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Comment by snarf21 | Hacker News Reader

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.

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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.

>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.

> 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...

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.

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.

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

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.

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.

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

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

>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.

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