- slow (15 txn/sec, 22-23 with the move to proof of stake) - expensive (I read somewhere that globally Eth users spend more on 30M USD in fees per day!) - too volatile to be reliable for everyday banking use cases - bad for the environment
Blockchain technology is interesting and very powerful, but VCs and founders have all too often put the cart before the horse. A few years ago I spoke to an Aussie tech entrepreneur who had raised funding for his “Airbnb for RV” platform. He didn’t get much attention until he said it was blockchain based. In 9.99 out of 10 cases there is no need for a blockchain when a trusted, centralised ledger will do just fine.
Edge cases I can think of where a blockchain makes sense is in cases such as post-trade activities or trade finance where multiple parties need to settle complex transactions in a distributed way (Contour is a good example of this). Disclaimer: I do not own shares in Contour; I just find it interesting.
The un-banked aren't un-banked because there are no banks, or even because banks are inaccessible. They are un-banked because they do not have money. This is a social problem characterized by folks falling through the cracks. It's a lack of social safety net, a lack of unionization, a lack of inflation-adjusted minimum wage, a lack of healthcare. Broadly, a lack of of social programs.
I've never met a single person who had money but couldn't get a bank account* - have you? What good is a bank account to someone with no money anyways? What are they going to put into it? Just opening a bank account doesn't make you magically any less poor. You can grab one at ally.com free of charge right now with no minimum deposit. They'll even pay interest on your checking accounts which of course stablecoins will not unless you put them at massive risk.
Not to mention for the poor, a massively volatile speculative asset with astronomical fees is literally the worst thing they could put all their money into.
* outside people on the OFAC list, which, I would argue, is a good thing.
I don't agree with defi but this is absolutely a problem in a lot of rural america. People with money, who get paid, but without a bank so they have to take their checks to gas stations who take huge fees.
That you haven't met someone like this isn't surprising at all.
I'm also open to postal banking as a solution to this problem, but I'm not really clear on where the system is actually currently failing folks who have money. Are they banned by ChexSystems or something?
I get it, "Bank the Unbanked!" is a compelling narrative, but folks seem not to be asking the relevant questions: (1) who are the unbanked exactly and (2) why aren't they banked - specifically - when there's a ton of banks out there, a bunch of which charge nothing.
And furthermore, the institutions more likely to be friendlier to customers with less money are sometimes also institutions on a smaller scale that may have a harder time offering some of the services of larger institutions (e.g. branch/ATM locations, compelling variety of credit and account instruments, investment arms, better online banking experiences).
To the extent this is changing, it also has to change in people's perceptions, in a fashion that makes it easier to predict and feel confident in.
You have an incredible amount of optimism for both Ally's marketing department and also rural internet. Furthermore, this doesn't solve the cash problem unless you want to pay upwards of $5 just to pull out of an ATM.
> folks seem not to be asking the relevant questions
This is an incredibly well researched situation affecting a lot of americans. You not knowing isn't the same as this not being well understood.
I can transfer money and pay my bills with my phone. I can even transfer money to people not having the same bank as I have. I did it today, it took 30s or so and the recipient could immediately see the money on her phone. Where I live we also tend to use cards a LOT. I can pay in almost any store with my debit card and the money is drawn from my bank account right away. It was decades since I've saw a check.
> I've never met a single person who had money but couldn't get a bank account...
This is an exhaustively documented problem.
There absolutely are banking deserts (riffing on the "food desert" phrase). Those pay day loan and 3rd party check cashing services exist (to exploit) those communities which don't have banks, credit unions.
You dont need DeFi for that. See M-Pesa.
Social spending has risen at unprecedented rates since the 1950s:
https://ourworldindata.org/grapher/social-spending-oecd-long...
If the social democratic narrative were true, we would have seen the rate of wage growth rise. The opposite has happened.
It turns out social democracy benefits only the public sector unions.
A couple anecdotes illuminates the kind of power these unions wield:
New York has nearly 300,000 unionized public sector employees receiving over $100,000 a year:
In California, emergency workers can retire at 55 with 90% of their pension, that averages $108,000 per year.
California now has $1 trillion in pension obligations for its unionized public sector workers. That is where all the social welfare spending is going.
>>Not to mention for the poor, a massively volatile speculative asset with astronomical fees is literally the worst thing they could put all their money into.
No, the worst thing is lottery tickets:
https://www.theatlantic.com/business/archive/2012/03/amazing...
Tokens on the blockchain on the other hand provide hundreds of thousands of people in the Philippines with a way to make a living, and literally saved many from death during the mass-unemployment created by the lockdown. See the rise of Axie Infinity.
And there are plenty of crypto platforms that offer zero/near-zero fees, like Axie's Ronin, which is a near-zero-fee Ethereum sidechain.
>>outside people on the OFAC list, which, I would argue, is a good thing.
What about innocent people from countries on the OFAC list. Do you think that is a good thing? Acceptable collateral damage? What about WikiLeaks, which was blockaded by the credit card companies, under pressure from US government agencies, after it revealed war crimes? Good thing too?
You speak from a position of privilege, to reinforce centralized structures of control that perpetuate that privilege.
It's clearly a Ponzi scheme, where new entrants pay a large entry fee ($1k+), which funds the returns of the existing players. Poor people borrowing money to fund other poor people, until the last to join are stuck with the bill (earnings are already crashing).
More details in:
- https://news.ycombinator.com/item?id=29725845
- https://twitter.com/larsiusprime/status/1459191090100244483
- https://ambcrypto.com/axie-infinity-ronin-blockchain-see-dec...
- https://www.reddit.com/r/AxieInfinity/comments/odmdrk/how_do...
Beyond this enablement of more sophisticated coordination between those with capital and those with time, the emergence of digital collectibles might increase the aggregate amount of physical wealth, as the emergence of physical collectibles did some 30 some thousand years ago:
You say that like its even close to a good thing. It's unproductive, a waste of time, resources, human capital. It's also a Ponzi scheme because all payouts are made from new investors minus operational costs. Gains are illusory in aggregate.
>>Gains are illusory in aggregate.
Gains might not be illusionary, given they are giving rise to new stores of wealth which can have economic utility. See the essay on the rise of physical collectibles 30 some thousand years ago.
I mean, you can make the same exact argument about any exploitation of poor people for entertainment purposes. Your description maps perfectly to Bumfights. I think most would agree that your description alone does not make an intrinsically good system, let alone a moral one.
> And no, if the transfer is done for entertainment purposes, as many game asset purchases are, it's not a "ponzi" scheme.
The rich folks are buying in to make a gain, not entertain themselves. They are 100% of liquidity. The system is unproductive and yields nothing of external economic value but purports an increased value over time via 'number go up' all while operators slowly bleed capital out of the system. This is a Ponzi scheme. Ask yourself, would it work if money weren't involved in any way?
> Gains might not be illusionary, given they are giving rise to new stores of wealth which can have economic utility.
Charles Ponzi and Bernie Madoff were just ahead of their time, apparently. Given sufficient mental gymnastics, they too could have been captains of industry. Bernie after all gave rise to a new store of value! Shares of Bernard L Madoff Investment Securities LLC with meaningful economic utility! You could even lend them to others to earn a yield via a brokerage, I suspect! Alas, time makes fools of us all.
Paying poor people, who are grateful for the opportunity to feed their family, is not exploitiation. People heeding your admonishments against 'exploitation' would lead to more suffering, and no party being better off. It's pure politicization of interactions, at the expense of actual real life humans.
>>The rich folks are buying in to make a gain, not entertain themselves
It's a game, with a competitive element, so obviously some proportion are playing for entertainment.
>>Charles Ponzi and Bernie Madoff were just ahead of their time, apparently. Given sufficient mental gymnastics, they too could have been captains of industry.
Your hyperbolic comparison, between a game with digital assets, and actual ponzi schemes, is immature.
And arguing that digital assets, which become far more durable forms of property when NFTized on blockchains, can find economic utility as a store of value, is a completely reasonable argument, and your extreme reaction to this, full of snark and hyperbole, suggests your stance on this is far too motivated by emotion and bias to assess it.
I mean it depends on what you’re paying them to do and how much you’re paying them. Axie “players” now make on average less than minimum wage in the Philippines and continued earnings depends on more people buying into the ponzi.
> Your hyperbolic comparison, between a game with digital assets, and actual ponzi schemes, is immature.
The economics are clear and you haven’t really disputed them except by invoking the intangible magic of the blockchain and digital assets.
The minimum wage in the PH is zero, with millions unemployed, and many more than normal, due to lockdown restrictions.
Axie saved many lives, and if you were to put aside your agenda, and objectively study this, you'd find out how many people in the Philippines who were on the brink are grateful for the lifeline Axie provided them.
>>The economics are clear and you haven’t really disputed them except by invoking the intangible magic of the blockchain and digital assets.
Collectibles don't suddenly become "ponzi schemes" (!) when they become digital or are issued on blockchains. Your analogy is absurd, but I suppose that's ok, given the abundance of hyperbole on the pro-blockchain side.
This is no longer the case with L2 solutions, like zk-Rollups. See what StarkEx, which is one particular Validium/zk-Rollup L2 solution, is doing:
https://twitter.com/EliBenSasson/status/1475206185762578437?...
>>Past week, @ethereum ~ 9M txs. StarkEx ~ 6.25M TWO THIRDS THE TX COUNT OF ETHEREUM.
L2 solutions can process transactions at scales and fees a couple orders of magnitude greater and lower than Ethereum L1, respectively.
>>too volatile to be reliable for everyday banking use cases
Stablecoins aren't volatile, and they are a major, and rapidly growing use case of Ethereum
>>bad for the environment
Ethereum's energy consumption declines by 99.95% upon the completion of the transition to Proof of Stake.
Why do Ethereum fans keep using this example as if it’s already done, when it still isn’t?
Just like a Tesla investor might believe autonomous driving is being worked on.
The completion of Ethereum's transition to Proof of Stake will occur very soon, most likely within the year. The testnet for the merge - which is the term describing the technical process that completes the transition (it refers to the currently running Proof of Stake Beacon Chain being merged into the execution chain to allow Proof of Work to be turned off) - is already running:
https://blog.ethereum.org/2021/12/20/kintsugi-merge-testnet/
Stablecoins aren’t volatile, correct, but that’s because they are pegged to an offchain fiat currency or other form of “real” collateral. Even DAI, which is the most “truly” decentralised stablecoins of them all, is pegged against fiat.
POS is good yes, but the Eth community have been saying this for a long time now. “Show me the money” ;)
L2 block selection can be entirely decentralized. The first iterations are centralized because the software is extremely immature and having the block inclusion process centralized allows bugs to be more quickly and effectively dealt with. The major L2s all have decebtralization of coordinators in their roadmaps.
>>Stablecoins aren’t volatile, correct, but that’s because they are pegged to an offchain fiat currency or other form of “real” collateral. Even DAI, which is the most “truly” decentralised stablecoins of them all, is pegged against fiat.
Dai is pegged to the dollar, but can use entirely on-chain assets like ETH as collateral. Other stablecoins, like RAI, are not even pegged to any fiat currency, and use only on-chain assets for collateral.
>>POS is good yes, but the Eth community have been saying this for a long time now.
Progress has been made. On December 1st, 2020, the Proof of Stake Beacon Chain.
The Merge, which will complete the transition to the Beacon Chain, now has a testnet, launched on December 20th, 2021:
https://blog.ethereum.org/2021/12/20/kintsugi-merge-testnet/
The transition should be complete within a year. It can't be rushed, given the amount of financial value involved.
Artificial scarcity is the aspect of web3 that bothers me most.
The web is all about abundance; reducing the marginal cost of software and information to zero so as many people as possible can have access. It seems like web3 advocates seek to do the opposite and lock software and information inside the digital equivalent of diamond mines.
DHH has written about abundance as part of his approach to Rails, https://world.hey.com/dhh/i-won-t-let-you-pay-me-for-my-open...
The “Post-scarcity economy” article on Wikipedia lists a number of references, https://en.m.wikipedia.org/wiki/Post-scarcity_economy
Generally, computing trends toward abundance. Computers are priced about the same, but do more each generation.
The reason this distinction is important is because a lot of folks try to make the case that the ideological origins of computer networking were with an eye toward post-scarcity, but this seems incorrect to me. Instead it seems to be ideological anger that the internet is not supporting post-scarcity economics.
> “The World Wide Web turns 25 next year. We have come a long way, but we must all continue to push for these various forms of openness in the appropriate places. Only then can we ensure that the Web is for everyone.”
While his essay doesn’t use the words “abundance” or “post-scarcity”, it gets pretty close. My guess is that the guy who gave the Internet away for free probably approaches technology from an abundance perspective.
> “…but this seems incorrect to me.”
I’m curious what has led you to the opinion these people are wrong? I’m interested to know about histories of the web that reflect a philosophy of scarcity.
Thanks for that essay. I actually didn't see anything that got close to post scarcity. The only point that seemed to touch on it was the point about Open Access but it seemed to be closely scoped to academic work.
> My guess is that the guy who gave the Internet away for free probably approaches technology from an abundance perspective.
Maybe? Giving things away for free doesn't lead to a post-scarcity mindset. Not every person that donated to charity or volunteers with their time thinks the world can get there either.
> I’m curious what has led you to the opinion these people are wrong? I’m interested to know about histories of the web that reflect a philosophy of scarcity.
It's hard because a "philosophy of scarcity" is pretty ill-defined. As early as 2016 [1] Berners-Lee was pushing the W3C to standardize web payments. And HTTP status code 402 Payment Required was in the HTTP spec since at least RFC 2068 [2] in 1997. So at least since then someone thought that the internet would be used to facilitate payment.
But that's enough uncertainty for me to comfortably say that the internet was not designed for (or even against) post scarcity in mind. Therefore there's no ideological connection between post-scarcity and the net or the web.
[1]: https://www.w3.org/blog/wpwg/2016/12/16/web-payments-tractio...
Some items, like tickets to the World Cup, are scarce. A payments API/protocol allows scarce items to be sold online. Presence of the API/protocol doesn’t prevent simultaneous distribution of abundant items online, or imply creators of the web are anything but pragmatic. Even the Free Software Foundation is pragmatic about people charging a fee for GPL software (e.g. sell a DVD with the software), as long as the GPL licensed source code is included. FSF hopes you’ll give away the DVD, but understands if you choose not to.
It seems like the idea that people are working toward abundance really bothers you. How come?
Oh I'm not saying folks cannot aspire toward abundance. I'm only saying that the technology didn't have abundance in mind when creating the net or the web.
> It seems like the idea that people are working toward abundance really bothers you. How come?
I'm not against that at all. A lot of arguments against Blockchain technologies seem to be that "the web used to be about abundance and Blockchain tech is against that so it's against the idea of the web as a whole." It's an argument designed around a narrative of a rug pull (e.g. it used to be abundant and now it's not) as opposed to a more realistic narrative that "we wish to bring the web to an abundance state and Blockchain technologies don't share that wish" which is an accurate but much more mild claim. I just want it to be clear that there was no solid historical basis for abundance in computer networking so that activists do not change history for stronger claims and that such claims (for or against abundance mind you) are ideologically motivated.
I'm not one to ever defend NFTs, but this is not right. Suppose I bought an extremely trendy natural number k ∈ ℤ and I have a signature σ from its inventor that says "doomrobo owns k". Suppose in a year the trend has passed and I'd like to sell k. How do I transfer ownership to someone else? Clearly sending σ doesn't suffice, since σ is public. Do I need a new signature?
Ok different setup: σ is actually a signature from me and the inventor saying "the non-inventor pubkey that signed of this message is the owner of k". How do I transfer σ now? Do I send my signing secret key? Who makes sure I deleted my copy of the signing key?
Is there a way in your system to avoid the double send?
> "$doomrobo_public_key owns $k as of $date" signed with the minter's private key
If you mean the minter could sign multiple owners of $k, of course that’s true, but that’s like saying that a painter could paint the same thing twice or sell printed copies of their paintings. Of course they can, and if they claim that each one is unique they’re likely to find that people don’t value their stuff much.
How does the receiver of such a transfer know that the transfer is final? There's no way for them to know that an "earlier" transfer of same item won't show up days later.
https://www.youtube.com/watch?v=tqAOaNS1tqM
(May be NSFW depending on who you work for...)
The problem being described above is the possibility of the trusted author minting multiple digital signature NFTs for the same content. A reseller can't create a copy because they can't sign a message conferring ownership from the trusted source without their private key.
I think that is the "minting" problem.
An artist simply signing stuff does not even prove that a physical object corresponding to the token exists.
I like to think of other use cases, like real estate or stock options. If you talk about a plot of land, it seems feasible to find a unique identifier (you could even involve the government).
Edit: HN does not allow me any more replies right now, so I have to leave it at that. The reason why a "government signature on the deed" would achieve the same thing is because we trust on the government to keep a proper ledger. And the government asks for a lot of money for a transfer.
A deed digitally signed by the government's private key satisfies this need without a blockchain.
Only because the government keeps track of who owns what in a centralized database. Typically they also ask for pretty high transferal fees.
The answer is that this is not a problem, because the whole point is knowing who the creator of the NFT is, and beeple trying to create additional copies using a secret wallet but not telling anyone will be treated by the market the same as me minting a copy of a beeple piece.
You point about minting another is an interesting point but its not a double spend so we veer off the topic.
If we take your point then its the same as saying anyone can create a new crypto and call it Bitcoin. If I have an OG Bitcoin and you have a fake one then you can steel my real one. No you cant.
The reason is that people discern what Bitcoin is vs. other coins.
NFT cooy/paste is a problem but it is a distinct and different problem to double spend.
"Double spend" is a cryptocurrency problem, NFTs do not have this problem since unlike "currencies" the goal is to create a "non fungible" record of ownership for an off-chain asset; a chain of digital signatures satisfies this need, the double spend issue is not relevant to the stated use-case.
You are correct double spend is not a problem with NFT because they piggy back on crypto layers.
However double spend is a problem with just digital signatures that “retroactively obsoleted” NFTs.
Since there are multiple people commenting and steering the thread in different directions I feel this is being filibustered. So ill stop replying. Im exhausted!
As I already stated, this is not true. Nobody can stop an author from minting two different blockchain NFTs pointing to the same content, there's no difference between that and "double spending" a digital signature NFT. At the end of the day, the only thing the NFT does is prove "the author authorized this verbal statement of ownership", a digitally signed text file does exactly the same thing.
btw, I own an NFT that represents all natural numbers, therefore all possible NFTs.
If Y is not an NFT, but you know the original owner X, and you wish to create an NFT, the same kind of mechanisms work: the first time you attempt to assign ownership is the canonical one. Which you seemed to get up-thread, you just failed to "do the math" to see why digital signatures alone don't support that as you are so sure cryptocurrencies have no value.
If you send two digital signatures to two people claiming they both own something, the big issue is that the second person might not even know the first person exists. You need some kind of mechanism to invalidate the second one by exposing the first one in a trustless global ledger of events.... that's what blockchains provide.
If you only care about the semantics of disputes--which is potentially fair for claims over a physical object: it acts as a kind of "second factor"--you get a long way by just including the entire chain back to the root whenever you transfer ownership, allowing people to show prominence over other chains they obviously dominate...
...but any time there is a conflict--and not just on the original sale!--in your histories you can't compare timestamps to resolve the dispute as you can't trust them: digital signatures cannot show that one thing happened before the other thing as any timestamp is just data being signed, attached by the signer, and is meaningless.
To resolve these conflicts you need to use your distributed ledger to establish that no such signature has been signed previously: you need a way to authoritatively assign prominence. If you have a solution for this, what you have invented is a cryptocurrency and could be used as such (as there is no relevant difference between fungible and non-fungible tokens).
(And note that this is true even if you try to solve this by using some complex web-of trust of a ton of random third-parties or overlapping sets of parties that different people haphazardly might choose to trust instead of a linear blockchain... you are just talking about systems like Holochain or Stellar or Avalanche instead of systems like Bitcoin or Ethereum.)
Incorrect. As @saurik says, but I'll just restate: an NFT also tells you the ordering of all such statements within one context (a single blockchain). So you can know whether this was the first such transfer by this owner or a subsequent one. This is the entire purpose of distributed databases, including blockchains.
There are so many problems being skated over here about provenance and ownership and nfts provide nothing of value in that domain, they’re just a get rich quick scheme.
The digital signature is thing that people want to own in the real world!
Being in physical possession of the bytes to a JPEG is not what gives people the sense that they own this piece of art in the way they might own a painting, because the bytes are so cheaply copied.
Owning the intellectual property behind a JPEG is an entirely different kind of ownership; the value is in the commercial exploitation of those rights, and the buyer is now taking over from the creator in being responsible for said exploitation to get their money's worth. This is not what artists or art collectors want.
The whole point is to artificially recreate the traditional experience of ownership, but for immaterial/digital goods. People talk about owning the work (or an edition of it), not the signature, because that is the whole point of the exercise.
Immaterial artworks such as video art, performances etc. are already being sold in the art market; what you get is a piece of paper stating that you own the work. It's exactly the same as an NFT.
It may seem utterly useless for people who don't care about owning editions of immaterial works of art, but there is nothing scammy about it. It is done entirely in earnest.
You created the image. You own the copyright to the image (which has legal weight). You may restrict distribution or reproduction in those situations.
These are all more meaningfully ownership than owning a digital receipt on the blockchain pointing to a url on a 3rd party site, which is more akin to buying a star or a piece of the moon from somebody who sets up a website and purports to be selling these ineffable things.
I disagree with you about the point of NFTs, the point of them IMO is to provide cover for ponzi schemes and convince marks parting with their cash that they are buying into a get rich quick scheme in which they'll get rich and someone else will be left holding the bag when they sell their receipt for digital art to someone else.
The references to art markets, asset tracking, provenance, new technology etc etc are just indirection used to distract from the fundamental transaction - give me money (including really high transaction fees for the marketplace) for this worthless receipt which says you own* this digital lion pic, unique amongst thousands of other similar lion pics because it has a cigar or an eye patch. No wonder companies like Nike, Games companies and football clubs and are rushing to take part too and sell fans NFTs, they can't lose!
* For certain values of own not conferring any rights over the image whatsoever.
By my count you listed just one - owning the copyright. But as I said, while owning intellectual property is certainly meaningful (and can be valuable), it is not art collecting. There is a reason why there exists no art market where people are trading copyright claims.
As a collector, I don't want to be in the business of managing an intellectual property licensing enterprise. Yet, I want the artwork I own to become a well-known, celebrated cultural object; the artist also wants this, and thankfully - incentivised and empowered by still owning the copyright - will try to manage their career to achieve this.
We can all agree that crypto lends itself to rampant and unrestricted speculation / gambling, which attracts all kinds of people looking for a cash grab or get-rich scheme. Those speculative bubbles have been going on for years, and in all likelihood will continue. It's an issue that artists and collectors in this space are struggling to deal with; people don't like that new releases are sold out in minutes, because flippers and their bots think they can make a profit (this is not dissimilar to event ticketing issues).
However, artists who have experimented with blockchain 10 years ago, were not looking for marks to scam. While pics of lions will go up and down in price, and people who bought even respectable art at the height of the bubble will be looking at a loss in resale value, this market will not disappear; it provides a product that artists and collectors find useful.
I am not of the opinion that this will be as world-changing and all-encompassing as web3 proponents proclaim. Art collection is a niche in the real world, and it will be a slightly larger niche in the digital realm.
The art market is a racket entirely divorced from value, if you want to emulate that, good luck to you, but know what you're getting into, the comparison with the manipulated and celebrity led current art market is entirely unflattering to NFTs as it shows them up for what they are - a get rich quick scheme.
I think this market will disappear when the cryptocurrency bubble bursts, which seems imminent now it has mainstream attention again and with the coming withdrawal of stimulus.
Monies for the transaction can be put into escrow with a third party (you'll need to go back in time to invent that too). When the notary notifies the escrow holder of the signatures they can release the monies.
When you have a legal system to enforce contracts and people put their own money or legal liability on the line two parties don't need to trust one another to conduct transactions. People buy expensive shit all the time. They don't need to trust each other with the money or valuables because they involve third parties that proffer up (staking if you will) liability to let the two parties conduct transactions.
The blockchain model replaces the staked liability with "expensive" proof of whatever. The only problem is monied entities can these proof systems. They can afford to run a majority of miners, stake the most (or spam stake offerings), or whatever otherwise supposedly expensive resource. They're only expensive resources if you naively assume all mining will be done by randos in their bedrooms.
Blockchains are just a way to do something almost no one needs in a slow expensive way.
Leonardo could still create one NFT saying "this is ownership of my painting of the woman that always looks at the beholder" and another saying "this is ownership of my painting "Mona Lisa" and it would perhaps not be immediately clear that they are the same painting.
Nevertheless, that is the "minting" problem and not the "spending" (or transfer) problem.
Edit: HN does not allow me any more replies at this point, sorry.
There is an infinite number of blockchains.
Even if the seller says "xyz is the official blockchain", it does not really solve the problem, as they could just say that several times for different blockchains. It does not actually add new information (signing something and putting it on blockchain xyz is equivalent to signing something, putting it on blockchain xyz, and saying "xyz is the official blockchain for my NFTs").
Just use a different private key for each sale.
Instead, what identifies the artist, is the artist saying "hey, this thing over here is the real one!".
None of which involves a Blockchain.
The artists says "this is my key" to their public key. Then they can use their key to sign things, and people can verify the signature because they can check that it belongs to the public key, which the artist has publicly announced.
People also used to create chains of trust with public key infrastructure. Maybe you trust Bob, and Bob trusts Alice, and Alice has personally met the artist at Burning Man and verified their key there.
Or you go to the government and let them provide a register of identities. In any case it is a separate problem.
If you can't verify the artist, don't buy the NFT, or only buy it at a discount, accounting for the risk. Forgeries are a problem with physical works of art, too.
Thats the point though. Nothing about the blockchain has anything to do with this part, and this is really the only part that matters.
So, once again, my point stands. The private key has nothing to do with identifying the real artist. Instead, it is something else entirely that identifies the real artist.
> on their official web site
So then the official website is what is doing the identifying here, of what the real art it. Not the blockchain. It is the artist themselves, saying "This art is the real one", not cryptography.
It is not proof of work, or proof of signed private keys. Instead, it is proof of "official website".
> In any case it is a separate problem.
It is the only problem that matters. The actual way to identify the real artist, separate from the blockchain, is what is actually doing all of the heavy lifting here. The private key isn't doing anything on the important part.
No it isn't. The point of NFTs is to prove ownership and facilitate trade. Not identifying creators.
You can only prove ownership of that specific crypto transaction, which might be just a fake NFT, or duplicate.
There is nothing about crypto that actually proves it was the "real" NFT, or real art.
You need something else to actually prove that you own the "real" piece of art or NFT.
> Not identifying creators
If you are unable to identify creators then you are unable to prove ownership, because that NFT could just be a fake one, or even a duplicate that the creator has issued many times without you knowing it.
With crypto alone, you'd only be able to prove that you own something that might just be a fake or duplicate, and anyone can make as many fakes or duplicates as they want, so that's not really proving ownership.
To verify the identity of a creator is a solvable problem, though, and is also yet another issue than the "sell it multiple times" problem.
Let's say I create a piece of digital art and create an NFT out of it. The NFT somehow starts increasing in value. Then I copy my original digital art-asset and perhaps use a Photo-Shop filter to make it have a different hue. I turn that into another NFT. And I keep on doing this for all colors of the rainbow.
What prevents me from creating new NFTs with the same or slightly modified underlying digital asset?
My way of thinking is an NFT is a shitcoin with supply 1 and smallest denomination 1.
Ah, see, I ususually skip over NFT nonsense because of the sheer number of WHY and WHO it brings up… but now and then it’s summed up nicely.
What prevents this and maintains the value of the work is that there are legal and social norms enforced through a vast network of institutions (galleries, museums, collectors, art fairs) that ensure that there will never be more than 1 actual edition of the work, or 2 or 3, whatever it is the number never changes after it is set, and minting more editions would be professional suicide, and the network of institutions would never allow or recognize it even if an artist tried it.
Lawrence Lessig's book Code developed the argument that any combination of social norms, legal structures/enforcement, and code or infrastructure can function as law, and sanction or foster certain behaviour and markets. "Code is law" was a clever observation and a bit of a revelation, but the NFT crowd seem to believe that it's enough or that it has more value than the social norms and contract law of the existing art world. It's engineering mindset hubris.
There's an attempt now to work social norms into the NFT space and enforce etiquette around "right-clicking", but convincing collectors of paintings that they could continue to collect photography was less of a challenge than convincing generations raised on BitTorrent, DRM wars, and authorless memes to introduce false scarcity into online digital abundance.
[0] https://en.wikipedia.org/wiki/The_Work_of_Art_in_the_Age_of_... [1] https://artblart.com/tag/transparency-in-light-box/ [2] https://en.wikipedia.org/wiki/The_Destroyed_Room:_B-Sides_an...
The "non-fungible" part refers only to the receipt, not the original work.
Right but a receipt of what? A receipt, evidence, or proof, that a transaction took place. But a transaction of what? One party got money. What did the other party get? A proof that s/he paid the money. For what? For the proof that s/he paid the money ... for the proof that s/he paid the money for the proof that ... LOL.
Makes me think that I should make an NFT out of Brooklyn Bridge. That might gain lots of fame and thus lots of value?
Your last sentence hit the nail straight on the head. You can in fact make a Brooklyn Bridge NFT and you would hardly be alone.
Heck you can mint as many NFTs as you like of any image you own the copyright of :)
That hasn't stopped loads of NFTs of copyrighted images being minted ofc.
And if NFT does not give you the copyright I might sell the copyright or license it to 3rd parties who could not care less about you having an NFT somehow "associated" with it.
I guess the key is what does it mean for an NFT to be "associated" with anything.
It's mind-boggling
It's a terrible analogy from the start, don't blame me.
My point is that if you buy a new record from an artist you generally expect it to be original music that’s the product of creativity. But a lot of artists release things that are perceived by many to be very derivative, unoriginal, and not creative.
No, you expect it to be one of hundreds to hundreds of thousands of exact copies that anyone else could buy regardless of whether you own a copy or not, and that will usually be repressed if the supply runs dry. It's the product of a record pressing/CD replication machine more than anything else; no creative or original work goes into producing copy 67,904 out of 100,000. There is no expectation that you are paying for original work. The money you spend might go into funding original work, indirectly, but what you're paying for is a copy, and that's also what you generally expect it to be.
If consumers generally each bought the only copy of the records they own, it might have been more relevant.
That one seems like a classic supply and demand thing. Make too many, sell none
Having said that, that does actually seem to be the business model in this wave. At least for the ones people are heavily pushing that get on on my radar. Maybe not hues but "accessories" (procedurally generated png layers, flattened)
But because anybody else can sell anybody else very similar NFTs it looks like the supply is infinite.
The only differentiator then is who is the seller, right? But how can the value of a thing be different based on who sells it?
People only want to pay for the NFT, because it is supposed to represent a desirable piece of art. The only person who has the moral authority to sell it is the artist. Anyone can create an NFT that "links" to some piece of art they found online, but if I am not the artist, why would anyone pay me for it?
Additionally of course, there are artists whose work is more desired, so they command a premium over other artists.
If I tried to create such an NFT from someone else's art that would be fraud if I don't own the copyright to that art.
Is that how it works in practice? Do NFTs (typically) include immutable text which clearly spells out what rights are transferred to the buyer of the NFT? And because the text of the NFT is in the blockchain which can not easily be forged, courts will accept that fact as evidence of a binding contract?
This can be included immutably on-chain. Mostly it is done off-chain, which is ok, because enforcement of any such license would happen off-chain and in courts anyway. Frequently, no license details are given at all, which may also be ok, because people who collect fine art aren't doing it for the use value ("I need a stock photo for my landing page"), they are doing it because they feel good about being an art collector. In that sense, very limited use-rights are actually required.
Specifically, what use rights does an NFT grant?
For photographs (and I have a small gallery of them collected over the years in art festivals and galleries), they're hanging on my wall... though I can't publicly display them (that's part of the copyright).
If I sell a print of a digital image (that I captured with a camera) and I sell a NFT of the same digital image, what are the differences in the use rights that the two buyers have?
If the digital image, hosted on a server that I maintain goes offline (I didn't pay my network solutions bill and someone else buys the domain), what does does the NFT retain rights to?
However, I believe in the US, there is no right to even download a copy of a file on the internet for purely personal reasons. I could see an NFT buyer successfully argue in court that this right is implied, even if not specified.
What happens if the file goes offline? I would think that this will not effect an existing license that you have previously granted. Of course, the buyer may struggle to make use of their license rights if they did not retain a copy of the image themselves.
Do you have any examples of an NFT that grant rights accompanied by TOS terms for minting the NFT that affirm that it is the original artist or someone who is authorized to do so who is creating it?
> However, I believe in the US, there is no right to even download a copy of a file on the internet for purely personal reasons.
There is de minimis which isn't so much a right but rather a "this is beneath the concern of the law".
As to the US aspect, every country that is a signatory of the Berne Convention ( https://en.wikipedia.org/wiki/Berne_Convention ) recognizes the minimum standard for protection which includes the right to to make replications or display to the public that is held as part of copyright.
For an NFT, would a baseball card be an acceptable comparison for what it represents in the real world? To that end, I would contend that the same thing happens to it when the player that it represents (there is no ownership conveyed in a baseball card beyond the card itself) leaves the game.
But baseball cards also have physicality. They are close to our world we can see them and turn them around. Physicality gives them desirable properties like easily carrying them around, no computer required. A physical thing is unique. Any sequence of bits on the other hand can always be copied.
That's what I fathomed. What I don't get is why would anybody pay anything for them
But consider a very successful real world use case: trading cards. As NFTs, these digital cards are limited by contract on their respective blockchain such that infinite copies cannot be printed - they are limited edition. Scraps of cardboard for this rookie or that player only have ever had value to people who collect them - now the same sort of thing exists in the digital realm, without the risk of losing the physical collection in a house fire. It's less the artwork that is valuable, but the NFT itself.
Another valid use case is Patreon-like support of artists (especially in the music industry). As it is now, tens of thousands of people contribute money monthly to their favorite artists via platforms like Patreon often in exchange for perks like early releases to tracks or works in progress. NFTs can represent the same sort of thing, except that at some point in the future these early released tracks - or really - the possession of a fact of support for a band during their career as an NFT - has value amongst other fans. In some cases possessing these things can become backstage passes to a band at a concert.
Much of the NFT space right now is a cash grab. That doesn't mean valid use cases won't emerge.
So. Digital art can be replicated, and they may or may not convey ownership. And then you immediately turn around, replace "digital art" with "digital cards" and "perks" and pretend that this is now somehow different just because you're using NFTs for literally the same thing, but called a different name.
> That doesn't mean valid use cases won't emerge.
It means exactly that: valid use cases will not emerge because of what NFTs are.
Some popular types of Layer 2s, namely zk rollups, have on-chain data and on-chain transaction verification, so I believe you are wrong on this count.
So contrary to what the grandparent comment claims, these layer 2 (i.e. scalability) solutions make no compromises on decentralization, as they would if they had a consensus-critical component that was managed by a centralized off-chain party.
Even if blockchain are technically equivalent to digital signatures, it seems like it has some real advantages from a business perspective: - it is capturing the market of people who want to buy "official" digital assets and is becoming the de facto way to do so - the market is one that should have strong network effects - gaining the trust of that market is crucial to supporting these sort of trades
I still think NFTs are a bubble that will come back down to Earth eventually. But I also find sneaker and stamp collectors equally perplexing, and people don't discuss these phenomena with the same sort of skepticism.
People for the most part don't get rich off of stamps. Is more of a hobby than an investment.
Anecdote time, I was at an Xmas party and people were talking about what crypto they were investing in. I said I speculated a bit, then got spooked and got my money out of Crypto.com. (which wasn't easy). This got everyone interested, they had no idea how to turn their Crypto back to dollars. The market is going up, because there's a one way flow of money.
Or the only voice, because no one else is interested in looking at a hash for fun. The real artwork is easily digitally duplicated and so if your hobby was to look at the art, you do not need to purchase the NFT.
I am literally interested in looking at a hash for fun, since it shows up online in NFT viewers with a little picture of it in my account. $10 is such a small amount of money to me, if I didn't spend it on an NFT then I may have bought a CS:GO skin or hypothetically some Candy Crush lollipop hammers, spent it at the arcade or put it into a slot machine or something. The NFT sparks better conversation.
That's before getting into the fact that if I buy an independently drawn NFT, that $10 doubles as a donation to help support the artist's work, and the NFT becomes public proof that I helped financially support the artist.
If you are concerned that this would need to happen off-chain, and I would need to trust my channel to God NFT launch announcement, then you are of course correct, but note that is is not a slight on NFTs.
NFTs are conceptually no different than the "Google Digital Art Marketplace", except people are less concerned it will be shutdown in two years.
I would think of art NFTs as more like character or weapon skins - completely useless except that it's visually appealing and you can show off your "ownership" of it to other people within the game. With art NFTs, the "game" so far is just NFT viewing tools, social media profile pics, etc.
Actually, premium Steam profile borders might be an even more apt analogy, since they aren't tied to any game and are also useful solely for vanity.
Of course, then you have NFTs that actually do represent usable in-game items like with Axie Infinity or Gods Unchained, but that's an adjacent topic.
That's a good point. We can only give our guess based on what we know. For example, people regarded Alan Greenspan as "smart" before 2008. I now think he is an idiot at best and a horrible, malicious person at worst (the truth is probably somewhere in between). Maybe things will change in a few decades and people will then recognize him as "smart" again? It is pretty silly trying to predict the future.
> I’d argue that someone that’s getting lucky over and over again are clearly on to something. As the saying goes: “You create your own luck”.
I present Sir Isaac Newton as a counterexample. Clearly a smart person but just because someone is smart does not mean he was right about everything. In fact, we know now that his nonsensical "work" with alchemy killed him. I am positive that this fad will fail. I am just annoyed that now the name web3 is taken by this nonsense.
While I agree with basically all of your comment, I'd like to point out that plenty of people in the online space look at the sneaker market with the same skepticism... but that skepticism isn't stopping teenagers with rented bots from making some serious money buying and flipping new releases.
What I should have said is that it seems a lot of people dismiss NFTs with a certainty that doesn't seem justified considering there are other collectibles like baseball cards without any inherently valuable physical properties that have retained their value long-term.
I honestly don't know anything about the sneaker world besides that it exists, so that shouldn't have been my example.
Fair enough! As a neat entry point into it: the sneaker reseller world is incredibly high tech: the bot platforms make huge amounts of money and have quite good UX these days. Impressive bits of tech, even if I despise what they're used for.
NFTs need support of the big names but they already have better solutions for what they want. Currently NFTs are creating their own set of *mon cards but I don't see why I would want that.
Another example - currently digital games aren't resellable and NFTs could solve that problem. But why would Nintendo, Sony, Microsoft etc want that?
- New brands are created all the time; you don't have to be Nintendo to do so. maybe you get bought be Nintendo after.
- Big brands ultimately still need to go where the customers are.
- What the blockchain gives your digital good is a sense of permanence. This may not matter for an individual purchaser who simply wants to speculate in a hot market, but there would be no such market if the ownership ledger was run by single company. The narrative that these ownership records exists on a blockchain that will survive any particular startup failing underpins the whole thing.
There is also the grading system and you can't really make the card go up in grade, just down.
The whole boom in the 80s really started because boomers came into their prime earning years. When they were kids baseball cards were mostly to put in their bike spokes to make a clicking noise or thrown around so cards in great shape were in short supply. Most importantly though they were not coins or stamps that their parents collected.
I use to listen to a radio show 5 years ago for card collecting that the whole show was basically people calling in and the host telling them the cards were not worth anything.
This past year though is the all time high for sports cards but we already well off the peak.
The problem with NFTs is they came along at the peak of the everything bubble so the prices have nothing to do with reality. Digital collectibles make perfect sense and are no less goofy than anything else people collect.
Not something I would ever buy but ultimately nothing is as goofy as the price of an original Mark Rothko painting. To me that is the gold standard of collectibles and the rationality of the collectibles market.
A piece of thin cardboard changing in value based on a guy hitting more home runs.
Stamps and coins are the WW2 generation version of all this.
Practically everyone has their own personal form of gambling and at the same time everyone believes all the other forms of gambling are foolish.
Even if homeopathy is just placebo, homeopathy has better marketing.
To say that NFTs are all scams is like saying that pixel shaders are all games. One is often used to implement the other, but they're not the same thing.
NFTs will likely find niches outside of signifying ownership. For instance, I'd like to see them used to denote package maintainer status. That way you could have automation that allows package maintainers to do certain maintenance things like publish the hash of the next version, and if they transfer the token to a new maintainer, no permission rejiggering would be required.
Presumably in this case you're doing this without a third party like github (e.g. the code is stored on ipfs).
Rotating that rsa key requires all of your users to update things on their side so they'll continue accepting updates signed by the new key. That's a problem because you want key rotation to be low-effort so people do it just in case, and notifying every user is the opposite of that.
On the other hand, when a new user or organization takes over for an old one re: publishing updated versions (presumably there's a smart contract that gets updated with the latest trusted hash by the tokenholder), that's an event where you really do want all you users to scrutinize the new maintainer.
Key transfer is opaque, NFT transfer is transparent.
"Social key recovery" https://vitalik.ca/general/2021/01/11/recovery.html
A credibly open and neutral protocol for holding and trading digital assets is not something digital signatures can provide alone. Digital signatures do not solve the double spending problem without trusted third parties. Thus far only blockchains have been able to provide this set of qualities.
>>All of the ideas about logistics tracking, deed tracking, etc etc are all rendered pointless by the oracle problem, you can get identical guarantees with digital signatures minus the blockchain.
Digital signatures provide no guarantees about data processing and availability. Massively distributed public blockchains do.
It may come as a surprise but there are other chains that support DeFi apps and which do not have high gas fees like Ethereum. For example, Avalanche and Solana.
Collateralized crypto loans are the equivalent of people taking loans out on their equity position so they don’t have to pay cap gains and don’t need to Liquidate. So the use case is already demonstrated, it’s just now applied in a crypto world.
The money transfer/bookkeeping system might be decentralised in comparison with standard finance, but it’s no less centralised than a fiat currency, and at least the democratically elected government in my country can 1: be voted out, and 2: employs people who actually understand finance and economics…
Such as?
Digital signatures could provide some sense of ownership, but how does that solve transferring value/payment, especially the common scenario of splits/royalty percentages on subsequent sales?
As a concept I don’t think they are going away, but their implementation will vary over time.
Exactly, when people claimed web3 is about the individual and decentralization I knew 100% it is a power play being attempted by some stupid people who have no idea how the web works.
Maybe, until ETH never pumps again.
Eventually the blue chip cryptocurrencies will find their fair price, and price swings of 10-20% in a single day will be a thing of the past.
DeFi DAOs like Curve Finance [0] (currently leading the DeFi pack in terms of Total Value Locked [1]) will generate income for whoever holds a CRV token... so long as the crypto trading markets exist.
Curve actually provides a service. They pool liquidity to enable larger trades with less slippage, and as such they're extremely popular.
The gas fees are not an issue either, as Curve works across 7 different layer 1 blockchains at the moment and I am sure that is bound to increase in the future.
But rather, the implication you were attempting to make that this is a "critical innovation" that provides value.
As pointed out, the cryptography existed well before blockchain. My only point was that the fancy decentralized way it orders the transactions is the real innovation.
(edit: grammer)
Instead you just slather more fancy technical lingo on top.
But point taken. I'll avoid using fancy technical lingo like "BFT" or "cryptographic" on hacker news any more.
To me, distributed systems means parallel computation. The blockchain by definition, cannot be parallelized (except when someone manages to pull off such a large theft that the developers are forced to fork the blockchain).
They are decentralized systems, which achieve their decentralization by being as inefficient as possible. Sure, it's a bit clever, but it's also incredibly stupid.
People talk grand about "permissionless data" but I fail to see any practical applications. NFTs are a scam and are retroactively obsoleted by digital signatures. All of the ideas about logistics tracking, deed tracking, etc etc are all rendered pointless by the oracle problem, you can get identical guarantees with digital signatures minus the blockchain.
DeFi is DOA. Gas fees are insane, "layer 2" is just a diplomatic way of saying "offchain centralization", every DeFi scheme is a money loser relative to just buying eth and waiting for a pump, "collateralized" loans where you pay coin so someone will loan you coin is not a valuable use-case to the vast majority of the population...
None of this is about giving power back to individuals, it's all about making money on mining fees and cryptocurrency speculation.