally recognised and you have no rights to it. Especially not when the minter stole the image[1].
An NFT isn’t a virtual image, but a reference to it. Anyone else can download the same file for free and your purchase can be gone without recourse[2].
A more apt comparison would be spending $1,000,000 on a Picasso or a document that says you own the Moon.
[1]: https://www.vice.com/en/article/n7vxe7/people-are-stealing-a...
[2]: https://www.vice.com/en/article/pkdj79/peoples-expensive-nft...
In both cases, an artist merely places their “this is official” stamp on something that is effectively a copy, and limits the number of copies available based on the desired economics for their work. And the fact that the “official” version is worth more than a “fake”, is merely because humans value genuineness and provenance, even when the end product is indiscernibly different.
And that's the reason you don't see many lithographs selling for millions of dollars.
Still, the combined "wealth" of lithographs may very well be in the 10s if not 100s of billions.
It is not artificially scarce. Picasso could've painted a Guernica every month for the rest of his life. Even then, he would've only painted a few thousand paintings. Instead of doing that, he painted the other thousands of paintings...
Any NFT could have infinite copies. You simply decide how artificially scarce you want it to be. Picasso could not have painted infinite Guernicas if he so chose.
You can buy a print of Picasso's works. The value doesn't come from the art. It comes from the fact that Picasso painted it.
It's the same way for collector guitars. People want guitars famous musicians played. There are plenty other versions of that exact guitar. But they weren't played by the famous musician. That's what makes it truly scarce.
I can't, but will happily pay anyone that can considerably more than the Ethereum gas fees involved in minting an NFT copy of something.
https://www.marcalexanderart.com/reproductions/
"own a museum quality reproduction of a great master’s painting that is indistinguishable from the original"
It'll look better on my wall though, which is why I'd consider commissioning it.
For related reasons, I suspect that whilst more people would flock to see the actual Sistine Chapel ceiling than one I commissioned for my living room, I'd still have an easier time wowing people with the living room artwork than a NFT with a gif, even if it was countersigned by the Vatican
It's almost like the important bit of the provenance for appreciation is in having the actual physical original the actual artist worked on, not a certificate saying you sent some money to someone on an aftermarket and exactly the same gif everybody else has
For example, consider a baseball or other trading card. Can be easily replicated/printed - yet certified authentic cards have value much more value. Why?
This isn't difficult to understand.
There are only so many "original" Picassos because Picasso is dead, but if we consider artwork that looks just as good as Picasso's, then the scarcity is entirely artificial and caused by provenance.
NFTs from a particular source will similarly become "truly" scarce once that source is dead.
There may be a difference in degree, in how hard it is to recreate a physical work versus a digital one. But it is not a difference in kind.
Except that those are also scarce because they take the labor of expert hands to make too. People actually would pay money for known forgeries because of it. Absent copyright law and a desire to fund the artist, no one would pay for digital art because copies are as close to free as makes no difference.
The NFT took work to produce, sure, but it's just a number with some mathematical relationship to other numbers and means absolutely nothing without other systems agreeing that it means something. It creates work to be done where none needs to be done solely for the purpose of trying to fit a square peg (post-scarcity information) into a round hole (scarcity-based markets).
That's where you're mistaken. An NFT is distinct from the work that the NFT is tied to, which might not necessarily be digital.
You can copy a Picasso, but no matter how good your copy is, you can't copy the "original" quality of a Picasso. That's all an NFT is, representing the "originaL" quality of something.
The worth (or lack thereof) of copies is completely irrelevant.
Yep. Which raises the question: what exactly does the NFT provide? Is the work it points to in any way lesser through its absence? If no, then why does the NFT exist?
> You can copy a Picasso, but no matter how good your copy is, you can't copy the "original" quality of a Picasso.
There's a long philosophical argument to be made here involving the ship of Theseus, the teletransportation paradox, and frankly thousands of years of philosophy of identity. Let me attempt a short version: if you have two identical paintings, and lack external information as to their origin, can not either one (or both) be said to be the 'true' painting? If so, then what value is there in the information that 'proves' one is the 'original'? The origin-information, an NFT in this case, is a construction, an arbitrary assurance. What value has an NFT that points at nothing?
> The worth (or lack thereof) of copies is completely irrelevant.
I think we agree about what NFT's are, so the only real disagreement is about their value. Precisely because of the point above, I think we would both agree that their value is completely divorced from the value of what they point to, right? So the NFT's value must stand on its own without regard to the work it points to, right? Therefore, saying it represents the 'originalness' of a work cannot be where its value comes from because that is a derivation of value from the value of the work.
I assert that the value of an NFT is effectively 0. Anyone can make any NFT they want, and it might be unique, but uniqueness is not inherently valuable. Here's a UUID v4: 6dee29bc-8798-4560-ba13-de94bac69333. I generated it just now and it is the first and theoretically only time that UUID will ever be generated. Since I have generated this UUID, I have gone ahead and signed it with a private key and thus claim ownership of it. Here's a pastebin to the public key: https://pastebin.com/ddVJxvck and the signed UUID: https://pastebin.com/0MweD9qN. This is effectively an NFT. How much would you like to pay me to sign a certificate of ownership transfer to you?
Summing all up: The work that went into the creation of a thing is all that has value. NFTs can be created for basically free by literally anyone who wants to and therefore they have no value. Claims that an NFTs value comes from it pointing to something are bunk as we both agree the value of what it points to is irrelevant.
This is the crux of it, really. Why do art buyers care so much about what the “original” is? If the reproduction is so good that you need an external expert to tell you which is the original and which is the reproduction, then that basically means it’s not the aesthetic qualities that you’re paying millions for, but the “original” quality that you’re paying for.
This original quality, as I’ve noted, allows you to signal your wealth/cultural tastes and whatnot. Now, I agree with you in that I hardly find any value myself in that, but it’s apparently worth millions to other people who are not us.
In short, I only claim that NFTs are as ridiculous/non-ridiculous as the traditional art market. If you think the traditional art markets are also bunk, fair enough. What I take issue with is thinking that NFTs are a uniquely stupid phenomenon but expensive traditional art is a respectable one.
Look - MBS bought that fake Da Vinci for $450M or whatever. I don't think the majority of people buying $50M+ paintings are complete morons. Maybe they are.
> Look - MBS bought that fake Da Vinci for $450M or whatever.
Case in point. That's why you hire an expert (or perhaps even a team of experts) to help you out.
I will 100% grant that it's mostly about signaling and bragging rights. But NFTs are artificially scarce. Original work from Picasso is truly scarce.
> But NFTs are artificially scarce.
We're just going in circles now. Reread my previous response to why they're no more artificially scarce than Picassos.
He even made two versions with the same title: https://en.wikipedia.org/wiki/Three_Musicians
I think it's not super healthy but as long it's taxed I guess it's fine but that shows wealth inequality.
Check "Genshin Impact" for prominient example.
NFTs are not secure or persistent. The asset at the URL could change at any time.
Liquidity is a function of people, not of the underlying technical structure of the marketplace. This is tautological reasoning. "more people will use the NFT marketplace, creating more liquidity, because of the greater liquidity of the NFT marketplace."
Not sure what you mean by this.
>security
The opposite in fact. If a hacker takes over your second life account and transfers your property you can bug customer support to get it back. If they compromise your secret key and transfer it over the blockchain you have no recourse. Unless the true source of ownership lives somewhere off blockchain and they invalidate and reissue it to the original owner, but then what purpose does blockchain/nft serve again?
>persistence
Already handled, obviously.
>liquidity
If second life wanted to offer liquidity they could(do?) without using an NFT. And if they don't want to offer liquidity than trading the digital asset as an NFT doesn't do you any good since there's no way to transfer ownership in second life.
> Not sure what you mean by this.
Yeah, I wasn't sure, either. My only clue was that there are some NFT proponents that talk about different applications using NFTs as content in the app. But that's just URLs. There's no need for the blockchain to do that. And when you start talking about things that go beyond simple aesthetics, like NFT game items/cards/weapons/etc., there are a lot of problems that either don't go away or are made worse by the fact that there is a supposed "real world value" and "ownership" tied to the objects.
There are a number of NFT Tradable Card Game projects in the works right now. And they sell themselves on the premise that players "own" the cards, and that the cards can be taken "elsewhere". But I think it pretty clearly starts to fall apart when you consider that digital TCG cards have no value outside of a game application in which you can play them, that said value is dependent on the game app not nerfing the card stats or the interpretation of the card stats, or debasing the value of existing cards by releasing new packs of more powerful cards, and that there is no incentive to any app accepting cards minted outside of their own structure.
Wizards of the Coast owns Magic the Gathering. I can't make MtG cards and call them MtG cards without violating WotC's trademark. I can't produce copies of MtG cards or the rules of MtG without violating WotC's copyright. Any cards I create that are not a part of MtG's ruleset are meaningless in the context of the cards inside MtG's ruleset. Regardless of those issues, WotC's incentives are to control the balance of the game in such a way that keeps people buying cards from them, so they have no incentive to interoperate with any of my cards, as they could potentially upset the balance of the game. And finally, WotC is well-known for deprecating old cards (if it's not usable in the game, then what value does it have?) and releasing new decks that make old decks worthless (a card's value is only definable in relation to how well it plays against other cards).
The NFT-ness of any of those cards doesn't change any of those issues. If anything, where MtG players can subvert WotC's shenanigans is in playing house-rules versions of the game. Which, again, won't be possible in an online, digital version because of copyright and trademark issues. So where physical TCGs have an out for groups of friendly players, because you have actual, physical ownership of those pieces of paper, NFT TCGs remove that ability, because they are useless outside of the context of a large, legally-targetable entity capable of deploying a competing application. It's as if you bought MtG cards, but the only place you were allowed to play with them were at WotC-sanctioned events.
And that doesn't get into the concept of the "value" of special versions of cards, like foil finishes, which are no different from standard versions of the cards outside of strict aesthetics. You may have bought a token that says you have access to play that foil card, but you don't have rights to the digital asset file, © WotC.
One of the key components of a concept of ownership is the ability to exclude others from access to the thing that is owned. NFTs do not provide any concept of exclusivity of the actual asset, only of the token. It becomes a Prisoners' Dillema in which the only way the system works is if no actors within it defect and take the assets without acknowledging the "legitimacy" of the token or the blockchain as an authority.
It's particularly funny to me to see the drain-swirling relationship to TCGs that crypto-* has had over the years. First with Mt. Gox (which was not a mountain named Gox, it was Magic The Gathering Online eXchange) becoming a crypto-exchange, then the controversies there, now NFT TCGs ala MtG.
You literally have the previous generation indoctrinating the newest generation into the scheme.
While "wealth begets wealth" in many ways such as compound interest, simply holding $100 USD from years ago doesn't by itself give you any advantage over people in the present day. Holding BitCoin from 2012 does give you advantage over people in the present day, and that advantage comes not from any value BitCoin itself generates, but from the present day buyers seeing the increase in money the 2012 buyers got for no effort, and wanting part of it, so throwing more money at it than the 2012 buyers did. Quantitative Easing isn't a Ponzi scheme because you don't buy Quantitative Easing hoping you can sell your Quantititative Easing for more to new people interested in the hype of Quantitative Easing.
Exchanging USD for steel, fashioning it into a steel bolt, and exchanging the bolt for more USD, is not a Ponzi scheme. Buying shares in a company, the company making steel bolts and becoming more valueable, and your share of it becoming more valuable, is not a Ponzi scheme. Exchanging USD for one BitCoin, then exchanging one BitCoin for significantly more USD, where that extra USD comes from the other person, who doesn't value the BitCoin but only hopes the BitCoin will increase in value in future, makes it very much like a Ponzi scheme.
You can grow flowers in your garden, you can find someone to exchange their company shares for your flowers, that doesn't make flowers a currency. You can declare that USD is a currency with an army behind it, that doesn't make it a Ponzi scheme.
The open question is whether BitCoin can get enough buy-in from people wanting to cash out for free money to generate a secondary market of people exchanging BitCoin for goods and services, large enough that when no more people want to buy in for the free-money aspect, people still want to buy-in for the practical use cases. Since most of the practical and legal use cases are well served by USD, the faff of exchanging USD for BitCoin to buy bolts and lose consumer protections instead of exchanging the USD for bolts seems value removing, not value adding.
I think of NFTs like car titles.
Having the car title in your name is the only way to prove you own a car. Someone can burrow your car, and have it in their possession but that doesn’t make them the owner - the title does. When you buy a car, what you’re really buying is a little paper that says you’re the owner - without it, you’re just renting.
NFTs work the same but for digital items. When you buy an NFT, you’re really buying the title for that artwork. Sure, people can copy and paste a JPEG, but they can’t take the title from you - Just like possesing a car without a title doesn’t make you the owner.
The concept of an NFT isn’t absurd, it’s a digital version of a real world use case we all rely on daily to prove ownership.
This is exactly why NFTs are different to a car title. If someone tries to use your car (the car which you have the title to) without your permission, then the police can intervene. (They often won't, but that's the principle.) In theory at least, they have no right to make use of that object.
If I own the NFT for a JPEG, there's nothing I can do to stop someone copying it, as you say. Not even an ineffective or theoretical method. That's just not part of the rights associated with an NFT to begin with.
In fact it's worse than that. The JPEG (or the image it represents) can still have copyright that someone can own and sell on independently of the NFT. That copyright is the actual analogue of a car title (though enforcement by the police is even less likely). You could have a NFT of a JPEG but not be allowed, in theory, to have a copy the JPEG itself!
Having a JPEG as your own isn't valuable, because JPEGs can be infinitely copied at zero cost. The title for the artwork doesn't mean anything when anyone can duplicate it.
If you want to spend money on art, why not commission some artwork from your favorite artist instead of throwing away money on procedurally generated garbage with a zillion transaction fees tacked on? At least that way the artwork might be something unique to you with a personal significance which makes it have more intrinsic value to you than it would to someone else.
People are betting on the fact that we'll spend more and more of our time in digital spaces, and I don't think that's necessarily a bad bet.
It's a bunch of unnecessary synthetic scarcity. What the fuck is good about that? Why do you want to sign on to a model where you're going to be nickel and dimed for everything you see?
As a consumer why do you want to pay for things that have zero marginal cost? What value do you get for buying an NFT to an image or virtual item that costs nothing to reproduce? You're not buying the copyright or any exclusive license to the things.
Why would anyone ever buy an "experience" NFT for something they didn't experience? So they can be known to be a poser and a sucker so long as the blockchain exists?
NFTs are just a way to enforce a class system in a virtual environment where there's no inherent system of haves and have-nots. Not only that but it's a system where an infinitude of intermediaries can extract payment out of any secondary market. It's sad that you're excited to participate in such needless rent seeking.
I think it's more an economic incentive for digital creators who have historically been nickel and dimed every step of the way trying to monetize their work.
> As a consumer why do you want to pay for things that have zero marginal cost?
The value for a consumer is less about paying and more about earning (which sounds dystopic to some, but is very exciting imo). And beyond that, layered experiences mean you could get an item / art / skin / etc and carry it through disparate digital worlds. One could imagine a world where no longer are you playing one game with one set of items, but are instead able to carry your stuff into multiple experiences.
Another point here: NFTs don't have to come into existance through some payment. E.g. playing an MMO and boss drops are NFTs, or by watching some sports game you're given an NFT (or in that case more correctly referred to as a POAP (Proof of Attendance Protocol)). This likely has no monetary value, but is more a social signalling device to show you care about something / did something in the past.
> Why would anyone ever buy an "experience" NFT for something they didn't experience?
Here I'm referring to digital experiences like concerts, parties, tours, AMAs, etc. where there is some set of rules to obtain the entry pass (in NFT form).
> NFTs are just a way to enforce a class system in a virtual environment where there's no inherent system of haves and have-nots
If people could altruistically create high-quality content and earn a living that way I'd agree with you. But, as we've seen with microtransactions, the model is changing as the world spends more and more time in digital 'spaces.' There is value in paying creators, and you're welcome to not participate if this isn't your cup of tea
Overall I think we're coming into this with different images of the future- agree to disagree and I hope it's less dystopic than it could be.
I don't understand. NFTs are not hooked up to the legal system of copyright, so how is it ensured that the "digital creators" are the ones that are rewarded? If you create an amazing image, what is to stop me getting the original NFT (by doing something like mining it? sorry I'm not familiar with the terminology) before you do and selling that on without rewarding you? Or, even if you did make the NFT first, what's to stop me altering one pixel or some irrelevant metadata of the image to allow a district NFT being created and selling that instead?
Another commenter said that NFTs are (sometimes? usually? always?) not even derived from the work itself but simply some URL that points at it. That crazy! What's to stop me making another URL for the same work (either hosting it separately or just redirecting to your URL) and making an NFT for that? What if my hosted version outlives yours? The whole idea is so totally ludicrous that I don't see how it's gotten this far.
Unless there's something huge I'm missing (which I'll admit is possible), it's obvious that NFTs are totally useless for this goal of rewarding digital creators. Traditional copyright, while flawed, at least makes an attempt at rewarding the creator of the actual work.
This comes up all the time and is laughably naïve. What possible reason would Epic have to let you transfer a skin or player model to their game if you didn't pay them for it? Game DLC is already broken and consumer hostile. Assuming blockchains and NFTs will do anything to improve it is absurd.
> Here I'm referring to digital experiences like concerts, parties, tours, AMAs, etc. where there is some set of rules to obtain the entry pass (in NFT form).
An NFT has no utility here. Where's the secondary market of suckers wanting to buy an NFT for a thing they didn't experience? If there's no suckers further down the pyramid there's no point in an NFT. It's just an event ticket.
> If people could altruistically create high-quality content and earn a living that way I'd agree with you.
This is the core problem. You're positing a world where every system for some reason cares about things on some blockchain. You're trying to treat an entry on a blockchain like real physical ownership. All this does is port inequality and inequity to a virtual space where it does not naturally exist. Scarcity is not a sine qua non of virtual spaces.
That's just a recipe for a hypercapitalist exploitive hellscape. Join the metaverse! You'll be just as poor as in real life! Join the fun!
It is incredibly sad that anyone is working towards a future where a post-scarcity space is fully subdued by artificial scarcity.
You're not necessarily, though. When Jack Dorsey sold his first tweet as a NFT, it didn't infer any actual ownership rights. You couldn't even make him delete it.
A car's title holds specific legal weight. The only way NFTs do is if there's a contract, at which point you don't need the NFT anyways.
Everybody except a few conspiracy nuts believe a title is what it is supposed to be. Your friends and neighbors, your parents, the government, the courts, law enforcement, car dealers… but the only people who believe NFTs are what they are supposed to be are insiders.
Maybe Ultra High Net Worth Individuals who collect cars and $10M lakefront mansions across the world don't buy cars and houses to "use" them. But >99% of cars and houses are bought for use - not for a piece of paper to prove ownership.
Sure - the people buying $1M NFTs are probably Ultra High Net Worth Individuals (or complete frauds - maybe both?). But the majority of NFTs are not $1M - and the majority of people buying them are not Ultra High Net Worth Individuals.
If I try to keep in my garage without the ownership title, the police will come, take the car, give it to the owner, and put me in jail.
What does owning a NFT of a JPEG allow me to do that I cannot do with just a saved copy of the JPEG on my hard disk? (Selling the NFT itself doesn't count, for obvious reasons.)
The NFT is more like a car enthusiast club issuing stickers or badges to its members.
P.S. I find value in this tech but it is still in primitive phase in my perspective.
I sense it is a case of somebody close to the NFT or virtual world buying the asset and making out it is a great thing and then selling it on quickly.
Many a scam involves somebody from the group buying something so the unwilling feel like it safe.
As always, don't be left holding the baby.