Yet, only in the cryptocurrency debate do defenders have to offer up a disclaimer about all the scams, hype, vaporware, fraud, waste, hacks, speculation, crime and other insanity before proceeding to make an appeal to the nebulous hope of future possibilities, as if cryptocurrency isn't older than instagram....
It's a bit goofy to make the comparison you made - I mean you didn't even finish your thought, you just painted a vague yet intense picture you expect people finish for you with the worst possible outlook. You aren't getting rid of crypto, so you'd do more to actually find out what's wrong with it and offer solutions rather than winging about it and praying for authoritarianism.
In my country, this also describes the day to day situation. You can't trust doctors because they make up diagnoses, people pay taxes but it never shows up in infrastructure, schools or anywhere; daily alerts by banks warning against some new clever form of fraud, until recently there was a fair chance new banks would vanish with customer money (I still only trust a few reputable banks), actual family destroying pyramid schemes, ransoms attached to child kidnappings not data, politicians stealing from their constituents, police not trusted because of lack of transparency and corruption, bribes as a defacto tax.
The combination of high levels of poverty and lack of regulation is what leads to the proliferation of scams and dishonest behaviors. Poverty lowers the threshold of criminality, lack of regulation and lack of an enforced justice system enables its flourishing. Poverty also catalyzes more susceptible victims of such crimes.
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> only in the cryptocurrency debate do defenders have to offer up a disclaimer
Financial activity in crypto lacks regulation, which attracts predators, who create scams that attract the poor who are not necessarily gullible, just gambles from desperation.
> Android or iPhone
In Android vs iPhone or Windows vs Mac, people do argue about vulnerability to malware and the merits and demerits of locked down platforms.
I'd also argue your examples are not appropriate, they're more clashes of belief systems and less people freely interacting in market like scenarios. Consider that kickstarter is rife with vaporware, hype and scams. Scams, fraud and hacks in Roblox and Entropia. Crime, speculation and hacks in Habbo Hotel. Western financial systems discriminate against certain professions and citizens of entire countries due to some cost benefit calculations related to fraud.
If you have a system where money can exchange hands, you'll find psychopaths preying on the poor and careless. Oh and this isn't just poor countries and virtual markets, psychopaths preying on the poor and desperate also occurs for developed countries too (you just give them fancy names like debt bubbles and mortgage crises).
This might sound far-fetched to outsiders, but not so far-fetched to those who have worked inside the industry and seen the waste. I've seen obvious shitcoins repeatedly succeed while legitimate tokens never get any attention. In this industry, you can feel the unlimited currency coming straight off the money printers. It's just like Wall Street Bets in reverse except it's worth over a $ trillion and they're going after regular people instead of big hedge funds.
But in general, a shitcoin is a poorly designed project (or just a clone of an existing project) where the founder sells a lot of their tokens and quits immediately after the initial ITO/ICO sale.
But what really are the "scarce assets" that Web3 is enabling self-custody for? A token on a blockchain that has metadata pointing to a digital file that anyone can view and reproduce? By definition, every NFT is scarce in that each one is non-fungible. But this scarcity doesn't mean there's any meaningful value. An NFT alone doesn't inherently give you ownership of or rights to anything except the token itself.
The minute you want to attach some meaningful rights to an NFT, like legal ownership of the digital or physical asset the NFT points to, or the rights to an income stream produced by such, you have to enter the world of our traditional legal and financial systems.
So while these digital deeds don't seem to have much connection to the analog world, they may not need to, if digital governance comes about.
That being said, I wonder if the main challenge with digital governance is not so much the digital part but the cross-border part. In other words, governments have jurisdiction over physical land and digital interactions transcend those boundaries. I wonder if many of the things people are trying to solve with crypto would be solved if we had more global governance. Global property deeds (right now, typically at most nation-state level, but also can be very local to city level), global currency (de facto USD right now but no official one), global company registration (at most nation-state level, but also lower as well), and global governance (the UN is there and many other standards bodies, but governance of many things still at most at nation-state level).
So, it says to me there's a desire for more global (read: physical borderless) ways to interact, own, and regulate all of that and that much of crypto seems to be the skirting of nation-state laws and almost reinventing governance from scratch.
These unique tokens almost always point to digital files that are accessible to everyone and anyone, and that can be viewed, downloaded and reproduced by everyone and anyone.
To the extent that a person might consider these files are "assets" at all, the bigger issue is that ownership of a non-fungible token is still just ownership of a non-fungible token. It doesn't on its own convey any ownership of or economic interest in the "asset" it points to. If you want the token to convey ownership or economic rights, you're back to the traditional legal and financial worlds Web3 is supposed to be supplanting.
To the extent that a person might consider the NFT itself to be an "asset", the question is where the value is derived if the NFT is merely a pointer to a digital file that you don't have ownership of or an economic interest in.
And that is orthogonal to whether the content is mutable or not. It just means that mutation is deliberate and obvious.
However, theoretically, you could tokenize other assets, like real estate, or intellectual property, and then trade them in a more liquid, global manner than is currently possible. The NFT ecosystem is one of the least developed parts of crypto, though.
If you want an example of tokenized value, just look at stablecoins. Stablecoins are literally tokenized dollars. They allow you to self-custody large amounts of, what is effectively digital cash. That is something you couldn't do before. If you didn't trust banks, you either had to store physical dollars in your home, which is extremely dangerous for a number of reasons, or you had to suck it up and trust them anyway. Crypto gives you a third option.
Possession of a token itself doesn't create legal ownership of a separate asset unless there is a legally-binding instrument that conveys ownership of that asset through possession of the token. To turn tokens into legally-binding instruments of ownership, you're back into the real world of laws, lawyers, financial regulations, etc.
> However, theoretically, you could tokenize other assets, like real estate, or intellectual property, and then trade them in a more liquid, global manner than is currently possible.
This simply isn't true though. Tons of real estate assets are securitized and traded in liquid, global markets. Even average investors can access these markets through REITs.
More esoteric assets, such as music royalty rights, have exchanges like Royalty Exchange[1].
You could of course use the blockchain for these types of things, but just using tokens doesn't absolve you from having to comply with securities regulations. Unfortunately, from what I see, a lot of the people trying to create crypto-based solutions seem to believe that the use of tokens is a "get out of regulation jail free" card.
> If you want an example of tokenized value, just look at stablecoins. Stablecoins are literally tokenized dollars. They allow you to self-custody large amounts of, what is effectively digital cash. That is something you couldn't do before. If you didn't trust banks, you either had to store physical dollars in your home, which is extremely dangerous for a number of reasons, or you had to suck it up and trust them anyway.
Stablecoins claim to allow self-custody of large amounts of basically digital cash. But there are a lot of red flags with stablecoins and I'd humbly suggest that anyone who doesn't trust banks but is willing to trust stablecoins is missing the plot.
Either way, your cash, in whatever form it takes, is at greatest risk because of central bank policy, not how and where your cash is stored. If the USD loses its reserve status, you're going to feel the effects whether you're holding physical dollars or Tether.
There’s a “mind-virus” doing the rounds on the crypto space, the idea that scarce = valuable.
How so?
This is how "web1" operated all the time: People have a cool idea and fire up a webserver to host it. Self-Custody in its purest form.
Sure, others could copy it, but they can also do that with whatever someone generates an NFT for "digital assets" (the certificate cannot be copied, the thing it certifies ownership for can).
As for "scarcity": Digital assets are either shared or scarce, there is no in-between. Distributed Ledgers allowing NFTs make the certificate of ownership scarce, not the asset itself.
Web1 assets are not scarce, that's the difference.
> Sure, others could copy it, but they can also do that with whatever someone generates an NFT for "digital assets" (the certificate cannot be copied, the thing it certifies ownership for can).
Forget NFTs. Go print yourself $1000 USDC and try to exchange it for dollars. The thing that prevents you from doing that - that's decentralized digital scarcity. There is no equivalent on web1.
Of course there is. If the service offered is not just access to some data, but things like computational power, access to a game server, food delivered, etc. I put up a payment system, and unless its used there is no access to the asset.
What form that payment system has, and what tokens it accepts USD, EUR, BTC, Seashells or Sliced Bread, is completely irrelevant.
And someone, somewhere, has the root pwd for that server. There is still a central authority.
That someone decides if the server is up, what code it runs, and how it interacts with voting, contracts, tokens, etc. on the ledger. The only thing in such an environment that is "dezentralized", is the public ledger (aka. the "Blockchain"), where the current state of the tokens, settings, etc. are stored.
If the people running the service decide that whatever is written in that ledger no longer applies to them, it no longer applies, period.
... It gives you a receipt.
A digital receipt. That points to a URL that may or may not exist in 10 years?
Not like a hash would be much better, as changing one pixel would give you a different hash, but at least it would represent a specific version of an image, a URL could change to anything tomorrow.
Proof of provenance is valuable in many, many applications. But anyways, that isn't the point. The type of digital self custody i'm referring to is for things like stablecoins. Stablecoins allow you to self-custody dollars in a way that was not possible before cryptocurrency.
That, doesn't seem very decentralized if it has to pinned to something controlled by one entity?
Ok, so self-custody is that you've not got an account with a bank (a "vault" to keep all your money in) that they ultimately control, you're walking around with a wallet, one with a very secure clasp.
That argument kind of makes sense? But a central authority can still squeeze on you just as much, by targeting who you would trade with though, right? The ledger is public, they know who you traded with, they can make life difficult for them until you're not a customer.
> Why is everyone here so focused on NFTs?
Because that's all we here of {$coinname}Coin and blockchain currently, it is the cultural zeitgeist and the face of the tech to the broad public.
Noone's giving a simple explanation that makes sense and gives the killer app features. It's all marketing hype or five dollar words. It took me a good while to realize that "Stablecoins allow you to self-custody dollars" means "bank can't lock me out of my account"
Ya, it doesn't make you totally immune from squeezing. It just changes the dynamics of how that squeezing works. Essentially, it becomes much less feasible to squeeze people in a scalable way for centralized entities.
> Noone's giving a simple explanation that makes sense and gives the killer app features. It's all marketing hype or five dollar words. It took me a good while to realize that "Stablecoins allow you to self-custody dollars" means "bank can't lock me out of my account"
Ya, I certainly admit the hype and everything else that goes with it around all this stuff is terrible. Crypto is nowhere near as useful as its boosters will tell you. But I do think there is a kernel of something very cool and interesting there.
Self executing and self-enforcing contracts and self custody is a real innovation, especially for people that live under less than stable governments, or have less than stable currencies. People that say this stuff is going to replace the legal system are idiots. It can never do that. But it can take a few superficial legal structures that are currently expensive and messy, and make them a little cleaner, more transparent, and fairer, I think.
If that’s even possible, is it to a single organization with 1:1 reserves in US treasury paper?
If so, how is that more “self-custody” than a bank?
It's unfortunately also pretty much pointless. Digital assets aren't scarce, and physical assets mean leaving the system and losing the properties of it.
I realise there are hypothetical advantages to NFTs over in-game items, but I am not yet sure they will be worth it in the long term.
I see it more as retaining ownership some of the content we produce and happily give to twitter, youtube, facebook etc to monetise and have some more control over it
Things as being able to:
* remove access to site to display my content but still be published somewhere else if I wish to do so
* be able to serve my content to people that prefer to use another tools without relying on twitter to have a public API as long as I granted them access
* get the person getting hits and making money of ads to share some of that with me, or maybe pay my gas fees
* not be shut down because a given site or state decides my content is not worthy of it, they are still allowed to do this, but I could still continue via another "frontend" and people can choose
There are more use cases around this, and there are many gaps yet around the economics of it to make it accessible/free, make it desirable, legality, liability etc which I believe remain to be solved
Right now buying IP rights is a bespoke process involving lawyers. It has very high transaction costs in the Coasean sense. Tokenizing and standardizing these things, and standardizing the way revenue across directly to the rights holder in a way that is agnostic to who the owner is.
This is the value of the decentralized economy. It has the ability to shrink the domain of responsibility for the traditional legal system, and standardize things in a way that simplifies entry for entities that are less legally fluent.
I think an appropriate analogy here would be between the private and public markets. Buying stocks on the public market is easy and simple, because the process is standardized. You don't have to read complex legal agreements or study cap tables. You just click buy. The token economy has similar properties, although all the details of what the best ways to standardize, and what should and shouldn't be standardized, are not yet flushed out.
Now the relationship is the reverse, I give content to some org and they can do as they wish with it; I'm surrending it for them to use in exchange of them allowing me to use their platform for free.
e.g. from Twitter's terms of use:
> By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods now known or later developed (for clarity, these rights include, for example, curating, transforming, and translating).
If the content was hosted somewhere else and then displayed on twitter instead, this would not be the case or I could revoke it in the future but still be able to distribute such content via other means
Now, if I want to use another site then I need to duplicate the content myself.
Since all that they really offer is the userbase/community, its very hard for competitors to come into play and offer better terms or capabilities. In fact, they can change these terms at anypoint and I can do very little about it aside of deleting my account (if they even allow you to do that!)
And you are right twitter can still have that clause, and they can cause they have somethign to offer (i.e. a userbase) but if the content of everyone would be somewhere else other competiors would be able to offer it and then competiion for users would tend to make those terms more accessible to those that care enough to read them.
* you can by doing it as in an event sourcing system. After all blockchains+smart contracts are similar to a giant state machine
This seems incompatible with the goal of control: instead of giving Twitter free rein to reproduce your content however, you’re giving everyone on the internet the ability to do what they want with it, completely unrestricted.
(Yes, you could DMCA then but then the blockchain is useless)
Unless whatever service accessed the tweet/image/text/whatever made a local copy and is displaying that once the "blockchain service" no longer allows access.
An NFT doesn't confer access control. Its a certificate of ownership, the asset itself is infinitely reproducible.
if you are not aware of how something like what I described could work maybe have a read around on some simple smart contracts where there is hidden state (like guess the answer or contracts that implement role access/control for certain features)
But this technology does enable something novel. Digital self-custody of scarce assets is a new thing. A thing that nobody could do before this stuff. And if that has utility, then the infrastructure for trading, lending, and all the rest related to those things has value.
Even if you don't personally find it valuable, it should be clear that it is a thing that people could, in principle, legitimately prefer to traditional systems.
That being said, a huge percentage of what's happening in the space is bullshit, an outright scam or an "essentially scam" project. All those things deserve heaps of scorn and criticism. Investigate Tether, regulate ICOs, do all the things. But don't go so far as to deny that there's anything there, or say ridiculous things like "Web3 is more centralized". Even if it's true that web3 is more centralized than the internet, that isn't the basis of comparison here. Web3 isn't competing with the internet, it's competing with traditional finance. And there should be no question that Web3 is substantially more decentralized than that.