Especially since those solutions would reduce the influence and revenue of the biggest players. It's like trying to replace Facebook with Diaspora. It's technically possible, and going nowhere.
The article lists success stories for NFTs: "Axie Infinity and how it’s bringing entire nations out of poverty"[1] Axie Infinity is a play-to-earn game. It's like Pokemon, with breeding and training and fighting, for real money. Players need about US$1500 to play, and earn Smooth Love Potion Tokens. This really caught on in the Philippines, and people were quitting their day job to play.
The article was from June 2021, when Axie was on the way up and Smooth Love Token was peaking around $0.35. Axie is now a Ponzi on the way down. This morning, Smooth Love Potion Token is down to $0.01897 and dropping.[2] Since all revenue came from new players, this was inevitable.
The NFT market is Axie Infinity, OpenSea, CryptoPunks, and the little guys. As with most things online, the top 3 have most of the market share.[3] Axie is crashing. OpenSea is stalling. Profitable NFT resales aren't happening much, and there's a glut of new issuers.
By the time the problems Moxie points out are fixed, this is going to be over. Especially since for US players there's a 28% capital gains tax rate on collectables resold within 12 months.
[1] https://www.notboring.co/p/infinity-revenue-infinity-possibi...
[2] https://coinmarketcap.com/currencies/smooth-love-potion/
Please correct me if I'm wrong, but isn't centralization in blockchain-related applications a critical problem which defeats the whole purpose of said tech?
I mean, if a Blockchain is controlled by a single entity, doesn't that entity have all it needs to rewrite it however they wish?
And also, is there any difference between storing a record in a centrally-managed Blockchain or a record in plain old relational database managed by a third party?
If there is only one node acting as gateway to the blockchain then it could use PostgreSQL and there would be no differences in trust.
Obviously you can modify your local copy of the chain as you wish, even corrupting the data, but if your chain isn’t accepted by the public, your changes don’t mean shit. So you’re really only able to (meaningfully) execute those public-allowed operations
The reason that you can trade a NFT is because the smart contract has an API written by the creator to allow it.
I read both posts, and I still have this question.
Is it possible to provide a clear and simple explanation? Is there any answer at all which is not the expected "you're right, centralized crypto is pointless at best and a scam at worse"?
Otherwise this sort of reply feels like a blatant attempt to dismiss a concern through hand-waving for which there is no good answer without addressing any of it's points.
Repeat after me: "blockchain is only required if you want to solve a problem that deals with permissionless, trustless and distributed consensus".
- permissionless: no previous vetting/authentication/authorization of any participant. If you can a priori authenticate users, you can have a decentralized system with Paxos, and you can run a "decentralized" governance system based on simple "web of trust".
- trustless: no participant is assumed to be reliable/honest
- distributed: the network can suffer disconnections and partitions, but the overall system can still work.
If you can choose who will be allowed to define "consensus", you can use other BFT consensus solutions, so no blockchain is needed.
If you have a "cooperative" model, this assumes that you can trust the participants, so no blockchain is needed.
If your system can withstand network disconnections/partitions, no blockchain is needed.
Shouldn't that be "at least one participant is assumed to be unreliable/dishonest"?
"Innocent until proven guilty," the modus operandi of the US judicial system, at least in theory, is the design of a system that assumes trust and removes offenders.
When dealing with Byzantine-style problems, there is no such thing of "who is more truthful?", just "what is the consensus that should be agreed on?"
The private key must always be trusted for what the person behind it intends for it to do
Blockchain only requires people to coordinate on choosing the same programmatic criteria for block validity (and then choosing the longest valid chain).
One potential use maybe would be a blockchain that is openly run by a company (80+% of nodes or something) but if you also run a note it could continue after the company ceases to be.
There are other ways to do that but it might almost be a reasonable use case.
Also, Ethereum is different from a real blockchain.
My understanding is, some centralization doesn’t defeat the purpose of the blockchain. e.g. if a centralized server stores and modifies the blockchain but it’s public, then clients can verify the blockchain, and fork it if they don’t agree with the server.
But too much centralization, which seems to be the case now, basically does defeat the purpose. Because if everyone is using the same client and server or if people are interacting with these services insecurely exposing their wallets and data, then these companies could switch their backend to not use a blockchain or just steal coins. Most people probably wouldn’t even notice, and even if they did there’s nothing they could do.
-- ps
So the question is whether it is possible to have effective solutions in that design space. Email in fact fits these design parameters: end users can use PGP and PKI to have private and authenticated communication, but as Moxie knows far better than me, it hasn't happened because now we have shifted the burden of running 'something' back to the end user again, who is now responsible for participating in a 'decentralized trust' system.
It appears the problem is reducible to (and thus is fundamentally about) identity and associated attributes of an identity.
So what we really need is a decentralized identity infrastructure with 'last mile' interfaces to your physical political jurisdiction for those who want "legal" attribution for fully decentralized interactions (possibly built on centralized infrastructure). All other "Web3" systems can be built on top of these.
I can build a competitor to OpenSea that has access to everyone's NFT ownership data because it's in a public blockchain. If Twitter decides to shut down their service, it's gone.
There are other wallets that do not, and the NFT never left Moxie's address.
This is not what the original article says. Here's the first conclusion:
> We should accept the premise that people will not run their own servers by designing systems that can distribute trust without having to distribute infrastructure.
In other words, centralized trust is a bug, but that's a different thing than centralized servers.
The problem with existing NFTs is that they not only don't have decentralized servers, they also don't have decentralized trust. They're just not what they claim to be at all.
I would also point out that "centralized" isn't a binary thing. Having literally everyone run their servers is not really what anybody wants, but neither is having one company run a single server for everyone in the world, which isn't really what happens. Even with a "centralized service" like Facebook, they have multiple servers distributed all over the world.
And if the servers didn't have to be trusted, they also wouldn't all have to be run by a single company. Having a billion servers for a billion users is not what anybody wants, but we already have a thousand servers for a billion users. And if the servers are not to be trusted anyway, why do we need them all to be run by the same entity?
Full atomization rarely works. Federation works.
The authentic dev communities building blockchain tech are throwing their weight behind the idea that they will in time transition towards technical solutions, having already set a course for the social solution. So from their end, this criticism is always technical in nature. The initial source of trust is going to be in mathematical realities guaranteeing certain outcomes: if not cryptography, then tokenomics. Of course there are a huge number of "P.T. Barnums" who have jumped ahead to create solutions today, and these solutions tend to platformize. That's the discontinuity making it a circus.
Except for all the centralized points you'd be correct. BitTorrent requires bootstrap nodes. While these can be specified in a torrent file but many clients have some hard coded values for bootstrap nodes. If bootstrap nodes are unavailable and a torrent doesn't contain new values a BitTorrent client can't do much.
Then there's finding content which doesn't just magically happen. Torrent search engines exist because BT doesn't have a built in search system like other P2P networks.
Finally there's the central locations where clients are developed and distributed. BT clients don't just manifest on people's computers. They don't magically update themselves.
Cryptobros talk of decentralization as if shit just exists in a luminiferous ether. You just wish hard enough and things manifest on your system from it. Centralization doesn't automatically mean Facebook controls everything. Stuff comes together at locii and those are by nature central in a network. They can be disrupted, blocked, or just disappear and then the network falls apart.
This. And take away the techno-libertarian glamour, it becomes just another technology that might have useful applications, or might be a huge waste of time, resources, and increases complexity and decreases transparency.
For efficiency what we do is we centralize and wherever possible we add safeguards and controls to the central authority, as auditors call them, mitigations.
From the looks of it, if the price drops at best we're in it for that sweet sweet URL pointing to Google Drive/imgur.
https://news.ycombinator.com/newsguidelines.html
If you want more explanation, there's many years' worth at https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...
Edit: you've unfortunately been posting unsubstantive and/or flamebait comments a lot. Could you please not? It's not what this site is for, and it destroys what it is for.
Is this not just how financial assets in general works? Anyone buying Amazon's share are not buying it because they want that share. They buy it because they hope some time down the line (weeks, months, years) they can flip it for more money than they spent.
A share without votes and without dividends would be worth $0.
(Also, many NFT shills and/or shovel salesmen fervently insist that they're selfless patrons of the arts, rather than simply trying to make ponzi cash)
Someone posted a link yesterday to an NFT they "own". I saved it to my computer, changed the file name, and uploaded it to a server. They had and have zero agency to stop me from doing so. Their NFT "purchase" didn't transfer any copyrights to them recognized by any entity with means to enforce copyrights. I can do whatever I want with those bytes I downloaded and the owner can't do a damned thing to me.
So what "ownership" do they have? They don't control redistribution. They don't physically possess a thing. They can't assert some sort of exclusionary control over who gets to see a thing.
Some record in a slow expensive database just says a wallet to which they have the private key transferred Geoffrey dollars to another wallet for the contents pointed to by an IPFS identifier. That's one of the more complicated ways I've seen to throw money away but it's not ownership.
I agree with some of the issues you point out, but in this case ownership is a construct built on social consensus, and these people are trying to define what "digital ownership" might mean, which you are conflating with physical ownership.
"They don't control redistribution". - They very much control it for the NFT itself.
Yes, you can right-click and save an image all you want, but that doesn't mean you own the NFT. In fact, you can right-click and save the most valuable NFT in the world, and re-mint it as an NFT... but that NFT would be worthless, because it would be missing the social consensus and provenance that gave the original NFT value.
Copyright and ownership are divorced from each other already, so this argument feels like a straw man when folks point to it as a failure of NFTs. For example, you can buy an oil painting from an artist, but that doesn't come with a copyright either. Same for almost all physical goods.
NFTs though, can have a license attached.
A lot of what you are saying is true today, but it might not be tomorrow if enough people agree otherwise. In that respect, this is very much an experiment in speculation, but all it takes is for a community of people to agree to honor the data on a particular blockchain and that can support a thriving economy like NFTs have for the last couple of years.
Who gives a shit? The NFT has no actual utility.
> Yes, you can right-click and save an image all you want, but that doesn't mean you own the NFT.
Again, the NFT itself has zero actual utility. The thing it points to is what people want to look at, listen to, read, or experience.
> you can buy an oil painting from an artist, but that doesn't come with a copyright either. Same for almost all physical goods.
If I have physical possession of an actual non-fungible physical good I have exclusive control over it. I can lock it away in a vault and never show it to anyone. I can hang it in my house and only let my friends see it. They can't right click on my painting and walk away with an atom-for-atom copy of it.
> In that respect, this is very much an experiment in speculation, but all it takes is for a community of people to agree to honor the data on a particular blockchain and that can support a thriving economy like NFTs have for the last couple of years.
If we only get enough people to participate in a shared delusion, these Geoffrey dollars will be worth a fortune!
You're wrong. I hold many NFTs that I want just for the sake of the art. Sorry to disprove your theory. One of my favorites is the Bonsai collection by ZenFT: https://www.zenft.xyz/
Some people use NFTs as simple mementos (free to claim, and collect): https://poap.gallery/
People enjoy collecting and displaying NFTs: https://oncyber.io/nawkzst People enjoy using their NFTs as avatars in Web3 games: https://www.webb.game/ People use NFTs to access exclusive areas on Decentraland (https://decentraland.org/) and Sandbox (https://medium.com/sandbox-game/cyberkongz-vx-partner-with-t...
People use NFTs for token-based access to websites or online services. People use them for real world events. People spend countless hours hanging out on Discord in various communities and servers and they build together.
> People want a central authority and not bother themselves with running their own server/infrastructure.
People don't want a central authority. Most people don't really understand the implications of the technology they use. Awareness is higher than it's ever been, however, in the age of censorship and deplatforming. It's not sustainable or desirable for all of humanity's communication and value exchange to be routed through a handful of trillion dollar tech monopolies.
It's not desirable that so much of the web be dominated by these entities. It's not good for democracy, it's not good for humanity.
> So the only way for OpenSea to "die" is if it's replaced by a different, but similar, central authority.
Only those who lack imagination or skill would assert such a thing.
This is an old debate and not really the subject at hand, but I'll still bite (against my better judgement).
You don't need to own an NFT to enjoy the art. That's the fundamental difference between art in the real world and digital art (NFT or not). When you own a piece of art you get to look at the original; this is a unique experience in the case of a painting, and sometimes a rare experience in the case of limited editions of photos.
But the digital art is the same whether you "own it" or not. From an esthetic experience (not a financial one, obviously), it's pointless to "own" digital art.
The only thing that would influence the esthetic experience of digital art is the medium. Buy a better screen. Better speakers. Etc.
> People spend countless hours hanging out on Discord
Sure. That I don't doubt.
What you lose is a direct connection to the original artist. Art is as much about the story of that artwork as it is the art itself.
If an artist mints an NFT and that NFT has has provenance that's generally accepted by the community at large, then it has all the properties of an original physical artwork. Except that you can be more sure of its origin, because the blockchain history is immutable and you can trace the transactions back to the original creator.
Music NFTs have been created, although they are certainly still nascent, it's possible to create an MP3-based NFT that has the same or better quality as a CD album. One could imagine NFT albums being minted just like CD and record albums of yore. One could imagine people collecting the NFTs just for the sake of actually owning the rights to backup and play that music without having to stream through Spotify or YouTube. One could imagine the user retaining the right to resell that album just like they had the right to resell a used CD back in the day.
I already gave many examples above about how NFTs can be used beyond the basic use-case of attaching a JPEG (access to services, access to software, use in cross-game or cross-app experiences, etc).
Some people are collecting them as Proofs of Attendance (POAPS), which are free NFTs used as badges. They're quite popular and fun to collect. I do so for the pure enjoyment of them. Sometimes the badges above are used for things like giveaways. If I want to reward loyal community members, I can issue a POAP for attending a particular video chat, and then give out random rewards to anyone holding one of my community's POAPs. That's cool, and fun. I've been in communities where we create our own POAPs as funny shared inside jokes.
There is extra enjoyment to be had knowing that you came into ownership of something according to a set of agreed upon rules. That is to say "legitimate" ownership. Legitimate NFT's can make one feel part of a community so there is value in that.
Perhaps most importantly, "legitimate" ownership generally implies that the artist(s) were compensated by you (somewhat) directly. That, in itself can enhance the enjoyment. There are more factors at play than merely ego.
I'll give a personal, real-world example. I own ~$1000 item that I bought as part of fundraiser for someone struggling with medical bills. I was also friends with the creator and wanted to support their work. So, even though I paid much more than I would have paid had I just bought it directly, I get a great deal of extra satisfaction out of owning this item. I supported two different people whom I admire by purchasing it. That makes me happy.
I'm not a huge fan of NFT's (as they exist currently) but I don't think it's correct that enjoying ownership of NFT art, or art in general, is solely ego-based.
As for claiming ownership, yes, if I paid some amount for the ownership of a particular piece of art (commercial rights or otherwise), that is called an exchange or a trade or a transaction. It's quite common in capitalist societies. Not sure why that leaves a bad taste in your mouth. But to each their own.
Something tells me you don’t care much for paintings if you think this is in any way a similar media.
Don't you still have the ability to listen to the cd post sale because you can always load up an older version of the blockchain where you did own it?
Typically what you will find in these scenarios is that front ends hosted in jurisdictions that recognize intellectual property rights will de-list those NFTs upon request. And file providers on Filecoin or Arweave (in said jurisdictions) will unpin them from their hosting services.
However, there's no guarantee that given an IPFS hash that a user couldn't find some pinning service to locate the file (just as a determined user could easily find a torrent for a particular MP3). These are agnostic protocols just like HTTP or SMTP.
> Don't you still have the ability to listen to the cd post sale because you can always load up an older version of the blockchain where you did own it?
The MP3 itself would not be stored on the Ethereum blockchain, as it would be prohibitively expensive to store a multi-megabyte file on there. It would be stored on a separate storage layer, such as Filecoin or Arweave (or even a centralized server). A hash of that file is what would be stored on the Ethereum chain (an IPFS hash).
It has zero provenance
> that's generally accepted by the community at large
Ah yes, that's why art isn't counterfeited en masse because community something something. Oh wait...
Also. "Community at large" is literally "we need an institution of trust".
Sorry, it absolutely has provenance. It's better provenance than any traditional art asset has by far.
> Ah yes, that's why art isn't counterfeited en masse because community something something. Oh wait...
Ok, go make a counterfeit CryptoPunk. Go make a counterfeit BAYC. Then try and sell it. Should take you 5 seconds to right click and generate a new NFT with the same image...
It absolutely doesn't. OpenSea (and others) has hundreds if not hundreds of thousands of stolen art pieces traded daily.
> Go make a counterfeit BAYC. Then try and sell it.
There's literally a fight now between two counterfeit bored apes ripoffs over which one is legit.
There's zero provenance in NFTs. They have zero relevant information on an art piece. Yes, if you are lucky to be somewhat famous you can tell people what is and isn't yours. Otherwise: no. You could yourslef figure out why.
Hints, if you can't:
- NFTs have zero relevant information on an art. They don't even contain the art itself, they point to a URL that hopefully hosts the art itself
- NFTs have zero information on the original owner of the art and whether that person has any rights to own and sell the art
So then, what is a Non-Fungible Token (NFT) actually good for? The answer seems to be proofs of provenance, ownership, and authenticity.
Provenance is defined as the place where something originally came or began, or a record tracing the ownership history of certain items that helps to confirm their authenticity and value. How many things in the world need a proof of provenance? Paper towels? No. Corn? No. Cars? Yes, maybe. Art? Yes, as established, but not everyone likes art like they do their cars, at least in the West. So, market sizes matter. A good idea is only as good as the market, and NFTs aren't an idea that is actually sold, it's an idea on an idea of selling something. Like marketing, NFTs are more like a meme than a product or service. (I realize some people consider marketing to include market analysis, which is something else entirely.)
But, who runs the car provenance proofs? Do we put all the data about the car on the chain? That would be too much data for current chains. I suspect, like the speed of computers, an increase in throughput will just result in more junk on the chain. How much junk can a chain take? Not much, I'd hazard. How do you sell your car NFT to grandpa when the car chain is full of junk? You probably don't.
But, there isn't really much in which I need to prove ownership. My house and my truck have titles. It's pointless to make NFTs for them, given the state runs the database and the state is pretty good at this by now, especially given they take money from me for property tax and plates. I don't care to prove ownership of anything else. What I have in my possession is enough proof. The police would take a photo of my 3d printer as proof of ownership if it were stolen and then located in my neighbor's house.
The whole idea about using NFTs to share(holder) out my house or truck is also pointless. To make me pay someone that held an NFT on a share of my house is going to be a challenge. There's probably a contract somewhere that would do more good in forcing my hand to pay up, like the mortgage company would do if I had a mortgage and defaulted. But, is it useful? I guarantee attorneys will get involved if that happens.
Authenticity? Who cares? In this age of mass consumption, the focus of NFTs on art defines a very small market. In fact, I'd say the desire by some to "collect", of a certain generation maybe, is pretty pointless. It reminds me of my friend buying a bunch of Hot Wheels in his 20s because he thought not opening them and playing with them would make them worth more in the future. He had a huge collection in his attic. I don't trade things like this, but many do, and I appreciate that they may think NFTs help with their "hobby".
At the end of the day NFTs are made for the imagination - which is why the conversation always turns to gaming. They cater to it like nothing else. They make people think that "value" is a real thing and that it can somehow be "preserved" by using a series of calculations. I get that some people love the idea of NFTs so much, they can't help but spread that love to others. The only problem I see with that is that there really is no killer use case here. Instead, we get things like NFTs of blocks of tungsten that can only be touched once a year or saving that "special moment" in game that will be forgotten by the mind in a year.
One difference with NFTs is you retain the right to resale and transfer at all times. Which is totally different than DRM.
As for Proof of Stake, it's already live: https://ethereum.org/en/eth2/beacon-chain/ It was shipped in December of 2020.
The remaining component is the Merge, which merges the Proof-of-Work chain with the Proof-of-Stake chain: https://ethmerge.com/ . That is coming this summer. The Ethereum community is almost 100% behind the merge, so it's highly unlikely that ETH forks over it, and even if one occurred, the forked chain would not succeed.
Hasn't that date been continuously pushed back? Like the parent you replied to, I'll believe when I see it. And regardless, the mining infrastructure spun up because of the gold rush on Ethereum isn't going away at thia point. Those miners will just move to different chains.
And while proof of stake does partially minimize some of the environmental concerns, it introduces other problems that aren't great (like all of the power being systematically consolidated into the hands of early adopters and the wealthy).
It's been pushed a few times. Like any complex technical upgrade with hundreds of billions of dollars worth of assets on the line, it has to be taken very carefully and has to be tested very thoroughly against numerous vectors.
But there are live testnets of the Merge already, if you feel like testing it out: https://kintsugi.themerge.dev/ Please submit any bugs you find.
> And while proof of stake does partially minimize some of the environmental concerns, it introduces other problems that aren't great (like all of the power being systematically consolidated into the hands of early adopters and the wealthy)
Not here to get into PoW vs PoS debate. But its worth noting that Ethereum has hundreds of billions of dollars worth of non-native assets sitting on-chain. Many of these are protocols that didn't even exist 2 years ago. Anyone can create a whole new token on Ethereum that backs a new application and be their own early adopter.
For a more philosophical deep dive on PoW vs PoS, see Vitalik's writing on this: https://vitalik.ca/general/2020/11/06/pos2020.html
> The nft would be authorization, which sounds a lot like digital rights management to me
The NFT can be used as a token to access a particular service. But by no means is it anything like DRM.
An NFT is recorded in a smart contract. The record of an NFT's purchase and transfer history is immutable and on-chain. It's not revokable by a record company if they sold it under some particular terms to begin with.
At this point, however, it's far more likely that a music NFT has been produced and sold by the artist themselves, rather than a record label (3LAU https://nft.3lau.com/#/auction), Euler Beats (https://eulerbeats.com/genesis/21575894274), RAC (https://rac.fm/nft) as some examples. That's part of the beauty of this system, though, in my mind. An artist can have a direct relationship with their fans and keep nearly 100% of the revenue. They may even focus on obtaining 1000 high dollar mega-fans rather than hoping for a billion plays on Spotify, for example. And that's going to be perfectly ok as a business model in Web3.
It is literally impossible to prevent piracy, but we still want people that create art/music/games to get paid - NFTs are the solution to this problem. The artist gets paid, fans get indie bragging rights, and everyone gets to enjoy the content.
Their is no ownership without exclusivity.
(And NFTs are exclusive; they just happen to currently mostly be used as pointers to non-exclusive items with no other meaning, but there is nothing inherent in the technology restricting them to that use.)
Why not? Plenty of people own parks and gardens that are open to the public. Art in galleries is all owned by someone but many are free for public viewing. Everyone getting to enjoy the thing while the creator still gets paid sounds like an awesome future to me.
Because “ownership” is the right to exclusivity.
> Plenty of people own parks and gardens that are open to the public
You can choose not exercise the right to exclusivity (or to do so selectively), but if you don't have it, you don't own anything.
> Everyone getting to enjoy the thing while the creator still gets paid sounds like an awesome future to me.
Sure, patronage of public art can be great, but it's not ownership (except maybe “ownership” of an exclusive right to receive some defined form of credit for the patronage.)
And let me guess, do these people also "build together" using the centralized and proprietary Github built on top (and now bought by Microsoft, who knows what they'll do of it now...) of the decentralized git ?
Which means, the technical solutions to the questions raised in the original article this responds to, will probably not have time to be implemented before the rush is over.
Also, one of the main points of the first article, if not the main one (and certainly the first one) is that centralization is a feature, not a bug. People want a central authority and not bother themselves with running their own server/infrastructure.
So the only way for OpenSea to "die" is if it's replaced by a different, but similar, central authority.