NFTs Are a Dangerous Trap | Hacker News Reader

NFTs Are a Dangerous Trap

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772 pointsjosephscott752 comments

NFTs make perfect sense for representing a claim on things that can be used, like event tickets or in-game virtual goods. But as certificates layered on top of collectibles... I'm not so sure.

With something like CryptoKitties, you can do something with the tokens (play a virtual pet game). But with something like CryptoPunks you're essentially paying for digital beanie babies, which are worse than real ones since anyone can display and enjoy the image you paid for.

You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set. When a set's popularity wanes, so does your token's value, and your ability to show it off.

I'm always happy to see artists being paid for their work, and if they can make some money during this craze - more power to them. Beyond a few creators being rewarded, it seems like this is going to be 90% bubble (with plenty of hucksters), and 10% real use cases that stand the test of time.

> it seems like this is going to be 90% bubble (with plenty of hucksters), and 10% real use cases that stand the test of time

All the most interesting developments in computing start like this. This is good. The future is being born now and not without the required creative destruction.

Not sure why you're downvoted. You're exactly right. This is how new frontiers always are.

Lots of hype, most of which never pans out, with a core of projects that change the world.

You obviously wont be displaying your rare nft art collection in the west wing of your 2-bit, thirdlifeVR mansion.

That may be Decentraland's business model.

CryptoPunks will be in the MoMA one day. They are a pioneer — and will be valued as such. Derivative works and obvious cash grabs are a bubble and low effort art will trend back to $0.

> low effort art will trend back to $0

This is being continuously disproved since decades by contemporary art.

Most contemporary art has a lot more effort put into it than you think. It’s perfectly okay to not value that effort, but things like those “black squares” or whatever actually aren’t just that. If you see them in person, you can see how the different brush strokes overlap and theoretically signify different things.

> If you see them in person, you can see how the different brush strokes overlap and theoretically signify different things.

You had me until this bit

Son, see the weave on the emperor's gown and how it's delicate changes in weave and texture signify the greatness, taste and glory of our leader.

Mama! Yes but ....

Respecting nuance in other other people's perspectives, even if you don't see it, is a good skill to learn.

The example you're using isn't contemporary, it's over a century old, and it's a design for a stage curtain. It's not valuable for the effort put in * (it's literally just a solid black painted square), it's valuable because of the point in time it represents w/r/t art history

* edit for clarity: what would be commonly considered technical artistic effort, although a large % of graphic designers would disagree with that as composition is a skill, and conceptual artists would disagree due to the thought put in (which imo feels post-hoc but hey ho)

Just to expand on that, I love Malevich as an artist. I've travelled specifically to see exhibitions of his and his contemporaries' works. If I had large amounts of spare cash and I were in a position to buy an original, I probably would. From an artistic pov, I feel the ideas he introduced are extremely important. From a technical pov, I think his colour and composition are superb. From a conceptual pov his art is a pretty laser-sharp distillation of the ideas he had regarding what art means or can mean. From a personal, professional point of view, I'm trained as a designer, and worked as a designer and illustrator. The tenets of constructivism and suprematism have been formational to much of my approach to design.

So, it's not that being technically spectacular in some arbitrary "really accurately painted or drawn picture of reality, like a photo" way makes art valuable (photography effectively destroyed that a long time ago, sorry!). It's that it has some special significance. If that significance is more than personal, as in it has some historical/cultural significance, then it becomes valuable. There's no point to it, it's art. So w/r/t original subject, above reasons make me think twice about any knee-jerk cynicism I have toward it (which I do have, I just have to have an open mind)

Art is what people say it is. Its appreciation is what probably separates us from the animals and certainly separates us from the AIs.

We say "Beauty is in the Eye of the Beholder", because it's true. There will be no accounting for a persons own taste or for what society finds fashionable today or over time.

If what you personally call Art and its story speaks to you then it is valuable. If others share that feeling then it is even more valuable. It's just that simple.

I personally like the idea of commissioning art like what big families did back in the Renaissance, but use Social P2P networks like what is already happening with customized digital Avatar makers/artists. NFTs have a role to play here equivalent to an old Renaissance painter signing the bottom of the painting, only now it's with the owner(s) and all future owner(s) signatures there for all to see.

Animals certainly appreciate beauty among each other[0] probably also in the environment[1].

AI can be trained to recognise and prefer beauty as well.

[0] http://www.bbc.com/earth/story/20150511-why-are-animals-so-b...

[1] https://www.independent.ie/entertainment/sir-david-attenboro...

I'll give you the Animals as your likely right and it's more a turn of phrase than a logical argument, however I have to respectfully disagree with regards to AI. A thing that is trained to recognize and prefer is exhibiting behavior - it is not experiencing 'appreciation' with all that implies at the human level. A machine may pick good art out of a line up but that art will not improve its mood or inspire it to take up painting or make it want to write a poem to an old lover it was reminded of. AI can be useful in creating art perhaps, but I don't see it ever as an end user consumer of art's appreciation.

But how good are they going to be at laundering money? I can't imagine they're going to be in the class that contemporary art is in, so they aren't really comparable.

CryptoPunks is not the first NFT market, not by a long shot. but it has more fortunate market timing and better optics than projects that predated it.

> You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set. When a set's popularity wanes, so does your token's value, and your ability to show it off.

And only as long as people recognize your NFT claim to ownership as even being valid. Other people may view that brag as being as sad as someone bragging about their land holdings on the moon: https://lunarland.com/.

There's a difference if the author of the art is the one that minted the NFT.

It's like jack dorsey selling an NFT of the first tweet compared with any random person trying to do the same.

What rights do you actually have in a tweet?

Which of those rights are actually transferable?

What rights do you have in a tweet that you made in your capacity as an employee of a company?

What rights do twitter as a company have with respect to tweets? Or to impose restrictions on the ability of people to transfer rights with respect to tweets?

Right. This is an example of the dumbest kind of NFT. It's not even a signed original, it's just a token that says "You own the thing!" but for a resource that anyone could download anyway and ownership isn't tied to use or display. It's about what I expect from Jack.

At least with cryptokitties, love em or hate em, the NFT was the character and the permission, so while anyone could admire your cat nobody but you could publish actions from it.

> NFTs make perfect sense for representing a claim on things that can be used, like event tickets or in-game virtual goods.

There’s absolutely no reason for that to be decentralized, only one party can honor the tokens anyways. Like most things crypto they don’t actually make sense for anything.

You still might want to hand out tokens to third parties to trade but not copy. I agree that a decentralized structure is not necessary.

If that’s what you want throw a “transfer” button on your site. There’s already a button to do this on the Ticketmaster app.

Agreed. I still think there's some charm to the idea that it can be supported passively but as you say the fulfilment is ultimately not passive, so it doesn't really gain you all that much.

> If that’s what you want throw a “transfer” button on your site.

Well when you buy a ticket from ticketmaster you can’t exactly dictate what features they offer through their platform...not to mention ticket master is a 3rd party service that they take a massive cut.

blockchain is cutting these 3rd parties out in these use cases, allowing the event holders to easily mint the admission tickets and users take advantage of peer to peer open source technology. Meaning easily trace the tickets and buy/trade/sell without relying on Ticketmaster.

The thing that makes ticketing difficult is not minting and selling unique items of inventory - that's a well understood problem with many viable solutions. Nor is verifying at any given moment if a single piece of inventory is valid and who owns it - again, that's a solved problem.

The secondary markets in ticketing exist because there's an excess of demand and entities who can exploit access, speed, or technical know-how for arbitrage. Blockchain ticketing companies don't fundamentally change that statement - they enable it.

No one likes Ticketmaster - but to call them a 3rd party service that takes a massive cut is inaccurate. Ticketmaster is owned by Live Nation, which usually owns both the venue and the artist's tour schedule. And owns the primary and secondary ticketing sales. So Ticketmaster is usually the first, second, and third-party in ticketing.

Blockchain doesn't magically fix this. It doesn't change the deep relationship Live Nation has with labels and artists, their fodness for excluding artists who play at rival and independent venues, their habit of defining contract requirements that can only be fulfilled by Ticketmaster software...

Blockchain is solving all of the wrong problems in ticketing. I don't need a distributed, trustless ledger of who owns a ticket when all of them are issued by and redeemed at the same location. The only real reason to push for blockchain in ticketing is to help scalpers hide what they're doing.

> The secondary markets in ticketing exist because there's an excess of demand

I don't buy "excess of demand" as being fundamental, though, except in the most technical sense. Imagine a super niche event, where the organizers know there are exactly 200 fans on the entire planet, and they offer that many tickets on sale. It still makes sense for a random scalper to take a loan, buy all 200 tickets, and resell them with a markup. It would still make sense if the organizers offered 300 tickets, i.e. greater supply than demand in terms of heacount! A scalper could still come ahead buying all 300, selling 200 at a high enough markup, and feed the remaining 100 tickets to a cat.

I think scalping (arbitrage) can occur in any situation in which the supplier isn't charging the maximum the market can bear (perhaps that's what is meant by "excess of demand" and I'm missing some technical definitions here).

Excess demand refers to a situation where a good is underpriced, resulting in a quantity demanded that exceeds the supply. [0]

[0] http://www.personal.psu.edu/dxl31/econ2/pizza_market.png

>Well when you buy a ticket from ticketmaster you can’t exactly dictate what features they offer through their platform...not to mention ticket master is a 3rd party service that they take a massive cut.

Is this an argument? We're talking about ticketmaster moving to a chain, why can't we talk about them moving to a cheaper better service that isn't based on crypto?

And besides, crypto isn't free. The network takes a cut. Doesn't it cost like $20 to perform a transaction right now?

People who issue tickets through Ticketmaster absolutely get to dictate terms. Otherwise they wouldn’t use Ticketmaster and would use a competitor.

There is a reason. Just not a technical one. It becomes obvious when you ask the simple question: why hasn't it already been done? The answer is that it's in no actor's local incentives to create the public commons.

Why is there no global market place for reselling digital event tickets? Certainly Ticket master and the other retailers could agree on an open standard protocol, pay for a centralized clearing house, and create a digital market place. But they don't. And they don't because it isn't in any of their local interests to maintain such a thing.

This problem, which is fundamentally social and economic in nature, is what is solved by smart contracts. It allows the creation of a public commons, not one that technically couldn't exist, just one that no private actor is ever incentivized to create.

The example you give - reselling tickets, is actually something that is directly something ticket sellers want to discourage, crypto doesn’t solve that.

And there's always a necessary third party to a p2p ticket exchange anyway: the entity that actually puts on the event the ticket gives entry to. Where they want ticket exchange (or at least refunds) to be possible they can do so in a centralised manner and when they don't, they're not a middleman that can be cut out.

One could imagine it being a kind of emergent community-organized event, somewhat modeling a decentralized peer-to-peer network itself. There will still technically be at least one intermediary of a sort, but hypothetically the only real intermediary could be restricted to the single person or group who initially proposes the event and issues the batch of ticket NFTs.

There are plenty of major concerns here, like how security and access are physically enforced if there are no official organizers or designated volunteers, but in theory you could maybe distribute a phone app so everyone is automatically scanning for unauthorized people, and just rely on physically capable attendees and police to deal with potential security incidents. Still probably a recipe for utter Fyre Festival-esque disaster and lawsuits in many cases, but feasible in theory.

If I’m in ticket selling business, if I can maintain a level of control with crypto I can, but back tickets and resell them, but most importantly I can capture any upside I missed by selling the tickets for too low of a price, and the purchaser resells the tickets for a profit given I get a cut of each and every transaction

How do you guarantee the person trying to get into the event is the owner of the ticket?

They pay their token when they want to go in?

They can verify ownership by signing something with the wallet that the token is associated to (signing is free). They're only able to do so if they own the private keys of the wallet.

It should be noted that private keys can be shared if the owner wishes. In the case of using NFTs as event entry the event organizer would still need to keep a record of which NFTs have been used already for a given event because the wallet can be shared. Third party services will almost certainly pop up to fill this need.

Exactly. It'll have to be like a software license key: in theory you can share your key, but the service can just authorize and lock in the first device/entity that presented the license key. This kind of DRM is often annoying for regular customers since you may have to manually contact customer support in order to request a transfer of the license to another device you own, but it does help mitigate non-paid use to an extent.

This could be enforced for real-life events by handing out a wristband with a GUID QR code to the first person to demonstrate they possess the private key that owns a particular ticket token, then never handing anything out for that token again, and also triggering an alert if the same QR code is ever seen on more than one person (to mitigate "pirates" who might offer identical or similar-looking wristband material and "replay attack" with an existing assigned QR code).

There are probably other attacks I'm missing (including obvious existing stuff like people just sneaking in and evading wristband checks), and there are lots of questions about whether an NFT or decentralized blockchain is a smart idea for a given live event, but from a security perspective I think it should probably be feasible if an event organizer does decide they want to do it for whatever reason.

However, there are other analogues that I think are much less feasible or perhaps totally infeasible. There are some NFT... apps? platforms? companies? DAOs? that are providing some service where an NFT grants you access to something like a restricted Discord server. Even aside from how valuable or sensible that may or may not be, there's absolutely nothing stopping a token-holder from just sharing their Discord account email and password with as many people as they want. The platform and the Discord servers would have no idea if anyone's doing this and how many people could be sharing any given account. (Discord employees could potentially detect some cases but I doubt they'd play any part in this.)

For a real-life physical event, someone can't just copy your body and make it a shared proxy for pirating, but any NFT ticket use case short of in-person events is probably often just going to rely solely on the goodwill of people to not abuse/pirate things, and we all know how that goes - especially in anonymous online communities.

The rubber-meets-the-road real-world crossover part is where NFTs and "Web 3.0" in general tends to become really shaky. I'm still mildly optimistic about it in the long-term, but I think a large percentage of existing use cases are going to fizzle as pointless dead ends that are surviving purely based on flavor-of-the-year hype and fad waves. Things are obviously stuck in one such fad right now.

> This could be enforced for real-life events by handing out a wristband with a GUID QR code to the first person to demonstrate they possess the private key that owns a particular ticket token, then never handing anything out for that token again, and also triggering an alert if the same QR code is ever seen on more than one person

This is quite close to what unlock-protocol[1] did for several conferences pre-covid. Overall it worked, though there are some key difficulties: gas prices make interesting on-chain things too expensive for most people, and wallet ergonomics aren’t great for this sort of thing.

(I am a former unlock-protocol employee)

[1] https://unlock-protocol.com/blog/checking-key-in

Why would that be so? My understanding is that they want to discourage scalping.

Digital tickets tied to digital identities that can only be transfered at market price. That's not a difficult smart contact to create.

Scalping is also selling tickets at market price - after first making sure the market price is a big multiple of what it was before scalpers got to work.

If I wasn't clear, the market price is just a variable that could be set. If they wanted they could set this at the initial sale price.

I like the idea of building in a percent cut taken out of the resell price and given to the venue/artist. It taxes scalpers and allows artists to benefit from secondary markets if they mispriced their initial offering. Its also easy to do in a contract

What does the tokens even mean anyway? It doesn't mean "I'm the owner of this one in five paper canvas art", it just means "I'm the owner of this one number, which someone decided is related to that digital piece of art for which there can exist infinitely many copies that are perfectly identical".

What does it even mean? Let's say I buy a NTF $1000 and get a digital copy, what prevents me (barring legalities) to perfectly duplicate it and massively redistribute it (not the token, the distributed supposedly high quality file) for a fraction of $$$ and turn a profit (because since it had such a high price it must be in high demand)? The question is not about the legal consequences but about the thing you own: of you have one original painting you have only one, it's quite hard to exactly duplicate it for resale.

I may be naive (the dropbox-is-just-rsync kind) but I've yet to see a tangible explanation of a use† of CryptoArt/NFT that could not be done with `xxd -l 128 -p /dev/random` and PGP[0].

† No. "being in the blockchain" brings absolutely nothing (except burning watts). If the author wants to reissue anything he readily can. You. Just. Own. A. Number. I also hear some picture the author getting a cut of resales of the token, which is even more crazy when you manage to entertain the thought while trying to keep a straight face.

[0]: https://twitter.com/lloeki/status/1366804865943556106

> Let's say I buy a NTF $1000 and get a digital copy, what prevents me (barring legalities) to perfectly duplicate it and massively redistribute it (not the token, the distributed supposedly high quality file) for a fraction of $$$ and turn a profit

The file is usually publicly accessible, why would anyone give you money for something they can just download?

Some rich dude has bought the "first tweet" for $2.5 million, despite the fact that it's publicly accessible [0]. I imagine it's about showing off how rich they are. They could achieve the same result by throwing $2.5 million into a furnace.

https://twitter.com/jack/status/20

I don't think that's the question. That guy paid for the exclusive NFT thing, but no one else is going to make a profit selling cheap copies of that tweet.

Everybody who wants a copy already has one for free, that's what "publicly accessible" means.

What rights do you get with ‘owning’ the first tweet? Who could you buy those rights from? Do you get any responsibilities along with that? Like if UNESCO declare the first tweet a culturally significant artifact, could you be held liable for allowing it to fall into disrepair?

And what does the existence of an NFT allow you to do with respect to that bundle fo rights you bought that couldn’t already be done by having someone write down a rights assignment on a piece of paper, sign it and hand it over to you in exchange for some consideration?

The buyer gets to own not the tweet but a "digital certificate of the tweet" which is the actual NFT thing. So what they buy is a certificate although I'm not sure what it certifies.

It certifies two things:

1. That you paid a certain amount for the certificate.

2. That there will never be another certificate for the same thing, from the same brand of certificates (e.g. "Valuables BY CENT").

Pretty much exactly like owning a baseball card, then.

> it certifies ... that there will never be another certificate for the same thing, from the same brand of certificates (e.g. "Valuables BY CENT").

How many "brand of certificates" are there now, and what is the barrier to entry?

I suspect 1) several and 2) low.

Also, how is "there will never be another certificate for the same thing, from the same brand of certificates" technically enforced?

Correct. Although there is only one brand that has sold a Tweet NFT for $3mil.

The enforcement, interestingly, is more traditional; the owners of the "Valuables by CENT" trademark can use existing legal structures to prevent anyone else using that name.

Meanwhile the NFT is digitally linked to the Valuables by CENT smart contract on Ethereum, which will presumably have an 'author' property attached to it, set to the string "Valuables by CENT".

> The enforcement, interestingly, is more traditional;

Ah, so they pinkie swear not to do it a second time?

It would be equivalent of Sotheby's starting a second brand competing with themselves, but yes.

Sotheby's was founded in 1744 (1). They have a track record, a _brand_ to maintain.

Your average blockchain was founded recently, and have a lot less to lose taking the money and running, or popping up again under a new name, for a second go at the same shtick.

1) https://en.wikipedia.org/wiki/Sotheby%27s

> Also, how is "there will never be another certificate for the same thing, from the same brand of certificates" technically enforced?

A Merkle chain[0] append-only ledger contains a transaction minting the certificate, and the consistency rules for that Merkle chain mean that any extension of the chain which mints another such certificate is not valid (the same as a extension that spends money from a account with no money in it is not valid).

0: technically a blockchain specifically, but that's not actually relevant

But when you buy a baseball card you get a card. Here it seems that you only get a receipt stating that you have paid (aka the certificate) AND NOTHING ELSE.

If I understand it correctly, that receipt in conjunction with your keys allows you to prove you own the NFT and can control it on the blockchain(sell it, trade it, etc).

> If I understand it correctly, that receipt in conjunction with your keys allows you to prove you own the NFT and can control it on the blockchain(sell it, trade it, etc).

And one should be happy to control the receipt of their purchase of imaginary goods? Ok.

Currently, when it comes to Dorsey's tweet? Yeah I agree. But there is more going on and it will not always be "imaginary goods".

https://medium.com/treum_io/on-chain-artwork-nfts-f0556653c9...

But the NFT is the receipt, if I understand correctly. You own a receipt (the NFT), and you can trade it, but why are people buying and selling receipts? You make a payment, you get a receipt, and nothing else, which makes absolutely no sense. Usually, when you buy something you get a receipt for free and then the actual thing that you have bought.

I think at that point the platform upon which the receipt resides will prevent people from making duplicates on their chain, and the owner of the receipt have control over buying/selling it.

If you have essentially bought a jpeg image, you have as much control over it as anyone else: Anyone can view, transmit or edit it, etc. Your "proven purchase" grants you exactly nothing extra.

But this would only make it unique on the CENT blockchain, no? What if another blockchain becomes the standard offerer, wouldn't that devalue everything on the CENT blockchain? Further, wouldn't we expect multiple blockchains to be competing to become the "primary" chain in which these items are deemed valuable, i.e. CENT and blockchain A & B & C trying to be the medium which holds a unique cert to Jack's first tweet. Jack's first tweet has a unique copy on each blockchain, but being that each chain has it's own NFT of jack's tweet, the digital certificate of the tweet is not necessarily unique. Or is twitter supposed to maintain their own blockchain that creates NFTs for each of their tweets and users are going to assign the most value to this chain since it's maintained by the company itself?

Further, I don't understand how this works in music/art. Grimes' copy of her music is issued on Nifty Gateway, but isn't that art only valuable as long as users assign value to the Nifty Gateway platform? What stops another art blockchain from becoming more desirable/valuable and creating a NFT of Grimes' art there? Doesn't that erode the value of the original NFTs?

What am I missing here?

That's correct. Which makes it all even more absurd. Although the smart contracts are there forever, so at least it can't "go bust" (although the web front-end certainly could).

This is the argument that gets me applied to bitcoin. It's first mover advantage. And the "gold2.0" market value is this perceived incorrectly if there is no other moat. That's why today we are announcing ... Bitquan!

There's no social validation in throwing $2.5 million into a furnace. Spending $2.5 million on a tweet means you are validating everyone who believes that NFT's are real and an industry with a promising future. Especially in an environment where these objects are so hyped and driving a lot of venture capital investment, participating has large social benefits.

It's not just some "rich dude". The highest bidder [1] (so far) is Justin Sun, creator of TRON crypto [2]. I see this as a big publicity stunt for his personal branding.

Not too different than paying $4.5M to have a dinner with Warren Buffett [3].

[1] https://www.coindesk.com/twitter-ceo-jack-dorsey-is-offering...

[2] https://en.wikipedia.org/wiki/Justin_Sun

[3] https://www.coindesk.com/trons-justin-sun-finally-gets-4-5m-...

Why do people pay extra for signed books? A signed copy is literally identical to a non-signed copy aside from the signature ink.

I'm not sure how that's relevant to the question of reselling stuff?

My prior response was at the "why would someone pay for a NFT when you can download an identical version for free" question of the parent comment.

> "I'm the owner of this one number, which someone decided is related to that digital piece of art for which there can exist infinitely many copies that are perfectly identical".

Which the ARTIST has decided is a digital certificate for the price of art.

Just I could make a duplicate of the supreme brick, my duplicate wouldn't have as nearly much value if I tell people it is a duplicate. Supreme could sell bricks again but they probably won't. There's nothing physical that's stops them but there's still an implicit agreement between artist and buyer.

I may not wish to buy own a supreme brick, but I can at least understand why people find it valuable.

The all-caps "artist" brought this to my mind:

https://en.wikipedia.org/wiki/Artist%27s_Shit

A can of old shit sold for €275,000???

Jesus Christ Mary and Joesph, what is the name of all things pure and holy...

Look, I get it outside of the money laundering scheme to modern art, throwing around how rich you are by buying "stuff". I get it. Tiny pecker syndrome. But let's stop and remember that Rockefeller and Carnegie, the OG capitalist titans, were dick measuring by donating their money. Sure "to the arts"... at least they were building halls and museums. They participated in some solid currency velocity that helped pay the wages to construction contractors. Still, they were assholes, but a lot better than just shoveling money between other rich cunts as a form of showing off.

Personally I think these should have a legal license associated with them. Like if the author transfers NFT it transfers the creative license as well (so the purchaser actually owns the art). For instance, Nayan Cat beanie babies can now only be manufactured by owner of said token, and whenever the new owner transfers the token the license goes with it. Etc.

Basically, if Token == Intellectual Property ownership then it makes sense.

This would mean if a creator, say a musician wrote a song and transferred the NFT and it became a wild success in the future, the owner would earn profits from the investment, but so too would the content creator receive the mentioned dividends proportional to the value.

How would you resell a stadium event ticket with a centralized setup? You'd need the event organiser to run the marketplace, which isn't always desirable.

Same way this has been happening for as long as I’ve been alive.

Why is a secondary market in stadium tickets a desirable thing?

If you want to use your ticket to go see the event, use it. If you don't, simply do not go. If you do not want to go and want to recover your costs, sell it back to the venue at the purchase price.

The blockchain is only infrastructure. It is an open decentralized cloud for financial services/contracts. Sure vendors could also have their own service and marketplace but why should they. This way they just print and sell some NFTs and that's it.

When it's owned by an external party, you might not be able to (easily) trade it. When it's decentralized, nobody can stop you from trading it.

It is funny: there are essays in this thread, authors clearly breathless to explain the utility or lack thereof of NFTs.

Yet your two sentence explanation is the most comprehensive.

NFTs enable the possibility of a market that is orthogonal to the channel that distributed the token.

The viability or existence of such a market is not guaranteed, but the likelihood that one could emerge at all has gone up thanks to the novel properties of NFTs.

But of course there’s only one place you can redeem them. That means either that party is ok with transfers (in which case your point is moot because they can offer that themselves like Ticketmaster does) - or they’re not ok with the transfer in which case they won’t honor the token, making your point moot.

So how does the party best offer a trading infrastructure when they are OK with it? Implement it? Good luck. Easiest right now is to offer an ETH based token, and you can trade it for anything you want.

When it comes to in game items... why should one game honor another game's items? EVE Online and World of Warcraft dont exist in the same context. Even if you did it between Guild Wars, Elder Scrolls online and WoW, you still cant interchange the items due to stats, style and general game mechanics let alone the coding rework to have these items function the same way between games.

If there was an mmo framework that is shared between different games, I guess. But even then, why have a universal currency instead of just making it framework/platform specific? It's less work and is all handled in a fast centralized DB. At that why create the extra work of PoW or PoS or whatever algorithm solving process it'll use. currencyAmount += tradedAmount is way easier and makes more sense on the game dev side.

All these anti NFT arguments amount to is, "This is solutionism at its finest, but people already bought koolaid in bulk...so enjoy the show."

In my opinion, it only has the possibility of making any sense if a game itself is (largely or entirely) an Ethereum dapp. I think a WoW NFT would make zero sense (and I think Blizzard would agree, barring the hypothetical potential of trying to exploit a fad purely for extra profit), but an NFT representing an asset in your Ethereum-based Second Life "d-game" could possibly make some sense. I know some dapp games exist and more will be made, but I'm not sure how practical or fun they are or can be.

Even then, there are still a lot of questions: what makes the d-game actually interesting/novel/unique/fun and an appropriate, creative, and clever use of a decentralized blockchain.

And although I mostly agree with this essay and the Medium essay it's referencing about environmental impact, I do think NFTs have some potential use cases outside of games, art, and bilking greedy people. I think those use cases just have to be a little further along the "blockchain from end-to-end" spectrum.

I dont know about theres a "use".

Remember that crowdfunded, over engineered juicer? It was some $400 and claimed to do like 100 pounds of force on a pre-juiced juice packet to squeeze into a glass for you. Some other article showed you can just squeeze these packs by hand into your glass with barely any force. This was "the Keurig" of juicing.

Total shit show of over engineering and solutionism.

I see the same thing with crypto and NFTs currently. Everytime I have this discussion in person, I always say that I do believe there will be a viable digital currency of some sort in the near future. The current gen of tech has proved the want, which is important, but now a real how is needed along with commonsense.

Like, theres a real want for an easy to go, healthy juice. Just bottle it and sell it that way. Why go through the extra step of a juicer if the shit is already juiced. I won't doubt their drinks were good. But they got caught up in solutionism gimmicks. Digital currencies are caught up in the blockchain gimmick.

The want it proved is people want to get rich fast. It’s important not to mistake want for wealth, for want for NFTs.

This assumes that the centralized minter (and ultimately redeemer) of the, say, tickets, is both willing and able to run a secondary marketplace for them.

Those two things are not a given.

Yes there is. If it is decentralized (properly), you can't be canceled or locked out of your account, you can trade your good at any time.

There is a collectible card game under development which i think is similar to Magic The Gathering. https://coa.se/ In this case it makes perfectly sense. It will be released on the Tezos blockchain which is already LPoS. https://tezos.com/

I guess, but if the web front end goes down all you own is some digits. Cool.

When people loose interest in stamps you have some scraps of paper. :)

It serves the token holder if said party just declares the ticket or other item a forgery or otherwise invalid, and doesn't let you in the venue or locks your account. It also serves the holder if they want a safe secondary market to resell or trade tokens.

So basically, decentralisation doesn't serve the vendor, only the consumer.

Yes it does because within the token, you can program that the token creator gets a share of the profit.

Mark Cuban talks about this regarding dallas mavericks tickets. Suddenly the ticket creator can still benefit from scalpers buying everything. Or, you can set the next sell price to be limited to only 10 percent more. etc.

There is a reason for artists and musicians to move to NFTs as well, as royalty is built in. See kings of leon releasing their album as an NFT.

Cryptopunks will always have mindshare as an early mover. In the collectible world it will maintain decent value. More than the original purchase prices.

In many worlds, image NFTs you own are displayed with special indicators that they are yours. You can print out a picture of the Mona Lisa, but its not going to have the same impression as the real painting.

Original Beanie Babies are worth a fortune.

This craze is happening because many people realize that at the least, there is sustained value in first-mover NFTs of various types. Before dismissing this as yet another craze or bubble, consider that a digital world where 90% of NFTs are worthless is no different than real life with commoditized art.

I believe the rarepepewallet project is considerably older (on the crypto time scale) than cryptopunks, maybe the first fully functional NFT market, and operating before the term was even in use. but its less polished and much of the content is laced with various racist smells.

> But with something like CryptoPunks you're essentially paying for digital beanie babies, which are worse than real ones since anyone can display and enjoy the image you paid for.

It seems like the obvious counterpoint is that perhaps all of these “collectible” scarce physical things which are bought and sold for huge amounts of money (art, coins, relics, etc.) are in fact being used simply as a way to identify a unique “token” that is good for generating hype among a group of people and exchanging value among that group because it has a story attached to it and isn’t easily counterfeitable. It’s pretty obvious that a decent reproduction of most of these things would deliver the raw surface aesthetic experience to the vast majority of interested people and would cost much less. For many famous paintings it’s easy to understand why someone would want a reproduction in their house for decoration. It’s less obvious to me why someone would want a reproduction of an old coin with a minting flaw, but perhaps that’s just me.

Also if anything is a digital beanie baby then so is Bitcoin, what’s the difference?

It is permissionless. You can transfer BTC without a bank or eBay or the postal service being involved. It is the best way to buy LSD from a stranger. So it has some value because of that. Similar to rare wine, most of the price is due today to speculation and asset diversification, and rich hobbiests.

You can transfer an NFT to someone else exactly the same. It's just that someone has made a real world distinction between 2 distinct NFTs, like if someone found that a particular coin's hash spelled out "Jesus will rise again" in base64.

I agree re: rare wine and rich hobbyists. Bitcoin's value is much the same, although without the wine.

Everything Seth is saying about NFTs is true for every crypto coin.

There’s a limited supply of Bitcoin

But there's no limited supply of digital coins. I could make one right now, and owning Bitcoin is no different from owning my one except that speculators place more value on Bitcoin than my unknown currency. Everything Seth said about NFTs is true for all crypto coins.

You're not wrong, but there can be more than one thing playing such a role. Bitcoin is Beanie Babies, Ethereum is a varied ecosystem of pet rocks, Monero is Pokemon cards with traces of white powder. Can't hurt to diversify your speculation.

> You can brag about owning such-and-such an image [...]

How? You don’t own a (digital) image. You own a token that references an image.

Everyone else can view the image and send it to their friends. But you have some token allegedly signed by the author of the image — who cares?

The author cares. They got real cash for signing a meaningless token.

So why not ask for donations or sell prints?

You're correct, though if I understand correctly, some NFT platforms do provide some (centralized) feature for "unlocking" content. For example, you could upload a full resolution art piece to an NFT platform or any other place and have the server serve the content to any request that proves ownership of the token.

This is a pretty terrible system, though, as it's completely off-chain and not "Web 3.0" or decentralized in the slightest. The server has to store the "private" content in a private centralized database, so the server owners also can access the content, and any hacker could access the database and publicly dump all of the supposedly token-walled content.

It's just taking advantage of the fact that any computer can determine the Ethereum address that owns a particular token and can check to see if a message was signed by that address's private key.

I could imagine a future standard that could maybe integrate this into Ethereum proper, though I'm not sure if it's technologically possible.

There's no way to prevent someone from just publicly releasing the art, but one could imagine some system like the full resolution piece stored as a public key-encrypted blob in the blockchain which can only be decrypted by a token holder.

Maybe upon token ownership transfers the key could be encrypted with the token buyer's Ethereum address public key, though I'm not sure how or if it could work since I think the original content key would have to stored on the network in some fashion in order to later encrypt the key for token owners. So it might not be possible even in theory, though I don't know nearly enough about Ethereum and cryptography to say with any certainty.

It's like owning a celebrity's autograph. Some people do care, a lot.

Except it is different in a way. Owning a physical autograph is different from owning a picture of one; the physical autograph can't be reproduced and has value due to its uniqueness and to its physical existence.

It would instead be like owning a unique piece of paper with a unique number on it, which somehow corresponded to a picture of the autograph. Now the autograph portion is identical between you and anyone else (neither of you has a physical autograph); the only differentiator is your piece of paper. Where is the value?

The NFT is cryptographically signed by the author. You can't forge it, and it's publicly, verifiably linked to the author. It's even better than a physical autograph.

So you'd place value in a cryptographic signature from the author that ties the piece of paper in my analogy above to the photo of their real life signature? How much would you value that at, given that anyone else can acquire and enjoy the exact same photo of the signature that you enjoy, just without the piece of paper saying "this photo that everyone can see and enjoy is owned by andypants"? If the value you'd place on that piece of paper is above zero, why? (Genuinely curious).

Then let’s call it that instead. Rather than pretend it’s possible to own information in the same way you can own a physical object.

> in-game virtual goods. But as certificates layered on top of collectibles... I'm not so sure.

I agree - the problem with most NFTs at the moment is that you can't actually do anything with them, apart from trade them.

There are games coming out now (e.g. Goal Revolution[0]) where your NFTs' properties (and, by extension, value) change based on what you do with them (how you use them). If the NFT thing is going to have any future, it needs to follow this example.

[0] https://www.goalrev.com/

Have you played Aavegotchi? [0]

[0] https://www.aavegotchi.com/

So the best case scenario for them is to be a part of the worst type of video games? The pay-to-win/microtransaction sector?

> the problem with most ~NFTs~ art at the moment is that you can't actually do anything with them, apart from trade them.

I dot agree with this statement but perhaps it'll help you expand why you think this way. As the article says, you don't have to own the Mona Lisa to appreciate it's beauty.

This always comes down to how you understand value.

How valuable is Jimmy Hendrix guitar pick? How valuable is a lok of Justin Biebers hair? How valuable is a book owned by Charles Darwin?

Of course NFT is a bubble just like about every other thing humans create, but humans will always attach value and meaning to dead things even digital ones.

And so NFTs can be used for many things including allowing people to buy something overhyped that will depreciate in value.

That's all good, the more of this the better.

Only in this case the value is stored in “digital gold”. Unlike gold, which is chemically stable, I’m far from convinced the digital format itself will end up sticking around long term.

Not sure about your definition for long term.

TCP/IP looks pretty solid to me. NFT is basically TCP/IP with memory, why shouldn't that be useful for all sorts of things?

Bitcoin is more like gold, NFTs are more like network based consensus validation of ownership.

Right, but unlike TCP/IP, which is a stateless protocol, the validation of an NFT requires a specific blockchain. While Bitcoin and Ethereum seem to be “here to stay”, they both seem under constant competitive pressure from other blockchains.

Silver and gold live side by side.

This has value because it’s a tangible reductio ad absurdum for crypto currencies. Best case art, median case scam.

NFTs are nonsense and just as much a pyramid scheme as everything else crypto. People will get left holding the bag at the top just like with CryptoKitties. I have several hand painted reproductions of famous paintings (impressionist). I get just as much enjoyment looking at them on my wall as I have at the museums looking at the real ones. I don't need to have $100M. I'm glad that content creators are getting paid now but remember that most "artists" end up penniless and their art is only highly valued posthumously.

>NFTs are nonsense and just as much a pyramid scheme as everything else crypto. People will get left holding the bag at the top just like with CryptoKitties.

You can say this about literally every non-productive asset, including NFT's real-life counterparts eg. painting or trading cards.

Except those sorts of collectibles drive much of their value from their limited supply.

paintings might be limited in supply, but trading cards are easily mass produced.

They are easily mass produced, but the companies still limit the supply specifically so there is value for collectors

But the same dynamic exists with NFTs. The issuers can limit supply to ensure value for collectors.

Physical goods have a counterfeiting risk. Is it possible to use NFTs to prevent counterfeiting by verifying that a product is genuine? If not then they really have no use. Physical goods need verification but digital goods can be replicated perfectly. A "bootleg" is just as good as the original so no verification is needed.

Yes. That is precisely one of their best uses.

I'm a dev at pruf.io and this is one of the many things our platform is designed to do.

>Physical goods need verification but digital goods can be replicated perfectly. A "bootleg" is just as good as the original so no verification is needed.

The same can be applied to physical goods as well. Why do people pay millions for the original painting, even though they could probably get a replica that's identical to the naked eye for much less? Clearly they're interested in more than it being "as good as the original".

They’re both still subject to entropy and the rules of the physical universe in a way that digital isn’t.

How is digital not affected by physics ? It's all relying on electricity and thermodynamics to begin with.

Furthermore digital assets undergo similar attrition to physical goods through people losing access to their goods. The BTC block chain is notorious for its forgotten wallets.

The entire point of NFTs is that you can attach a verifiably limited supply to a set of collectables. Just like with their real world counterparts, you can have knock-offs and reproductions that people collect, but the owner of the actual original one knows they have something of a limited set.

When beanie babies have limited supply, it's because the factory has to manufacture other goods for their next contract.

When imaginary cryptohashes have limited supply, it's kind of pointless, or at least there is nothing good for the buyer or society.

There are plenty of products where scarcity is intentionally created, though. Disney DVDs are a prime example.

I’m skeptical about NFTs too but trying to keep an open mind, because at the end of the day, while you or I personally don’t need the 100M to enjoy the impressionist art, you can’t ignore the fact that someone out there is in fact willing to pay that for the original. And that’s kind of the same weird authenticity bragging rights situation.

Well there's also the allure of the physical object that the artist created by hand. People done go see the Mona Lisa rather than a replica for bragging rights. That's not there with digital goods.

There's a big practical difference between owning an original and owning a print. People have discovered secrets behind paint or canvas before. New technologies often allow us to introspect qualities of the art that we previously didn't know (chemicals used, techniques, tools, lifestyles, etc.). An original is a snapshot of history that includes tons of unique information that is simply not available in prints or nfts.

while you or I personally don’t need the 100M to enjoy the impressionist art, you can’t ignore the fact that someone out there is in fact willing to pay that for the original.

There are people who happily pay $10,000+ for an Italian purse. There are people who are happy with a $10 Chinese knock-off.

There are people who happily pay $2,000 for an Apple laptop. There are people who are happy with Linux on a $100 machine from Goodwill.

There are people who go outside to feel the breeze. There are people who are happy with a fan.

I don't understand NFTs at all. But I have to remind myself that often value is subjective.

You should also account for how early NFTs are. If you've been following blockchains for a while, you may recall that in 2012 and 2013 there were an ocean of Bitcoin knock offs that distinguished themselves by changing things like the difficulty adjustment algorithm, or the hashing function, or the total coin supply. All of these "altcoins" to experts seemed to be completely useless and many chalked the entire category up as worthless. Eventually of course a lot more interesting altcoins were invented, and it turned out to be a great source of innovation, it just had a hurdle to cross first.

I feel like NFTs today are roughly where altcoins were in 2012. Lots of good fundamentals to the ideas, but most of the implementations are really missing the mark. Whatever the NFT equivalent of Ethereum, Zcash, Sia, etc is... it's not here yet. And it may yet be a year or two until it first appears.

I feel your take is the correct one. I'm old enough to remember when home video recorders were criticized because porn, but porn was just the kick off to the wider world of video uses and purposes.

That comparison is really the opposite, the open question on the morality of porn does nothing to damage the usefulness of home video recorders.

On the other hand, the morality of NFT's is already mainstream while the usefulness is an open question that's leaning toward "not really".

At the time, people were buying video players and recorders just to watch porn because people hadn't figured out and weren't in the habit of time shifting their video viewing. Porn was really the only thing they seemed good for. That was my point.

> There are people who happily pay $2,000 for an Apple laptop. There are people who are happy with Linux on a $100 machine from Goodwill.

This is the weirdest sentiment that I see all the time on HN, but enough people express it that I have to accept it as both widespread and genuine.

However, I think that if you think $2000 US for an Apple laptop isn't the best value for money you can get on the laptop market, then you're either very good at finding bargains or completely bonkers.

Yes, macOS is no longer for developers. Yes, for extreme workloads I use my linux ryzen7/2080ti or the cloud rather than the MBP. Yes, they had a strange couple of years with the keyboards.

But honestly, they're the best hardware hands down. Not just the best absolutely, but the best per dollar. And personally I love macOS, but I'm just a manager these days so I guess I would, right?

I'm not disputing that a Mac laptop is the best hardware out there. I'm stating that not everyone needs it. They're happy with a $100 Goodwill laptop. I've always been someone who believes in using the best tool for the job at hand.

FWIW, I used my Trump Bumps to buy a new MacBook for my wife, and I plan to use my Biden Bonus for a new MacBook for me. (Assuming Apple releases one with a large enough screen in the next six months.)

I have a sager (Taiwanese) laptop i7-9750 9th gen intel 4.5ghz, RTX 2060 with full on CUDA support for deep learning, 1Tb NVMe SSD, 32 GB ddr ram, and a 16" 144hz screen that cost me about $1300 a year ago. It also has plenty of IO connections (3 USB type-a ports, a single type-c USB port, smart card reader).

It's rock solid running win 10 pro, has extremely low DPC/ISR latency for ASIO music recording with Ableton, can chew through blender modeling with cycles, and I can do all my dev work in vs2019 and intellij with zero hiccups.

I challenge your assertion that you can't find equivalent if not superior hardware per dollar as what apple offers. Maybe you're just not looking hard enough.

I worry about the weird effect on society of massive lopsided wealth encouraging hucksterism (from all levels of wealth) just because people don't know what to spend their too-much-money on.

I think art is different in some ways though. Far be it from me to tell others how to spend their money, but at least with physical art it is preserved. The art may mostly be traded by the ultra-wealthy, but at least it still exists for the good of society.

An NFT is really just a digital autograph. Not even really an autograph, isn't it a cryptographic signature? Which would surely need to be random by nature, so the artist can't even do something unique with that. It's external to the work itself.

>I get just as much enjoyment looking at them on my wall as I have at the museums looking at the real ones.

I'm sorry, but I simply don't. Not trying to be contrarian, but reproductions bring me a very different joy and appreciation than provable originals. I agree some things in crypto are scams, but NFTs, in my opinion, have a really important function in some domains.

NFTs aren't the original and digital reproductions are perfect.

NFTs are the orginal NFTs

The equivalent of painting reproductions with unique IDs on the back.

The whole things feels like a scam to me. Taking the best part about digital goods (that they’re non-rival) and attempting to hack on scarcity for the purpose of exploiting a psychological flaw.

I used to hate veblen goods, until I learned to appreciate the "fool and his money" aspect. Now when I see some $100k handbag I'm glad that person gave away a bunch of actual societal influence (money) for a bit of temporary status.

That's because you aren't adding the human perspective into the equation. Who is doing the scamming and why?

a16z? They "Why" being massive financial return.

The most charitable interpretation is that it's a way to reward artists for creating digital art in a new way.

The HN article for this comment thread shows the risk here though. If the monetary incentives become pushing these tokens, then the most successful 'creators' will be the people that can maximize getting people to pay for these dumb tokens. The incentives are bad and you end up with the 'artists' being mostly ICO style scammers.

It's like the corrupting influence of ads on media, tokens value will be a similar but different corrupting influence.

You could argue how is this different than monetizing anything? I think it's because of the pseudo-value/speculation driving people to spend more on the hope of a future return. That's the psychological hack of fake scarcity.

Pokemon cards, collectors card, Fortnite skins, art, watches and I could go on. All these and many many more things are thing people pay money for without any conspiracy behind.

These tokens are already diversified beyond anyones control.

Arguably in app purchases have already corrupted a lot of the game space into slot machines.

Tokens take that a step further and make it worse.

Incentives create the world. On one side you have Apple Arcade trying to align incentives for a better global outcome/end state. On the other you have in-app purchases, loot boxes, and NFTs - trying to maximize profit for the house.

again you cant take the human minds tendency to attach value to things in their life and to operate in hierarchies. NFTs were inevitable as tokens of value because they function as physical objects. You can say thats a scam but all ypu are saying is that you dont yet attach value to NFTs. Anecdotes are not the way to validate your claim though.

They don’t function as physical objects though, people just pretend they do - that’s the scam part.

That's not the right premise for the discussion.

A stone is a physical object, some stones are worth more than others.

You can call the fact that humans apply value to thing a scam but that would give you a suboptimal understanding of the world.

> NFTs are nonsense and just as much a pyramid scheme

What scares me is that there are artists who I don't think understand how scammy this is. They've drunk the kool-aid and accepted the handwaving "you don't need to know how it works, just that it exists" explanations. Creators who wanted to make an honest dollar but ignorantly perpetuated the scam could find them themselves in hot water.

> Creators who wanted to make an honest dollar but ignorantly perpetuated the scam

To be fair, if they're doing it honestly the value proposition is "Support the artist and get bragging rights for having done so!", which doesn't become a scam (or at least any more of scam, depending on your view of bragging rights) just because there's a scammy secondary market that the patron doesn't necessarily have to participate in.

It seems like there should be a better way to "Support the artist and get bragging rights for having done so!" that doesn't involve the scammy other part. You see this with Patreon all the time where certain tiers get a shout-out.

Oh certainly, and we should encourage such methods where practical. But if we're going to condemn people for using the same financial tools that can be (and are) also used for scams, I have some bad news about that global economy of yours...

How do you go about having such quality reproductions? What are the costs?

A few hundred dollars: https://www.galeriedada.com/

This is supposedly the company the movie Ex Machina used for the CEO’s Jackson Pollock.

I’ve been tempted to get one from them. :-)

https://www.quora.com/Did-they-use-an-original-Jackson-Pollo...

As mentioned in the thread, there are different qualities but a couple of hundred will get you something pretty nice that is hand painted. Usually framing will cost more. Impressionist paintings tend to have some thick paint that can't be captured in a print. Large prints can also be just as expensive as real paint on real canvas. I know it isn't as good but I don't sit and stare at it for hours from 6 inches away. It is also a beautiful reminder of a nice trip to the museum.

Worth noting that NFTs aren’t just cryptokitties; there is a lot more you can do with them.

ETH NFT refers to the smart contracts that you would use to digitize ownership of a house or any other (physical or financial) unique asset that you might trade.

You can nest an NFT under an ERC20 token, too, so that you can sell partial ownership tokens in your NFT.

Of all the use-cases in crypto, I think digitizing ownership is the one that seems most likely to be actually used for a non-trivial volume of non-speculative trading.

What happens when a judge says "no, the person who the NFT says owns the house doesn't, it's Bob over there"?

When it comes down to it, the entry on the local tax rolls or property registration office is going to be the one that counts.

What's the other proof of ownership?

NFTs are the digital equivalent of a vehicle title, that's the strongest usecase (proof of ownership), IMO. I'm not too keen on the collectibles/art usecases, they're probably the easiest/low-effort ones.

My point is, that states have monopolized property transfers and there's all sorts of weird and arcane laws and practice around how you transfer property- especially real estate- and convincing the state to recognize an NFT as evidence of anything is going to be a real challenge.

ex, if the law requires an actual notarized handwritten signature to transfer ownership, what you and I do on the blockchain will simply not count when it comes down to it.

If I accidentally burn the NFT that represents ownership of my house I'm definitely still the owner of the house, there's no world where a government would shrug and say "I guess nobody owns it anymore, oops"

there is work being done on bridging smart contracts with contract law and it may be further along than you think. https://www.lawsociety.org.uk/topics/research/blockchain-leg... https://www.lawtechnologytoday.org/2020/12/how-smart-contrac... https://www.ikigailaw.com/how-have-different-states-in-the-u...

It seems to me that there's going to be an unbridgeable gap when it comes to physical property. If someone hacks my wallet containing my "house NFT" and transfers it to themselves and I can't hunt them down and force them to return it, who owns the house? How do I sell it, if I don't have the NFT? Can I go get another NFT minted, and who from? How does the buyer know that this newly minted NFT represents the true ownership and the old one doesn't?

Suppose I die taking my wallet keys with me; how do my heirs inherit my NFT-ized house?

If the government is minting these NFTs and deciding which transfers are legitimate and which aren't, why are we bothering with all this?

Basically: at some point, an NFT will become separated from the ownership as recognized by the people who count (banks, governments, etc). Without a mechanism to reunite them, the NFT is not very useful; but if there is some sort of mechanism, it's really that mechanism that determines ownership, not the NFT and you might as well use a centralized ledger.

One easy way to resolve all of these problems is to build an escape hatch in the contract so that in the case of theft, loss, or other special circumstance you can invoke arbitration and mint a new token if needed.

It’s important to understand that these tokens aren’t going to replace the existing legal system (much though the anarchist/libertarian wing of the crypto community might wish it). They just enable certain transactions to occur with lower overhead and time delay. This is about improving friction in the happy path, not providing new solutions for every conflict case.

Personally I don’t think there is a reason to put your primary residence one the blockchain (you don’t trade it that often). But it’s interesting for places where you might want to trade assets at higher frequency (eg micro loans, supply chain finance, etc) and maybe there is a real-estate trust angle too.

When I read about smart legal contracts, all I can imagine is Google's live-staff customer support combined with government flexibility. Is this the future we want?

Blockchains are a shortcut to social consensus, not the final word. There is substantial value in the state giving credibility to a blockchain, allowing an NFT title for a house to be transferred digitally.

That value does not disappear if the state + courts also build in processes for over-ruling the on-chain owner of an object and forcibly transferring it to someone else. The core value here comes from how much easier it is to clear all of the red tape in a fully programmatic world.

Are you insane, what happens when my grandma forgets her password?

So now you have two ledgers: one on a blockchain and another one that's just "the court said X". They will diverge over time, and eventually everyone will just use the latter one, because that's the one that counts.

Before I buy an NFT, I'll have to check the GovLedger anyway to make sure that NFT is actually that person's to sell, and hasn't got a lien on it or something else that means they can't actually sell it.

If the idea is the blockchain is permissioned and the state can choose which transfers to allow and can forcibly recover NFTs, why not just use a database?

The court, in making their ruling, could forcibly transfer the NFT, as it would make sense that they would give themselves admin status in the smart contract. So there's no reason the blockchain would need to diverge.

Regarding liens, it seems simple enough to say that if someone does not own an NFT "free and clear", then they cannot transfer it "free and clear". It might even be a different NFT entirely (a "liened NFT," where the original un-liened NFT is held in trust by yet another smart contract, with limited or conditional ownership rights given to the lien holder.)

The reason not to use a database is interoperability. Any smart contract can transfer these NFTs according to infinitely nuanced scenarios, and only during disputes would a court need to get involved and forcibly transfer the NFT according to a judgement.

I’d add on the “why not use a database” - in general you should always prefer a database to a blockchain/DLT, all else being equal.

The typical case where all is not equal in finance is where currently parties transact via a trusted intermediary like a clearinghouse (who might take a 1% fee, say), and a startup wants to allow parties to transact directly, thereby capturing the fee as upside. Large financial institutions don’t tend to trust small startups that might implode any month, but they can (sometimes, it seems) be persuaded to trust a distributed ledger.

> NFTs are the digital equivalent of a vehicle title, that's the strongest usecase (proof of ownership)

No they aren't, and least not until they're recognized by law as such.

I'm not sure what a "usecase" has to do with laws, a usecase can exist outside of the law.

Are you implying that laws should come before inventions/ideas?

> a usecase can exist outside of the law

So, let me get this straight: you have an NFT that represents the deed for a vehicle, but the law does not recognize the NFT as the deed for the vehicle... if you don't see any problems with that, boy do I have a bridge to sell you.

Let me reprharse this.

You have a piece of paper that represents the deed for a vehicle, but the law doesn't recognize the "paper" as the deed for the vehicle...(this during the time of clay tablets)

Was that clear? or do you still have that bridge for sale?

You're missing the point. A deed is only as good as the legal framework that enforces it as a representation of ownership rights. The thing that matters is that framework, not the technology use to implement it.

There are people who sell deeds to land on the moon (https://lunarland.com/), but they're worth little more than the paper they're printed on, because they have some of the same deficits in legal recognition that NFTs have. Those people have no more ability to will their certificates into having legal force than NFT advocates have.

In short, an NFT is little more than a trading card (representing only itself) unless a court would side with the possessor of an NFT against competing claims for whatever property it's suppose to represent (e.g. transferring ownership of the property/rights to party A using traditional means AND transferring the NFT to party B). If the court picks party A, the NFT meant nothing.

Oh god, why??

I made a point, which you missed and you're telling me that I missed your point? seriously?

I'm just telling you that this technology is suitable for doing the job of a paper-title, but in a digital way. Is it that hard?

I don't get it. If the law doesn't recognize the paper as the deed for the vehicle, then that piece of paper is worthless.

It is already possible to write legal contracts which say “whoever controls token with public key X, hereforth ‘Owner’” for many asset classes.

I’m sure there are many asset classes where you can’t write such a contract but I don’t think your categorical rejection is correct.

Right, analog of a purchase receipt is maybe a better way to put it.

I don’t really get your point. What happens when a judge says “you don’t own your house any more, the government owns it now”? Well, what happens is you lose your house. The fact that the government can circumvent any notion of property ownership isn’t really a criticism of any particular notion of property ownership.

Yes this would also defeat the government's own ownership database/archive.

Just highlighting “there’s a trump card over your claim to ownership lurking out there.”

As a sibling mentions, you can't digitize a house. The state has already done that. The whole point of crypto is decentralized trust. You don't need that when the state is the system of trust, whether you like it or not.

That's what I think too, which is why i started pruf.io

Not sure if it's just me but it sounds like you're sort of making an argument in favor of NFTs here. The main argument against NFTs I hear is that what is being certified can just as easily be enjoyed by people who are not the certified owner. And you're saying that that's actually the case for regular art as well - but still someone ends up willing to pay $100M for the original!

I think there is a case to be made for NFTs, but would also not be surprised if you're right that it ends up with mostly bag holders.

I think the real issue is that NFTs are really a secondary to the data they're certifying (i.e. the art). In the same sense that "stealing" means something different in the digital world, "ownership" also means something very different. Ownership of physical goods precludes other people owning them. There is only one original. Ownership of a digital good does not preclude other people "owning" it in the sense that they have one they can use/view/whatever.

The only thing you "own" in the physical goods sense of precluding other people from using it, is the NFT itself. It is exclusively assigned to you, other people can't conceptually say they own it.

Another example of how that divide manifests is how would someone show off their NFTs? Art is easy, hang it on the wall conspicuously with canister lights. You could do the same with an NFT piece, or you could put it on your profile or something, but anybody can do that. You're not showing off your NFT, you're showing off the art. Your NFT is just a jumble of cryptographic data. It has to be random for functional reasons, I presume, so it's not like the author can make your NFT a piece of art in and of itself.

> NFTs are nonsense and just as much a pyramid scheme as everything else crypto.

https://news.ycombinator.com/newsguidelines.html

The underlying thing has to be already considered valuable. Consider tokenized single cask scotch.

So, it's made, and costs 150 a bottle. Why? Ostensibly, it's good scotch whiskey, and it's a limited run, 10 years in the making.

So why tokenize it?

Gamification.

Only people with the actual bottle can play.

Open it, scan the qr under the cap, then you can share the official tweet from posh-makers whisky announcing the opening of the bottle.... "that was us last night, good times all around!" maybe you get a 25 dollar certificate for your next limited run bottle. It's a social flex, and it's great publicity for the brand.

...and the remaining 237 bottles just went up in price. Fast forward a few years, and somebody has one of the last three bottles.... Which is mostly because he can actually prove he has one of the last three. Now its worth 270k.

Why is it worth 270k? It could also be worthless. It could be worth a little.

What's nonsense is dismissing the idea and the work that's been done because there are people looking for a cash grab. Following from that logic, you should throw your routeur in the garbage dump. After all, the early days of the Internet were filled with shady companies selling buzzwords. So the Internet is by essence trash, right ?

NFTs are revolutionary for digital assets and allow for something beyond the world of licences as well as much greater scaling.

I think you have my comments out of context but to each their own. Do you believe in NFTs enough to put your entire net worth in them? I don't see this current pump and dump ending any better than CryptoKitties but I guess time will tell for sure.

I wouldn't put my wealth into NFTs any more than I would into Magic The Gathering cards, sports memorabilia or any other collectibles. But that's the point. If you do put your money into it, it's dissociated from central control, online services that might go belly up at any moment and so on. It completely solves the problem of never really owning anything online (software licences, items in video games and so on).

Fads like CryptoKitties are completely irrelevant to the core tech, just like Bitcoin is in the grand scheme of things irrelevant to the potential of block chains.

It seems like your argument is more agains collectibles in general. I also can go online and look at the art for various rare Pokémon cards for example. I think you underestimate the psychological component of ‘ownership’ and the extra satisfaction that might bring a collector.

An anecdote,

I am an avid jazz record collector (vinyl). Every record I own is available to me on Spotify and I actually frequently find new records to purchase on Spotify (they have a great jazz selection).

Interestingly, or maybe not, I find that I listen to the records I own more than those I don’t even though I have access to so many more.

I also find myself having significantly more patience with the records I buy blindly than I would a random thing that comes on algorithm radio.

The point being, ownership creates psychological attachment which in turn creates some intangible form of value that I can’t quite put a number on but I definitely feel.

what is the use-case for an NFT for an in-game virtual good? A sword from World of Warcraft (WoW) can already be traded between players within WoW, since the environment in which it appears is already centralized and that's already provided by the environment. Trading a WoW sword outside of WoW has ambiguous logic. Let's say you sold your WoW sword to a Destiny player. Ok, does the sword still exist in WoW or not? What if the WoW servers just say that it does? Do all players verify that other players have the items the server says they have? If the player uses the sword and the server says "they did 9000 damage because that's how big the sword is", what difference does it make if your client say "NO! Nooo! They don't -HAVE- that sword"? You can't just wave your hand and say "but we'll just make the games peer to peer and that fixes it". P2P lockstep protocols were extremely widespread but fell out of favor due to performance and anticheat issues inherent in lockstep protocols. Most gamedevs would prefer the luxury of not having to run any servers. How do you make a purely P2P multiplayer game protocol that is cheat-resistant and allows more than a very small number of players to witness one another simultaneously? If everyone needs to establish a network connection to everyone near them inside the virtual world, how do you handle crowded spaces?

When the sword is sold -outside of WoW-, how does it have value in another context? Can a Destiny character equip a WoW sword? (No.) Ok but what if the Destiny devs made an in-game Destiny item that was pegged to that WoW sword, and then the games all checked your inventory at login? You'd have to check the ledger -every time the item is used- or the player can just login, trade it away, and then stay logged in and continue to use it (use after sell, essentially).

If players can -already- trade items within the simulation where they were created, but we're not defining what it actually means to move an asset -between simulations-, what is the actual use-case here? That you can trade non-functional skins outside of the game? That's it? Why is that good?

I will help clear up some confusion if I'm able.

First, I don't think the big use case is for items being traded between different games. However, a system like that is possible. Blizzard would be a good example here, since their games have a high degree of cross-pollination, and they frequently offer promotions that unlock similar items in several of their games at once. So, owning a Blizzard "magic sword" token might give you a sword item in WoW, another one in Diablo, and a sword card in Hearthstone, each adapted for its own game. This is a small use case, in my opinion.

I imagine that the big use case is for any game developer (indies especially) to leverage the marketplace without having to build one, or be locked into one provided by a single publisher/distributor. The game itself does not have to be p2p as you're suggesting. Game architecture would remain centralized, and would communicate with a blockchain where the tokens are stored.

The process might look like this:

1) A player purchases an NFT representing an in-game item issued by a wallet owned by the game developer.

2) The player sends that token to a smart-contract address, also owned by the developer, with a memo that identifies their player account.

3) The smart contract notifies a centralized game server, then sends the token back to the player's wallet.

4) The in-game item appears in the player's inventory, within the game.

There could be any number of steps involved, and the contracts could operate however you'd like. The token could be destroyed after a single use (like purchasing keys for loot crates in CS:GO) or used and traded any number of times. The game server would have to keep track of which player account controlled which token, and update players' inventories whenever the token changed hands.

One more thing - NFTs can be programmed such that creators receive an automatic royalty (a percentage of the sale lands in the creator's wallet address) whenever the item is sold on the blockchain, no matter who is selling to whom. This could be huge for indie developers, who would benefit not only from selling the original items up front, but also from the long-tail resale of such items between their players.

> So, owning a Blizzard "magic sword" token might give you a sword item in WoW, another one in Diablo, and a sword card in Hearthstone, each adapted for its own game. This is a small use case, in my opinion.

I'm like 90% certain that there are cross-game item unlocks in Blizzard games already.

> NFTs can be programmed such that creators receive an automatic royalty (a percentage of the sale lands in the creator's wallet address) whenever the item is sold on the blockchain, no matter who is selling to whom.

Why is that good? Who is it good for? Why would a game developer sign up for this? You seem to be under the impression that I have no concept at all of what NFTs do. The problem is that a multiplayer game server is fundamentally already a trusted third party and the incentives for gamedevs to use them are poor, while the complexities enormous. Boiling the oceans to produce a trustless ecosystem for asset transfer is a fruitless endeavor if those assets can only be reified inside of environments that fundamentally require trusted third parties.

You already need to have a trusted third party (the game server) in order to give any functionality to the assets. Once you've added that trusted third party, you've thrown away the key benefit of blockchains.

The trusted third party is effectively required to moderate custom assets in games; untrusted asset creation is an unchecked liability in general, and is expressly prohibited by the terms of many game platforms. If a player creates content that is hateful, then another player that is a child can download it, and if their parent sees that, the kid will say "I'm playing $your_game", and then the parent will raise a stink about how $your_game has $hateful content in it and $your_game exposed their children to that content. That sort of thing will certainly get your game delisted from the Nintendo or Sony stores. Even if you're only concerned with an unregulated PC market, it's going to be a hit to your sales.

If a child wanders onto a hateful website, the parent is going to say "the web exposed my child to $extremism", and then use parental controls to control what their kid can access on the web, but you cannot do that in a game. Sorry, you can't bring your $valuable_item in here because $other_player has it disabled in their content settings. You'd better believe parents are going to say "$video_game exposed my child to hate speech" and it's going to harm your sales.

Beyond hate speech, assets have to be verified by the game dev to verify their integrity; the asset has to be loadable and working without errors and without breaking the game. That's assuming there are zero vulns in the asset pipeline. Beyond merely being loadable, it should also conform to some guidelines so that the asset doesn't perform well for players with fast machines, but make the game unplayable for players with slow machines.

As for royalties: Steam Workshop already gives royalties to people who create assets (albeit at poor rates) and people already play that game. Why would I, a game developer, sign up for something that makes all of this worse, reduces my revenues, is massively more complicated, requires me to verify data against a blockchain constantly, AND increases liabilities? This is assuming you even -can- verify the data against the blockchain frequently. Even assuming you're using a blockchain with a read latency of zero, you're still performing i/o. You want to perform blocking i/o to an external datastore every single time a player wants to use an item? The only away around that would be to write a lock into the blockchain to prevent transfer with a contract and cache the ownership semantics, at which point you have completely duffed every single advantage a blockchain is giving you.

Let's say, hypothetically, that we ignored all extant games and ONLY considered new games. Again: if you're not moving an item between simulations, it's all for naught because the game dev can just implement a traditional inventory system more easily, and if you -are- moving an item between simulations, the spawning simulation and the target simulation need to be in agreement about what an item spawned in one simulation means in the other simulation. That alone is a terrifically difficult problem that NFTs do nothing to address. Few game devs would sign up for this, because it would mean that the -other- gamedev would be able to affect the balance of the economy in -their- game, potentially to catastrophic effect. It effectively ties the game economies together, but different games have fundamentally different economies with different mechanics. Who is in control of the spawn rate of assets? "You just make the asset be some random thing whose nonce is some thing that's made on the blockchain at a fixed rate determined by the blockchain itself" like CryptoKitties or whatever. Ok, fine. How do you issue a patch to alter spawn rates, balance the relative frequencies of different items appearing, or change their properties? If you -can't- do that, you can't balance your game. Balancing live game economies is -incredibly- difficult, you can't just hope to get it right on the first shot.

That's right, Blizzard does cross-game unlocks already, through their own platform. I don't expect that companies like Activision/EA/Valve would be the ones to use NFTs for this kind of thing, since it's better for them to build and operate their own marketplaces, which gives them total control.

I completely agree with you on the boiling of the oceans. It's a problem that cryptos will have to solve in the long-term to be viable as any part of a green economy. There are a few projects that are energy efficient, but Ethereum and others have work to do. In any case, NFTs aren't specific to any one blockchain.

I think content creation and limitation is a separate issue, and not implicitly part of NFTs. You can issue a token representing a particular game object, with no ability for the player to customize or modify it. You bring up an interesting point though - there could be a limited, controllable level of customization available to players. Consider a smart contract that mints NFTs and allows certain attributes to be modified, which could affect the cosmetic or functional details of the in-game item they represent. You could sell a class of NFTs representing a certain sword, and players could pay extra for a golden version, or a version with infinite durability.

For Steam Workshop, I think you've identified exactly the issue. They control the marketplace, and set the rates. If it's more profitable for a developer to set their own rates/royalties, and it's easy enough to implement, and there are enough players willing to use NFTs (or a platform that manages NFTs for them) then we'll start to see developers use them. Marketplaces aren't mutually exclusive, so you could have some items on Steam, and others on blockchain. You could make certain desirable items exclusive to the platform that nets you the most profit.

I agree regarding difficulty of implementation - this is something that most developers won't bother with at the moment since it doesn't make economic sense, but as the ecosystem develops we'll likely see companies that provide a simpler abstraction layer for NFTs (perhaps even specializing in games). As the implementation costs drop, we'll start seeing adoption. This might take several years.

Regarding blocking I/O, I don't think it would work like that, just like it wouldn't work as p2p. A game server could poll the history of its smart contracts (or the abstraction layer provided by a service platform) every few seconds or minutes, and update its centralized database of items to match whatever transactions have occurred. All reads within the game would still be to its own database, and not directly from a blockchain.

You have to look at the bottom line. The only benefit of decentralization is cross publisher items. If it's through the same publisher it can be done in a centralized way. Publishers care about their profits. If NFT can increase their profits they will do it, but if someone buys a WoW sword on Etherum and uses it in Destiny (I haven't played either so please don't nitpick that Destiny has no swords).

Why would the publisher behind Destiny care? Blizzard is the one profiting off the items. Each publisher would create their own mutually incompatible smart contract to maximize profits. Companies absolutely hate the existence of secondary markets. They want cash shop items to be tied to accounts so that every player has to rebuy the same items over and over again. It simply won't work except as an easter egg.

Totally agree - this will only happen if it makes economic sense for the developer. Big companies like Blizzard won't bother since they can build and manage their own marketplace, but smaller developers who can't afford to do that will still be able to unlock value by participating in an open market.

Players re-buying the same item is definitely profitable, but it may turn out to be more profitable in the long-term to allow players to freely trade items while taking a cut of each transaction as royalties. Also, as mentioned before, NFTs allow for single-use items. A game could provide all sorts of different items with different rules.

Looks like artists aren’t quite making money either:

https://twitter.com/isyourguy/status/1366176796996112385

I feel that this is true of any art, NFT or otherwise.

> “You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set.”

I think that’s the whole point. An enduring aspect of human culture is that we praise and confer social status on owners or stewards of rare curiosities. You aren’t buying NFTs for tangible value, you’re buying a speculative investment in social status. And people feel very confident that the market cap and liquidity for buying and trading this type of social status will go way up, and that unique, verifiable digital ownership allows the pay-for-status desires to take place untethered to physical goods.

NFTs also suffer from the same attribution issues as traditional certificates for collectibles. You still have to validate that whichever account 'minted' the NFT was actually controlled by the creator of the collectible at that time.

You're missing the point completely and you have to take some time to think about it and let it roll around in your brain to start making sense of it. It took me a long time but now I fully believe. Including cryptopunks.

In real life, people wear rolexes. Why? You and I both know that a casio can tell time just as well as a Rolex. I don't know the difference between one model of Rolex from another, but some may cost 10k and some may cost 20k.

To those deep in the Rolex world, the difference is huge. They can tell right away.

Why do people wear rolexes? A casio is lighter and easier to tell time. But a Rolex. That's status. You're not SAYING you're rich, but you signal you're rich. Big difference. The former, people will scoff at. The latter, people may be impressed. And if you're in the Rolex world and you own the top of the line Rolex? Those in the know are even more impressed.

How does this translate online? How can you signal status online? In centralized systems like twitter, you just look at followers. But what if... you just now made a twitter account to talk about something you love, and you have no followers? How can you signal status to people you talk to that you deserve some clout?

Enter something like cryptopunks. People in the cryptospace use cryptopunks as their twitter pic. Those in the know realize that one cryptopunk does not equal another cryptopunk. Maybe yours has red hair and only 2 percent of cryptopunks have red hair. Maybe you know all red hair cryptopunks command a huge premium and cost tens of thousands of dollars.

They can verify in your wallet that you own that crypto punk.

You can move from one platform to another, with no followers, and suddenly, you have digital clout.

Mull it over for awhile.

Pretty bad take on NFTs.

There are numerous configurations, networks, and commercial structures that can be created for NFT offerings that can mitigate "problems" described in the OP and accommodate for different tradeoffs.

A simple retort would point to the many alternative NFT networks that don't use POW-based consensus algorithms or the NFT offerings that enable value add offerings very differently than purchasing art or baseball cards.

Evaluating the capabilities of NFTs against the value offerings of something like rare art is an apples to oranges comparison. Of course the market for digital assets offered via NFT is immature and speculative; this is a new market, based on an alternative technology paradigm, that has a long way to go before it settles into a more usable and valuable structure.

Ultimately, the idea of using key-pairs pegged to widely accessible peer-to-peer public networks as a mechanism for tracking ownership of digital (or near digital or at times even physical) assets is incredibly novel. It turns the conventional model of third-party hosted digital assets on its head and enables really interesting mechanisms of distribution, ownership, access, and value consumption and creation that does not compare well with traditional mechanisms. And in saying it doesn't compare well I mean to acknowledge its limitations and its potential at the same time. However, the critique in the OP is pretty bland and doesn't seem to acknowledge the full scope of the situation.

> Evaluating the capabilities of NFTs against the value offerings of something like rare art is an apples to oranges comparison.

Someone should tell that to all the artists who are selling NFTs with the implication that they're analogous to owning original works.

I agree that it's apples-to-oranges, which is why so many people are appalled at the charlatans who are successfully selling these oranges as apples.

> It turns the conventional model of third-party hosted digital assets on its head

How so? The assets that are "sold" as NFT are still hosted somewhere.

Owning the NFT for something does nothing more than copyright already does. You can store the digital asset on your computer with or without the NFT. You can "consume" it either way as well.

So what if the digital asset is an item in a video game? The game can check to make sure you own it before you use it!

Yes, it can. But the creator of that game can also choose not to do that, just as anyone can choose not to respect copyright.

> I mean to acknowledge its limitations and its potential at the same time

What is its potential? What can someone do with NFTs that they couldn't do before?

> What is its potential? What can someone do with NFTs that they couldn't do before?

The novelty comes from the underlying protocols that back the NFT. These protocols create marketplaces that are widely available and accessible and are reliably secure and robust.

Take copyright for example. Copyright laws vary across regions and marketplace. The encoding and repudiation of these copyright laws is based on analog processes. The data related to the assets in question are stored in databases with a widely varying degree of access. Verifiability across assets or even within a single asset class varies and to varying degrees of reliability. And I'm not saying this to point out that copyright laws and the assets relying on them have failed or are not value add in many ways. The fundamental point is that the technological infrastructure underlying the use of copyright laws today has a lot to be desired when it applies to ease of use for digital media.

Networks using blockchain protocols can offer a natively digital infrastructure solution that helps extend or replicate the value offered by something like copyright law. The natively digital aspect enables broader interaction which engenders more general purpose usage which ultimately leads to new consumer models (i.e. direct artist to consumer, peer to peer, etc.).

> Owning the NFT for something does nothing more than copyright already does. You can store the digital asset on your computer with or without the NFT. You can "consume" it either way as well.

The point is not to displace copyright law)(although others may argue this I do not). The value add here is in creating a widely accessible and reliable digital mechanism for creating, expressing, and modifying ownership rights. Different, or maybe even traditional, consumption models are then built on top of this to capture this value.

To your point about gaming creators choosing to do so or not; this question is really a question about what is the value of blockchain protocol networks in the first place and how would someone like a game creator benefit or capture this value? To this point, I can only point out the potential benefits as I'll be the first to agree the nature of blockchain and its value is still being explored. My arguments above are trying to express the value as I see it.

Would be curious to hear more thoughts and criticism.

The point you’re making is valid, but you’re side stepping the key concern being raised.

The tokens you acquire are worth nothing.

Nothing about owning a token grants you any rights to anything other than what some other person is willing to pay/exchange it for.

So if a game developer chooses to accept tokens, you can use them; but that developer can at any time choose to stop accepting tokens or a subset of tokens making what you own worth actually nothing.

Now... for a regulated system of tokens (eg currency) a developer can’t do that: they are legally bound to accept fiat currency even though it is not redeemable for any “real” equivalent (eg gold).

Since a token is not bound to the DRM access to an item (say, image for example), it’s totally pointless to asset ownership with it, because it does not prevent the copy of the original digital asset.

The best you could ever hope for would be a regulated system, in which access to an asset via DRM was granted by a token.

...at which point, any “decentralised” benefit is lost.

So ultimately, the risk is 100% on the buyer here.

What you buy may be redeemable for something for some period of time... but that is true of any kind of token.

The “uniqueness” of the NFT is an illusion; it does not offer any strong guarantee of uniquely representing an actual asset.

> Now... for a regulated system of tokens (eg currency) a developer can’t do that: they are legally bound to accept fiat currency even though it is not redeemable for any “real” equivalent (eg gold).

This isn't true in general. Legal tender status is very loosely an obligation to accept for existing debts, but it is not an obligation to accept it as, say, a means of accepting a offer. So unless they are giving you goods first, and the looking for payment (which certainly is not the norm for digital goods), they are under no obligation to accept currency.

But that's really why everyone will always accept them, because they can pay their debts/taxes with them. It's probably a common misconception because it's so close to correct.

Rephrasing your questions and critiques more broadly: What is the point of all this digital infrastructure if no one uses it? Why would anyone use it?

This is a more difficult question for NFTs as the market is even smaller than the financial use cases which has been driving blockchain applications. It'll take some time for seemingly legitimate and long-lasting value in areas for NFT to emerge as they are still being explored and developed.

However, no matter how you frame it, rhe value proposition for applications comes down to the value add characteristics of the networks they are built on top of.

> The tokens you acquire are worth nothing.

The tokens worth is determined by the market place that emerges around the tokens characteristics.

Some tokens are censorship resistant and run on globally accessible networks so that they are not easily erased, their ownership is easy to prove, and their history is reliably known. Some tokens are required to access other marketplaces or services because they have properties that make them more easy to use as traditional currencies. Some tokens allow for self-ownership paradigms.

Again, the tokens acquired carry the value of the characteristics of the networks in which they are issued. What these characteristics are valued as and actually "worth" in real economic terms is dependent on their demand.

> The “uniqueness” of the NFT is an illusion; it does not offer any strong guarantee of uniquely representing an actual asset.

This is only true if the NFT isn't accepted as value. If the characteristics I described earlier indeed do become valued, then the ledger which holds the claim i.e. the NFT will be taken as the source of truth for representing the ownership of the claimed asset. Its the theory of accounting applied to a different space.

> the NFT will be taken as the source of truth for representing the ownership of the claimed asset...

I simply can’t see how that is possible for digital assets you can copy and paste and have two copies of the original asset; it only works for physical assets where there can only be one copy of the asset, ever.

You’ve hit it on the head: what does it mean to own an image when ten other people also “own” a copy of it, and any of them can create more copies other people can “own”.

It’s meaningless, unless you assert ownership entitles you to additional legal rights beyond what the token conveys... and in which case, how the hell is that different from the same thing with no crypto involved?

> You’ve hit it on the head: what does it mean to own an image when ten other people also “own” a copy of it, and any of them can create more copies other people can “own”.

Also worth remembering: doing anything with a digital asset involves automatic creation of countless of copies. When you're viewing an image from your computer's storage, you already have at least three copies at that moment - one in storage, one in RAM, and one in video memory. There may be another one in your screen's buffer too. If you try to send it through the network, every switch and router along the way effectively creates its own temporary copy.

This is to emphasize: ownership as a concept makes no sense in the world of bits. It doesn't exist. Ownership is defined by agreement between people; these days, usually through the legal framework.

> unless you assert ownership entitles you to additional legal rights beyond what the token convey

This is precisely the idea to a certain extent. The ledger serves as proof of ownership which then allows access to entitlements dictated by that ownership. This being done in a digital first way is another aspect as well (although not really conceptually mind blowing to me personally).

> how the hell is that different from the same thing with no crypto involved?

This goes back to what I said earlier about the characteristics of the underlying network driving the value. The differences can be in things like the peer-to-peer nature or the decentralized infrastructure which provides a degree of censorship resistance or improved accessibility.

We're at the point where credible evidence of the value added by these characteristics is still being explored. You can certainly make some level of argument as to why the decentralized nature of these protocols is better than the traditional alternative, but even I'll admit its difficult to parse through the noise of speculation and hype for the arguments that may be worth a damn.

The idea of distributing control, responsibility, costs, and other aspects of operating a system away from singular points of failure is an idea that seems worth investigating and to me this is what blockchain is doing. NFTs are a different flavor of exploration then that of cryptocurrencies.

Possession of the private key also allows you to create signatures which prove your ownership, while not revealing your private key. Artworks could be encrypted and only decryptable by such signatures. Client applications could be built to incorporate this.

We have a big problem today in that our information technology's ability to infinitely create copies of digital artifacts seemingly breaks the incentive mechanism to create. I.e. art, news, authorship worked better when you could sell physically sell copies of your album, book, painting. This has resulted in a glut of low quality stuff.

Think of the long term. It would be very good for society to solve this problem. With the distribution abilities of the internet, plus the ability to monetize adding incentives to create, we should see much more, and higher quality art. It would enable more of our economy to move online, which would be good for the environment. I.e. humans are mostly interested in social status. Today we show that status by creating and showing off possessions. But also we need jobs. What will people do for work in 2050? Perhaps we'll still be busily working to climb the pile of monkeys, but now with virtual goods. That's more sustainable than the current situation.

For a hacker & technology forum, Hacker News is remarkably negative on crypto topics. Part is a justifiable reaction against the hype. Another part I think is FOMO. But also, the crypto space is only partially about technology. It is very inefficient technology from a functionality point of view. But from an economic point of view, where the problem is coordinating human activity in the way that money does, I think there's a lot of potential there.

At a certain point there is more risk in being a "permabear" than there is in taking a measured interest. The crypto space has been growing for 12 years ... is it really just a giant fraud at this point? No value, nothing of interest at all?

> For a hacker & technology forum, Hacker News is remarkably negative on crypto topics. … The crypto space has been growing for 12 years ... is it really just a giant fraud at this point? No value, nothing of interest at all?

The negative reaction is _due_ to HN being a technology-heavy forum: the blockchain field is a marketing invention and divides into two camps: Merkle trees, which are useful but not new, and everything else, which is uncompetitively reinventing commonplace concepts with language designed to attract speculators’ money. For a decade, salespeople have been showing, repeating marketing points which don’t hold up to much thought, and hammering the “use your money to make me rich” message, so it’s not surprising that it’s hard to get attention with the same spiel now.

Put another way: after 12 years, huge amounts of money and attention, where’s anything clearly better than its predecessor? (For the user, not the seller) That’s considerably longer than it took for the web to have a huge impact on advertising, sales, dating, travel, banking, research, job hunting, etc. despite much lower barriers to adoption. Someone trying to invent a new DRM system to make signed prints isn’t remotely close.

> where’s anything clearly better than its predecessor?

At the moment, there isn't a single alternative product for a state-free currency as a store of value that has reached the valuation of Bitcoin.

I'm not even a Bitcoiner, but if this isn't proof to you at this point, nothing will satisfy you. The proof doesn't have to convince you it's the future of currency, but it should certainly statisfy the question of "how has blockchain enabled anything new and interesting?".

The truth is, blockchain is less of a technological innovation than it is an organizational one. It is technology that attempts to digitize human organizational patterns as opposed to simply analog processes.

Those selling crypto to the moon and profiting off of the hype certainly ruin it for everyone. The promises, the lies, the failure to deliver is certainly an issue to take up. At the same time, there is quite a bit behind the lies that is worth looking at.

> At the moment, there isn't a single alternative product for a state-free currency as a store of value that has reached the valuation of Bitcoin.

I thought the Bitcoin people stopped referring to it as a currency a few years ago when it became obvious that it had failed to be capable of filling that role? The current “store of value” sales pitch seems likely to follow a similar trajectory since, unlike a reserve currency like the USD or a traditional commodity like gold or real estate, it has no inherent value other than the current social consensus and is thus highly volatile.

This comes back to the same question of what value it offers. Someone who wants buy or sell things defaults to faster, cheaper, and safer options. Someone who wants to save value has faster, cheaper, safer options which have much longer track records of predictable valuation. A devout libertarian who thinks “state-free” is important similarly has a range of options, many of which do not conveniently provide their government with an itemized log of every transaction.

> How so? The assets that are "sold" as NFT are still hosted somewhere.

This is what I don't understand. It's like a baseball used in a World Series game and then signed by members of the team and the Certificate of Authenticity that accompanies it. The value of the CoA is when it ACCOMPANIES the baseball and authenticates it. I don't see how the CoA in and of itself has any value when the baseball is in someone else's possession.

> There are numerous configurations, networks, and commercial structures that can be created for NFT offerings that can mitigate "problems" described in the OP and accommodate for different tradeoffs.

Ah, yes. The goid old "might", the adage as old as the whole blockchain itself.

Translation: "will painstakingly re-invent all the attributes of what real world needs, and already has, and doesn't need blockchain in the least".

More eloquently put in these articles: https://medium.com/@kaistinchcombe/ten-years-in-nobody-has-c...

This same author can be seen here recommending blockchain technologies to the CA government here: https://www.govops.ca.gov/wp-content/uploads/sites/11/2020/0...

If you're not willing to consider the hypothesis of value proposed by blockchain I can genuinely understand why and it makes sense. Lots of other areas to invest personal time and effort in.

> This same author can be seen here recommending blockchain technologies to the CA government here

404 page not found for me

> If you're not willing to consider the hypothesis of value proposed by blockchain

So, not even the value proposed by blockchain but the hypothesis of the value?

What would those values and hypotheses be?

Search "govops ca kai stinchcombe" and you'll see the doc.

> So, not even the value proposed by blockchain but the hypothesis of the value?

Of course. This is a nascent and emerging market. To act as if this is anything but a hypothesis on what may be valuable is a lie. This is true of every emergent market ever.

> What would those values and hypotheses be?

See my other comments in this same thread if you'd genuinely like to engage in discussion. The value is derived from the characteristics of the network protocols and the hypothesis is these values are difficult to achieve without the protocol and that they will come to be highly desired.

As a simple example, take the oft common hate for Google accounts being deserviced. A globally accessible, immutable ledger representation of a user account could be a theroetic start in the direction of mitigating the problems of thirs-party owned account data.

> Search "govops ca kai stinchcombe" and you'll see the doc.

Did you read the file you're referencing? Let me quote it for you (emphasis mine):

--- start quote ---

Permissioned blockchains as a datastore

Solutions can be built on either open source datastores (like mysql or postgres), on proprietary datastores (Oracle), or on blockchains.

Our position on this topic is that the proof is in the pudding: let the bidders describe the system they can build and the costs, let them choose the underlying technologies they will employ, and let the state’s procurement officials select the most competitive bid. If blockchain offers an advantage, they will be well positioned to win in the marketplace.

Unpermissioned or semi-permissioned blockchains as a datastore

..., recall that the most complex and burdensome aspect of maintaining a non-Torrens ledger is preventing false data from entering the system. Absent tremendous progress in digital identity, we believe the types of title fraud commonly seen in the lived experience of the several states would be increased by such a system.

--- end quote ---

The only place he "recommends" blockchain is in (paraphrasing): "governments should not be afraid of new technologies, and new technologies like blockchain should also be proposed on equal footing as other technologies. However, all these technologies should be evaluated whether they have the potential to make search, record validation, or detection of error or fraud cheaper, faster, or more accurate"

> See my other comments in this same thread if you'd genuinely like to engage in discussion.

Others have already answered to that.

> The value is derived from the characteristics of the network protocols

Technology on its own has very little merit.

> These values are difficult to achieve without the protocol and that they will come to be highly desired.

Which values? If you're talking about "this is the proof of ownership", the entire value falls apart at the point of data entry (see the articles I linked).

> As a simple example, take the oft common hate for Google accounts being deserviced. A globally accessible, immutable ledger representation of a user account could be a theroetic start in the direction of mitigating the problems of thirs-party owned account data.

Riiiight. And what will stop anyone from not accepting your immutable ledger representation of a user account in a service? Just the fact that it's on a blockchain? In the form of NFT? How will this help you if you still can't access any services?

He's still recommending blockchain. Four years after writing the initial article, you think it'd be easier just to say its worthless...but he didn't.

There's quite a bit of spirited discussion regarding these points elsewhere.

> He's still recommending blockchain.

He's literally not recommending it in the paper linked. [1]

> There's quite a bit of spirited discussion regarding these points elsewhere.

You'd think that if there was such a discussion, there would be links to it, or articles addressing these points. But,... no.

[1] Edit.

Here's section on permissioned blockchains as a datastore (emphasis mine):

--- start quote ---

Solutions can be built on either open source datastores (like mysql or postgres), on proprietary datastores (Oracle), or on blockchains.

Our position on this topic is that the proof is in the pudding: let the bidders describe the system they can build and the costs, let them choose the underlying technologies they will employ, and let the state’s procurement officials select the most competitive bid. If blockchain offers an advantage, they will be well positioned to win in the marketplace.

--- end quote ---

Here's section on unpermissioned or semi-permissioned blockchains as a datastore (emphasis by the authors):

--- start quote ---

recall that the most complex and burdensome aspect of maintaining a non-Torrens ledger is preventing false data from entering the system. Absent tremendous progress in digital identity, we believe the types of title fraud commonly seen in the lived experience of the several states would be increased by such a system rather than decreased.

--- end quote ---

And then:

--- start quote ---

(v1) We do not see any reason that a permissioned blockchain is inherently more likely to be error-free or fraud-free than the existing system, and so do not believe new technology supports a move to Torrens any more than was the case in the past. (We are open to being proved wrong!)

(v2) Torrens title system implemented on an unpermissioned blockchain. For the reasons described above, we believe this would be a disaster

(v3) imagines that the potential for fraudulent transactions being entered into the blockchain is reduced by using smart contracts or similar means. ... [lists the very serious issue with fraud]

We do not believe the technology is ready to seriously consider moving tens of millions of property owners collectively holding $4 trillion worth of real property in California onto a system such as this one... In contrast, if the adoption was mandatory and universal, it seems likely that just its first year adoption of a system like this would lead to thousands or even tens of thousands of homes being irrevocably and fraudulently transferred

--- end quote ---

And the only "recommendation" is this: if you're evaluating technologies, evaluate all tech, including emerging tech like blockchains on equal footing, and that includes, quote, "potential to make search, record validation, or detection of error or fraud cheaper, faster, or more accurate". In all the points above they considered blockchain on equal footing, and found it wanting.

A new medium requires reinventing and making explicit "real world" constructs. The article rejects anything worse than the best part of current systems without making clear the explicit tradeoffs. I could retort and point to companies actually using blockchain but you can easily argue flaws in their implementation. A "real world use case" is not well defined.

> The article rejects anything worse than the best part of current systems

For a technology that's frequently hailed as the best new thing since sliced bread, it's quite telling that it can't exhibit a single of the best parts of current systems. And it's replete with parts that are worse than even the worst parts of the current systems.

> I could retort and point to companies actually using blockchain but you can easily argue flaws in their implementation.

Of course I would. And the articles argues as well, successfully. Because for the absolute vast majority of these real-world companies anything they do can be done better, faster, and more efficiently without the use of blockchain. And if the are not busy scamming people, they are busy re-implementing, often poorly, those "best parts of current systems" that you're so quick to dismiss.

Blockchains are definitely oversold and overhyped but they do make improvements in certain areas. It's like discounting TOR just because steaming youtube is a lesser experience.

Their use of consensus mechanisms make what was implicit explicit. Their global nature is truly without borders. Specific cryptocurrencies are mathematically private and more censorship resistant.

Blockchain for the most part isn't ready for the vast majority of people, but discounting it entirely seems like throwing the baby out with the bathwater. Not everything needs blockchain but for the things that do they really do.

Real world companies also make tradeoffs, often a single point of trust (the company) and implicit assumptions or state.

The current systems that work are great and I don't want to dismiss them at all, but there are specific cryptocurrencies that currently serve some specific needs better. In future I'd imagine there are other ways to take advantage of DHT to serve even more needs better.

ah yes, another bitcoin obituary, there's hundreds of them on the internet posted quite regularly, ever since bitcoin's inception.

It's not an obituary, and you'd know it if you'd bothered to read it. It very aptly describes the perpetual state of bitcoin in particular, and of blockchains in general.

I read it, it’s an article from 2017 proclaiming bitcoin is worthless for a payment system while it is now 2021 and amount of value exchanged on bitcoin is more than ever. Author is clueless and the article is worth nothing.

> it’s an article from 2017 proclaiming bitcoin is worthless for a payment system

It's clear you didn't even pretend to read it. Or understand all the problems listed. Payments is just a part of the first article. The sequel doesn't even talk about payments.

> it is now 2021 and amount of value exchanged on bitcoin is more than ever.

Amount of value exchanged on bitcoin !== it's useful for payments. Actual payments (you know, for goods and services) are a very, very, very tiny fraction of exchanges.

> Author is clueless and the article is worth nothing.

Ah. So you didn't actually read it. Or you'd try to address the authors' points (or link to an article that addresses his points) like:

- The key feature of a new payment system is the confidence that if the goods aren’t as described you’ll get your money back (bitcoin has none, and is busy reinvents centralized institutions to help with that)

- The government-backed banking system provides FDIC guarantees, reversibility of ACH, identity verification, audit standards, and an investigation system when things go wrong. Bitcoin, by design, has none of these things.

- In terms of micropayments, people enthuse that bitcoin transactions are free and instant. Actually, they take about eight minutes to clear and cost about four cents to process. <- This is now outdated. It's significantly worse now. Median confirmation time is ~10 minutes (and was as high as 25 minutes just a few months ago [1]) and transaction fees ar $13 to $30[2]

^ And that's just payments

The article and its sequel go on to discuss the issues with smart contracts, distributed storage, computing, and messaging, authentity verification and so on.

[1] https://www.blockchain.com/charts/median-confirmation-time

[2] https://www.blockchain.com/charts/fees-usd-per-transaction

> It's clear you didn't even pretend to read it. Or understand all the problems listed. Payments is just a part of the first article. The sequel doesn't even talk about payments.

it's clear you didn't even pretend reading my comments or understand the words i'm writing. we can be playing this game all day.

> Amount of value exchanged on bitcoin !== it's useful for payments. Actual payments (you know, for goods and services) are a very, very, very tiny fraction of exchanges.

since when you're the authority on what counts as useful and what counts as actual?

> The key feature of a new payment system is the confidence that if the goods aren’t as described you’ll get your money back

that might be the key feature in the payment system of your choice, but it's the anti-feature for people who find bitcoin valuable. finality of transactions is way more important and on top of a system with finality you can build all sorts of escrow services that offer money-back due to customer dissatisfaction and what not. without finality your payment system is worth shit.

> The government-backed banking system provides FDIC guarantees, reversibility of ACH, identity verification, audit standards, and an investigation system when things go wrong. Bitcoin, by design, has none of these things

again, all anti features. i don't want them in a system that handles my assets. thank you very much.

> In terms of micropayments, people enthuse that bitcoin transactions are free and instant. Actually, they take about eight minutes to clear and cost about four cents to process. <- This is now outdated. It's significantly worse now. Median confirmation time is ~10 minutes (and was as high as 25 minutes just a few months ago [1]) and transaction fees ar $13 to $30[2]

this also shows how clueless you yourself are in anything bitcoin related. confirmation time is a function of hashrate fluctuations, not some inherent property of bitcoin that gets worse with time. and the article author is obviously clueless for even claiming nonsense like "people enthuse that bitcoin transactions are free and instant", his exposure to bitcoin is probably a single drunk talk in a bar.

and btw in payment channels payments are instant and essentially free and unlike visa and other payment processors, payment channels are completely independent and dont require centralized coordination, so i can already claim with all seriousness that bitcoin is able to process unlimited number of transactions per second.

read up on the topic before arguing.

PS I personally made an on chain payment today, the fee was less than $2, which is still great considering that micropayments were never supposed to be on chain to begin with. And yeah, fees today are higher than fees last year because Bitcoin is more expensive and fees are denominated in bitcoin, duh.

> but it's the anti-feature

> again, all anti features.

Ah yes. "Anti-features" like protecting your money.

It's easy to "refute" the point and call the author "clueless" if you just call anything useful an anti-feature.

> this also shows how clueless you yourself are in anything bitcoin related.

and immediately:

> And yeah, fees today are higher than fees last year

So you're just confirming the point tht the author said and my update to his numbers.

> micropayments were never supposed to be on chain to begin with.

That's some interesting mental gymnastics. So, according to you, bitcoin is not a worthless payment system, but at the same time you're claiming that it's not supposed to handle the largest chunk of what payment systems routinely handle. I guess, micropayments are an anti-feature, too?

> Ah yes. "Anti-features" like protecting your money.

they aren't protecting your money, they are protecting the financial system in which you're currently being fucked but it happens so slowly that you've fooled yourself into enjoying it.

> It's easy to "refute" the point and call the author "clueless" if you just call anything useful an anti-feature.

how can you not? bitcoin has transaction finality by design. that's the purpose of bitcoin. that's one of the core features. when somebody comes criticizing bitcoin for not having an opposite anti-feature - what are they if not clueless?

> > And yeah, fees today are higher than fees last year

quoting out of context should be bannable offence. also you're just displaying your own ignorance and inability to understand a trivial thing - fees in bitcoin denominated in bitcoin didn't change, price of bitcoin change.

> So, according to you, bitcoin is not a worthless payment system, but at the same time you're claiming that it's not supposed to handle the largest chunk of what payment systems routinely handle

nah, you just didn't understand words. i'll break it down: bitcoin is a system with limited on-chain settlement capacity due to reasons. this means that lower value settlements will get priced out by higher value settlements because higher value settlements can afford to include larger fee. on top of this system one can in context of single on-chain settlement execute billions microtransactions with micro-fees that in aggregate make the onchain settlement economically viable.

so bitcoin is very much capable of handling unlimited number of transactions per second, you just don't understand how it achieves that.

your understanding is on the level of "so your shipping containers with motors attached cant even cross the atlantic ? what's the points in that?", missing entirely the idea of container ships.

> they aren't protecting your money, they are protecting the financial system

Ah, yes. Let's imagine a real-world scenario: I pay for some goods. The seller never delivers the goods.

Real world: I have an arsenal of tools at my disposal that can help me return my money.

keymone and bitcoin: no, it's an anti-feature, these tools only protect the financial system.

> how can you not? bitcoin has transaction finality by design.

Please say "finality of transaction by design" a few more times. This will surely address the issues raised.

> fees in bitcoin denominated in bitcoin didn't change, price of bitcoin change.

and immediately below:

> lower value settlements will get priced out by higher value settlements because higher value settlements can afford to include larger fee.

So chose one, please. The fees didn't change? Or they change all the time, and you have to pay for the "privilege" of sending money?

> so bitcoin is very much capable of handling unlimited number of transactions per second, you just don't understand how it achieves that.

I mean, you can call 0 an infinity and even do maths around that. However, there's an actual tangible reality: actual real-world transaction times in bitcoin are 10 to 30 minutes. Your "infinite transactions per second" don't work if I pay for something and have to wait for 30 minutes for the transfer to settle.

> on top of this system one can in context of single on-chain settlement execute billions microtransactions with micro-fees that in aggregate make the onchain settlement economically viable.

Ah, yes. The mythical systems that are yet to materialize anywhere. And, by the way, if you're creating a separate system to aggregate multiple transactions, that's ... centralisation. Something that bitcoin is supposed to be against.

> missing entirely the idea of container ships.

So far you've addressed zero of the issues raised besides payments. And with the issues about payments you've demonstrated next to zero understanding of what people realistically want from a payment system. Oh, and you've devolved to calling white black and vice versa ("10 to 30 minutes per transaction is actually unlimited transactions per second").

It’s like you’re trying to misunderstand and not understand on purpose...

Bitcoin has finality and on top of bitcoin you can build the arsenal of tools.

Lower value transfers got priced out because fees that previously were low in dollar terms have become high in dollar terms because Bitcoin was previously $1 and now it’s $50,000.

Payments in payment channel are settled as fast as your internet latency because they don’t need to be settled on chain, that’s what payment channels do.

Payments inside payment channels are not constrained by anything but you system IO, and there are lots of payment channels acting independently, so for all intents and purposes transaction capacity in bitcoin payment channels is infinite.

Payment channel systems are already built and they don’t require centralization.

You obviously know next to nothing yet you keep arguing trying to pretend to be smart and knowledgeable.

> Bitcoin has finality

Indeed, and that's the source of many issues.

> on top of bitcoin you can build the arsenal of tools.

Which shows again that you didn't read the article, or read it and didn't understand a single argument in it.

> Lower value transfers got priced out because fees that previously were low in dollar terms have become high in dollar terms because Bitcoin was previously $1 and now it’s $50,000.

So, both the article and me were correct about transfer fees.

> Payments in payment channel are settled as fast as your internet latency

Once again, payment channels are required due to inherent limitations of Bitcoin. So, in order to combat the absolutely real and valid issues raised in the article, you dismiss them out of hand, while... advocating for additional systems built on top to valiantly combat these issues. smh

--- start quote ---

Only two transactions are settle on the Bitcoin blockchain. the first transaction and the last. The first transaction is used to open the channel by locking the funds, and the last one to close channel and get each participant his final balance back. So in a typical payment channel, only two transactions are added to the block chain but an unlimited number of payments can be made between the participants.

--- end quote ---

So, all transactions are happening outside bitcoin in a completely separate system just because Bitcoin can't handle all this.

> so for all intents and purposes transaction capacity in bitcoin payment channels is infinite.

Of course it's not :)

It's two transactions in Bitcoin, so the actual transaction time of the actual assets in Bitcoin that people care about will be (10 to 30 minutes) times 2.

And it's the capacity of the payment channel, and that depends on the implementation.

And on top of that the actual true transaction time and transaction capacity will depend solely on when the payment chain will commit those transactions to blockchain.

Congratulations, you've invented classical banking.

Oh, yes. They still don't solve the actual use-case of "micropayments": receiving multiple "micropayments" from multiple people. So, a cafe would get flooded with "micropayments" from dozens of people during rush hour. In payment channel terms this will be two transactions per person with a micropayment on a blockchain with unknown fees and waiting times. Perfect.

> Payment channel systems are already built and they don’t require centralisation.

Of course they do. It's a separate system built outside of bitcoin that aggregates multiple transactions between users. Aggregation simply by definition implies centralisation.

> You obviously know next to nothing yet you keep arguing trying to pretend to be smart and knowledgeable.

These ad hominem attacks sure do make you look smart and knowledgeable.*

NFT's are Bullshit: https://samim.io/p/2021-03-05-non-fungible-tokens-nft-are-bu...

In Summary: 1. The NFT doubles down on the worst of copyright, the property metaphor, & tries to impose old ideas of scarcity & exclusion on the digital realm, where both are obsolete.

2.NFTs are an absolute ecological disaster

The same is true for Bitcoin and all crypto “currencies”

I know it sounds catchy to say that NFTs are an ecological disaster, but that statement is sensational and not accurate.

NFTs do not cause carbon emissions themselves, just like you don't add carbon emissions by occupying a seat on a public transportation bus. The bus is doing its daily route and has a fixed amount of emissions per day whether it has any occupants or not. This analogy breaks quickly, so I wouldn't look too much into it.

Maybe a better analogy is to think of your WiFi router. Its energy use is (predominantly) static regardless of how many packets you route through it. So by browsing, you are not causing additional carbon emissions.

In more technical terms: more transactions do not cause more hashrate. Ethereum's CO2 footprint does not scale with transactional count. So asking people to use the network less will not cause the hashrate to go down. The only way you reduce energy consumption is by getting miners to mine less, which triggers the protocol to adjust the mining difficulty accordingly. As laid out above, this has nothing to do with how many transactions are happening on ETH, or whether NFTs are being minted on it.

This argument has some flaws. So firstly, if nobody got on the bus, the number of buses on the route would be reduced, and depending on circumstances the route would be cancelled. Additionally, the weight of the passenger does slightly increase the power requirement. Ignoring that, while there's minimal direct effect of usage, ultimately the bus is only there due to demand.

Similarly, for block chains, mining only occurs when the thing being mined has value. NFTs would not be mined if people weren't using them. Therefore I would absolutely call them an ecological disaster.

> Similarly, for block chains, mining only occurs when the thing being mined has value. NFTs would not be mined if people weren't using them. Therefore I would absolutely call them an ecological disaster.

The point is that energy consumption due to mining on the Ethereum network does not scale with transaction count. So it does not matter if NFTs are issued ("minted") or not. They add no marginal energy cost in the mining process. That is why calling them an "ecological disaster" is a misnomer.

I’m less familiar with ETH than BTC but my understanding is that this is true:

1. Minting an NFT costs ETH in the form of “gas”

2. The miner who mines a block gets that ETH

Assuming both of these are true, each NFT minted on the ETH blockchain increases the amount they can profitability spend on energy in economic equilibrium.

Your understanding is correct, however ETH is moving sharply away from PoW to PoS systems which are significantly less demanding systems in terms of energy requirements. I believe the roadmap expects the full PoS transition to happen this year (a multistage launch that we are partway through).

On top of that, there's other more specialised NFT blockchains like flow which are becoming very popular.

What they're saying though is that if no one was using Ethereum (for NFTs or other purposes), there would be zero reason to mine them in the first place. It seems to follow to me that as demand goes up, the supply will increase in turn, since it's seen as a more attractive thing to mine.

More accurate would be to say that NFTs are additional fuel for the ecological disaster that is ETH. Your analogy makes little sense in this context.

Mining hardware will always run at 100% capacity, regardless of the amount of transactions, unless mining becomes unprofitable.

The issue is, while the energy used by mining is not directly dependent on the amount of transactions, it is dependent on the amount of people and money invested into the network, which raises the price, which causes an expansion of mining effort. With more people investing, the amount of transactions also increases.

If NFTs were to become a popular thing, mining will obviously increase at an even faster rate

The energy used to secure PoW networks is indeed wasteful. But just a heads-up, Ethereum is currently transitioning to Proof of Stake consensus mechanism which will reduce electricity costs by an order of magnitude.

How long and how often have the announce the transition yet?

Well Phase 0 is already live with a lot of people staking.. Don't pretend like it's never going to happen

This is only a short term issue. ETH is currently transitioning to proof of stake with ETH 2.0

OK read the article again because it addresses two different and significant reasons why that doesn't solve the problem.

Their arguments seem to be

1) Eth2 has been "coming soon" for a long time, so it will never happen. (Yes progress has been slow, but it's happening, with phase 0 live now.)

2a) In PoS, the rich get richer. (Not true in a meaningful sense. Staking rewards are neutral with respect to economic inequality, since everyone has access to the same rate of return.)

2b) PoS is a social issue. Climate change is also a social issue. Therefore, a PoS is a climate issue. (This is a converse error.)

Buying an NFT requires buying ETH which increases demand for ETH and pushes up the price, encouraging more people to mine ETH, which uses more electricity. Also another effect is pushing up gas fees as people compete to make transactions which again helps miners and encourages more new miners to rig up and join in.

Just want to point out that Ethereum 2.0 will be Proof of Stake, so moving forward the ecological argument is moot.

Exactly! Too many people in this thread are making huge judgements based off a very limited knowledge of what is going on in the blockchain space.

I agree with OPs inference that the art market is going to get over saturated, but ETH ecology is not an argument against NFTs. Plenty of alt-chains exist and interchain marketplaces are being built as we speak.

What’s the timescale for that? I know they are testing it now.

If all goes well, 2022 [0]. The transition will happen in multiple phases. IMHO it's very interesting from a software engineering perspective.

- The Beacon Chain is already live (since December last year). It's going to act as the coordinating entity in the PoS system. Future validators are already staking Ether on it.

- Shard chains support is expected to be launched later this year. The plan is to have 64 shards to improve scalability. Together with Layer 2 solutions (which are on the verge of becoming mainstream, e.g. Jack Dorsey's tweet was minted using a L2) that will bring the throughput to ~100-200k transactions per second.

- The last step is "docking" the old Ethereum Mainnet to the Beacon Chain as one of the shards of the new PoS system.

[0] https://ethereum.org/en/eth2/

The unique expression of ownership is novel, it really depends on how they're legally interpreted to conclude if they're bad.

If you interpret them literally they're a better form of copyright that what currently exists. It accepts that digital recreations are easy and doesn't seek to prevent them yet still provides scarcity and reward for the effort in producing it.

The NFT of Jack Dorsey's tweet is interpreted to captures some essence of the time, effort and manpower that went into creating twitter the platform.

> It accepts that digital recreations are easy and doesn't seek to prevent them yet still provides scarcity and reward for the effort in producing it.

I like this description quite a bit. Im obviously a believer already, but this is a good way to describe the value potential of blockchain based NFTs.

Slight digression, but personally I hate the way scarcity always makes its way into the conversation due to the obsessive discussion of deflation, but I think in the case of NFTs it fits well.

I'd rephrase your statement as saying that NFTs using blockchain protocols preserve the scarcity of owning an asset. Then extending that, digitally verifiable proof of the scarce resource (i.e. ownership) is the aspect that can create an economic incentive for ownership.

Well said!

I don't use NFTs, but the author of the linked blog article said Proof of Stake avoids the ecological problem.

That author also does not engage meaningfully with the green energy side of the crypto ecosystem. Strong international and local regulations would go a long way in protecting the environment and local prices.

> tries to impose old ideas of scarcity & exclusion on the digital realm,

NFTs also impose the best aspects of physical goods. Namely that I can re-sell, trade, or borrow digital things as I wish. It’s an improvement on DRM in that sense.

GameStop can become a marketplace for NFT tokens for games. Better than Steam keys.

There seems to be a mix of legit use cases and mania going on with the NFT craze. I can see use cases like NBA Top Shot being legit, here you have essentially the digitization of trading cards (a proven collectable market) backed by a major sports league. The top shot "moments" have some unique advantages over traditional trading cards in that they can't be damaged/stolen/lost, can be traded instantly online, and may be more interesting to fans since they are videos vs pictures. You can see the transaction history of a moment, and in some cases NBA players themselves are trading them adding to the value for die hard fans. Being backed the NBA and unique content created specifically for the purpose of trading via NFT, I could see them having a long term value & market https://www.nbatopshot.com

Then there are ideas leaning more towards mania, essentially trying to make "NFT for X" by adding a token to every piece of digital data. For example, NFTs for tweets: https://v.cent.co/tweet/20 (current bid is 2.5 million for Jack Dorsey's first tweet). I suppose these tokens have value as long there is a market for them, but at certain price points I question if they can sustain long term and if they are more trying to cash in on the mania.

Debate on this topic here: https://news.ycombinator.com/item?id=26370866

Wait so you can create an NFT on a tweet that you don't own? You're just claiming ownership in this NFT universe but it doesn't entitle you to anything related to the tweet does it? Meaning Jack Dorsey who "owns" the tweet didn't create an NFT on the tweet, a 3rd party did?

In this system https://v.cent.co/ anyone can bid for a tweet, and it's up to the actual Twitter user who created the tweet to verify ownership and mint/sell the NFT via their system. All you own by buying it is the token, the real owner of the tweet could delete it any time :) see what I mean about mania?

An NFT really is just a commemorative plaque that says "I own [URL HERE]". It doesn't come with some crypto-backed security that only you can do anything with whatever is at the URL. It doesn't give you any legal rights unless backed by a separate contract (which could just as well have been made without the NFT). All it guarantees is that no other plaque with exactly the same words can exist on that blockchain.

It reminds me of those companies that will sell you a plot of land on the moon or a star.

Live example: https://twitter.com/SLVTRMNDI/status/1368314035284873218

Seems like case better suited to staking than NFTs.

This is nothing new in the art world

https://edition.cnn.com/2015/05/27/living/richard-prince-ins...

So, lets think, we have following issues:

- Climate change

- Artificial general intelligence

- Biotechnology risk

- Ecological collapse

- Molecular nanotechnology

- Nuclear holocaust

- Overpopulation

- Global pandemic

- ...

Most of them caused by way we use our energy and time.

Oh, yes we also have excess of computing power ... hm what shell we do?

Solution: Let spend even more energy on large calculations in order to create meaningless random numbers.

Obvious solution to everything(to me) is to establish on-orbit 3D print space colony manufacturing by the end of this century to boldly go with.

Wanna spend silly amount of energy on fake Internet points? Totally fine! Just buy a bunch of cylinders and do it there. Makes more sense anyway because they come with batteries too.

Teaching people that being "rich" is not a goal would help in the progress. The goal is enough: a point when one still yearns, so they can progress, but they don't suffer or live in fear for losing warmth, shelter, food, etc. But this idea seems far from the majority of the US mindset, and it's polluting many parts of the world as well.

The voice of reason right until the end. The world has problems. Lets blame the US. Even if you are right, it will help nobody to say so.

not that i don't think your points aren't good just that finger-pointing is a bit destructive.

"Shelter" sounds like a modest expectation, but at least for me, and a lot of other people, a decent level of "shelter" requires you to be pretty well off. The average house here in the UK costs £~305k, so a mortgage on that requires like 30k deposit + 60k income, which means being a top 10% earner. I've no real aspiration to be "rich" in a superyacht sense, but I would like to be able to remain in my home city and own a modest flat, which requires me to be rich.

Good point. In most modern cities, the only individualistic solution to escape eternal rent-slavery (forgive the strong word) is to become rich.

A collectivist solution would be to coordinate with other citizens to abolish the building/zoning restrictions and savings devaluation enforced by local and national governments, that cause the constant real estate price inflation in the first place.

Unfortunately, the "other citizens" are the ones who want the zoning restrictions.

Since most governance schemes favor entrenched players, there's a natural tendency for policies resulting in pyramid schemes to emerge.

The first step is to educate enough people around this issue, so that some opportunistic countries/cities can become competitive at attracting residents using fairer policies as a differentiator.

The solution is simple: build more houses to increase supply. It needs to be said: there is a drastic shortage of decent housing in the UK. The cost of building a new house is approaching less than half the final sale price (if not even less) simply due to pressure from scarcity.

Why aren’t people building as many new houses as there’s clearly demand? Numerous factors: greenbelt laws, height restrictions, “Right to light”, NIMBYism, etc. I don’t believe I’ve seen either major political party advance a policy of making it easier to build new houses - or tall tower blocks (the nice kind, not the 1960s council flag blocks), I suspect because it would result in immediate uproar from the Daily Mail-reading types who can’t bear to see their house-values fall (I think Sunday Observer types would be a bit miffed too, if not about house prices then certainly the ecological impact: having lived in multiple countries in my life I noticed the “rural-rights” types that advocate preserving hedgerows and rambling access have a considerably larger influence in UK politics compared to other countries).

It is not so simple, let me give example, in UK during pandemic prices hyped by 30%. Reason is, rich own land and properties, but they own them on account of debt and cash flow. Some people have more than 100,000 properties in their portfolio, and they relying on cash flow. So, if anything disturbing happen let say pandemic kills lots of people (or they lose their jobs) and no one rents anymore, then next thing that will collapse are banks, as Banks cannot get their money back. Next thing is government collapsing. In order to maintain this structure, or protect it from collapsing, during each economic crises government pumps more money (subsidies, interest free money, free money) to the rich. What they do? They buy even more properties. So, basically on account of the blackmail-standoff-ransom-situation, they siphoning all the properties from the market. Regardless how many properties you make in UK they will buy them all, as they buying them with additional debt - and in that way protecting their renting business. ¯\_(ツ)_/¯

Uk house prices are crazy enough to make people want to emigrate. But now with remote work you could live in a cheaper UK location but also consider another country. Maybe even just rent so cheaply you can save and invest in other things.

Desire for superiority over other people is instinctive. I don’t believe it’s something that can be “taught” out of existence.

citation needed

> - Artificial general intelligence

Not only we don't have AGI but there is an ongoing discussion whether it's possible to have it at all.

If we had it (AI), talking about dangers of having it, would be too late (as human intelligence cannot argue with god intelligence)

It is simple, as ant cannot contain human, in the same way humans won't be able to contain AGI. Can it exist, yes it can - simply, can me and you think, yes. In a way we are "device", so therefore, it is possible to make intelligence similar and/or more powerful than our is.

> In a way we are "device", so therefore, it is possible to make intelligence similar and/or more powerful than our is.

I mean, yes, I can have a child and raise her to be smarter than me, but I don't really think that's what you have in mind.

The strong AGI proponents always resort to hand-waving and dubious analogies. There's no reason to think that building ever-larger ML models will produce an intelligence capable of comprehension and insights like a human mind unless you believe the human brain is nothing more than a bunch of weighted vectors.

I am just simply stating, if it (bionic intelligence) already exist - another (artificial) can be built. I am not saying anything about existing models, ways or methods, just that if exist - it is possible to build one "again" so to say.

I still don't think we've proven that at all. Unless you believe in god, then no one has ever "built" an intelligence. The human brain is the result of millions of years of evolutionary pressures.

Regardless how it is created, if it exist it can be made artificially again - it is just matter of time.

Same as with bacteria. 'In May 2019, researchers, in a milestone effort, reported the creation of a new synthetic (possibly artificial) form of viable life,' - https://en.wikipedia.org/wiki/Artificial_life

Give human enough time and resources, we can replicate anything, that is in our nature.

Bro this made like no sense.

At first I thought it was generated by GPT-3, but then I realized GPT-3 generally generates coherent content.

AGI in no way, shape, or form belongs on that list.

You’re right - it belongs on a list of universal-scale risks rather than global-scale ones.

There are multiple solutions, but all requires that the our current power structure decide and commit to solving them.

So far there's no consensus on any level. (Meaning there are not enough people at any level to force, or agree/compromise, or influence the economy, or make it the dominant single issue politically/culturally.)

Sure, participating in it by buying, mining PoW coins (or basically any coin that then - due to hedging/diversification - leads to even more PoW coin mining/demand) while knowing about the external cost is morally problematic. However the actual harm is likely less than doing many-many other selfish (immoral/bad) acts.

If the early crypto billionaires exit crypto and put their newfound wealth into effective altruism the moral calculus changes very starkly.

Some of the items on this list - namely AGI, biotech, nanotech - are actually not problems; they're dangerous, but very desirable developments.

Agree with the gist of your comment, though.

This idea that we need to be perfect optimisers is foolish and pure whataboutism . You could say the same for any recreational, non productive activity.

If Alice buys art from Bob, and that art goes up in value due to the open-market activity of anonymous [Carol?, ...], then Alice can donate that now expensive art to a digital museum for a tax write off. Where could Alice get the NFTs appraised? Is the open market activity sufficient?

It's almost like the NFT system allows proles to do fancy tax write-offs like their bourgeoisie cousins.

NFT appraisal is a grey area if it is anything like the art market, and yes it can be used to defraud.

https://www.latimes.com/local/la-me-irs2mar02-story.html

Thank you for posting this article. I had not come across this one in my limited research.

>It is appraisers, not museums, who determine the value of art for donors. But the U.S. attorney’s office in Los Angeles is investigating whether museum officials furthered the scheme by knowingly accepting donations of overvalued art from suspect dealers and collectors over a decade, according to affidavits filed in January.

Looks like software might eat this too.

Anyway, I think I naturally tend to support the Liberal Project for better or worse, but today's streams of turbulence feel refreshing on tired feet.

Why does it feel to me like a way to launder money.

Its not like the art market hasn't been used for that for centuries.

Do people donate for the tax write-off or do they donate and happen to enjoy an additional tax write-off benefit?

Rich people absolutely do donate things for the tax writeoffs. Land and art especially can have on-paper values significantly different from what you could actually receive from selling them at a given time.

I can't find it now but a few months ago there was an interesting article going around about this written by an accountant. A large part of the work of accounting is matching different appraisal methods to best fit the needs of the person at any given time. Donations definitely factor into this.

Key quote for me:

> The trap, then, is that creators can get hooked on creating these. Buyers with a sunk cost get hooked on making the prices go up, unable to walk away. And so creators and buyers are then hooked in a cycle, with all of us up paying the lifetime of costs associated with an unregulated system that consumes vast amounts of precious energy for no other purpose than to create some scarce digital tokens.

Tangentially, this resembled me of troubled financial markets (minus energy expenditure). Companies are hooked on making their stock go up, even if it requires distorting reality to hide fundamental problems. Like creators who become more about NFTs and their value than art, companies become more concerned with inflating valuations than actual business. Stock buyers are hooked on making stocks go up, not selling even if fundamental indicators are suffering to the point where viability of the business should be in question. Banks are hooked on making stocks go up… A vicious circle all around.

Hitchhikers guide to the galaxy:

Earth - a small planet in the outer reaches of spiral galaxy M7529, so far the only planet on record that the semi-intelligent biped inhabitants managed to overheat so badly that they became extinct. Overheating has happened before, of course, however the method of overheating is unique - the inhabitants invented a method of identifying uniqueness by making large calculations and attaching small drawings to the calculations, they then proceeded to trade these tokens as something of value, using more and more energy and creating a runaway green house effect. This has been used as an example to disprove the existence of god.

I'm hoping we can do our NFT trading on non-PoW chains within the next couple years. This should reduce the environmental impact to that of baseball cards.

I've seen a bunch of artists jump on https://www.hicetnunc.xyz (which uses Tezos, which apparently is a Proof-of-Stake chain?) after the "wait, ETH uses how much energy?!" shock.

It is LPoS. It means you're able to delegate your validation rights. So you don't need to run a node to participate in the staking process, you just delegate to a baker. And It's self amending. Every 3-4 months a proposal with upgrades will undergo a voting phase. All bakers are able to vote on this to accept or reject the proposal. The source code is written in a purely functional language on which formal verification is applied.

One random idea I had was to use cryptomining to “soak up” excess power: so, for example, you could build nuclear out to meet peak load and then set up mining rigs to use the difference between peak and the current load, subsidizing the cost of power production.

It’s probably a bad idea for other reasons, but it’s one way to reduce the environmental impact of PoW

Or just stop the proof of work stuff. Just an idea.

It's a bad idea because the energy used is worse than wasted since all it does is contribute to an increase in the mining difficulty for the entire network, thus worsening the environmental impact. It's actually better for the environment to leave that energy completely unused rather than use it for mining bitcoins.

This isn’t necessarily true: if the subsidies spread clean power generation then the percentage of miners that have bad environmental impacts will decrease over time. Also, since this would make relatively clean power sources cheaper, it would help phase out fossil generation capacity.

They're not "subsidies", they're just profits earned from selling what was mined, nothing useful happened, it simply makes the blockchain needlessly more expensive for everyone because a nuclear power plant is dumping hashing power into the network. Green energy doesn't change the fundamental nature of PoW, it inevitably expands to consume all available energy because the more energy you can burn the more money you can make.

The important part is that the profits from mining are used to reduce rates: so it’s subsidizing the power costs for the customers as well as offsetting the capital investment into the powerplant.

Any reduction in rates would drive up the costs for everyone else. The capital investment required to construct a nuclear plant utterly dwarfs anything that could possibly be earned by mining.

I disagree with the last part about direct proportionality between energy and money. But my real wonder is if we can use this hashed/mined out coins for something that is actually useful socially.(even if it is a transaction of services anonymously.) I keep wondering if we can create a crypto currency + IOT devices + energy tracking system that can value the coins you have based on the energy sources that fed into mining it. But it feels so complex that I am not optimistic about creating such a thing..

Why do you disagree? If I profit X per kWh why wouldn't I burn as many kWhs as I can?

Because not everyone is the "economically rational agent" that just wants to maximize profits as much as they can. May be you disagree, and think most people are and it's strong enough to be a normal distribution. (I am not sure it is, but i sure hope it is not a normal distribution and there are enough people outside).

It doesn't matter that not everyone is a "economically rational agent". What matters is that there are some of them. People who will reinvest their profit into more mining, to profit more and reinvest it further. The people who are currently fabbing their own ASICs and setting up mining farms in places where electricity is cheap. These people left unchecked will, over time, suck up all spare electricity generation capacity and eventually outbid quite a lot of normal electricity use.

Once again I disagree.. these "some people" need to be the majority(of anyone participating in these currencies) for this mining to stay profitable.. Of course i may be mistaken about that part of the reasoning, but I'm fairly confident about it. Please let me know if you think it is an unfair assumption.

Majority is counted by hashing capability, not by head count. Is it not?

Ah... I am talking about who gets to determine the cost of the coins.. So I assumed it's majority of the people who use it as a currency or exchange. But then that's my default assumption about crypto currencies in general and not sure that applies to NFTs..

You can reduce the energy output of a nuclear reactor both through the moderation of the fission reaction (via control rods, coolant temperature variation, neutron poisoning, etc), and through moderation of the electrical generator turbine (slowing down the turbine speed, venting steam, etc).

There is no such thing as "excess power" for crytomining. Even if there was then that energy could just be stored using batteries or gravity storage or something, or it could be sold to neighbouring energy users, or it could be used in the grid and other more polluting sources could be scaled down instead.

> There is no such thing as "excess power" for crytomining.

I was thinking the idea seemed to have some validity.. For ex: storage of solar/wind-powered is critical and the current inefficiencies and batteries rely on lithium and alternatives are still in research.(http://worrydream.com/ClimateChange/#moving-storage) ..

so in theory there's a system that can be built around the excess energy(of renewable systems) + crypto mining as a incentive for taking up renewable energy setups.(Of course this cannot convert the mined stuff back to energy so it's a one-way stuff at best and has it's own cons and pros).

What I’ve generally heard about nuclear and the grid in general is that it’s cost-ineffective to build out generation capacity to meet peak demand and that nuclear power is relatively bad at meeting fluctuations in demand. Sure, you could use batteries or whatever to store/use the power that the grid currently doesn’t need. You could also build aluminum processing plants or arc furnaces or whatever. Cryptocurrencies would be interesting because the mined cryptocurrency could used to reduce rates to consumers.

This is called "Demand Response" and it's an important part of grid management. For example a factory will agree to decrease consumption when asked in exchange for lower rates.

Too much power is usually handled in the generation side by incentivize producers to scale back generation or even paying to have them take a plant offline.

For a bitcoin mining operation, I suspect it would not be profitable to have all that equipment sit idle except when there is an oversupply of electricity.

I was thinking that if you built for peak load, you could reduce the idle time to four hours or so a day.

Another way to change this : Could crypto not make useful calculations instead of useless calculations? Like protein folding for example?

Like Folding@home? No crypto needed.

https://bitcoin.stackexchange.com/questions/20879/why-cant-w...

You could use mining to incentivize the build out of remote energy generation before transmission infrastructure is ready.

For example, drop some solar panels and miners in the middle of the desert and immediately start generating profit. Use the profit to deploy more solar panels and build out transmission lines. You can do this piecemeal at low initial investment to feel out an energy source without committing billions of dollars to build out.

I'm not aware of anyone who's done major operations like this, but with the profitability of mining so absurdly high right now plus scrutiny on using dirty energy sources, I wouldn't be surprised if it starts. Access to mining ASICs is likely the key bottleneck.

This is the story used to explain part of the reason so much mining is in China. They built out a ton of hydroelectric dams over the decades that have been underutilized due to lack of infrastructure. Miners came in for the unused electricity and brought in a ton of money to the area.

Yup, this idea has already been explored, eg. here is an example of environmentally net-positive way of mining: https://www.bloomberg.com/news/articles/2019-12-06/why-bitco...

I don't see it as a net positive unless you believe high energy cost crypto is of high value to society. You have a large environmental impact in building out and maintaining a mining facility and transport infrastructure thereto, as well as the ongoing waste all the way down to the food put into the pieholes of the humans running the facility.

Net positive means the benefits, ie. eliminating huge amounts of CO2 that would otherwise be released into the atmosphere, outweighs the costs, ie. your list of capex+opex. Turning gas flares into miners is both ingenious and objectively net positive.

Or, there’s an idea, just generate a random string, bundle it with the artwork and sign the whole damn thing using good old RSA. Achieves the exact same goal, uses a fraction of energy and no fancy tech.

Yeah, you could plausibly just transfer these things by having each owner sign an attestation of the new owner's public key. But since it looks like this junk will happen on a publicly accessible slow computer/database, I'm just hoping it happens on e.g. Solana instead of Ethereum.

Signing attestation by itself wouldn’t work because of double spending. You would need either a centralised database of who owns what or a blockchain.

Uh...no?

These can trivially be copied (double spent), which means they're just as scarce as any digital data. Valueless without some significant proof of violence and hyper censorship ability enforcing copyright protection.

The primary revolution of bitcoin was the invention of self enforcing digital scarcity.

Can’t the subject of NFTs also be trivially copied? All you really have is a token that refers to a particular file and proves that you own a token that refers to that file. Everyone else is free to ignore the token and copy the original file at any time.

Is there something that you can only do via the token? Are there special events or access for token holders? I could see something like that being independently valuable, and interesting.

It's an "emperor has no clothes" kind of thing. A big farce, that's all it is.

The artist can sign a message including your public key. The message is verifiable using the artist's public key. If other people copy it, they're just copying the proof that it belongs to you.

If you want to sell it to someone else, you sign a message saying you give it to them and so on, forming a "chain" of signed transactions.

Any owner can sign as many receipts of sale as they want.

Can't an artist also mint as many NFTs as they want?

What stops an original owner (of the to-be-digitized asset) from selling an NFT on the same thing multiple times? Perhaps on multiple different platforms?

Nothing, but they can only sign the "first" once

If the NFT is just a pointer to a digital good, can't they have multiple "first" NFTs all referring to the same digital good?

Yes and no. If they minted multiple within the same block then yes. If not, then proof of first minted NFT could be verified by block height.

They could mint or 'sign' as many as they want.

But like a painting that can be copied, people decide to disproportionately value the first one...just because.

sure, but unless they are signed in the same block, then there will be a "first".

Congratulations, you just invented an inefficient PoS for a single use case!

The point being made is that it's trivial to create a proof of ownership system without using the blockchain.

The proof of ownership system described above is a blockchain where every single block is produced at irregular timestamp and contain a single transaction.

Some company can run a DB to record spends. Why trust a third party? Well with any crypto linked to real world outcomes you need it trust a third party. Be that tether or some NFT hustler.

Because if I'm a rich person wanting to spend stupid amounts of money on some 'original' work of digital art, I don't want to trust a third party store the ownership records that could easily be corrupted.

The ownership record in a public blockchain can't be corrupted.

Rich people entrust their entire wealth to third parties to manage it for them. Why wouldn't they trust a third party to keep some ridiculous record of ownership?

Because the entire ethos of the cryptocurrency space is about dematerializing trust from large, complex networks of humans with various carrot/stick incentives keeping them honest to trust based on cryptography and game theory dynamics of open distributed systems that can't be successfully cheated without a massive accumulation of power.

What do you mean dematerializing trust, can you put an example? As far as I know, trust is not made of matter, I don't know how it could possibly be dematerialized.

The ownership of the NFT itself is verified through public-key cryptography, the blockchain adds nothing of value.

> The primary revolution of bitcoin was the invention of self enforcing digital scarcity.

I thought DRM already invented that.

ECC (curve 25519) would be preferable.

If the artist signs the NFT to you, then you can't track resales. It will always be signed as belonging to the original person who bought it. So basically this "alternative" to NFTs would be impossible to trade. It blows my mind that people still don't understand stuff this basic.

And how valuable is that capability?

It's what you're paying for.

That's up to you. It could easily replace steam for me. Or digital audio purchases.

The only reason for tracking resales is to prevent double-spending, in other words, to create a false illusion of scarcity. The whole thing is a charade.

We already have artificial scarcity. It's called steam. You buy a game in steam, you can't resell it. This allows you to resell the things you buy.

It cant be artifial scarcity when there is endless supply.

You can't resell a game in steam because Valve doesn't let you, not because the game is being made artificially scarce. Which it is, but this is not the reason you can't resell it. The point is that reselling an NFT doesn't require a central ledger. The central ledger is necessary to prevent the same token from being sold multiple times by the same seller. In other words, to create the illusion that the seller doesn't have something (and therefore can't sell it) when in fact they actually have it.

Each NFT is separate. You can authenticate a digital game by owning the nft. The publisher can sell as many tokens as they wish, that's entirely different. The point is that they can't stop you from reselling, because it's on the blockchain, not on steam.

This was hilarious and well-written.

I've become extremely alarmed at the number of completely non-technical people who don't know anything about how cryptocurrency works getting extremely into it via YouTube click holes. It's obvious that these NFTs are capitalizing on it.

A guy I ran into at the hardware store today was talking to me and he didn't understand the concept of a cryptocurrency that has a stable value so that it can be used as a means of exchange.

He's an airline pilot and he just has tens of thousands of dollars invested in various crypto things that he heard about on YouTube and he's made a ton of money on it.. It was eerily reminiscent of conversations I had with people flipping houses in 2006.

Thanks for the compliment - I'd like to think he would agree.

Every single male friend of mine is talking about crypto. I am so tired of this topic.

That and Tesla.

I avoid the subject since a friend insisted on taking about Bitcoin with me during the funeral of HIS mother.

> He's an airline pilot and he just has tens of thousands of dollars invested in various crypto things that he heard about on YouTube and he's made a ton of money on it.

"made a ton of money on it." Until he has sold those assets and turned them into a major, stable currently like USD in his bank account or a diversified collection of other assets, they are as reliable a store of value as Enron stock was in July of 2000.

Isn't it interesting though that the people who don't have the technical understanding of why most cryptocurrencies at the core are unsustainable, just as the housing market was in 2006 are still the ones making money on it?

When betting in any market understanding people and psychology seems to be more important than understanding the product.

No, the price is going up, everyone on average is making money. In a bubble everyone tends to think they are very well informed and investing rationally and getting the psychology right.

"why most cryptocurrencies at the core are unsustainable" would you care to elaborate on such a sweeping statement?

It's also currently reminding me of the second-life land rushes from about that time.

Loved it .... I've been craving a replacement for Douglas Adams for a while now.. Terry Pratchett was quite close.. but now he too is gone.. perhaps it's time for me to find other writers or write stuff myself..

Sounds like bitcoin predictions coming true.

How much for an NFT for this comment :)

I am reminded of the Shoe Event Horizon.

https://hitchhikers.fandom.com/wiki/Shoe_Event_Horizon

I would be a bit more optimistic, here is my take on it.

Hitchhikers guide to the galaxy:

Earth - a small planet in the outer reaches of spiral galaxy M7529. Inhabitants with watery brains came up with technology to use their star energy directly for complex mathematical calculations. Our space archeologists still don't understand why the calculations were producing random outputs so they never managed to get out of their star system and used all their star energy for that. Their Dyson sphere is interesting place to visit because as of now, it is the only civilization that achieved building it and never managed to go any further.

DON'T PANIC

The huge USD value of this market seems odd. It either points to how rich these cryptocurrency holders are, or how illiquid their market is.

It’s all very well having 18.78Ꮆ (gorgcoins; ~$687,441) but if all you can do with them is buy 18.78Ꮆ of Cryptotchotchkees then it doesn’t seem like such a big deal.

I guess, if you’re stuck with an exit, what you really need to do is to make some kind of a market for some new product that can only be bought using gorgcoin. Then you’ll finally be able to sell your gorgcoin for USD, and buy a lambo / Patek / heart operation.

> ...stuck without an exit...

NBA Top Shot runs their own very liquid marketplace (when it is, cough, up). It is 100+ times more liquid than selling physical cards on Ebay.

Yeah, if you buy some random crypto art, you may be stuck with it just like in real life.

NFTs, the new way to spin a copyright or incorporate into DRMs, but since it pumps and is bullish for crypto, all cool kids are lovin it.

This is a complete misunderstanding of what an NFT does. The content isn't protected by the NFT, ownership is.

I know what an NFT does. It doesn't even give you ownership on anything other than a blockchain print. To me, the logical conclusion of this is copyright protection, where, say, an eventual platform only plays content where the player can only be verified as the owner.

> It doesn't even give you ownership on anything other than a blockchain print.

I’m pretty sure my domain name NFTs give some ownership rights you are overlooking.

What if someone in a similar position to you sold a domain name they 'owned' to someone else off-blockchain? Where would the rights sit then?

It’s to much of a hypothetical but in general it would be the same as being the registered owner of a domain name and selling/leasing it direct to someone.

In other words if I own abc.eth and abc.com and sell them both to you directly but I keep the abc.eth NFT and keep abc.com, then you could still bring me to court to enforce our agreement

Neither the content nor the ownership is protected by the NFT. The NFT has literally no connection to the content at all, except that someone said, "Hey, buy this and you own the 'original'!" Except in all things digital, "original" means absolutely nothing.

There's a guy who has been selling property on the moon[1]. This is exactly the same thing.

1. https://www.usnews.com/news/articles/2013/03/25/meet-the-man...

People are attempting to create a new world so scary and different to what you know, that it seems insane and completely off base. But we know what we're doing. We know this is leading to the future of a world where artists and fans can take back and redefine ownership.

It doesn't matter what you think ownership is. We're redefining it. :)

See you on the other side.

Cramming the concept of ownership into another post-scarcity environment is hardly redefining it.

Talk about delusions of grandeur.

There is no substance to your reply, so I can't even refute it. It sounds like something copy/pasted from a crypto startup's landing page.

I'm just being terse. Happy to expand but it seems the sentiment is not well received here.

It doesn't have connection to the content, unless it's declared that it does.

All intellectual property law works this way already. The copy you have does not have any bearing on the copy someone else has, but we created laws that link it back: you don't "own" the copy you have, and using it in certain ways is made illegal.

NFTs as they are now, without any legal protection, are still innocent, but they are bought because people want to "own" something. Since NFTs don't actually provide technological means to implement that "ownership", the next logical step is to declare it by law: "owning" an NFT gives "ownership" of the content. I hope it never comes to this.

That guy selling plots on the moon is an idiot. If he were selling NFTs for ownership of the moon he’d be a multimillionaire by now.

It’s like owning a shitcoin with tokenomics of 1 coin premined, no future coins and zero decimal places.

It’s easy for a famous entrenched artist who mass produces their work thanks to legacy infrastructure to talk down on this but I’m seeing lots of independent creator artist friends making some money for their work

What property of NFTs has suddenly made them make money where previously they weren't? Like how did adding NFTs to the mix suddenly make their art start selling?

This is exactly what I don't understand. If it's the same art, why does it matter if the art is in an NFT or in a physical representation? Like, why are people buying pieces of art using NFTs?

Digital art doesn't have a natural physical representation, and people find it interesting to get rid of the requirement for creating and maintaining one just to make it a thing to exist as art. I.e. fundamentally digital art pieces are today often sold as part of installations which are a pain to maintain long-term. Or as physical media, which also are difficult to maintain long-term, or if you don't require the specific media to be preserved you get into the chaos of which later copy is an "original". That really only works at an expensive high end.

Or you don't create exclusivity and sell it cheaply, but while people do buy e.g. music that apparently doesn't work as well for other art forms (artists certainly have tried).

Limited/unique prints apparently do work (as in people are willing to spend money on those), but limits you to static 2D media.

In principle nothing stops you from selling digital art with licenses like we do sell software with licenses, but that hasn't caught on, for whatever reason. (I'm actually expecting that to be added to NFTs soon-ish)

Enough people do seem to be currently willing to accept the concept of an NFT representing ownership of a digital thing to put a price on it, and that price is noticeably higher than what they pay for non-exclusive digital art. For many artists, that's reason enough to use this new avenue to sell their art.

One amazing use-case is recurring revenue on secondary market sales by coding royalties into the smart contracts. Artists used to die poor and their family saw nothing as their work skyrocketed in value. Not anymore with NFTs.

The problem I think, is that their art still isn't selling. NFTs aren't art, they are effectively trading cards referencing art.

These trading cards are, somewhat mysteriously, selling, and that does get money into the hands of artists which is good, but they're not doing it by encouraging people to buy art or tip artists, and it's hard to see how "everyone can just print trading cards referencing things" is a sustainable anything.

People pay for mods and skins all the time. People will pay secondlife furniture. They will pay to be be able to display it in their VR houses. They will display it like badges on their forum avatars.

The speculation and whales will being the capital to generate a steady market and build out the partnerships and incentives for customers. Once people are used to digital wallets, sending a few bucks for instant delivery of some unique design is easier than etsy.

> People pay for mods and skins all the time. People will pay secondlife furniture. They will pay to be be able to display it in their VR houses. They will display it like badges on their forum avatars.

All of those are neat ideas which do not require NFTs, and are not enabled by NFTs. People already pay for Second Life furniture.

And advantage I see is the shared protocols and blockchains offer quick and seemless ownership validation even after the original merchant has gone out of business or stopped selling. And for the merchants, its painless and seemless to sell and delegate ownership without having to manage that inhouse, or pay a large fee for the service.

I don't have the impression people buying NFT art consider there to be much difference between the art and what you call a "trading card" referencing art. (sure, many probably buy for speculation, but that happens with meatspace art too)

Thought experiment: if they sold a digital art piece in traditional terms, would you consider the printed licensing contract (which is our usual legal tool represent selling a file) to be a "trading card" and the art itself to be not sold? (the legal meaning of an NFT is less defined, true, but I suspect people will tie licensing contracts into that soon enough)

Especially in art, a lot of this comes ultimately down to social convention of what people do consider to have value, and as long as enough people agree it doesn't really matter what the rest of us thinks. (I think I get how the logic works for NFTs, but it doesn't work for me in the sense that I currently don't consider owning an NFT to be meaningful to me, unlike owning other kinds of (representations of) art)

> if they sold a digital art piece in traditional terms

People do sell licenses to digital art, yes. I've both bought and sold such licenses, primarily on TurboSquid (https://www.turbosquid.com/), a digital market place which has been doing that for over 20 years.

That's neither a trading card nor the art itself, but it's certainly closer to "art" than "trading card", because I get specific legal rights to do specific things with the art, such as use it and reproduce it in a book, website, computer game, etc.

It is worth, I think, asking what is being offered by NFTs that TurboSquid (and it's endless competitors and equivalents for other media types) don't offer. Scarcity? Nothing stops such marketplaces from selling exclusive licenses, and some have tried, although I don't think it's ever been popular.

> the legal meaning of an NFT is less defined, true, but I suspect people will tie licensing contracts into that soon enough

Well, yes. People might start selling some sort of "NFT + rights" package at some point, but they don't come with any now, hence the "trading card" digs. Even if people start adding rights in the future, it's not clear that these rights will be (or will be seen to be) an integral part of the NFT. If I can sell an NFT of my 3D model now, and I can sell the right to use my 3D model in a game now, why would I combine these in a package and not just keep selling them independently?

(Now, one interesting thing is that the rights attached to NFTs would presumably be transferable, while licenses to digital art are currently overwhelmingly non-transferable. That is a big change. But...we could sell transferable licenses now; you don't need NFTs for that, and the concept is currently not popular. I rather think that rather than NFTs true value being that they enable transferable licenses, the transferability of licences attached to NFTs will be a drawback.)

> Especially in art, a lot of this comes ultimately down to social convention

That is true. Art prints are an interesting example; you're basically paying for 1) the right to reproduce an artwork on a single piece of physical media and 2) paying for the artist to do that reproduction for you. Both are legitimate services, but it's odd to find them packaged together like that so frequently. And yet, art prints are a huge and very well accepted part of the art market. If NFTs become widely accepted, they will seem less strange, to be sure.

The turbosquid comparison is fair...basically NFTs are recreating that, but without the need of turbosquid.

To your other point many NFTs already include these additional legal rights, it’s articles and forums like this where people are talking about NFTs as if they are all just digital baseball cards.

Just look at decentralized domain names as the obvious counter examples (Unstoppable Domains and/or Ethereum Name Service). You aren’t just buying an NFT for a domain name, the NFT includes the rights to the actual name. I use both companies as examples, because even if this new space they are not offering the same rights over the underlying domain and it’s incumbent on the user to understand what rights they actually get with the NFT.

Think of it as a certificate of authenticity. If it's not made/endorsed by the artist it's not worth anything.

That still doesn't make any sense to me. Would anybody have paid for a physical certificate of authenticity for a digital file pre-NFTs? If the NBA started selling certificates of authenticity for video clips that didn't come with any intellectual property ownership or exclusive ability, people would have laughed and would have never paid millions for them

Exactly. What would you say if I told you I have a famous painting and a certificate of authenticity and am willing to sell you the certificate for $$$ and keep the painting?

What if it's a digital painting where all copies are identical? The certificate basically is the ownership.

Suppose I own a game on steam. I pay a friend to write me a certificate saying whoever owns the certificate owns the game. I sell you the certificate. You pirate the game. Do you own it?

If the NFT doesn't come with conventional legal rights, you don't own the thing the NFT points to in the real legal system. If it does, it's redundant.

If first sale doctrine is ever fixed, your friend could sell you their copy that way.

I don't know why all your examples involve third parties stamping sweet nothings onto a piece of paper. Of course something made by a non-author and with no ownership is useless. I said that in my first comment.

> If the NFT doesn't come with conventional legal rights, you don't own the thing the NFT points to in the real legal system. If it does, it's redundant.

An NFT needs to have some kind of rights in the contract or it's a scam. Notably you at least need exclusivity!

But that doesn't make it "redundant". It's a way of making a contract, not a replacement for contracts.

> If first sale doctrine is ever fixed, your friend could sell you their copy that way.

Yes, but NFTs claim to get similar effects without changing the law.

> I don't know why all your examples involve third parties stamping sweet nothings onto a piece of paper.

The third party is the blockchain. Because the blockchain can't enforce that you actually hand over real ownership rights to correspond with the NFT ownership.

> An NFT needs to have some kind of rights in the contract or it's a scam. Notably you at least need exclusivity!

If I own a piece of paper my country's legal system will accept as meaning I own something, why would I also want a piece of virtual paper that a bunch of people on the internet will accept as meaning I own some sort of rights to something.

> But that doesn't make it "redundant". It's a way of making a contract, not a replacement for contracts.

What NFT can I use to make a contract that any real legal system will accept?

> If I own a piece of paper my country's legal system will accept as meaning I own something, why would I also want a piece of virtual paper that a bunch of people on the internet will accept as meaning I own some sort of rights to something.

So you can buy and sell it easily, and show everyone that you own it.

That's much better than paper!

> What NFT can I use to make a contract that any real legal system will accept?

Surely they have terms of service? That's where the legal system ties in.

Previously there was no way to credibly sell an "original". You can produce a commission for someone, but the nature of a digital artwork is that anyone you show it to has the whole thing.

To a certain extent this was already the case with photos, and IMO that's part of the reason that prices for photographic artwork are much lower than other media. You'll sometimes see photographers selling a series of 500 numbered prints (or whatever) as a sort of a way around that, and NFTs are kind of a more digital version of that.

No, the NFTs are a separate thing which apparently has some sort of sentimental value. The digital artwork is still whatever it was before. I could sell an NFT for my cuckoo clock. It has nothing to do with my cuckoo clock.

It's akin to a certificate of authenticity for a numbered print in a series. Anyone can make another copy of the print, and it doesn't really matter which copy a certificate goes with, but without the certificate the print is worthless.

I think it has to do with the money being held in crypto... the whales have more than they’ll need and are looking for reasons to spend it.

Well for one, NFTs on art create a unique money laundering strategy.

Drug dealer buys an art NFT for $1k (using legit money), sells the NFT plus a bag of drugs to someone for $10k. They just made $9k in "artwork" profit, which is clean money....and since the value of art is always subjective, it can't really be questioned. On top of that, all monetary exchanges and transactions can be handled via smart contracts, so this reduces risk to everyone involved.

Yeah i am not going to buy relevant amount of drugs on something that has a visible public history when i easily cant.

I think you highly underestimate how liquid the crypto craze market really is.

I suppose the reality one would have to buy in to is that people were previously sitting around with tens of thousands in disposable cash ready to spend on art, but were held back by the fact that ownership of the art could not be proven digitally.

Access to markets. Like it or not, there are many, many wealthy cryptocurrency holders. NFTs are a way of exposing the new artist class to the new rich.

It's also easy to discount someone's arguments by writing them off as an "entrenched artist" and implying their opinion is invalid and old fashioned.

I'm not so convinced, especially when Seth has been a major proponent of digital currencies and economies for decades now.

>CREATORS may rush to start minting NFTs as a way to get paid for what they’ve created. Unlike alternative digital currencies which are relatively complicated to invent and sell, it’s recently become super easy to ‘mint’ an NFT. [...] The more time and passion that creators devote to chasing the NFT, the more time they’ll spend trying to create the appearance of scarcity and hustling people to believe that the tokens will go up in value. They’ll become promoters of digital tokens more than they are creators. [...]

>BUYERS of NFTs may be blind to the fact that there’s no limit on the supply. In the case of baseball cards, there are only so many rookies a year. In the case of art, there’s a limited number of famous paintings and a limited amount of shelf space at Sotheby’s.

How do these make NFTs signficantly different from the art trade and collectibles market? In both cases, creators could fall prey to focusing too much on selling things, and in both cases, the creators at any time could decide to put out a ton more. (I don't get why the case of baseball cards is treated differently: nothing stops them from suddenly deciding to print many more cards.)

---

I think the externality of the power usage of proof-of-work blockchains is a significant issue though, and that maybe NFTs should be discouraged on that basis until we have NFTs working through environmentally-friendly solutions like proof-of-stake. I think this is way more of an issue than whatever possibility of a downside exists from artists maybe deciding to focus too much on making sellable tokens instead of art.

NFTs seem like an amazing opportunity to extract some money from people who got rich fast with crypto currencies ;)

ICOs were better

ICOs were the NFT of 2017 for sure; still waiting on my dentacoin investment to pay off ;)

Exactly, with all the VCs, celebrities, etc hyping up their own coins and launching an ICO to potentially pump and dump the coin for a quick exit scam in 2017.

This is no different and it is another giant scam. Where was the same 'thought leaders' on Twitter who were screaming and hyping about ICOs in 2017? Bust.

On to the next get rich quick scheme I suppose for the VCs and the hype brigade on Twitter, I guess.

Why can't NFTs be done without a blockchain? Please explain. Just add multiple hash, public/private-key cryptography, downsample discrete cosine transform, etc. You can just create a file format and a protocol. Why do you need to dump tons of CO2 into the atmosphere just for this purpose?

You’re trying to apply common sense to mania and speculation

In your example, the money flowing into the market would need to come from regular people rather than crypto speculators, which would be much less lucrative.

Preface: I'm not endorsing NFTs nor do I know much about them and personally I would never buy one.

> Why can't NFTs be done without a blockchain?

In the physical world it is rather involved to check wether eg. a painting is the original one and not a copy. A simple way to define original is that it came first, before any of its copies. In the digital world the blockchain acts as the canonical timeline. You or anyone else can always tell what came first.

> Why do you need to dump tons of CO2 into the atmosphere just for this purpose?

In short we don't. The author of the article conflates blockchains and PoW:

- There are blockchains that don't rely on PoW

- The ones that are currently PoW might not be PoW in the future

- The ones that stay PoW might solely use non-CO2 producing methods in the future

> The ones that stay PoW might solely use non-CO2 producing methods in the future

What does this even mean? How can a Blockchain possibly enforce that your electricity used in mining is coming from a carbon neural source?

Blockchains can't and won't enforce it. They will be forced to rely CO2-neutral renewables when fossil fuels are taxed to oblivion and/or outlawed. This also points to the absurdity of blaming energy usage of things rather than attacking the root of the issue.

PoW can't be non-CO2 producing even if solar powered. You still have to contend with e-waste and even the poop of the janitor in your calculations.

Everything is life uses energy. We can only minimise the harmful effects of energy production, not (yet?) eliminate it. I first and foremost want global warming to slow/stop and imho for that we need a global restriction and/or ban on harmful ways of energy production. I can't see any other way. Everything else is either a distraction or ideologically driven, eg. "crypto wastes energy" really means "I think crypto is useless hence is deserves no energy". Once everything is forced to run on renewable energy sources then we will be in a much better position regardless of crypto.

You'd want some system of verification and notarization by parties involved. Analogous to real world where art is inspected, verified, and notarized. If you own the mona lisa you'd wanna be damn sure you have the real thing. Kinda like a certificate authority.

Blockchain like structures use consensus to uniqueness. A protocol that attempts to replicate this meets the loose definition of blockchain.

As the other commenter explained, concensus doesn't require CO2, but most of these have been recent developments.

Short term view NFTs look like a scam or a joke.

Long term view we will need digital ownership especially when it comes to content or individual data/items.

When the augmented reality spectacle takes over and everyone is looking through AR glasses, rather than through a small device but through their own eyes, digital collectibles will have more value.

Shared spaces with others will have collectibles that only exist in the virtual space, but also with AR a shared virtual reality. Sitting in your room you can have layers of digital collectables that you can swap out: art, sports/gaming, music, landscapes etc that others can also see and experience. Availability and exclusivity are always part of the market and the augmented world will have similar in many areas.

Eventually consumption will have to move mostly digital with carbon neutral energy generation to prevent overuse of resources, people can collect much more in the digital space. Hoarding digital/augmented content is not as problematic as hoarding in the real world.

Everyone knows this is coming and NFTs seem to be an early iteration of digital ownership to make unique collectibles.

Making games let you know that many players just like to collect things, obsessed with it. Digital collectibles already are a massive market.

When that market changes to an augmented world, where people will share spaces virtually or play games in the real world overlaid with fun elements like games, scenery, educational content, history, events and more. This is when digital content ownership will make more sense when it comes to the unique experiences and items that people will need to make money and a market. This will only grow with more augmented spaces, events, experiences, games, entertainment, education, history and more.

Rather than tie these digital items to a platform, ownership outside the platform is better in terms of being a standard. NFTs might not be the final form, but digital content uniqueness is actually something that can help the planet once the power usage is improved or neutral. If you think about it in the long term, where more people will be viewing augmented experiences from their own eyes (Apple Glasses and more) suddenly it makes more sense, then some items may only exist in that augmented layer.

Why are we introducing scarcity to digital goods? That's not a good thing and shouldn't be praised!

We rail against companies selling cosmetic additions to games. It doesn't add value.

We already have "ownership". The legal framework of copyrights, purchase or goods, and licenses.

NFTs are barcodes. People are selling cryptographic barcodes.

I fully agree. I hadn't heard of these NFTs before, but sounds like a dystopia to me, a perversion of the underpinnings of the digital world.

Here's my Mr. Brightside view of it, there is a Black Mirror-esque side as well as some humans build towards utopias and some build toward dystopias. I look at the quality of life and good side of things where I can.

I agree with most of what you are saying but that is based on the current era. Created scarcity and exclusives are annoying but there are pros and cons. Putting value to something will create markets and digital markets you can take your stuff with you.

When we get to more augmented spaces it will change the world dramatically. There will have to be some sort of digital ownership that is transferrable preferably a standard outside walled platforms. For instance artists or entertainment events that are unique are collectible.

Uniqueness creates value, value creation makes markets, this would create massive amounts of jobs and quality of life/livelihood if done right. Already it is spawning some amazing art and assets. It is in a pump/bubble but new things always come out hot, rework, then in the end the best parts do live on and the initial bubble might have even been undervalued, like the internet, or mobile. The augmented space will have all sorts of network effects like that.

It is in the very early stages, like a sketch of a storyboard early on in pre-production, everything early on in a way sucks, but we do know that over time the world will be more augmented and in that space digital ownership and uniqueness will be a thing.

The market is there now for collectibles and stores of value and it will only grow.

Take for instance you participate in a launch AR game for a launch event that takes place in your own environment with others locally or virtually, where you are in maybe a Stranger Things Upside Down world and you have to kill Demogorgons. The winner gets to keep the Demogorgon from that event. That item has value, you can buy a regular copy of one, but the original may be worth value over time. Do that same thing with any Star Wars, Marvel or other property, you start to see people will want those.

Or let's say you go to a concert and an event gets a recording from a musician that you get to keep and show others who are sharing your augmented space but you own it. You own the unique view or access, but others can get copies of other parts.

Or you watch a piece of digital art be created and the piece is sold and traded.

Like right now if I got to buy some sort of collectible from the first Half-life that was unique and part of it was my house or a yard can be turned into a level like datacore or stalkyard and I could have friends play it with a unique character added in from the Half-life launch it would be pretty awesome. There can be copies, but to have the one specified by the creator has some value and some uniqueness that creates that value.

Collectors love this type of stuff. Think of it like comicbooks, baseball cards, movie poster one sheets and unique characters. The fact that a collectible has value makes it more fun in a way but also creates value that can employ people and make a digital market. Markets like this will help keep people happy and doing things. The more people in the digital market the more jobs and resources out there. There is value in creating a marketplace that people can participate in that doesn't require physical assets/resources or even location. It could be used to help inequality and create economic markets. Economics can solve lots of problems but also require resources, if the resource problem is solved then it can be very beneficial.

These were just game/entertainment examples but you get the idea.

The coming eras of augmented reality and shared spaces on that will probably refine this idea more and more.

The far end of this is like some of the tech in Blade Runner 2049, unique landscapes, augmented bots that are friends/assistants that learn, companions like virtual pets, and other valuables that gain unique knowledge that cannot be replicated because it learned from your experience/event, but that is way in the future.

Few things - I think the whole AR world could end up pretty sad. Imagine I go to a friend's house and all the art on his walls is mine? Like a world I've chosen where I'm not exposed to anyone else's tastes and choices?

That aside - isn't this all still likely to rely on something central? I mean it sounds like you're talking about something pretty close to Ready Player One (which was owned by a central corporation)? Any AR world (in order to be successful) is going to need a whack of capital (Google, FB, Apple) and then vested interest in making it successful/profiting from it - at which point why do you need a Blockchain to own items? If you were the corporation running it, wouldn't you just implement your own "in space" ownership? Not saying it's better or worse - just isn't that more likely?

The web was supposed to be distributed.

But we wound up with Facebook and Google.

AR and the metaverse will be the same.

"We rail against companies selling cosmetic additions to games. It doesn't add value."

That's not quite true. There are sub-groups of gamers, in particular with racing games (e.g. Forza Motorsport), who do value cosmetic additions quite a bit.

There's tens of millions of people that disagree with you regarding cosmetics in games. Gamers largely have disposable income and are happy that they can support their favorite game developers and look "cool" (show off their status) while doing it.

Cosmetics in games largely have value due to the game being online and multiplayer, which means NFTs aren't useful for them because there is already a central server to manage ownership.

They don't buy cosmetics just to show off their status, but to actually make their character look different when playing with a group of people who can see it. It's rarely "oh look - expensive" it's more "oh look - freaking Cowboy Ursa lmao"

That will change when cosmetics can be shared across multiple games, which is already starting to grow with the onset of custom multi-game avatar+identity APIs being provided to game developers.

When you avatar persists across multiple different games, it makes sense to have an ownership mechanism that isn't managed by a single central authority.

What economic incentive to game developers have to respect NFT ownership? Or anyone, for that matter?

In VRChat, you can be any model.

If I had a game, I wouldn't care who owned the NFT. It's not a value add. As far as I'm concerned, anybody could use it.

The incentive is that the players care about it, and players will actively choose games that respect their avatar/NFT ownership because it allows them to show off their prized avatar and share their persona with a larger audience.

Okay, but that doesn't mean companies will have economic incentive to support decentralization.

Games don't honor any fiat currency or stocks I hold, any unlocks I made on other platforms, or my Reddit upvotes.

This is going to go nowhere.

Game platforms have been providing cross-game "unlocks" / achievements for years, and they're only moving more towards that (this is one of the whole reasons for Epic, Riot, etc. shipping their own launchers, it gives them a runtime on the client where they can securely share state between games).

It's going to be huge for VR in particular:

- https://www.roadtovr.com/getting-social-oculus-unifying-mult...

- https://ieeexplore.ieee.org/document/8845288

It's more or less a small amount of whales that can actually buy meaningful amounts of cosmetics though. Cosmetics and digital content are EXPENSIVE; for a person to get many we're talking thousands of dollars. $30 US mounts are easy to make, and incredible profit.

Even granting people who buy limited amounts to show support, its very easy to price them out of the market fast.

Here's the thing most people on Hackernews have missed. Owning an NFT does not usually mean you own the copyright to the image, and this is a good thing.

It's not introducing artificial scarcity, its purchasing collectable bragging rights that allow an artist to 'monetize' their work, while retaining the copyright.

Here's the relevant line from the Rarible TOS "In the absence of an express legal agreement between the creator of a Collectible and purchasers of the Collectible, there cannot be any guarantee or assurance that the purchase or holding of the Collectible confers any license to or ownership of the Collectible Metadata or other intellectual property associated with the Collectible or any other right or entitlement, notwithstanding that User may rightfully own or possess the NFT associated with the Collectible. " Link - https://rarible.com/terms.pdf

Here's one example of an attempt to standardise this contract - https://www.niftylicense.org/

The arguments made by people around NFTs strike me as suffering from the same maximalism that people apply to decentralization and inflation.

Digital is not always better than physical. Decentralized is not always better than centralized. Deflationary is not always better than inflationary.

All of these exist in a continuum, each with costs and benefits depending on a number of other external factors.

NFT: non-fungible token. https://en.wikipedia.org/wiki/Non-fungible_token

Expand your acronyms, peeps.

Thanks! I assumed non-functional tests and was really confused at first.

*ACRONYM: a concise rendition of nomenclature you'd misplace

<bow>

Thank you.

Keep up folks. Your so Feb 2021 to not know what NFT means.

NFTs have been the wildest mania to sweep the internet in the last three weeks. If you're not watching, well, check it out.

People are paying millions of dollars for artwork that doesn't exist.

The bid for Jack Dorsey's "first tweet" is over two million dollars. (What does that even mean?!)

Sure, I suppose you could link ownership of intellectual property or actual goods to NFTs, but what's the benefit? Who enforces it? And what happens when crypto is broken and people can't prove they owned the private keys?

I hadn't made the "first tweet" connection, though I'd seen that story. Thanks.

@admins is it ok to flag that article just for that reason?

I'm not an admin but I think the answer should be yes.

whats the reason?

Failure to expand / define the acronym.

That isn't mentioned anywhere in the posting guidelines. I don't think posts should be flagged for breaking rules that don't exist.

A broad interpretation of clickbait as any low-quality or gratuitously obscure writing style might be seen as a factor.

In practice, people will vote down or flag what they will. Asking for permission really won't change that.

The practice of using a recently-coined acronym without definition as the principle focus of a story is pretty egregious.

No, the HN submission guidelines explicitly ask that the original title be used.

With numerous exceptions.

For a more technical definition following the citations:

> NFTs are distinguishable and you must track the ownership of each one separately.

> The pair (contract address, uint256 tokenId) will then be a globally unique and fully-qualified identifier for a specific asset on an Ethereum chain.

https://eips.ethereum.org/EIPS/eip-721

NFT is an initialism [0], not an acronym. Acronym is used when you say the initials as a single word (eg, “nift”). Initialism is used when you say each letter distinctly.

[0] https://www.merriam-webster.com/dictionary/initialism

Consider baseball cards. I own 5000 cards with a total value of about $50.

A few NFT’s will be very very valuable. The first one George Clooney sells. The first one ever created. The 6 Banksy sells under a pseudonym that no one realizes for a year. The song Taylor Swift limits to 1 copy.

But almost all of them will be worthless.

The difference between baseball cards and NFT’s is that for generations, no one really cared about baseball cards. It wasn’t until the 80’s that people realized they had significant collectible value. By comparison, NFT’s have tremendous cultural hype.

Some people will do very well with this bubble, as a few do in every bubble. But it will be very few.

As a fellow former card collector, I can emphasize although I don't think the result will be as extreme as you've laid out. It all comes to supply and demand. If Taylor Swift could create 1,000 NFT prints for $10 each for each of her songs, they would be sold immediately.

I'd agree for a lot of the "random things getting NFT'd" - but it's definitely different in the art market, where right now quite some moderately known artists are making okay money from digital art through nfts. Not Mona Lisa kind of money, but it definitely does open up the art market for digital creators in a beneficial way.

A picture isn't inherently worth anything, it's worth what someone will pay for it and doesn't depend on some kind of novelty character

Regarding the energy use: Since the 1st of March Cardano has native tokens (you can create your own token without the need for a smart contract) and multi-assets (wallets and transactions can contain more than one asset). The blockchain is using Proof-of-Stake and a full node runs on a raspberry pi 4. So it is completely possible to have NFTs without the massive energy consumption of Ethereum and without the very high gas fees problem. You can transfer for example 10 different tokens in one single transaction for just 0.16ADA (around 16cents at current price).

I still don’t understand why someone would buy a tweet or the ownership of an image, but you can do it in a more sustainable way if that’s something important for you…

Adding to this most newer smart chains are kinda like that plus even ethereum 2.0 is going in that direction

They're buying an autographed tweet.

For such an intelligent(on average) audience, it really feels like people on HN stopped paying attention to crypto years ago and still think it is just bitcoin + some scammy alt coins.

There are other networks besides Bitcoin and Ethereum with very little eco footprint and billions of dollars invested.

What prevents someone from creating another NFT platform for tweets and do the same thing? The tweet is only unique on the Cent Valuables platform, not on the blockchain itself. Or am I missing something?

Nothing, you are missing nothing.

There's an implicit social contract that the tweet owner (the "artist") wouldn't create a second NFT of the same tweet on a competing platform. There's nothing to enforce that social contract, though.

When cryptocurrency became popular, it was hard to imagine a more poorly designed system. Generating random numbers, continuous guessing, to verify a ledger? That’s the culmination of decades of algorithm and performance knowledge?

Then smart contracts took the stage, and we realized they were an even worse idea than cryptocurrency. Permanently lose access to your money by locking it into a buggy computer program? How could we lose?

And now NFTs are the new worst idea. It’s somehow made the fundamentally terrible random number generation idea of cryptocurrency worse.

The collapse can’t come soon enough.

Maybe NFTs for collectibles isnt ideal but Im wondering if there are some more - lets say - utilitarian uses of this concept that we havent discussed yet. The other day I tried buying a bike. Id really like to know it wasnt stolen, and somehow being able to tie a real world representation into a virtual single item good would be somewhat useful.

Bikes have unique serial numbers. https://bikeindex.org runs a free website to let you lookup serial numbers and mark them as stolen, and there's also various other regional websites that do a similar sort of thing.

If you want to buy a bike, make sure it has a serial number (and if the number was filed off, then yes it was probably stolen), and look it up on the index.

How would an NFT be better than the above database in any way?

I do think the bikeindex could be run better (fewer regional websites, a database we can download for archival purposes, sharing of information between multiple registries), but all of those things seem like they're easier and cheaper to do without a blockchain or NFTs.

Rather than do something like NFTs, they could do what the certificate transparency project does, and just dictate "here's the data format, here's how you share data", and get all the benefits I can think of with none of the downsides or ecological waste.

For what it's worth, there is evidence that such a database can be made and work in a similar case, since car registrations, transfers, etc are all quite well handled with no NFTs.

An NFT is inherently decentralized, maintained by multiple independent parties, and more or less tamper-proof. That database is only as resilient as the organisation running it (or maybe less, plenty of organisations have lost their databases before), and presumably there are corruptible humans with write access to it.

The certificate transparency project has the same attributes you mention to my knowledge.

There is the problem of correct data, but I don't understand how an NFT manages to make data correct. How do I prove to the NFT that I own the bike with SN 123? How do I prove it was stolen?

I'd love if we replaced the bikeindex with a certificate transparency project-esque system and each large bike manufacturer ran an instance.

That also seems like it would be vastly easier to create than having people use the bike-stolen-registry-NFT you're talking about, and as a bonus it would be far less wasteful.

It seems like it would optimally require the manufacturer to participate in creating a token representing that serial number and assigning it to the person who bought the bike who would have to transfer it to the next owner and so forth.

And so when I sell my bicycle to someone (and write them a receipt) but forget to do the weird token transfer thing, who owns the bike?

In the eyes of the law, the guy holding the bike and the receipt owns it. What the NFT says is irrelevant.

So how are NFTs useful again?

If they had been out long enough to be pervasive you could require all online marketplaces ebay,offer up, facebooks etc which are commonly used to traffic stolen goods to upload an NFT as part of the transfer whose description matches the item being sold which is transferred with the good.

It would be like requiring every good sold to have a trivially electronically verifiably accurate original receipt that only someone who acquired it illegitimately would lack.

Certificates still have the problem of who your trusted root is, and don't (by themselves) solve provenance issues - if two people have certificates for the same bicycle then there's no way to choose between them, whereas an NFT inherently has an auditable chain of custody going all the way back to the original issuer (presumably the bike manufacturer in this case) and digitally signed at each stage.

I'd love it if these industries/communities adopted log-structured distributed datastores with digital signing to track provenance of things without wasteful "mining". But the fact is that they've shown no willingness to do so, and it's a lot harder to bootstrap a system like this - if your system relies on a trusted root then you need the trust before you can start to develop the system at all, but users have no reason to trust the system until it's all fully running and proven.

It's another example of the title problem. You can think of it in a similar to how VINs work for cars, or ESNs work for phones. In those cases, there's a centralized database that tracks whether things are stolen or not. It's possible that NFTs could be a decent way to handle supply chain auditing of this variety, considering it's just rebirthing a process that already exists but in a more analogue form.

The advantage over something like bikeindex is that you could make the transfer process a lot more seamless. You could build things like escrowing into the protocol, so when someone sells a bike to you on craigslist, you have a nice clean transactional system which adds some nice anti-fraud measures and protections for you without necessarily requiring you to buy it from a store or marketplace to gain those protections.

> How would an NFT be better than the above database in any way?

It wouldn't depend on the benevolence of a third-party absorbing the cost of running the index.

It would be geographically and culturally agnostic. Zoom out here and notice how little of the World's population is involved: https://map.bikewise.org/#0/84/-77

It would be globally unique and would not require the cooperation of manufacturers. Neither of my two bikes has a serial number because they're 'too old'. Other bikes have conflicting serial numbers.

It would eliminate the privacy and security risks of maintaining a central database of PII and associated valuable assets.

> It would be geographically and culturally agnostic

Who's to say everyone is using the same NFTs for this? We already see a variety of different platforms for NFT art.

> It would eliminate the privacy and security risks of maintaining a central database of PII and associated valuable assets.

How are there now fewer privacy and security risks when the entire blockchain is completely public? Where's the privacy?

I still am confused by this though. If the police/government don't acknowledge this then you can't really get it back without a fight.

Wouldn't you rather just have it run by an entity the legal system can point to?

If you don't trust the legal system...then I really doubt that having a third-party website is going to help you with a bike thief in anyway.

No instead it would foist that externality on the entire world in the form of carbon emissions and depend on the highly uncertain future value of a cryptocurrency.

And it would still require a third party to benevolently run an app to search and make sense of the data from the ledger, and also to verify that the data inserted was actually real and not poisoning the db.

How would you prove to a blockchain that a particular serial number really is owned by you, or was lost, or all the other things that can happen that don’t occur on the blockchain? Aren’t you sort of back to needing the cooperation of lots of different entities globally, and some kind of authority equivalent to the third party database maintainer to ensure the data makes sense?

I actually had a similar idea, last time the theft of a famous painting was reported in the news. The museum could offer a deal, where they get the painting back but give the thieves a certificate for it. As part of the deal, they have to hang a sign next to the painting, saying, "This painting is considered to be stolen."

The thieves can do whatever they want with the certificate -- use it to pay illicit debts and so forth. They can visit their painting at the museum, and brag to their friends about it. But the rest of the public still gets to enjoy the painting too.

Now closer to home, I'm a musician and play a modestly valuable instrument. I've thought of taking really high resolution images of it, because the grain pattern of the wood is practically like a fingerprint, and would be difficult to conceal without destroying the instrument. A database with hi-res pictures of valuable instruments would be like a serial number database for bikes.

You could do the same thing today, offering a certificate of authenticity or whatever, validated by the relevant comunnaly accepted authority, and it would be be just as baffling and nonsensical an offer. The certificate is not the weilder of value , even if it were required for the object itself to be valuable (eg originality).

With an NFT I don’t even know what you’re certifying, except that this one chain says you own the object. In your example that’s not even true, the museum “owns” it, yet the thieves have it, and the NFT is now just as flawed as today’s understanding of ownership.

> The thieves can do whatever they want with the certificate -- use it to pay illicit debts and so forth. They can visit their painting at the museum, and brag to their friends about it. But the rest of the public still gets to enjoy the painting too.

I love this answer because it's a perfect analogy to explain why NFTs are total nonsense.

Owning a one-of-a-kind, literally irreplaceable painting cannot be substituted for a certificate. The certificate has zero value because it does not allow the owner to restrict access to the original painting.

The core concept of ownership (control over a scarce resource) is violated as soon as you start trading a certificate instead of the original item.

It's like someone saying that owning the last remaining Michael Jordan baseball card is the same as owning Michael Jordan, and that both have the same value. It's ludicrous.

> The core concept of ownership (control over a scarce resource) is violated as soon as you start trading a certificate instead of the original item.

That’s entirely how our markets are run. Nearly all stock is owned by a few trusts and what everyone is trading everyday are “certificates” of the original stock certificates.

Even big ticket items like cars or homes, they really aren’t worth anything without a clean title or deed. On the other hand people buy deeds all the time without ever seeing the actual property.

Stock ownership is backed by the legal system. It also has a ledger that must be settled and sent to the government.

Stock ownership gives you dividends and votes, too. You can sue for these things if they aren't given to you.

Cars and homes are things I can physically interacg with.

Digital certificates of digital goods have none of those qualities. If you do get any legal rights when you own them, it's not any different than copyright, which we've already seen is essentially impossible to enforce for digital works.

Note that I wouldn't endorse owning a person, but whether they have the same value is a matter of whether they have the same utility. Leaving the painting in the museum might make the certificate more valuable for all we know, because it ensures that the painting will be stored properly and not forgotten by the public.

Honestly I didn't even think about a definition of ownership when coming up with my idea.

Couldn’t the thieves just make a new NFT blockchain that says they own whatever they like and skip the messy steps in the middle? You’d end up at the same end state where the museum has a painting and the thieves have a certificate that says they own it.

Since the theft is newsworthy, it would be clear that only the first NFT was genuine.

This all assumes most people care about buying a stolen bike or not. Maybe you care, and maybe I care, but I’m sure there are plenty of people that really don’t give a shit and are thinking “it’s a cheap bike and I don’t have the luxury of money or time to care, I’ve got to get to work”.

The be your own bank headaches that most people can’t handle will then apply. You need to spend a lot of money on gas fees, hardware wallets etc and get a good grounding in cyber security. Or just get a lock and bike insurance.

OK, so what happens if, say, the worlds energy demands jump 100x in 2-3 years due to out-of-control feedback loops like crypto?

Energy prices go up. People suffer. There are two possible responses:

- Regulation/laws to stop the feedback loop

- Investment + deployment of new energy technologies to increase supply

Will be interesting to see which of the two scenarios above happen, or if the fears of this crypto wave leading to insane energy cost increases just don't happen.

Sounds like an investment in the energy sector is worthwhile now. Make money selling the shovels (reference to the gold rush where shovel sellers made more than people looking for gold, i.e. valuable NFT's and cryptos being "gold" here)

The reality is neither. No feedback loop will be removed, and no new energy will be ready (at scale) in time. China has been building a lot of coal plants, I expect more of that.

The simplest answer is to move people towards the various networks already operating with very little energy consumption in comparison to bitcoin or ethereum. Cardano and Polkadot both operate on a proof-of-stake mechanism rather than mining.

It's like HN doesn't realize there's more going on in the space than bitcoin and ethereum.

"It’s an ongoing waste that creates little in ongoing value and gets less efficient and more expensive as time goes on. For most technological innovations the opposite is true."

Reminds me of another cryptographic novelty that's come back into vogue lately.

Has anyone done an analysis of NFTs being used for money laundering? Seem like they'd have most of the benefits of art plus most of the benefits of crypto.

I suspect NFTs will continue gaining in popularity, if only for this alone.

Why? Trading histories for NFTs are usually fully public. There are so many other things like ponzi smart contracts that move millions every day that using NFTs doesnt sound so appealing

1. Buy NFT with clean funds

2. Bid 10-100x price on NFT with dirty funds, buy it

3. Clean fund account gets a big multiplier on funds in a "clean" way

Take a look at dappradar or so to get a feel for how much money is flowing trough different types of smart contracts. I still think it does not open any money washing doors that have not been wide open anyway

The articles is to simplistic and the author doesn’t understand the technology.

The author claims it’s easier to mint an NFT than a currency...for all intents and purposes it’s no different to mint a erc20 token vs erc721, so the we shouldn’t pretend NFTs are somehow the lowest common denominator while “alternative currencies” are inherently complex. A shit coin is a shit going whether it represents a digital image or nothing at all other than a store of value people collectively agree on.

What everyone ignores is that not all NFTs can be described as representing a jpeg (the digital baseball card). sure many are that, but others actually include a transfer of the intellectual property they represent. Others have a “public” representation but have embedded files accessible only to the owner. Others represent ownership of digital items that can be used in various DApps across the ethereum blockchain.

And even assuming all NFTs were just digital baseball cards, if baseball cards were your thing, then I think you could acknowledge how valuable it is to be able to trace every baseball card that exists and otherwise be connected to a marketplace that include the ability to buy/trade/sell directly with other persons without a centralized authority regulating those transactions.

Problems I see with NFTs: - What prevents anyone from launching a competing chain and re-tokenize the same assets ? - As other chains: if you lose the access to your private key, you're done. - For real world assets (like a house), you have to enforce that the token is equivalent to the asset. That is: ownership of one implies the ownership of the other. Legally, it looks like a hell of a thorny problem: high-frequency house trading anyone ?

Tip the artists you love. If you want you can send them money by paying for prints, or buying originals, but ultimately just send them money. There's no need for it to be transactional. If there are artists in the world that make things a little more beautiful for you, you can just pay them for that, without any need for it to be tied to something concrete.

Buying an NFT directly from the artist could be seen as this form of tipping.

Buying one from anyone else is clearly not.

As far as I understand it, some NFTs are built where the original creator gets some percentage of every sale.

How can the contract know the actual sales price? I.e. sure, it can see a transaction, but it can't see the second transaction with the rest of the sum, or the cash that changed hands at the same time.

My understanding is that the USD value attached to an NFT is just the equivalent of however much ETH is being traded. If some outside monetary platform is being used to exchange the item then the real price wouldn’t be known.

The major NFT exchanges like OpenSea and Mintable enforce it in the marketplace. But otherwise it's mostly honor system right now.

So basically the same way it's done with traditional meatspace paintings: you make a (legal) contract stipulating it, or you rely on people to do it because they think it's right.

It's also transactional if they put the work behind a centralized DRM system, yet somehow we are not pushing back against that, which to me suggests a lack of imagination.

This article by the author/podcaster Seth Godin [1] highlights the issues with Non-Fungible Tokens (NFT) [2], built on the Ethereum cryptocurrency. It extends the ideas introduced in an Everest Pipkin post [3]:

> Cryptocurrencies and NFTs are an absolute disaster for so many more reasons than the ecological.

The ecological issue is due to the energy consumption required to perform (some^) cryptocurrency computations.

[1] https://en.wikipedia.org/wiki/Seth_Godin

[2] https://en.wikipedia.org/wiki/Non-fungible_token

[3] https://everestpipkin.medium.com/but-the-environmental-issue...

^EDIT: added “(some)” cryptocurrency computations based on Tenoke’s comment

Except there are non-ETH NFTs which don't consume much electricity and the author is specifically talking about some of them - like NBA Topshots - while pretending they all have large consumption.

Regardless of what you think of NFTs, you have to recognize that the author's only counterargument against NFTs is that they're bad for the "rest of us" due to externalities that everyone else has to pay.

The "rest of us" don't pay for the electricity use. The ETH miners are paying for it directly. And creators and buyers are paying for it indirectly through ETH usage. It isn't an externality. That's like saying the physical art world shouldn't exist because it uses physical real estate, electricity, and raw materials to be made on -- and the rest of us pay for those things.

Is it a good use of electricity? Maybe, maybe not. That's for people to decide individually, unless we'd want to go down the moral rabbit hole of judging every single use of electricity.

The externality of the electricity use is the pollution, and increased prices due to demand.

That's an argument for a different question, which is "should we allow people to waste electricity if they pay for it?". If your answer is that we should regulate what people are allowed to use electricity for, then we'll need to change the laws in this country.

It is very difficult to start being the moral judge for every single use of electricity. Instead, we let the free market decide in most situations. And when there are true externalities (meaning costs that borne by the broader population, e.g. car emissions) we do impose regulations to reduce those externalities.

right, we should just tax carbon emissions by just enough to pay for removing those emissions, and then use said taxes to remove said emissions.

Isn’t his argument moot due to ethereum’s eventual transition to proof of stake

I’m sure Vitalik will deliver we just have to wait (skeleton meme). That is to say I’ll believe it when I see it.

What hasn't he delivered on? Does he have any track record of delivering what's been promised? If I recall correctly, proof of stake already started to roll out this year.

To date? A scalable payment network with low transaction fees and a small environmental footprint.

That’s a bit disingenuous. Ethereum isn’t as static as bitcoin; they’ve been making steady progress. Proof of stake also has started rolling out already

The question as I interpreted it is "what has he not yet delivered on" - not "what has he promised to deliver on and appears to be making progress on, and has started rolling out, but is not yet broadly available" :)

Yes, let's rely on word play to make it seem that ethereum isn't being actively upgraded as we speak ;)

Kidding aside, I would think that most people understand "what has he not yet delivered on" as "he's completely broken his promise and he's no longer working on it". I didn't have a "yet" in that sentence.

Your point is well taken :)

"This is bad because of externalities, the externalities are big and will grow" is exactly why we don't have general nuclear power, saying it's the only argument doesn't make it a weak argument.

When the cost is directly paid by the actor, it isn't an externality. It is the literal opposite of what externality means.

carbon emissions aren't currently paid for by the person paying for and using the electricity?

And pollution is usually not, or only partially, paid for by neither the energy producer nor the consumer. Thus it's an externality.

> you have to recognize that the author's only counterargument against NFTs is that they're bad for the "rest of us

No, I think he makes a valid point that they're intentionally misleading and a scheme to sucker someone out of money.

Let's look at Jack Dorsey's 'minted' first tweet.[0]

This is in no way gives to exclusivity to 'owning' this tweet. It literally is just 'owning' the rights to 'Valuable's' NFT of this tweet (if they even are committing, legally, to never create another NFT of it). There are no limit of companies that can do exactly what they are doing and 'selling' this tweet in the same way, nor is Jack Dorsey committing never to accept those 'sales'.

To me, it seems like an outright scam that anybody but Twitter is trying to do this.

[0]https://v.cent.co/tweet/20

Same for art though. You don't own a copyright. You own only the bragging right as well as the useless physical canvas and paint. All artful beauty it has can be copied much more cheaply than the original painting's price.

Until the price of carbon is accounted for in the price of electricity, using ridiculous amounts of electricity for such trivial uses is externalizing the costs of these transactions onto all of us.

We are facing a climate crisis that is projected to accelerate a mass extinction crisis and create tens of millions of displaced refugees and yet we are spending 200 KgCO2 of wasted compute on a 'digital ownership token' on this: http://cryptoart.wtf/#https://superrare.co/artwork-v2/the-fo...

Not sure I care about the price.

How much for the whole world?

Negative environmental consequences with costs imposed upon society are literally externalities. All the things you list are textbook examples.

The electricity argument loses weight when you look at the world allocation of GPUs. Although mining has cut into supply, they're also being used for gaming, workstation, and cloud compute tasks. One way or another all of that chip supply would be sold, and then it is a case of benchmarking the social value, load and efficiency of the different uses to some utilitarian optimum.

Much easier to cut off the framing early and declare "all crypto is bad and has no value", which is what the contra side is leaning towards. It's easily embraced by authoritarian-left ideologues, since their inclination is to reject market solutions anyway.

My suspicion is that we'll all be surprised in eighteen months. The "boom" will be gone, but an unalterable trend will have taken hold regardless, and the platforms will have largely moved on to proof of stake, closing the environmental argument.

The thing of cryptocurrency is that at the end of the day, all you have is a file of a few hundred gigabytes that somehow represents hundreds of billions of dollars of market value. That value means that an absolutely huge number of eyeballs are scrutinizing it, looking for a way to protect their investment. They can't "turn off" the system and make sweeping changes. The hypotheses of anything-goes "assassination markets" have not panned out - crypto has become a sector with a civic outlook.

> One way or another all of that chip supply would be sold, and then it is a case of benchmarking the social value, load and efficiency of the different uses to some utilitarian optimum.

I disagree. Cryptomining created a new market that increased the demand. There's no reason to assume the same numbers of GPUs with the same utilisation rate would be in use if we didn't have crypto. Thus, it does have direct environmental consequences.

Not all of that electricity use is a total waste: a friend of mine uses part of his mining heat to warm up the apartment in the winter. It's an expensive heater though.

>The "rest of us" don't pay for the electricity use;

No but the rest of are paying it with the overheating of the planet which is way way worse

You should try looking up what an "externality" is again, because this is almost a canonical example of one.

I don't quite get this post, it somehow seems to make a case FOR nfts and then try to make the point that these are not look likr stocks (which is rather obvious).

The whole point of nfts is to create uniqueness among endlessly duplicatable media, and provide the possibility for digital art to be handled like physical art.

Just like the Mona Lisa, you can look at endless photos of it without restriction, but only one person can actually own it - the article correctly points out that nfts enable the same principle to hold true for digital goods, and then goes on to argue that this is bad because doesn't provide any passive return to the collector, which holds true for physical collectibles all the same ...

The Mona Lisa is a physical "rivalrous" good, meaning if I own it, you cannot.

Digital goods are "non-rivalrous", so although NFTs can give a psychological feeling of ownership, I wouldn't say they make digital goods rivalrous.

I think digital NFTs only make sense in two ways: (1) psychological feelings of ownership, (2) perhaps a claim on something digital that _can_ be made rivalrous, for instance royalty streams. If these are subject to a smart contract that ensures one entity gets them, for example.

Scarcity and print # allow for making them rivalrous (e.g., only 200 numbered cards).

Royalty models have been tried where the owner of the original receives 90% of the sale of a digital print. See eulerbeats.com

Basically, I agree with your points and there are already active efforts in these areas that will make some NFT efforts very viable.

Digital ownership expressed through blockchain could certainly make it more difficult for others to own the good. This would be dependent on the configuration of the NFT, but if done this way it certainly would meet the definition of a rivalrous good.

Music that requires you to present a private key in order to play it would meet that configuration, for example.

Do people own the mona lisa in their home or do they have a curator hold it for them and their ownership is backed by a contract in the current legal system?

The possibilities of NFTs fascinate me, especially for portable, digital identities and assets that transcend any specific virtual realm and can't be arbitrarily erased by any central authority.

But I also won't put a single sat in any of them right now.

> The possibilities of NFTs fascinate me, especially for portable, digital identities and assets that transcend any specific virtual realm and can't be arbitrarily erased by any central authority.

I'm struggling to understand the possibilities. Can you enlighten me? It seems like people buying these things are just speculating. Can you paint a picture of what kind of possibilities you're excited about?

“digital identities and assets that transcend any specific virtual realm”

I think they mean, you could have the same stuff in different video games

The hard part about this isn't the crypto, it's the coordination between game companies on how to store and render assets.

This is exactly why I would be wary of committing to the current stuff.

Without integration into large networks, NFTs are worthless.

This thread touches on it, https://twitter.com/FEhrsam/status/1366248629661552642

A very simple example is that it could partially solve the problem of verifying digital identities. If I follow/friend your NFT based identity, and various virtual realms (games, social media, virtual spaces) integrate with that 'identity' NFT for user accounts, then any new virtual realm I enter, I can immediately find and connect with people I already know, or identify imposters. There will obviously still be some other hoops I need to jump through to know a digital identity maps to a particular physical person.

I could also see game studios start to issue varying tiers of rare in-game items as NFTs that can then trade on a free market, like collectible cards. Not only would I suspect people will be much more likely to pay more for digital items they can actually take uncensorable possession of (and still sell after they get banned from a game), but different studios could even make deals to make their NFT items cross compatible. (Mario NFT skins and items in Minecraft?)

Maybe I'm starry eyed and delusional, and I'm sure it's a LONG, messy road to get wherever we're going with this.

> A very simple example is that it could partially solve the problem of verifying digital identities. If I follow/friend your NFT based identity, and various virtual realms (games, social media, virtual spaces) integrate with that 'identity' NFT for user accounts

You don't need Crypto Kitties for account verification. All you need is a cryptographic keypair, like the kind you already get by default in any Bitcoin wallet. Just sign a message proving you own a public key with the corresponding private key.

> Maybe I'm starry eyed and delusional, and I'm sure it's a LONG, messy road to get wherever we're going with this.

Evidently we’re going back in time to 2015, when “NFT” meant a blockchain representation of a digital trading card game. No one cared then, and no one cares now. The only thing new to the 2021 “NFT” narrative cycle is Twitter trying to monetize itself by selling tweets. Needless to say, none of the historical attempts at NFTs have ever resulted in lasting value to society, and probably this won’t either.

> A very simple example is that it could partially solve the problem of verifying digital identities.

It does not. In fact, it reduces to the public/private key system we already have for verifying digital identities.

I have zero way of proving that I am the owner or creator of an NFT without the private key used to sign the original transaction. Why bother with an NFT and the complexity of a wallet when I can just sign whatever you'd like me to sign and you can verify it with the same public key that verifies my identity claim?

NFTs add _nothing_ to the equation.

Thank you for your answer. Personally, as a gamer the idea of cross game microtransactions and collectibles does not interest me. Minecraft skins are free and easy to create, you can make yourself look like Mario if you want, or anything else. The idea of putting that on the blockchain instead seems dystopian. On top of that, I’m pretty sure that Nintendo would never want to do such a thing.

Ooohhh not the evil speculation. So scawwrry. Seriously though, everything in life is speculation. Do you have a job? That's speculation on return for your time. Do you own a house? That is speculation on property prices. Do you have a bank account? That is speculation on inflation. Everything is speculation unless you have a God's eye view of the world. Get over it.

> portable, digital identities and assets that transcend any specific virtual realm

Why not just have a government or trusted company sign things rather than an NFT? If the UN says "we will digitally sign digital passports", that seems strictly better than an NFT for identity. Without a central authority to verify identity, how do you solve the problem of a thousand people creating NFTs saying they're john doe living at location X? Don't you need someone to validate it, at which point you have a central authority?

Or is this for digital assets like "I own this git repository", which you can already do by signing it with your gpg key and then distributing it via ipfs or such?

> can't be arbitrarily erased by any central authority.

Sure they can be. If a government creates a law saying "anyone that processes NFTs must first put them through this list of NFTs to filter, must filter them out, etc, or go to prison", well, now NFTs are effectively erased.

>If a government creates a law saying "anyone that processes NFTs must first put them through this list of NFTs to filter, must filter them out, etc, or go to prison", well, now NFTs are effectively erased.

Just like how the government successfully erased the drug market by making drugs illegal.

Here I'm talking more about pseudonymous virtual identities that aren't necessarily publicly tied to meat world people. Digital passport for verification of physical world identity probably will be some government agency.

Boy would it suck if they 'accidentally' delete your digital identity and suddenly you can't participate in any social media. As more and more of our lives go virtual, this could legitimately become a prison like punishment and hopefully there's an arm of the justice system that manages that transparently.

You mean like getting your facebook profile banned?

As always, this always exists and the question is why Facebook would want to give up their centralized control of it, just like national central banks won't willingly accept loss of control over their own currencies.

NFTs do not exist outside of the blockchain, a central authority would not care in the least about the NFT, they would simply target the actual asset in the realm of their authority.

Really? The latest random string of numbers for a gazillion dollars isn't a wise long-run investment?... Look, I know this isn't very HN-ish, but the Pope is a dangerous Catholic, and the woods are full of dangerous shitting bears.

I agree that most NFTs will be mostly useless outside of certain conditions. Ie. If I want to play a blockchain-based game NFTs in that game will be valuable because my client and other player client to the game is forced to accept that toke legitimacy. But outside of the blockchain-world? What's the point of a NFTs? I guess this who care to brag that they overpaid for a png or mp3...

But I feel this post is another excuse to accuse cryptoassets of wasting energy. Up until 10 years of so ago detractors tried to tarnish cryptoassets reputations by associating it with traditional crime. Now they do it by trying to associate it with climate crime.

> ... detractors tried to tarnish cryptoassets reputations by associating it with traditional crime. Now they do it by trying to associate it with climate crime.

Help me understand, are you suggesting these aren't the case, or that they aren't legitimate concerns?

With ETH based NFT markets (which is the majority as far as I can tell) there seems to be a lot of sticker shock around ETH gas fees [1].

Fundamental transactions like minting new NFTs or buying/selling can be expensive depending on network conditions at the moment. It's not uncommon to see gas fees of $40-$60 to make a single NFT purchase [2].

[1] https://ethgasstation.info/

[2] https://coingeek.com/the-ridiculously-high-cost-of-gas-on-et...

It would be really awesome if there was a digital exchange that dealt in multi use media. I would love to be able to buy an album, image, movie, 3D model, etc directly from the creators and then own the rights to use for whatever their content license allows. And then I could then resell that content and the original content creator would get an originator fee from the transactions. Some new data formats may need to exist because I would like to share my media with my license and the content creators license/copywrite intact.

I think all of this will happen, it just takes time. Crypto is entering a more mainstream and useful phase right now, but it will take another 5 to 10 years for entrepreneurs to really make the future.

As many others here have pointed out, we stumble upon a fundamental issue with blockchains here. The thing that's inside the blockchain can be verified but as long as it points to something in the physical world or to be more precise, outside the chain, you have a weak link. People can ignore to respect the NFT, or simply choose to reject it. Tokens in themselves have no intrinsic value, unlike a painting, a commodity (like gold or even uranium). Of course, there is one exception to this; money. That's why bitcoin was a slightly better idea (but it suffers from different problems in my opinion). The ultimate conclusion for me at least is this one, ownership, art, justice (legal blockchains, smart contracts), these are all social problems and they cannot be solved with mere technology. Technology may help of course, but in the end I strongly believe that social problems require social solutions, not technical ones. For instance, consider bitcoin, with a 51% attack you could gain control over the chain, with PoS big stakers have control, this means you just traded the bankers of today with some other bankers. In the case of NFT, you could have a token that indicates you're the owner of a painting, but if that painting is stolen and sold by people who don't care about your NFT, what's the point? Stealing, in this case is a social problem, not a technological one.

I've seen articles in the news try to compare an NFT with signature of an artist. This feels like a romantic concept, which supports the idea of unique value.

If I start to think about NFTs as a receipt, some of the latest bit stories start to gain a new perspective.

Someone has a receipt for buying the first Twitter message for $2.5m dollars.

It feels like stupidity, because it's a clear case of the tail wagging the dog.

On the other hand, there's a hug amount of utility in the idea of a transactions (receipts) being stored on a blockchain.

Just a technical question about NFTs and physical ownership. Are NFTs just a cryptographic key that points to digital goods or do they somehow encode them? If the former then the image is "on the cloud" and therefore actually on someone else's physical network, and the key will only be able to access the goods as long as a third party keeps the encrypted goods on their network. Once money has been exchanged what is in it for the third party keep hosting?

The electricity argument is flawed. The electricity used is to power the ethereum proof of work blockchain. All its doing is checksumming hashes.

It doesn't matter if you buy 0, 1, or 100 NFTs: your marginal impact on the electricity usage is zero.

The argument of marginal gas fees is also going away in July, with the network upgrade no longer paying gas fees to miners but burning them instead.

Anything that is marketed as a collectable is not a good investment. The thing must have some other use, a use that causes some (hopefully most) of them to be damaged or destroyed. The one exception to this seems to be sports trading cards, because, as the article says, there are only so many rookies every year. And even fewer who become superstars.

> BUYERS of NFTs may be blind to the fact that there’s no limit on the supply. In the case of baseball cards, there are only so many rookies a year. In the case of art, there’s a limited number of famous paintings and a limited amount of shelf space at Sotheby’s. NFTs are going to be more like Kindle books and YouTube videos.

Well, this is just flat out wrong. You can mint limited editions. And there are unlimited worthless paintings in real life which do not affect .

The author got so swept up in the NFT craze, wanting to write a trendy blog post that rides the hype wave while pretending not to, that they didn't actually do their due research before trying to distill a topic and worse, paint a biased, negative portrait.

> Let’s walk away from this one.

Let's not write ill-researched analytical blog posts with a narrative in mind before getting familiar with the subject, and then try and convince others to stay behind so we aren't the only ones missing out.

What happens when someone actually starts going after IP rights on these things? I suspect that's when the "popping" starts.

3D-ified pokemon card, no way the creator licensed the trademarked character or the copyrighted text: https://app.rarible.com/token/0xd07dc4262bcdbf85190c01c996b4...

Knock-off CryptoPunk where someone just ran a filter on the original image (that someone else "owns"), and apparently sold it for 0.11 ETH: https://opensea.io/assets/0x495f947276749ce646f68ac8c2484200...

I’m curious as to how NFTs will compare to a sales contract from a legal point of view.

E.g. if say an artist sells the rights to a digital artwork via both an NFT and via a normal sales contract. Both buyers claim ownership to the artwork and end up in court.

Who wins? And what implications will a legal presedence have for the vaule of NFTs one way or the other?

If the artist sells the same exclusive right to two people, he's committing fraud and could do that without NFTs.

Yes, indeed. My question is if the NFT will be treated as a valid proof of ownership in a legal battle. I’m guessing it would hold some validity, but lose against a well-written sales contract.

You're either transferring ownership of the copyright or not. Hopefully that's clear when they're traded otherwise neither party will have any idea if they're getting completely ripped off or not. If it's not clear then you probably aren't. Though, some countries' copyright laws allow ownership to be transferred without being explicit about it through the (imo yucky) commissioned work exception.

What if the person who buys the art/NFT off the artist then sells the art to someone else but doesn't sell the NFT?

Why would owning the NFT give you any rights over the goods? If I've understood correctly, you just own a token. It has no inherent value by itself anf you basically own a link to something.

The NFTs are meant to prove ownership over digital items, aren’t they?

Not ownership as in «I am the only one who can share this GIF in Facebook», but as in «I own the copyright to this GIF».

No, not really. (without license terms saying so not even the former, but those can be a thing)

If so, then it would actually be legally and morally ok for the artist to do a «double sell» as I describe in my original comment. It would be like i.e. selling a signed copy of a book to one person (the NFT) and the underlying copyright (the sales contract) to another person.

Morally is complicated if they are not transparent about that from the start - the social expectations around this are not fully developed yet, but preventing the holder of the NFT from displaying the work (by selling an exclusive license to somebody else) would probably be seen as wrong.

If there's no legally binding contract attached that you won't do it, then it should be just fine to sell as many instances as you want, no? In the absence of a contract you're just buying a unique tag, not the work itself.

Seemed like a good start to an argument. I don't see the blockchain power use as a consequential issue for NFTs. From what i understand its just a concept that can exist on any blockchain based system. Also, the vicious cycle he refers to would apply to a small niche of the digital market. The race to put out content is real in any new market. I hope this becomes a sustainable way for artist to make a living. At this point it seems open ended in where this lead to. I can imagine NFT's being a thing in games like Destiny, Warframe, etc(whatever genera bucket fits) where devs can release unique assets. I wonder what an NFT from 2021 will mean in 2121. Is this a fad or the beginning of new paradigms? Will that peice of digital art exist 100yrs from now or even be verifiable?

Independent film/animation/interactive studio here-

NFT's are a cool new space we are very excited about experimenting in. I usually like Seth Godin's stuff but that blog post feels like an old rich man yelling at a cloud that exists in a dimension he doesn't understand.

Doesn't he know all the NFT stuff is going on in Ethereum which is transitioning to POS which mitigates the whole "crypto mining is the death star stealing all the earths electricity and killing baby animals" narrative?

If you want to yell at the electricity cloud then yell at Bitcoin, though we are using that to pay a composer in Venezuela for our new film and produce a novelist in Brazil so Bitcoin is cool too :0

>Doesn't he know all the NFT stuff is going on in Ethereum which is transitioning to POS

Ethereum has been "transitioning" to POS for years and it is still using POW. It reminds me a bit of nuclear fusion that is always "30 years away".

This is on the assumption that the original buyers are only buying to make a profit.

What if NFTs are simply patreon for whales? In that context I think they're a great idea, allowing people with plenty of spare money to support creators they love while having a token they can use to show how big of a fan they are.

In response to energy use: what powered these networks before decentralization? Many humans all over the world, expending energy to distribute these goods and ensure they are legitimate. This wasn't free energy, these people could have spent their time on other things. It's simply more visible and calculatable now that computers are doing that work.

I was disappointed to see many of the artists I follow on social media filling my timeline with talk of 'crypto art' and NFTs. I understand that art is hard to monetize, especially when original designs can be stolen and reproduced by some anonymous faker.

But digital-only art is already expensive, and adding this NFT stuff on top of it feels pointless. Who but the artist thinks this adds an element of unique-ness to the product? Nobody will be buying crypto kitties at Sotheby's to impress their friends at their abode in the Hamptons. And impressing others with your taste is half the point when it comes to collecting expensive stuff.

> The more time and passion that creators devote to chasing the NFT, the more time they’ll spend trying to create the appearance of scarcity and hustling people to believe that the tokens will go up in value. They’ll become promoters of digital tokens more than they are creators.

This has always been an issue with art. Artists can be promoters of their art to support their livelihood (“sell out”). I do not think that stops making people creators.

And a small nit: > Unlike some stocks, it doesn’t pay dividends or come with any other rights.

Many NFTs pay a cut of future sales back to the creator. For that reason, I think of NFTs more like a stock than a claim of uniqueness.

I can see use cases for this in the future applying to real world items to prove authenticity such as unique cars, expensive shoes, pet ownership, antiques and plots of land.

Digital artwork seems to be an easy go to item at this infancy stage of NFTs.

All worth is in the eyes of the parties to a transaction. Sometimes you can take comfort that there is a cohort with similar thoughts. You probably got your starting thoughts from that cohort. But caveat emptor, that expensive house might go down in value as the crime rate rises in the neighborhood, and maybe your “investment” in fine china and antiques disappears because lifestyles and interests change. A NFT for ownership of Woody Allen’s Sleeper would probably be worth less now than its peak value.

Meanwhile, a big (or the main) point of the art was the environmental impact. That part seems really pertinent to keep in mind.

>NFTs are going to be more like Kindle books and YouTube videos. The vast majority are going to have ten views, not a billion. It’s an unregulated, non-transparent hustle with ‘bubble’ written all over it.

Some people will called Seth have no clue about technology or don't know what's he talking about, blah blah, but I think this is more about human psychology & behavior(also, greed) than technology, like any speculation game. History will repeat itself regardless of technology.

My opinion about 'current' use of NFTs: what a useless way to use our world's power. But who am I to judge...

I've been reading a lot of pro-NFT opinions recently. This is a nice counter.

If non-fungibility is just a constraint of current technology protocols, and these protocols could be extended in time to allow exchange of larger swathes of tokens of different degrees of dissimilarity then the only things stopping this at the moment would seem to be demand - is that right? I.e. if Joe owned a uniquely verifiable, exchangeable and trackable piece of code, and so did Mary, then both of these codes could be pooled on the same market no matter how they differed within the constraints allowed by the protocols for verification, exchange and tracking?

The world is full of dangerous value traps: money, status, likes, power, attention, etc. where the trap seems like a good idea to encourage something important but has a dark side which destroys it instead.

Yeah, but this one lets you post variations on "bitcoin = global warming", a meme which achieves transcranial stimulation of HN's pleasure center.

An interesting (paraphrased) perspective from someone who bought one of Beeple’s $999 pieces and watched the value go up above $80k:

“I’m in an interesting bind. On one hand I can prove ownership to Beeple and claim my physical piece, but on the other hand, I could keep what is essentially the ultimate unopened package.”

I feel like Beeple might lose out on storage fees, but this is a stunning perspective. What if someone could buy a 20 year-old token that allows them to have the piece delivered direct from the artist’s house where it’s been untouched the whole time?

It is all about creating Veblin Goods [1] - where the price paid, and the obviousness of the price paid, is a key part of the asset, and have very different supply-demand-price curves.

Also, not far from Greater Fool theory of investing, which always ends well, ...ha...

[1] https://www.investopedia.com/terms/v/veblen-good.asp

I agree with the author’s premise but find the crypto argument at the end weak at best and misleading at worst. I don’t see how NFTs will ever be responsible for any remotely significant slice of the raw energy usage of the blockchain they might be implemented atop. Or, if you implemented a blockchain solely for an NFT, how it would ever get to a scale of energy consumption that is prohibitive or wasteful.

People looking at NFTs as beanie babies or mona lisas are severely missing the point.

The vast majority of high value art transactions are ALSO tax/asset management activities. The prices are only loosely coupled with the art, and are primarily derived from the scarcity AND the fact that someone else paid $x in the past.

The fact that you purchase these with cryptocurrency should highlight the use case.

I founded a blockchain project dedicated entirely to NFTs. This is clearly a bubble. There may be some long term value in these NFTs long in the future simply because they will be some of the first NFTs ever made and NFTs will eventually possibly be extremely commonplace (offchain in-game items in MMOs, etc.), but IMO it would be prudent to just stay far, far, far away.

Don't forget that this is just a social construct. Without anything tangeable (physical) we just have to agree that a NFT is unique / original.

Compare it with paper notes, they are worthless but sociaty gives it value. If we all agree paper notes are worthless it is worthless.

I can see easily how this becomes worthless in a couple of years when the bubble bursts and the hype is over

When an article rants about the high electricity use of NFTs without acknowledging that some projects are on PoS and more are moving to it they are clearly just trying to present it in the worst light.

Even worse here as he mentions NBA Topshots which is on Flow, PoS and likely uses up less electricity than his blog.

NFTs applied to media just feels like a really rubbish version of CDs, tapes, vinyl, DVDs, and trading cards.

The whole thing has a large "bragging" part to it for now. Public auctions, showing how much you've paid (on the site I saw about NFT's) This is also true in the physical art-world, you display it on your wall, show it off to your friends etc, hang it in a gallery.

I know there are some cryptocoins that actually do _useful_ calculations.

Maybe we should all strive for some kind of open standard with which every interested party can get their calculations calculated as the proof of work (e.g. cancer detection, seti, dna-analyses, ai-training, ..).

this severely underestimates their value. the baseball card analogy is good. there’s only a few that become valuable. the top shots nfts are good example, only some replays from the last 10 years are ones people care about. and those will retain value

So much FUD. If the author tokenizes their blog posts they may come to find out they cannot sell them for much whereas Jack's first tweet tokenized is definitely worth something to people.

Digital collectibles can be transacted much more easily that trying to sell your old baseball cards (store, list, ship, etc).

ETH is moving to PoS and FLOW (which is used for NBA Top Shots) uses PoS. The energy complaint is short sighted.

Check out eulerbeats.com for a model that allows owners of originals to generate income and owners of prints to easy recoup 90% of their cost (all built into the smart contract).

If I could buy an NFT of my favorite YouTuber's piano video, I would do it in a heartbeat. It would support them directly and allow me as a fan to 'own' something valuable to me (proof of that support).

Yes, there will be many who lose money and like anything else, we build up a lot of hype for something new, but it is early days and there is so much potential.

Since many still use RSS and since this post on Seth's Blog is so popular, thought I would point out that the blog has an RSS feed: https://seths.blog/rss

Are NFTs actually decentralized? I heard they run on the ethereum network, but not too sure if thats universal. Also, what happens if someone starts uploading illegal content? Is there a method for deletion once an NFT is 'minted'?

Ethereum is the most common, but not the only blockchain people build NFTs on.

As far as I understand, for space reasons they usually do not put the actual content on the chain, but a pointer to it (e.g. a hash that can be looked up on IPFS).

AFAIK other blockchain things solve the illegal content problem by having lists of content they'll not show and that appears to have been enough for now. (e.g. there's been various blockchain-based social media projects that had the same question long ago)

Why not batch these with a hash to a list of hashes? Is it that one extra level of indirection makes it too hard to explain to friends and newcomer investors what you own?

> They use an astonishing amount of electricity to create and trade. Together, they are already using more than is consumed by some states in the US. Imagine building a giant new power plant just to make Christie’s or the Basel Art Fair function. And the amount of power wasted will go up commensurate with their popularity and value. And keep going up. The details are here. The short version is that for the foreseeable future, the method that’s used to verify the blockchain and to create new digital coins is deliberately energy-intensive and inefficient. That’s on purpose. And as they get more valuable, the energy used will go up, not down.

Binance Smart Chain has many NFTs and doesn't use Proof of Work. Ethereum is migrating to Proof of Stake soon and will eliminate the power waste argument. If he wanted to attack NFTs he should have used a better argument.

Weird that multiple people downvoted this.

Mining wastes power on purpose. Transactions don't waste power on purpose, and there are designs that make them minimally expensive.

"Don't worry, we'll be on PoS soon!" is what the crypto space has been saying for years, and as far as I can tell right now the majority of NFTs are done on PoW chains, and still people doing them trumpet "but soon!!" instead of putting their money where their mouth is and actually using a PoS setup today. As mentioned elsewhere, some actually do, props for that, but the overall impression of the crypto space is that they're completely fine with deflecting to some point in the future, and then they shouldn't be surprised if people judge what's actually done and not what's possible and are a bit tired of that argument.

Even without proof of stake, it's possible to make transactions low-cost.

Bitcoin is going to burn power whether or not you attach your token-tracker to it. If you design a system with thousands to millions of users that makes one bitcoin transaction per day to secure itself, then it's responsible for a pretty negligible amount of wasted power.

> Even without proof of stake, it's possible to make transactions low-cost.

only at the cost of reversibility.

the central thesis of proof of work is that an attacker must expend more energy than the "main" chain, across the duration of time they want to be able to reverse a transaction (older transactions require more time).

The amount of energy expended is determined by mining rewards - over time, mining profit will converge to zero, miners will expend however much energy the mining rewards buy.

as such - any reduction in energy expenditure (i.e. a reduction in mining rewards) will lead to a reduction in security, making it easier to reverse transactions.

That's a perfectly fine analysis for a standalone network, but that's not what you'd want to use.

If you tie into bitcoin or ethereum once per day, you get the full security while only being responsible for about a millionth of the power use.

That means your NFT trades will only be 100% locked in once a day instead of continuously, but that's plenty.

It is odd, I've been involved in the cryptocurrency scene from the beginning, and I've seen the whole "Bitcoin kills Mother Gaia" talking point pop up every couple of years - but I've never seen such prolonged parroting as this last cycle. It is a silly complaint, because it never considers the wastefulness of the status quo. But it is an interesting method of attack, trying to conceal the fact that it is a call for others to act against their own interests, while also tickling their envy. It could be a dangerous gambit though, while most people can't see far enough ahead to realize that global carbon caps effectively freeze the international market's structure, they can see when somebody is ham-fistedly screwing with their money.

That’s a dead easy argument to debunk. If each visa payment used 600kWh like a Bitcoin transaction visa alone would consume 3x as much power as the entire world generates and produce 100% of the worlds ewaste. So no, the status quo is orders of magnitude more efficient on a unit basis by definition.

Bitcoin's transaction throughput is independent of its energy consumption. If its block size limit was raised to allow Visa-scale transaction throughput, its per transaction energy cost would be 1/1000ths what it is now.

Bitcoin Cash forks Bitcoin to provide a block size limit that allows these kinds of throughput levels, while Ethereum enables both sophisticated transaction compression methods and layer 2 models, that can achieve Visa-scale throughput without raising layer 1 block sizes.

So attacking the cryptocurrency concept based on Bitcoin's peculiar shortcomings is misguided.

When you blow up the transaction limit you physically centralize the verification process. This is why you'd see miners gamble with sitting on a solved block and secretly beginning the next search, with a few seconds of head start, before announcing to the network, or skipping the inclusion of any transactions: because fractions of a second make a big difference. Bigger blocks propagate more slowly, and magnify the advantage of employing those kinds of undesirable behaviors. This is why HFT boxes end up as physically close to Wall Street as possible. This is also why bcash got so much early support from Chinese miners.

> When you blow up the transaction limit you physically centralize the verification process.

What numbers are you basing that on? Bitcoin is 1.5KB/s. A $10 vps is 80,000 times faster than that.

> because fractions of a second make a big difference

No they don't. The examples you are talking about are rare and have very little impact. If the entire network makes blocks once every 10 minutes on average, each miner finds blocks much less frequently.

> Bigger blocks propagate more slowly, and magnify the advantage of employing those kinds of undesirable behaviors. This is why HFT boxes end up as physically close to Wall Street as possible.

Where are your numbers here? How long do you think it takes to send around 900KB ?

A single twitch stream will propagate more than that around the world every second to thousands of individuals. Cryptocurrency only has to send the same tiny amount of data every few minutes to miners.

High frequency traders trying to be physically closer to a connection are operating on the scale of single micro seconds. You are comparing that to something 600 MILLION times slower.

> What numbers are you basing that on? Bitcoin is 1.5KB/s.

You know you can't verify an incomplete block, right? If you think you can just plow ahead after getting the first packet... you are going to have a really bad day once the other miners notice that you can be fooled into wasting hash power on bogus headers. You know that blocks get announced by the miners after they solve the hash, in chunks that can be up to the max blocksize, right? For Bitcoin that is 1MB, for bcash it is 32MB. Imagine if NASDAQ offered two levels of service: one that put the FIX protocol behind a 1MB buffer, and the other behind a 32MB buffer - which one would be disadvantaged? Anyone sitting at the 32MB buffer would be getting their lunch eaten. This is about as fundamental as it gets, so you might want to do some reading - because you've clearly got a big blindspot.

> No they don't. The examples you are talking about are rare and have very little impact.

If you are talking about bitcoin, you are very wrong - it is a thoroughly documented occurrence, it even has a name: the selfish miner strategy. If you are talking about bcash, I dunno one way or the other - I don't pay much attention to the joke coins. https://doi.org/10.1109/ICBC48266.2020.9169436

> How long do you think it takes to send around 900KB ?

Again, you need to actually do some reading on how mining works and what the network propagation characteristics are. I really don't want to have this come off as meanspirited, but it needs to be said: you obviously thought you knew how things worked, and you obviously don't - I wonder how many people you've misinformed.

> you are going to have a really bad day once the other miners notice that you can be fooled into wasting hash power on bogus headers.

What are you even talking about here? 900KB takes a fraction of a second to transfer on a modest internet connection, any miner with $10 a month for a VPS can transfer that is a millisecond. No one said anything about downloading fractions of blocks, you hallucinated that.

> Anyone sitting at the 32MB buffer would be getting their lunch eaten. This is about as fundamental as it gets, so you might want to do some reading - because you've clearly got a big blindspot.

What is it that you think is even happening? Blocks get sent out. One has 32x the transaction throughput. Why do you think 32MB or more would be anything other than trivial to send and receive? Any miner can send and receive that in a second.

> I don't pay much attention to the joke coins.

Bitcoin cash already has more sustained transactions than bitcoin. Maybe you should reach beyond the propaganda of /r/bitcoin

> it even has a name: the selfish miner strategy.

Miners that do that take the risk that someone else will propagate a block before them since they didn't share the previous block they found. Empty blocks have much more of an impact on bitcoin because the throughput is so constrained. Empty blocks do not have much of an impact on the usability of bitcoin cash because it has plenty of throughput. A miner maliciously mining empty blocks on bitcoin will also leave a lot of money on the table because they won't get transaction fees.

> you obviously thought you knew how things worked, and you obviously don't

Everything you said is either completely made up or an exaggeration of some minor effect. In your last message you compared something with a 10 minute window to millionths of a second. For some reason you ignored this and ignored the actual numbers of modern bandwidth. You keep using hyperbole but won't quantify anything because the numbers don't add up.

> What are you even talking about here? 900KB takes a fraction of a second to transfer on a modest internet connection...

You are assuming that there are no bad actors in the network who might not want to transfer a block in a fraction of a second, and don't have to because they control the packet rate. Also you seem really hung up on this 900KB figure, you've repeated it in 8 recent posts. You know bitcoin's 30 day average block size has been above 900KB since 2018-10-24? But why would you harp on bitcoin's block size when you are advocating for a max block size that could accommodate all of Visa's transactions? Is is because you know that a 300MB+ block guarantees the death of decentralization and you'd look ridiculous pretending otherwise? To quote you before you presumably exchanged your BTC to double down on your bcash airdrop:

"Once again, whatever people's views on bitcoin at least realize that mining hashes don't dictate how many transactions can be processed by a miner. They mine a block, then they include as many transactions as they think they can get away with and keep the latency low enough to propagate."

2016 -- https://news.ycombinator.com/item?id=11689765

> ...a VPS can transfer that is a millisecond.

Ah yes, that has worked out great for several exchanges and various other cryptocurrency related services. The cloud has been great, fill it with all the things.

> No one said anything about downloading fractions of blocks, you hallucinated that.

You don't seem to understand how packet switched networks function either. Go lookup "MTU", I look forward to hearing how even the most modest internet connection enjoys IPV6 with a 300MB jumboframe policy spanning the entire network path!

> Why do you think 32MB or more would be anything other than trivial to send and receive? Any miner can send and receive that in a second.

Except for everyone transiting a sub 256mb peering point... so alot of people: https://www.peeringdb.com/advanced_search?info_traffic__in=0...

It isn't that it'd take them 10 minutes to download the entire block... it is that they are at a 0.92 second disadvantage to their competition - this drives the physical centralization.

> Bitcoin cash already has more sustained transactions than bitcoin. Maybe you should reach beyond the propaganda of /r/bitcoin

lol, the salty salty tears.

> Miners that do that take the risk that someone else will propagate a block before them since they didn't share the previous block they found.

And yet they do it, because it has been mathematically demonstrated to be a winning strategy - even before block bloat induced propagation delay. The rest of the statement is simply nonsensical.

> In your last message you compared something with a 10 minute window to millionths of a second. For some reason you ignored this and ignored the actual numbers of modern bandwidth. You keep using hyperbole but won't quantify anything because the numbers don't add up.

Yeah, you clearly don't understand the comically simple idea that a consistent head start on your competitors guarantees eventual domination. The 10 minute window is completely immaterial to the point. If you can consistently verify the newest announced block 1 second before every other miner - then your average solve rate is guaranteed to be 1 second faster than their average solve rate.

> You are assuming that there are no bad actors in the network who might not want to transfer a block in a fraction of a second,

No, you are assuming that it matters if people try this. Who cares if someone sends slow? No one waits for them. They send a block slow, someone else mines the block and sends it out fast. You have hallucinated this attack, it doesn't happen. Show me evidence of this having any effect if you can.

> bitcoin's 30 day average block size has been above 900KB since 2018-10-24

This is not true. 900KB is where the MAX size of the blocks. The average is much lower from variance. This is not difficult to see:

https://bitinfocharts.com/comparison/size-btc.html#3y

> But why would you harp on bitcoin's block size when you are advocating for a max block size that could accommodate all of Visa's transactions?

Where did I say any of that? All I've done is point out that the things you say have no evidence and don't even make sense.

> Ah yes, that has worked out great for several exchanges and various other cryptocurrency related services. The cloud has been great, fill it with all the things.

This is just vapid sarcasm. There are no problems with exchanges. If you have evidence, show it.

> You don't seem to understand how packet switched networks function either. Go lookup "MTU", I look forward to hearing how even the most modest internet connection enjoys IPV6 with a 300MB jumboframe policy spanning the entire network path!

Focus please, confront the topic at hand, stop with irrelevant nonsense.

> It isn't that it'd take them 10 minutes to download the entire block... it is that they are at a 0.92 second disadvantage to their competition - this drives the physical centralization.

Show evidence that this happens and is a problem to anyone.

> lol, the salty salty tears.

This is not evidence of anything. Ethereum and bitcoin cash do have more transactions going through them than bitcoin. I will show you the actual information:

https://bitinfocharts.com/comparison/transactions-btc-eth-bc...

> And yet they do it, because it has been mathematically demonstrated to be a winning strategy - even before block bloat induced propagation delay. The rest of the statement is simply nonsensical.

It isn't a winning strategy, it is a mild attack that accomplishes very little and loses money from not including transactions. Bitcoin cash does not have capacity problems so people don't even notice. Sitting on blocks accomplishes very little since the rest of the network is more likely to out mine you as time goes on.

> If you can consistently verify the newest announced block 1 second before every other miner - then your average solve rate is guaranteed to be 1 second faster than their average solve rate.

The time it takes to verify a block is trivial. If it was so important, why aren't all the blocks empty?

>>When you blow up the transaction limit you physically centralize the verification process.

You could 500X the transaction throughput and running a full node would only require a 25 Mbps internet connection.

>>Bigger blocks propagate more slowly, and magnify the advantage of employing those kinds of undesirable behaviors.

Miners do not propagate blocks all at once. They use propagation protocols like compact blocks to only propagate the transactions not already in other nodes' mempools: https://ieeexplore.ieee.org/abstract/document/8922597

The transactions fill the mempool over the course of the entire on average 10 minute duration between blocks, meaning that by the time a block is discovered, other nodes already have almost all of the transactions in that block.

The 'validation free mining until the new block is fully propagated and validated' strategy further mitigates the competitive disadvantage miners face when receiving large blocks from other miners.

All-in-all, centralization concerns do not justify preventing Bitcoin blocks from growing to meet market demand up until they reach at least 500 MB (ie. 3.3 MB/s of transaction throughput). The current 1 MB - or 1.6 MB assuming full SegWit adoption - limit, which only allows for 2 KB/s of transaction throughput, is absurdly inadequate, and makes Bitcoin's current energy consumption absurdly wasteful.

You are overlooking the disadvantage of not verifying the prior hash, which you can't do until you can verify hashMerkleRoot, which you can't do until you have collected the entire block. If you skip verification, you open yourself up to bad actors feeding you a bogus header - and you only figure that out after being drip fed a bunch of transactions that don't match the merkle root. Erasure coding doesn't fix that. In any case, proponents of the 'cram everything in the public ledger' method have already advocated 128MB and even completely uncapped block sizes... so the outcome is predictable.

Take a hint from every successful network that has ever networked since ever: hierarchy, extensibility, etc. Demanding that it all be crammed into a homogenous block is so obviously doomed to fail that you should be suspicious of the proponents' motives.

> being drip fed a bunch of transactions

Where are you getting ideas like this? How fast do you think internet connections are?

Only in the context of bitcoin do people start thinking 250 byte transactions are somehow difficult to send over gigabit connections. The average bitcoin block is 900 -kilobytes- at most at 10 minutes on average.

How is it that people have absorbed propaganda that makes them actually think that causes anyone a problem? blizzard.com is 13MB, gfycat.com is 29MB. Who are these miners that are struggling to send out 900KB ?

> Where are you getting ideas like this? How fast do you think internet connections are?

As fast as the packet source wants? The only way to defend against a slowloris DoS is by accounting for it at the application layer, which is both unusual and difficult - as DoS attacks are usually handled at the transport layer. In this case that could mean applying a deadline for the block announcement in its entirety - which means mandating a minimum connection speed, and classifying every connection that dips below that as an attack... so you better have a good SLA with your upstream network. Well, that is no problem for centralized operations... Guess what happens to cryptocurrencies that adopt massive 128MB+ blocks in order to increase their transaction throughput - they become incredibly fragile as the slightest amount of packet loss starts waves of peer bans.

> Who are these miners that are struggling to send out 900KB ?

Anyone who wants to handicap a competing pool by forcing them to either wait for the complete false block, or waste time hashing on a fake block header.

When are you going to admit that you haven't thought this through?

Now you are trying to say that for after 11 years, miners will for some reason sit and wait for someone that isn't sending them a block fast enough and that other miners will attack people like that.

No one is waiting. If someone tries to send out a block slowly, someone else mines that block and sends it out fast. This is not difficult to understand.

It's amazing all the made up nonsense you've thrown out to try to predict a future that has already come and gone. Why are you so desperate to prove something so ridiculous? What you are talking about doesn't happen at all at any throughput on any cryptocurrency.

Check the reference client buglist, they got hit with a slowloris resource exhaustion combo. They fixed the resource exhaustion (kind of), they did not address the slowloris vulnerability. So again, you have no idea what you're talking about. Doubly so if you didn't write the backend of a major mining pool - because you're just running your mouth about code you haven't seen otherwise.

Are you actually saying that a bug in bitcoin is a reason that no cryptocurrency can scale to many times more transaction throughput? Why do ethereum and bitcoin cash work so well?

Did you write the backend of a mining pool and build in a bug where you wait for a block to be sent slowly? That's a pretty crazy mistake to just wait on a single connection.

>>If you skip verification, you open yourself up to bad actors feeding you a bogus header - and you only figure that out after being drip fed a bunch of transactions that don't match the merkle root.

Malicious actors can't give a bogus header, because you can verify the bogus header doesn't have enough PoW. If the malicious actor does produce sufficient PoW for their bogus header, they are foregoing massive block rewards to fool your node for a few seconds. That's why this kind of malicious activity doesn't happen, and why miners do validation free mining on a new header until they've verified the whole block.

> Malicious actors can't give a bogus header, because you can verify the bogus header doesn't have enough PoW.

Ok, I guess you don't know how verification works. Here are the 19 steps: https://en.bitcoin.it/wiki/Protocol_rules#.22block.22_messag...

    Step 4) "Block hash must satisfy claimed nBits proof of work"

The bad actor has full control of that, he just has to make sure the fake header has enough leading 0s in phony header nBits, the function that checks this is CheckProofOfWork() at https://github.com/bitcoin/bitcoin/blob/master/src/pow.cpp#L...

    Step 10) "Verify Merkle hash"

Well gee-wiz, how are we going to do that without having all the transaction in the block that the phony header hashMerkleRoot represents? GetHash() at https://github.com/bitcoin/bitcoin/blob/master/src/primitive...

What kind of a response is this? They said anyone can verify the proof of work and you are saying they can verify the proof of work. Where is the contradiction?

Verifying blocks is trivial. You aren't still saying that needing to receive 900KB is a big deal are you?

You seem to be acting like there is some sort of prediction that there will be a problem. Ethereum already produces blocks every 13 seconds at three times bitcoin's throughput.

> Where is the contradiction?

I said that you can't verify the header until you have downloaded the entire block - meaning the time between a false header being submitted and the last transaction in the block being downloaded is time the miner either abandons its work on the last real block and then sits idle or risks hashing a new block prior to verifying the false header. He implied that you can somehow verify using the PoW. I demonstrate that you cannot. I'm not sure how you could have missed it.

No, he said that blocks are verified to have enough proof of work put into them. You were confused.

That doesn't adrress my point at all. You can verify the requisite proof of work was done just by hashing the data in the block header to see if it meets the difficulty requirement.

The malicious actor cannot fake that. They have to produce massive amounts of proof of work to find a value in the nonce data field in the block header that results in that hash meeting the required difficulty, and even if the malicious actor delays transmitting the whole block, they cannot delay transmitting the block header, or other nodes will not even bother trying to extend their block.

So all miners can immediately verify if the block headers they are receiving have the required PoW behind them, and it would be very costly for a malicious actor to generate fake block headers with enough PoW to be accepted, while giving the malicious actor very little advantage in an attack, meaning it would be a completely impractical and ineffective way to attack way to attack Bitcoin.

I've never seen such prolonged parroting as this last cycle.

The scale of the thing is getting out of hand. Cryptocurrency mining is eating up power on the scale of a small country, a sizable fraction of GPU manufacturing capacity, and a noticeable fraction of wafer fab capacity.

This has some parallels in how Spain went broke mining gold in the Americas in the 1500s. Expeditions went to the New World and gold came back. They were rich! Well, no. They had only created inflation by creating a gold glut. At a much higher operating cost than printing money, too, because it took ships and armies to make this happen.

I've never seen an estimate that withstood any kind of scrutiny. I've seen estimates based on both fundamental misunderstanding of the function of mining, and wild assumptions regarding miner behavior and out of date asic specs. Have you bothered fact checking any of those claims you just made? I mean actually reading the papers they cite, and learning the methodology they used. Because while you're thinking about conquistas, I'm thinking about the field of cybernetics in the 70's, and how it killed itself dead with ridiculously flawed methodology for modeling population growth - as the Davos types all nodded in agreement.

"Give me a one-handed Economist. All my economists say 'on the one hand...', then 'but on the other..."

-- Harry Truman

Oh and it gets better: known bad data is still repeated, despite the poster being told why it was bad data - over a year ago. Pointing this out results in flagging, for reasons that have nothing to do with ego or narrative continuity... surely.

Somehow I feel like the message of this article is:

cryptocurrency is bad

and nfts are double bad because artists are the ones making a lot of money off of the absurdity of cryptocurrency instead of blockchain fanciers

maybe I'm just sleepy and cranky

"A fool and his money are soon parted"... This is a great way to part the early, non-sophisticated but luckily wealthy bitcoiner and ETH-holders from their rapid and "easily" won windfall.

Should be interesting as soon as Tikectmaster or something offers NFTs to boost sales but with the explicit written agreement that NFTs are non-transferable and any transfer history voids the ticket.

You can't trade them? Then how would you capture gains? I thought they were an investment

"And unlike actual works of art, NFTs aren’t usually aesthetically beautiful on their own [...]"

How blatantly gate-keeping can a single individual (that is not aesthetically beautiful on their own) be?

I remember growing up and seeing a very active “Warez” scene online, with cracks being distributed of all sorts of licensed software. Companies have since tried to make the programs “phone home” in order to check the licensec or turn them into SAAS to get revenue, but that is anathema to decentralized assets.

I haven’t looked too deeply into NFTs but it seems clear to me that:

1) NFTs are not for read access, but rather write access to a certain thing. Think Earth2 or MillionDollarHomePage or buying a domain name or some other namespace.

2) Ethereum and blockchains are entirely overkill for NFTs, because they are designed for arbitrary balances. If you want NFTs you can just have non divisible files that are collectively managed on MaidSAFE or something like that.

I hate to be a complainer, but where is the definition of NFT in this article? I was taught in university to expand acronyms the first time I used them. Is this not common practice?

Don't just blindly do what you're taught. There are reasons for expanding acronyms and reasons for not. In this case, I'd say that if someone doesn't know what an NFT is, the article will be meaningless because it also lacks a long "background" section teaching the reader what they are. So maybe you're not the intended audience or it's more effective to let you Google it yourself if you don't know.

Two misconceptions in this article:

1) proof of work is not the only way to do blockchains. You can do NFTs on e.g. Stellar or soon on Ethereum 2.0 and it would make sense to do that as it would be cheap to transact. That is in fact the main motivation to create ethereum 2.0: transacting needs to become cheaper. Some companies seem to have some success tokenizing e.g. supply chains, energy markets, art ownership changes, etc. The resulting tokens are typically not intended for speculative trading. Proof of stake solutions are optimal for this since making money of the transactions is not a goal here typically.

2) supply can actually be constrained quite easily. E.g. on Stellar you would issue a limited supply of whatever token from an issuing account (stellar tokens are identified by their issuing account) and then lock that account forever by increasing the account thresholds to be higher than the weight of the account signers (stellar supports multi sig accounts). That effectively is the last transaction that can ever happen on that account. No more tokens can be issued from then on. On ethereum, you'd be able to do something similar with smart contracts. I use stellar as an example, because I've used it to create a token. Creating tokens on Stellar is super easy and requires no programming. An NFT is basically a token with a supply of 1.

NFTs make sense in any kind of scenario where a group of stakeholders wants to agree on who owns what without relying on a trusted third party like a bank or government agency. If it's cheap and easy to use them; why not use them?

You can get your own stellar account by putting in enough xlm to cover the base fees. About 5 XLM should be enough to create a handful of accounts + trustlines that you would neeed to create your own token. Stellar laboratory provides you all the tools to do this if you want to practice this on their testnet: https://laboratory.stellar.org/#account-creator?network=test. You click your own token together in a few minutes. Simply switch to the mainnet to do it for real. If you are serious about this, the legal work is going to be most of the effort.

Can the owner of the nft of a digital art start to sell printed copies in the real world and profit? Or other words, have the commercial rights to it?

What people don't realize, is that we already have fantastic alternatives to Ethereum for low-energy, world-class decentralized networks with built in NFTs. My favorite is avalanche. This is all so new, but we CAN have a future that is feature-rich, fast, cheap, decentralized, and good for the environment.

https://docs.avax.network/build/tutorials/smart-digital-asse...

I feel like in these conversations about crypto that people use the following terms somewhat interchangeably:

- Coin

- Token

- NFT

- Transaction

- Smart contract

Is there some place with a concise definition of each of these terms?

linked in the article: cryptoart.wtf

Just insane... what a completely indefensible ecological cost for such a trivial and absurd use.

NFTs are the perfect fraud for the moment, and will be controversial right to until they are worthless.

Has someone made a meta-NFT yet? I want to be able to buy an NFT representing another NFT transaction.

Aren't the costs associated with creating NFTs included in their price? Who pays to create them?

The NBA is selling rare pepes now? Yeah that's a pretty clear sign of a bubble about to burst.

So the gist is NFTs allow contracts to be traded on a secondary market?

So what’s an NFT? - 12 paragraphs down in the article... ¯\_(ツ)_/¯

NFTs aren’t much different than merchandise artists and musicians sell. Tshirts, buttons, plastic figurines, stickers, etc.

The environmental critique rings hollow. Our economy revolves around this unnecessary consumerism. Why single out NFTs? Seems like sour grapes to me.

> The environmental critique rings hollow. Our economy revolves around this unnecessary consumerism

It is only proof of work which needs to be more wasteful the more efficient things become.

If it turns out t-shirts are polluting massively, and someone finds out that by replacing one chemical with another they pollute much less, then people will do that.

If a more efficient machine comes out for making a t-shirt, t-shirts will become cheaper to make.

Proof of work chains can't take advantage of any improvements. They waste X amount of money in electricity intentionally. If computers get faster, they need more computers. If electricity gets cheaper, they need to burn more electricity to have similar security (make the cost of a 51% attack the same again).

Any time computers get significantly better, old hardware has to be thrown out in favor of the new fancier hardware, or else other miners outcompete you.

Whether it’s a waste of electricity is a matter of opinion. You may think it’s a waste of time and energy, others do not.

Electricity generation can come from non-polluting renewable resources (the sun, the water, the wind, etc.)

Can but doesn’t, and of course there’s a ton of generating capacity that would need to be replaced with green power first. Let’s operate in the reality domain.

Wasting electricity may share a good feature with wasting water or wasting internet bandwidth. It's troublesome in the short term but it leads to increased capacity being made to meet demand which benefits everyone in the longer term.

The author didn't present the case for "danger"

What happens when the network supporting an NFT goes away?

The fact we’re so far into crypto and NFTs that this famous bloggers take is “it’s bad for the environment” should be the signal he’s past giving relevant takes.

This would have been the take to have in the first months of Bitcoin.

A boomer can’t comprehend the actions of the generation where house prices rocketed and their salaries stayed the same. They’re going to do whatever it takes to build wealth and gambles like crypto, gamestop, nft are now the norm, anyone over 30 today realizes building savings and living within your means is now a waste of time as they still struggle to afford houses.

When it comes down to it “but the environment...” isn’t going to put anyone off, the environmental impact of AirPods never put anyone off the convenience of no cable so why would this?

This meme that living within your means and saving isn’t effective is ... dangerous.

It’s pretty always better to do so.

Saying ‘yeah but if I do that, I still won’t be able to afford x purchase’ easily becomes a justification for being in debt, which just doesn’t help.

Even if we don’t live in a meritocracy, behaving as if we do and assuming you can increase your merit, is an effective strategy.

Only if you're the last one holding! /s

One major distinction between cards and other physical collectibles is that they come bundled with the implicit protection of the legal system on others making more physical copies (i.e., counterfeiting). So if one owns a rare card, others can see pictures of it, but they cannot make their own physical copy (backed by the legal system and threat of being arrested). This is unlike the NRT / digital side where making identical copies (sans blockchain) is perfectly legal.

So how is it any different Bitcoin?

NFTs are 21st century Dadaism.

What is a "NFT"?

Read the first few paragraphs. Still don't know what an NFT is.

Tldr: proof of stake is a climate disaster because it rewards those who already have money, which means those without money will get hurt more by climate change.

Yes, this is the actual argument made in the underlying post that this is blogspam for.

>I’m sure you’re seeing the problem here- there is not a schema that doesn’t reward those who already are already wealthy, who are already bought in, who already have excess capital or access to outsized computational power. Almost universally they grant power to the already powerful. This is also a climate issue. Climate justice is social justice. This is true in that the worst impacts of climate collapse are felt by those with no means to avoid them, while those with resources easily fuck on off to somewhere where they don’t have to see it.

Crypto == destroy planet is an important meme.

So will this help everyone realise how stupid Bitcoin is? Is this dorseys goal? To counteract the insane libertarian propaganda through reductio ad absurdim?

> People can look at images of the Mona Lisa all day long without compensating you, because you simply own the original trophy, not the idea…

Your ownership isn't stamped or an inhenrant part of the Mona Lisa, your ownership comes from the certificate and trust in the certificate, history of sales and its legacy. NFTs are simply digifying this.

> [Creators will] become promoters of digital tokens more than they are creators. Because that’s the only reason that someone is likely to buy one–like a stock, they hope it will go up in value

Since this is such a new idea and market speculation is rampant but the comparison and suggestion is still unfair. Money may be one driving factor in buying stocks, but it often isn't the only factor. NFTs don't change much for physical artists but non fungiblility did not exist for digital art until now.

> NFTs aren’t usually aesthetically beautiful on their own, they simply represent something that is.

In both cases the certificate is a representation of the art. The certificate or idea that you own the Mona Lisa isn't what's beautiful, the piece of art your ownership represents is.

> BUYERS of NFTs may be blind to the fact that there’s no limit on the supply. In the case of baseball cards, there are only so many rookies a year.

Creating a new token is easy, just as doing a scribble and calling it art. There's still implicit trust that the creator won't make a duplicate token with the same representation just as there's implicit trust an artist won't certify identical paintings as originals.

The benifit for collectables is that the minting and supply is public. You can verify that your NFT is 1 out of X, and only X.

> THE REST OF US are going to pay for NFTs for a very long time. They use an astonishing amount of electricity to create and trade. Together, they are already using more than is consumed by some states in the US. Imagine building a giant new power plant just to make Christie’s or the Basel Art Fair function. And the amount of power wasted will go up commensurate with their popularity and value. And keep going up. The details are here. The short version is that for the foreseeable future, the method that’s used to verify the blockchain and to create new digital coins is deliberately energy-intensive and inefficient. That’s on purpose. And as they get more valuable, the energy used will go up, not down.

The energy costs of the NFTs are currently pretty high, but to claim it'll only go up is disingenuous. In the foreseeable future Bitcoin will be the only energy intensive blockchain as others move to proof of stake. Ethereum has begun to make this transition and most other large platforms have already made this transition.

Since blockchain is digital and public the ease to produce a concrete estimate of energy paints an easy target. Measuring energy from other recreational activities is much harder and fuzzy. Gaming is a similar target but is much harder to discredit.

One of the issues I see around NFTs is simply a misunderstanding of what they are at a fundamental level and the constraints which exist. The lack of understanding is causing hyperbole and flat out mistakes in online discussion around the topic.

Some truths:

* NFT is simply an idea; non-fungible token. The idea is that of a certificate of authenticity.

* The most prominent implementation of the NFT idea is the ERC-721 standard on the Ethereum blockchain.

* The ERC-721 standard simply defines a common interface for verification of ownership (validity of the certificate of authenticity) and transfer of ownership - https://eips.ethereum.org/EIPS/eip-721

* The ERC-721 standard allows for a token to be purchased in one market place and sold in another. The same way an email can be sent from a gmail server and received on a proton mail server.

* The ERC-721 standard allows any party to verify that a given Ethereum address (wallet) owns a particular token. It allows anyone with the private key of that wallet to verify their ownership of the wallet and therefore the token.

* The private key can be shared with anyone in the same way a physical certificate of ownership could be replicated and shared with others given sufficient resources to perform the replication.

* The underlying implementation of an ERC-721 compliant smart contract (think token owner registry) is up to the developer. The simplest implementation would be an array of Ethereum wallet addresses where each index of the array represents an individual token and its corresponding value represents the owner. Just a lookup.

* If the ERC-721 standard is being followed then there is only a single "owner" of the token. Multiple owners are not supported by the standardised interface.

* Other standards exist and will likely be created in the future. Their success will be determined by network effects.

* A different NFT standard to ERC-721 COULD assign value of a single token to multiple owners. I would argue that this token is no longer an NFT :shrug:

* NFTs are not JPGs, GIFs, tickets, or pointers to an owned item. They are simply some kind of ownership entry in a smart contract stored on a trusted ledger (the blockchain). They're collectibles in the sense that a wallet can collect them.

* The value of an NFT lies solely in the external value assigned to an individuals ability to verify ownership of the token through a private key. For an art piece this might provide access to an exclusive real world event, the ability to hang the art piece in a virtual world, bragging rights etc.

* The external value can change over time. Right now you may "own" a GIF but in ten years time the artist may host an exclusive event and invite token holders.

* The standardised interface means that anyone can assign value to a given token. A cryptokitty is minted by dapper labs but can be used in any environment which recognises the token as a "thing". For example this could be a virtual world or any number of games.

* A new platform can sort of bootstrap liquidity by supporting an existing type of NFT (e.g. cryptokitties, punks etc.). One of a new MMORPG's value proposition may be that they have integrated hundreds or thousands of popular types of virtual items to be used within their world.

* As such, Dapper Labs could go bust and disappear but a cryptokitty could have value in other environments beyond this event. The standardised interface means that a cryptokitty can continue to be bought and sold beyond the lifetime of Dapper Labs.

* NFTs cannot be copied, replicated, cloned. Private keys can be shared and therefore access to the NFTs value COULD be shared.

* Based on the above points, hopefully it's clear that a given NFT cannot be minted multiple times. If the artist mints three NFTs then each one is unique. Each could have different external value assigned to it (or the same).

"An NFT"?

This represents a reasonable-sounding surface view but is mostly off the mark. There are valid concerns but insufficient logic to justify a dangerous trap.

O/P TLDR:

1. Art is silly too but it's ok for Real Art because we've done it that way for a long time

2. It'll become a soulless money-grab

3. Buyers don't understand scarcity

4. It's killing the environment

re #1 (Art):

> You either own this thing or you don’t.

This logic just doesn't make sense and seems backwardly purist. Status conveyed by owning original editions of physical art doesn't just come from having it sitting on your wall where you can show it to 3 people a week, it's from making sure people know you own an original edition (art as flex, art as humble brag). In the digital world there is tons of status to claim using mediums beyond that narrow view and that's fine.

And the point:

> Owning a Honus Wagner card doesn’t mean you own Honus Wagner. Or a royalty stream or anything else but the card itself.

Why should you limit your thinking on what art can be and why it's valuable to people based on an old model? The "other stuff" which can be layered in increases its value substantially to some segments of buyers and there's no reason the artist shouldn't benefit from this.

re #2 (Paying creators):

> CREATORS may rush to start minting NFTs as a way to get paid for what they’ve created.

Why shouldn't creators get paid!? This is a very top-down, privileged argument. The biggest impediment for most creatives to creating their creations is usually worrying about monetization! Why shouldn't we try to get them paid as much as possible with as little work as possible so they can go back to making the things we love?

Chris Dixon had a good post [https://a16z.com/2021/02/27/nfts-and-a-thousand-true-fans/] about how NFTs allow more fine-tuned segmentation among different fan groups, allowing artists to gain more from their work while simultaneously satisfying the market. Seth is a marketer who understands segmentation intimately, so I have to imagine this is an oversight.

The embedded fear here is that we'll corrupt the purity of art by finally allowing creators to have a business model, and to be fair it's one that will probably see some crazy bubble dynamics and abuses. But that's well worth it if the world becomes a more creative place by introducing better tools to monetize creation and community.

re #3 (buyers don't get scarcity):

> BUYERS of NFTs may be blind to the fact that there’s no limit on the supply.

And buyers of stock may be blind to the fully diluted EPS of the shares they're buying... what's the point? Again, there's a reasonable embedded fear that we'll get over our skiis and convince people or imply things that aren't true, resulting in consternation, but this isn't sufficient to call NFTs a "Dangerous Trap"

re #4 (Environment):

> They use an astonishing amount of electricity to create and trade.

This is a fully Ethereum-centric view of the world but today Ethereum isn't the only chain. Ethereum is only used for NFT minting right now because it had years to build up tooling but it is unsuitable for creators because transaction fees run in the $50 range just to transfer tokens and >$100 to mint, so obviously creators are desperately looking for alternatives. And they're out there -- I work on the NEAR project (near.org) which is Proof of Stake, has purchased offsets to become fully carbon neutral, and is cheap enough to test in prod. Look where the ball is going, not where it is today!

Sorry for the rant. We need the biggest voices to present a more nuanced case for this technology.

I think the immediate value of NFTs lies in industries where you need to keep the producer honest to protect against artificial scarcity.

For example, what stops baseball card printers from re-printing "rare" cards? And how do we know they're not hoarding some of the best cards for a few years, then selling them individually? I could see NFTs being demanded in situations like this to force producers to create digital proof of initial production and distribution.

I haven't thought about it much, but hashing old tweets or a picture of something and claiming it's valuable sounds like snake-oil sales to me.

NFTs are not useful for securing anything in the real world because there is no way to verify that the thing in the real world is uniquely connected to the NFT.

I was thinking they would still make the physical baseball card, but also provide the purchaser with a NFT linked to that specific card that includes the card's metadata, etc.

This way you have the physical card to display, and have the NFT as a proof of authenticity and ownership.

The NFT is proof that you purchased the item, but it's not proof that what is in your possession is the the thing the NFT claims it is.

I think the author needs to look into NFTs more closely before making a judgment like this. With the sole notable exception of NBA TopShots, which is on Flow, all prominent NFTs are currently issued on Ethereum. Ethereum's energy consumption will massively decrease in the near future as the long-planned switch of its consensus algorithm to one based on Proof of Stake is implemented.

Ethereum's Proof of Stake Beacon Chain launched in December 2020 and has worked smoothly since then. The launch was the first of the three phases of ETH2, by the end of which Ethereum will be fully reliant on Proof of Stake - with no dependence on energy mass-consuming Proof of Work - and be massively more scalable.

The author's criticism aside and on the subject of the nascent NFT market, I hope in the future multiple MMORGs recognize NFT sets and allow players to unlock certain digital items, traits or characters by proving ownership over an NFT within that set.

Being able to migrate digital assets across virtual worlds could lead to the emergence of a global cyber culture with universally recognized digital cultural items.

"Buyers of NFTs may be blind to the fact that there's no limit on the supply". Sure anyone can make an NFT, but not all of them will be viewed as realistic stores of value. Like baseball cards, you will not print an unlimited copy of rare cards cause they would lose their value, and no creator would sabotage their brand like that. Besides, it costs money to mint a token, so there is a limit related to the artist's economic situation.

> I could, for example, turn each of the 8,500 posts on this blog into a token and sell them on the open market.

So it's like a DOI?

DOI's can apply internally, so a book can have one, a chapter can have one, paragraph, sentence.

I guess someone will blog the difference at some point

NFTs real value is "BS identifier" and "crypto market cleanup".

How much electricity is used refrigerating frozen desserts in the US? It's probably a lot. Probably more than a small country. Is ice cream an unnecessary and "dangerous" trap that we will all pay dearly for in the end? Probably.

I don't understand the point of this comment. It's almost schizophrenic in nature. Are you advocating for wasting energy by saying that wasting energy is fine because it's done in other places but not criticized?

It’s probably more like if we had a common point of comparison for all the energy spending points in our society we wouldn’t be focusing on blockchain that much.

Pointing out the environmental impact of NFTs is not taking away a meaningful amount of attention or effort from pointing out the impact of nonrenewable power, cars, etc. What it can do is clue in NFT users who may not understand the impact of their participation.

Anecdotally I've seen several artists on social media making posts recently saying "wow okay I just heard about the power use of NFTs, this is nuts" because it's really not obvious if you're not already familiar with blockchain-related stuff.

Even if something like frozen desserts used the same amount of energy as NFTs, it's still not a good light for NFTs considering those frozen desserts probably support a large number of jobs, infrastructure, and at the very least some kind of nominal amount of calories (even if not very healthy ones).

NFTs might help some artists get money. That's not really as much of an impact.

So if we're comparing things, the full context needs to be included as well, not just some strawman of a magnitude.

And all of that being said, if the world decided that it would stop producing desserts, I'd probably be on board with it anyway, but the impact would be pretty large. If the world decided to stop supporting NFTs, not much would change (I suppose it could in the future, but based on their current trajectory it doesn't seem like that'll be the case).

I've noticed that low karma accounts like the one above yours tend to leave snarky comments to gain karmas. It's ambiguous enough to get some up votes from readers that like their humour and not get down voted out right for its vagueness.

I think keeping food from going bad is a lot more useful than very inefficient digital signature verification.

great write up thanks Seth.

we're going to have to suffer hearing about these terrible ways to extract money from people & waste energy for so long.

this is a demented game of make believe, and it's just going to keep getting worse all around us.

Youtube has been successful even though most videos are watched a dozen times or so.

NFTs are a parallel copyright system. The market price of an NFT that violates meatspace copyright law would be a function of the relevance and enforceability of the law/jurisdiction in question.

The shortcomings cited by the author are critiques of the distriution of market prices, but there is no alternative proposed. Of course most Youtube videos get a handful of views, and of course most NFTs will be nearly worthless. That concern is orthogonal to the question of whether NFTs offer some benefits over traditional copyright mechanisms.

This repeats the same mistaken belief that "energy is precious". In reality, there's lots of energy that is either worthless or has negative value. There currently is no economical solution for storing this energy and it's the biggest impediment for renewable energy.

Many bubbles have left lasting improvements to infrastructure. The railroad bubble brought railroads. The telegraph bubble wired up the country. The internet bubble made internet connectivity mainstream.

I believe that proof-of-work can bring lasting improvements to both energy infrastructure and semiconductor processes that are unaccounted for in all the naive calculations that make for a good headline.

Demand for energy efficiency improvements already exists. All PoW adds is a new form of demand designed to scale up to consume all energy efficiency improvements; every time energy prices fall miners are incentivised to increase the rate of mining (unless the block rewards or coin market price also falls)

The Internet bubble was people making infrastructure available in the hope people would use it, not people converting DDoS attacks into money and claiming that stopping others using that bandwidth would be worth it in the long run if it lead to the invention of servers and cables that scaled to infinite capacity

> ...unless the block rewards or coin market price also falls

At least one of these is guaranteed to happen, so that kind of makes your argument moot.

The author is confused about what an NFT is. It's simply a verifiable digital claim about 'anything'. It also happens to be a token that is easy to transact with, i.e., buy and sell.

I think the author is just complaining what someone is willing to pay (and is paying) for NFTs. This argument comes up all the time, especially regarding items that have mostly status value.

The answer to that is simple, anyone can pay whatever it's worth to them. It's none of the authors business. Stop complaining.

There are artists and creators who have worked for years and never made a dime from their art. NFTs have changed their lives. NFTs create instant markets for any digital item, giving them value. And there are no middlemen.

The author is missing the beauty of this creative explosion and opportunity. Look into it for yourself and you'll see. Either that or stay poor.

I disagree with the arguments there.

- Creators... become promoters of digital tokens more than they are creators": Is this a purist approach that artists needs to do only art for 24/7? Anything else is a violation of their artist oath or something?

- "BUYERS of NFTs may be blind to the fact that there’s no limit on the supply": there's the same limit on supply you got on regular art. Attaching a token to an art piece does not change its supply.

- "THE REST OF US are going to pay for NFTs for a very long time. They use an astonishing amount of electricity to create and trade": No they don't. NFTs are not a separate blockchain. They add nothing to the electricity already being spent.

The post has so many more inaccuracies, making it difficult to take its conclusion seriously. Here's another example:

- "Unlike alternative digital currencies which are relatively complicated to invent and sell": what? no. There are ERC20 tokens generators exactly like there are NFT generators.

The article references a fishy source for its claims of the „astonishingly“ high carbon foot print. That web site „cryptoart.wtf“ does not site any source on how it derives its carbon foot print numbers.

Probably, they are derived from the claim Bitcoin consumed as much energy as Argentina. First of all, NFTs are minted on the Ethereum blockchain where mining is still much cheaper. Second, energy usage does not simply equate carbon foot print which is a function of geolocation and hardware efficiency.

However, I found a nice peer reviewed article on the estimate of Bitcoin‘s carbon foot print: https://www.sciencedirect.com/science/article/pii/S254243511...

It’s from 2019 and states that the whole Bitcoin blockchain emits the carbon dioxide equivalent of Kansas City.

I am not aware of similar analysis on Ethereum but I guess one could use the Bitcoin number and scale it down quite a bit.

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