Metakovan, the mystery Beeple art buyer, and his NFT/DeFi scheme
amycastor.com
amycastor.com
What's more is the pseudo-intellectual justifications for it all. As soon as you bring up value, proponents put on their philosophy hat and ponder "what is value? money is just paper, maaaaan, we just believe it has value." Or we hear that owning a digital "asset" is actually the same thing as a physical "asset" because they're both unique things that can't be copied. It's all smoke and mirrors, and you know that when you have to hide behind vague philosophical assertions about "well nothing really has any value", then you have no actual argument supporting the value of the thing you're defending. It's a new illusion, pumped by hype, and they're trying to justify its existence by pointing to other illusions.
Thanks but count me out.
Something I wrote yesterday[0] that I think is relevant here:
> I'm not sure I understand the hate for NFTs. Don't get me wrong, the concept of NFT as currently used is completely absurd and definitely overhyped. But what is bad about it? People who spend their money on NFTs mostly do it because they got rich in the past few years gambling on BTC or ETH, and now use that money to basically tip the artists they like. Or they plan to resell the token at some point, which is pure speculation, but nobody other than themselves risk to get burn. Minting and selling NFTs is almost zero work and effort for artists, all the risks are on the buyers side, and only if they buy them as speculative assets.
> It still make no sense to me, but if rich people want to gamble their money and by doing so support some artists, that doesn't sound too bad IMHO.
> I would be more cautious if retail investors would start to gamble in this market, but that's not what I've seen so far.
Regardless of your view on NFTs, haven't they been "a thing" for like a week now? Perhaps I'm just too risk averse but that feels like a very low amount of data to make such a large decision on
Does that also work for physical art? My parents were full-time artists, but did not know how to sell anything, so now I have inherited hundreds of paintings. Should I create NFTs for them?
The artists who create the future cannot short-sell themselves, can they?
Also one of the artists I was talking about, who quit to work on NFTs, was design director at one of the world's biggest agencies, so not exactly waiting tables.
But yes, I was thinking about artists waiting tables. My spouse works in theatre, and it's normal even for modestly successful actors and artists to be working service jobs. I have asked why they worked those kinds of jobs when they were clearly smart enough to have better-paying white collar jobs, and they always say that quittability was one of their top concerns.
In the period where one could live in San Francisco for a non-insane amount of money, I knew lots of visual artists and sculptors who lived like that. (Anyway, all of them are now coding or have left.)
I don't mean to contradict your experience: the word "artist" covers a pretty wide swathe.
This stuff is in the news to sell the crap to the people who don’t really know what they are doing.
And I can’t help but wonder if it is a true scam - you could do some massive early transactions to pump of perceived values and create get-rich-quick hype (optimally, these should mostly be left-hand-to-right-hand transactions), then go ahead and make money as an NFT marketplace. Or by selling other works from the artists that you just pumped to the moon (which you had purchased before the pump operation).
As a broke artist, if I can get some rich assholes to start convincing each other that my art has ludicrous amounts of money, then I will happily let them pay me for it, and let the gallery owner who was instrumental in convincing them of this value have a healthy cut. If the gallery owner wants to arrange a money-laundering kickback to the rich assholes that's their own business, personally I feel like I'd rather avoid it but who knows how I'll feel when I'm being offered a price with enough zeros at the end of its number?
Create a bunch of art, put the ownership into a decentralized autonomous organization with 51% held by the artist and the other 49% held by a bunch of random, anonymous "owners".
Start the hype train with a loud, crazy scandal that results in the "death" of the artist.
The artist's estate leaves their stake to the gallery owner who starts to sell off the stake at stupid prices following the death of the artist.
Secretly, you've faked your death and also were in control of the "anonymous" ownership stake. You can launder the increased value of that part of the stake and recombine it through a bunch of shells and mixers.
Who knows, maybe this was "Satoshi"'s plan all along. That "unclaimed" stake was just there to increase the mystery and the hype, meanwhile "he" actually had control of a bunch of other coin that "he" was able to launder at a later date.
I mean if you've got a bunch of money burning a hole in your pocket, I'll gladly take it off your hands. My Patreon's over at https://www.patreon.com/egypturnash.
The NFT space is building in royalties via transfer taxes. Which means you the artist would earn a lot more from volume than from the initial sale, and this is potentially even better than the subscription SaaS model, and for people that want to support you they may be even incentivized to keep you alive to make sure the royalty goes to you instead of possibly burned.
I don't really see using stablecoins such as USDC or DAI as "extra layers of bullshit that comes from involving cryptocurrency". In the US with the latest OCC regulations, these are the same as using settlement networks like FedWire or SWIFT. Your self-limiting philosophy requires conflating all aspects of cryptocurrency as the same, and the good news is that you will find a lot of camaraderie in doing that, for now.
1. There are some people who struck it megarich with crypto and now have so much "f-u money" that they are willing to spend it on conspicuous consumption. It is the same sort of thing that comes from "look at how much money I lit on fire" posts being given social credit in places like WSB.
2. There are other people who already had a gazillion dollars and are also interested in conspicuous consumption.
3. NFTs are trendy and trends in the crypto space attract people seeking to make money on a trend. A bunch of people are surely buying these things hoping to leave somebody else holding the bag.
4. It is crypto, so some degree of fraud and crime is involved.
How do you shield your gains when every traditional asset is either losing to inflation or looks like a bubble? You start reaching out for non-traditional assets.
NFTs have some marketable aspects for someone looking for an alternative investment vehicle. They're self-contained and require no real ongoing costs to just hold and flip later (compared with, say, opening a McDonald's franchise). They're also fresh and new with the promise of getting in on the ground floor of future exponential growth (as opposed to, say, buying an existing Van Gogh or a bag full of Krugerrands).
Now, in no way does this make them not bullshit (what ownership is actually conveyed? Do you now even own the copyright on the work, so you could monetize it later?) but that might be why it looks briefly compelling.
some degree of fraud and crime exists in regards to anything of value. Money laundering existed before cryptos. Most banks caught laundering money, did it at a massive scale in comparison to the value of the Bitcoin network. Fraud and crime are directly connected with value
Not to mention that centralized exchanges are an exit scam waiting to happen.
Most people could not participate in blockchain without dealing with a criminal onramp. (Bitfinex, for example.)
Plus this argument is ignoring that the way the banking system is protected from such failures is with taxpayer money, so you still end up losing some of it.
1) It could be a scam of sorts, but one that the parties are in on. For example tax fraud or an attempt evade capital controls.
2) Leave aside digital anything, art has gotten really weird lately. The self destructing Banksy thing, the banana duct tape thing—-I could see being knowingly, publicly scammed as some kind of bizarre performance art. I guess the super rich are really bored.
3) The most reasonable spin on it I could think of is what if there was a limited edition print where the print itself wasn’t limited edition. There were as many prints as anyone wanted to buy for the cost of production, but the artist sold a small number of certificates of authenticity. It still seems kind of pointless and scammy to me but it’s at least closer to understandable.
Buying art with an NFT is just a way to give artists and/or art auctioneers money for their art. That's it.
Oh and it can be used for other things like event ticketing, software license keys, etc.
An NFT is just a way to record (in an immutable distributed ledger) that a specific, uniquely-identifiable token was transferred from A to B.
People have always paid stupid amounts of money for art, and in the last 100 years increasingly art that doesn't require years of training/practice and advanced craftsmanship. Why is this any different?
It sounds like you just don't want to be involved in the art market, which nobody in their right mind wants to be involved in anyway.
Complaining about NFTs is like complaining about "blockchain" or "the internet" or whatever.
The thing that is "non-fungible" is the token, not the actual art. The underlying digital asset is actually fungible with copies of it. With a painting, there are prints and reproductions of the Mona Lisa, but they are all fundamentally different in some way - the exact brush stroke texture, etc.
NFTs have this feeling of valuing the receipt, not the art. As if I walked into a gift shop at The Louvre and bought a Mona Lisa slick poster print, but then valued the gift store receipt more than the more-or-less completely replaceable poster.
I heard the bozos on the A16Z podcast (I think it was) compare NFTs to land deeds, but they very seldom know what they're talking about.
The point is not that land is somehow fungible, but that we have plenty of precedent for "owning" a thing without taking physical transfer of that thing.
PS It would have been quicker to google A16Z than type out those words, but I’ll save you some time by telling you that it’s (the podcast of) a top three silicon valley VC.
For the first sale. I'm not sure current contract law permits any legal rights to follow the token in subsequent sales.
Because if you buy a painting, you can hang it on your wall.
But we could already do that. It's a solution to a problem no one had. A NFT would only be useful for proving ownership if it will hold up in court, which I doubt it would without accompanying proof of purchase.
Whatever their flaws, NFTs are perfect proof of ownership of the token...
But yes, once you've stolen the thing from me I have less control over it...
Also, this would never happen as written. If you tried to claim my asset without having changed the key, then I would. We'd never be in court with shared custody, and thus they'd never get a chance to rule on this. The only time a court would come in would be criminally if you actually hacked my system.
Otherwise, owning the key is the entirely of ownership. Blockchain is intentionally a knowledge-based version of a bearer bond. (It could be based on hash-preimages which would count as a password and probably be legally protected, but intentionally it's based on math because factors in an equation aren't protected.)
Also, you aren't really purchasing art because it's untenable. You're purchasing something like the right to show that the artist considers you to have purchased art. To actually purchase art would be to actually codify a contract (from what jurisdictions?) in an NFT, and that's not what anyone is doing. It's all just digital signatures of a phrase like "Thanks for being the first sponsor of my work 'Autumn Leaves', with shasum XYZ".
C.f.: https://www.reddit.com/r/NFT/comments/m3y4go/my_art_stolen_a...
But if you care about the artist enough to want to donate I imagine you're more familiar with their work than all that.
Anything you can do with a non-fungible piece of paper, you can do with a non-fungible token. Anything you can't do with a non-fungible piece of paper, you can't do with a non-fungible token.
I'm blown away by how many people are upset that other people are doing stupid things at the confluence of new technology and excessive spending money.
Pretty much. It's a bit harder to show your paper autograph (and prove its veracity for full status points or before selling it) than to demonstrate this with an NFT. If that's what the paper is about for you, the NFT is better.
With concert tickets though there are a ton of benefits from proving authenticity, not needing to meet to transfer paper, not needing ID to prove you didn't steal it when checking in, etc.
> I'm blown away by how many people are upset that other people are doing stupid things at the confluence of new technology and excessive spending money.
Me too.
I mean this artist is now the third highest paid artist alive and it seems like he just pretended to sell the art to his business partner and the money transfer may not have even happened. That’s not excessive spending if true, that’s lies and fraud
https://twitter.com/checkmynft/status/1371633090318249984?s=...
https://twitter.com/scanlime/status/1371509988179464196?s=21
From secondary market sales, the artist can get a royalty if they choose and the secondary transaction is on the same platform. Typically around 10%. The same platform requirement is an issue and hopefully a future NFT standard smart contract will build in a royalty option/.
Those Oracles would ideally be known parties who could be sued under the laws of their jurisdiction for lying.
I have a pretty good understanding of block chain technologies but didn't hear about NFTs before, so like you, I started to challenge his ideas. Partly to understand what he was building. Because at first I tried to find real and practical applications for the platform that somehow connect to physical things, works of art.
But what he said was pretty interesting. The guy had a background in art management and, I think, trade. He said that art collection has always been about being able to say that you have the original piece. And that it's not rational anyway, not even for physical works of art, like paintings. It's not that you like the actual picture on the actual canvas so much that you want to buy it for say $1M and if you just had a copy you'd notice the difference and that wouldn't give you as much pleasure. It's simply about having the original. And also collecting related originals.
Now it's easy to trace it back to real, actual scarcity, where indeed there weren't many e.g. paintings (or books, etc.) and there was a big difference between the paintings of different artists (both in style and quality) and you had no way of looking at these other than having the originals probably.
I guess the big question here is whether this phenomenon is strong enough on its own to transfer to purely digital assets or whether this is really rooted and tied to that original scarcity that we kept changing the story around. (I.e. while it's not about being able to enjoy and look at the piece anymore, now it's tied to the knowledge that that specific piece of canvas was painted on by that specific very talented guy X hundred years ago, and he was standing in front, etc.)
One hint might be those 'limited edition' sport cards that some people seem to collect, as well as 'limited edition' e.g. CD or vinyl albums from the past millenium. (I never understood those, but I had a friend who did get a very obvious joy out of being able to buy those. For me, these were always just delivery mediums and I only cared about the music.)
Honestly, I have no idea, but that call was definitely interesting.
https://www.tate.org.uk/art/artworks/lewitt-wall-drawing-113...
In that sense, this is ownership over something intangible very much like NFTs.
The lines between economies and schemes are blurry and hero’s and villains are only declared once the dust settles. We’re not there yet.
What I also find hilarious, folks who love this NFT "can't be copied" are great are the same people who hate DRM. While I'm not a fan of intrusive DRM, I'm going to side with paying what folks deserve for putting time into coding/art/planning for a game/movie/whatever. I get something from their effort, they deserve something in return.
That and I'd rather buy a $20 poster of art from my real life wall than over glorified digital wallpaper.
Also, you realize that you could print the digital artwork and have a poster, right? Personally I've got more than enough posters, too many to put up in ten houses, and would actually rather have high quality scans of them so I can still enjoy them.
You have no recourse or a leg to stand on. Good luck getting a refund.
As far as supporting artists goes, doesn't Patreon kind of already do this? Or what about cutting a check directly to the author? NFTs seem like "supporting" artists with extra steps.
Plus, the middle-men always win on this with all the silly gas fees. I'd argue NFTs are extremely inefficient when those fees are taken into consideration.
NFTs provide the right to whatever they control. If you buy a software license via NFT, it will unlock the software. You can prove this before buying.
NFTs to show you own art? Yeah, that's pretty basic, it's the equivalent of a paper receipt. If you'd pay more for print #1 then an equivalent NFT is no more wasteful.
> For instance, Jack Dorsey could delete that one tweet he sold an NFT against
Yeah, Jack is an idiot and so is his NFT. Not a surprise.
> As far as supporting artists goes, doesn't Patreon kind of already do this?
Yeah, but it takes a bigger cut.
> Plus, the middle-men always win on this with all the silly gas fees. I'd argue NFTs are extremely inefficient when those fees are taken into consideration.
Don't buy an NFT on an expensive blockchain then. Some have almost no transaction fees. Besides, you could just buy an off-chain cryptographically signed token of donation if you don't want the blockchain but want to be able to prove that your receipt is real.
EDIT: My other real concern, which I don't believe NFTs really address is the fact that, unlike a physical artform, like a certified Picasso painting, digital art can be infinitely copied, and having an NFT token isn't the same to me as actually owning the physical painting outright, something that cannot be properly 1:1 copied. Also... NFTs don't prevent a bad actor from tokenizing someone else's work and passing it off as their own.
And yes, the art itself is unrelated. Anyone can download it. NFTs (for art) are a prestige way to sponsor the artist via that specific work. You can 100% prove that you sent that author the funds. That's it. (I think it's a bit like buying an original and giving it to a museum.)
IMHO, The future use of NFTs is actual non-fungible goods, like a concert seat. It's not "real property" so there aren't many legal restrictions on trading usage rights and a court is likely to respect the decision of the two parties to keep their ledger wherever they want. This NFT-art boom seems like people just playing with the tech before we manage to sign a venue to use crypto-tickets - a proof of concept and a way to familiarize enough people with the tech that there's an audience for it when a real service using NFTs is launched.
Yea, but copyrights do. Lots of pro-photographers have lawyers as best friends for this exact reason. The drawback to buying long dead artist art is their copyright ran out. Oh well. We all celebrate public domain day for books even though they're subjugated to the same rules. The NFT, inherently at least, doesn't give you the right to distribute or anything of the sense. It really obfuscates the concept of ownership into some weird hippie mentality that boils down to, "How can you own anything man?" It literally neuters the idea of ownership because what in the hell do you actually own? A string of numbers saying you bought what amounts to a wallpaper background? But at the same time, everyone has access to it anyways without buying it? What bothers me about this "ownership" discussion is just that, what are you even talking about? The idiom possession is nine-tenths of the law refers to this. Not just the law "enforces" possessing something, it refers to defining what that even means and limitations. Copyright and IP lawyers are their own special sector because it's a far more complicated aspect of the law because so many people want to have such a wishy-washy idea of "ownership". Are you allowed to produce, distribute, end of sale, consume and just how much consumption? Within your own home, to a group of people? For how long? Etc. That's just the easy stuff by the way.
Sponsoring the artist is also an extremely weak argument. What's the difference between this and buying a $20 printed tshirt of their art? Or a poster? Or a pdf of their comic? Or their mp3? Except for the fact I get something. This whole thing of, "Yea, but patreon/apple/amazon/paypal/merchantServices/platformX gets a cut out of it."
And?
Because places to purchase/convert crypto and NFT don't exist nor take a cut themselves? When was the last time you mailed a check or cash to someone? Are you going to do that for an artist to buy their stuff? Or is a stamp too much of a "cut"? That and the envelope. Those pesky manufacturers of envelopes. Why do they oppress us by not providing them for free? Just like paypal and patreon not dealing with the debit/credit card companies for free since their data centers and employees are all volunteer anyways! I mean come the fuck on. This is ridiculous. Do you work for free? What do you do? I guarantee the same argument can be applied to your job and you would foam at the mouth about how you deserve to be paid. No one goes into these services stupid. They don't go, "Oh, this is a 100% free services and I make all ze monies." Specialization is such a worshipped concept around here, this is part of it. Someone deals with ease of purchasing and a marketplace so an artist can "art" instead of figuring out how to connect with a merchant services API and the cart to fulfill transactions, let alone all the security required. Yes, they deserve to get paid.
This whole NFT thing feels like some twisted Twilight Zone red herring. It's an immensely complicated way of solving nothing. Concert tickets? What does it do differently? "Verifies ownership". How does it do it differently than the 2 to 3 sets of ID numbers on the ticket and/or putting someone's name on it and verifying by picture ID? A piss poor MySQL db and terrible PHP accomplishes what NFT can do, minus the computational power. That and it's not "the courts" that don't let you scalp tickets. It's the venue. The agreement to buying a ticket either lets you or restricts you from scalping, which was created by the venue or whoever is performing, but normally it's the venue's rules. That's then upheld in court as the agreement is considered a binding contract. Again, the whole "ownership" and legality wannabe work around doesn't work. The restriction was placed by the venue. You think they won't do the same? Or even better, not give a shit about an obscure 3rd party system that grants no value to them or the customer?
Why NFT has ruffled my feathers so much is honestly weird. It has this Twilight Zone feel to it. The question is, wtf is the punchline at the end? I know it's not going to be pretty. Crypto in general led us to this weird new religion of tech. Or maybe it's the worship of "disruption" regardless of purpose or benefit? Disruption for the sake of disruption and regardless of consequences. Could even lead to the same type of pandora's box that the nuke gave us. The biggest difference, crypto tech is energy consuming. Nuclear tech was rapid energy producing. Curious what the fallout from this insanity is going to be.
in short, it's bullshit, but for the tech crowd rather than wall streeters.
I don't think the implementation is interesting. I don't think the technology is interesting. I think the concept is extremely interesting, though not in the context of the NFT linking a user to a digital artwork.
If people believe a product has value, then the product has value. If consumers are willing to pay money for it, then the product has value.
People are willing to exert considerable effort to submitting the first comment on a popular youtuber's latest video. People are willing to spend considerable money in order to "own" unique items on roblox. None of these items have any marginal cost to the creator, the hard work has been done, but they are an interesting auxiliary product to the creator's product.
I think an interesting intersection lies between the thinking that lead to NFT, the idea of community and the implementation of smart contracts. Being part of a community, with bragging rights and smart contracts and agreements and sanctions and a culture and so on, becomes much more interesting if people are willing to take the leap to believe that the investment is worth the value they get in return. I think NFT is the proof of this, and the implications of this worry me deeply.
We can create reality out of nothing but talk now. If enough people assert a story as real then it is indeed real. Social media is wonderful for this.
Yes, it's basically 1984 with some extra steps.
People are using NFTs as stores of value. Despite spending, the owners are not illiquid and are much more liquid than fine art collectors, as borrowing at decently high Loan to Value ratios against the NFT can happen in the subsequent block.
Given your existing predilection, knowing that probably also just moves the goal post for why you think there is something wrong with it "omg, now there's leverage!?". But its just an efficiency on the existing art world which has all the same stuff just much slower due to poor data and information, and nothing to do with the pseudo-intellection abstraction of value.
In a single protocol (standardized class with a set of standardized functions), art provenance has been disrupted, art appraisal has been disrupted, art insurance has been disrupted, art lending has been disrupted, and art royalties have been disrupted.
You will just be seeing more participants in the collectors market because of it, and a market that moves faster and can attract more capital globally, instantly, during a period of massive currency creation.
Its not anybody's problem that new galleries/marketplaces have fees for the artists. Its not anybody's problem that there will still be a ton of starving artists that will never get bids on these platforms. Its not anybody's problem that a buyer ends up with an asset that might not be valued the same or higher or ever get a bid again. Its not anybody's problem that a lender winds up with an illiquid asset. Buy art you like and from creators you like to support, maybe some times you won't get outbid.
It is a sort of performance art.
Beyond that, I literally see no reason to buy these things, but they don't seem that different from physical collectibles, and most art pieces in general, where the concept of "original" is just as "irrelevant" in a world where we can duplicate things relatively easily.
[0] https://eu.usatoday.com/story/life/2019/12/09/banana-priced-...
What's the difference between paying 100x for a purse, etc, and a digital status symbol? It's not bought as a good, it's bought as a symbol. Yeah, it does seem wasteful, and I generally think "spending Dad's money" when I see it, but it doesn't offend me.
> but doesn't anyone else think this NFT art thing is bullshit?
Yeah. Because it's not clear that it's just a prestige way to sponsor someone. Non-techies may not understand that the NFT offers no control over the art, the way that owning an original allows you to lock it in a vault or burn it.
Personally I'm buying only stuff that resonates with me. I do not plan to flip it for a quick profit. In fact, my.taste is sometimes so eccentric that I doubt anyone else will want to buy them from me. However, I must say that owning a NFT to an artwork, gives you a stronger connection to it, even if it is digital. The artist also appreciate that you support their work.
That's the way you should go about this too. If you see anything promoted by celebrities, run, run away. Also avoid corporations caching in on it like the NBA. Only buy from Artists directly, and if you must, then trade only peer-to-peer.
Btw. I meant, only buy NFTs that were produced directly by the artists themselves, and the artists have rights to their work. Basically, avoid middlemen. That's what crypto is for.
Centralized marketplaces for the resale of 721s (NFTs) can enforce this for sales they arrange, but there's nothing inherent to the blockchain or NFT to require it, which means that sales bypassing such centralized marketplaces would not be subject to those conventions.
Other people can also see this information, but it isn't as useful to them.
People are buying a number here which has no relation for he actual artwork. You own nothing but the number.
A few weeks of ordinary household energy usage per NFT is realistic.
https://www.loop-news.com/p/the-big-problem-with-nfts-energy
And people can use them to prove ownership of physical things, TRUSTLESSLY. Because it's so much safer to have decentralised system of digital bearer shares, than a central registry run by the government or a bank, right?
Oh but it's for third world countries where the state is not to be trusted. Of course that also means you can't trust them to enforce your digital bearer shares either, but that shouldn't be a big problem. We'll just get all the farmers and villagers to agree on using one particular blockchain bases system to keep track of who owns what land. What could be simpler.
And if you thought that was stupid, enter NFTs for digital art. Yes let's use advanced technology to create digital tokens that can't be copied, and use them to track the ownership of digital art that can be copied indefinitely. Brilliant.
And they're basically selling it off to 'investors.' So it was really just an elaborate marketing ploy for some shady crypto currency? I'm surprised an institution like Christie's was willing to lend their reputation to such an endeavor. Or were they conned too? Or did they actually net that $9m 'fee' which is enough to buy Christie's reputation?
> https://mobile.twitter.com/beeple/status/1347406074685566977
There’s too much money being pumped. Crypto is a symptom not a solution.
BTC is at like $60k right now, and there are something like 18.4 billion BTC in circulation, which translates to over a trillion dollars in "value".
Yet if any of these bitcoin (or ETH or whatever) billionaires tried to cash out their massive reserves, the bubble would burst. So stunts like this NFT thing, where a "humble artist" becomes a millionaire overnight, serves to just further inflate the bubble, and help those bitcoin billionaires become real billionaires without crashing the market.
I wonder how many of these bitcoin billionaires are doing this (possibly colluding), or are actually so deluded that they believe $60k is the real intrinsic value of their BTC. Or maybe it's neither, and this bubble is still nowhere near the bursting point yet.
Either way, it's all fucked and I hate it.
Also, it's 18 million BTC, not billion. You're right though that it's close to a trillion dollars market cap, so I assume that was just a typo.
It's literally a scam. People are throwing their real dollars into the BTC market because they were sold on vague concepts and bullshit viral articles like in the OP.
Maybe it's the investor's fault for being dumb and not doing their homework? Sure, so long as they weren't mislead, otherwise they're victims of a scam.
Real dollars? This seems to suggest that USD currency is "real" while BTC is "not real". Exactly how does this rationale work in your mind? Why is a USD more "real" to you than a bitcoin? The latter involved real work (energy) to create, while the former was just invented by a politician (by QE) or a bank (by fractional reserve).
> ...otherwise they're victims of a scam.
What if I told you that maybe by using fiat currency you have been scammed all along for your whole life? Mind you, I still agree with you that NFTs are a scam, but not bitcoin.
What two consenting adults do in the bedroom has zero affect on me. What a cabal of opportunists do with cryptocurrencies and then a possible epic black swan event could cause a domino effect that could even be considered catastrophic across the entire economy. Then a select few run off with their bags of real money while the rest of us take the hit.
That's no good, if you ask me.
What you seem to be describing here, precisely, sounds like the Cantillon effect (which wouldn't happen in a bitcoin-based economy, actually).
After seeing the after math in 2013 and 2017, I'm really spooked about how Bitcoin is being somewhat interwoven into index funds, and this trend could potentially continue as more institutional money gets on the gravy train.
This is because you're still measuring bitcoin's value in terms of fiat unit of account. If goods & services were already priced in bitcoin (something that might happen at some point), then what you would think is volatile is fiat currency. Not to mention that there have been studies already that forecast bitcoin's volatility to be going down over time and it will reach parity with normal currencies soon (e.g. https://medium.com/@silvestrimichela.s/is-btc-volatility-goi... )
Banning cryptocurrency itself would be very foolhardy (because how do you ban source code?), but what governments could do is prohibit exchanges from operating in their home countries, thus deterring any growth in mind-share amongst the peanut gallery, and even leading to a drop in the price per BTC. All they need to do is hamstring it for the vast majority of people. Diehards may continue to use BTC, but the allure would diminish greatly thereafter.
And, say if you decide to go around traditional exchanges and use more underground methods to attain your home currency of choice, I'm sure the tax agency will get very suspicious about the massive windfall you got that you can't properly explain away.
Climate change being what it is, I would be shocked if governments don't start cracking down on this sooner.
Not sure if you're living under a rock, but Coinbase IPO is about to happen. You think they would kibosh anything after so many financial interests depend on BTC? I remind you that even Tesla already went in.
> what governments could do is prohibit exchanges from operating in their home countries
This is the typical FUD argument of government regulation, which everybody is scared about it but: 1) it never happens or 2) if it happens, it happens slowly in some odd countries here and there (which doesn't affect BTC at all unless all governments together decided to ban it, because right now if X country bans it, the other ones are seen as more tech-innovative, e.g. see Japan which is positioning itself as the hub of the future of DeFi).
> I'm sure the tax agency will get very suspicious about the massive windfall you got that you can't properly explain away.
Most people are using P2P & DEX exchanges more, so the surveillance possibilities are getting reduced. Note, I'm not advocating for tax evasion, everyone should pay their taxes, but actually having to pay capital gains deter people from selling, which makes actually the price to not go down (and after your BTC appreciates you can benefit from that without selling, e.g. borrowing against it, or buying small things with bitcoin here and there).
> Climate change being what it is, I would be shocked if governments don't start cracking down on this sooner.
BTC is not environmentally-unfriendly, this point has been long-debunked: see https://news.ycombinator.com/item?id=25320652 (and even if it wasn't debunked, there are cryptocurrencies which don't have PoW: PoS or PoST don't use so much electricity).
> What’s interesting is that Beeple, the creator of the artwork, is actually a business partner of MetaKovan’s. He owns 2% of all the B20 tokens. I’m sure there is no conflict of interest here
So really this is just adding crypto to the mix, because "everything's a little bit better when you sprinkle crypto on it"
[1] https://www.cnn.com/2020/07/29/business/art-money-laundering...
But of course, without any governance or rights.
B20 tokens launched on January 23rd. Beeple has been on Clubhouse and other NFT spaces for months. It is common in the crypto space (and everywhere) to give an influencer an "advisor" share of the project.
Their pie-chart says 11% of the tokens are to collaborators. So really its 13% but Beeple is the influencer that is worth having his own separate piece of the pie, for advertising.
"You know its legit because Beeple is involved", and its working because now I know to bet on winners!
This token is up 2,000% in a month and a half, and I didn't know about it before and have been searching for the right way to get exposure to the NFT space, and these are the winners! They got Christie's involved and the whole world!
I'm absolutely going to try to partner with them as I have more clout in the crypto space.
The real discussion is on whether there could be a more community oriented token distribution schedule, or a similar project without the massive team/advisor share. So there is a market to compete in this regard.
It's enough to point out that MetaKovan has a financial interest in increasing the value of Beeple's art. That alone lessens the impact of this auction, and I'm a NFT booster.
Using auctions to increase the value of your holdings is one of the questionable things that happen in the high end art world. Check out the Mugrabi family Warhol collection sometime.
One reason that Christies can charge substantial fees is that it serves as a guarantee that the transaction is somewhat real. If an artwork changed hands privately between friends for $1M, there'd be no reason to believe that price. But when they're paying a 15%+ fee to an auction house, there must be something valuable.
Of course this is a scam.
I can create NFTs for Beeple's art too.
I can create NFTs for Jack Dorsey's first tweet. I'll sell you a hundred of them if you want.
This is exactly like buying a spot on million dollar homepage, except anyone can make a million dollar homepage and nobody will honor your purchase because they don't have incentive to care.
I could make an NFT for Mickey Mouse, and it _should_ be worthless, but if Disney created one then maybe it could be worth something?
That same token might grant you access to use that skin as a statue in Decentraland and everyone will be able to see who issued it (based on digital signature). Other people can make their own LeBron statues, but just like having a knock off of a statue in real life, having the real thing is more impressive.
These NFTs can also encode more information such as how many of this same item exist, which other items are in the set, etc... and these virtual worlds can understand that info and you can prove that you own the entire LeBron set and only 10 sets exist.
With NFTs being so new, people haven’t seen the eventual way they’re supposed to be used across ecosystems and their only experience with them so far is that they are useless.
And then I guess - outside of "in game" what incentive would companies ever have to work with/create compatibility with any NFT stuff as opposed to just creating something similar themselves and owning it whole? Like if I was Apple, would I make it compatible with Facebook and Google, or just wall in another marketplace?
But for smaller game studios, you may not be able to do it, due to lack of resources, or lack of a moat, or you're not #1 in the space. Then you'd rather go into a collective marketplace. NFTs allow you to have marketplaces with items that are usable in any game that recognizes it.
This has already happened once. For example, in Gods Unchained (a CCG), you can import a Cryptokitty that you own, to decorate your playing board.
https://www.cryptokitties.co/gods-unchained https://blog.godsunchained.com/2019/02/11/cryptokitties-x-go...
It's kinda like cross promotion between games, in the same way mobile games did cross-promotional ads.
You also see this kind of behavior with Openstreetmaps. Google is #1, so they don't care. All the #2 and #3 players are working together on openstreetmaps to collect their market power to beat #1.
What lots of people on HN don't see is that NFTs are public interfaces for interchangable immutable items with a history that any application can choose to honor for interoperabililty. I think you can use it for more than just art.
This is the thing though. How do you authenticate the creator of the NFT to ensure that the "legit" token is actually legit.
To give you a concrete example, right now an organisation calling themselves "GlobalArtMuseum" is selling NFT's of artworks held in museums. This is not being done in collaboration with any museum, the artwork is counterfeit.
How do you set the "authentic" NFT in the first place without rigorous compliance controls?
Why do you suppose it is that the first use case that has gained near-mainstream appeal is a use-case that portrays them as "useless"?
How do you verify that Apple has released a new phone? You don't, you hear from Apple that they released a new phone. Why would it be different with NFTs?
It feels strange reading all these on the news now. Either future is coming fast at us, or people are crazy. I wish I had bought bitcoin though
Source: https://www.antiquetrader.com/collectibles/lincolns-rocking-...
And who knows whether Christie's keeps all that, or part/most finds it way back to Beeple/MetaKovan/Sundaresan in other ways.
https://twitter.com/justinsuntron/status/1370227566125096961
https://twitter.com/justinsuntron/status/1370227566125096961
Wrt. the people trying to question what value NFT has - well what value a piece of a paper with a black square has? I'd guess close to $0 or less - a ruined piece of paper. Until of course it is said to be done by Kandinsky. The value of the most of the art is in that information, not in the material artifact. NFT is just a distillation of that idea.
Reminds a recent Russian meme - a photo of Kandinsky with a bubble "Everybody can paint the same. Not everybody can sell the same way."
I have spent hours sifting through the crypto-art space and amazed at the "so called" artworks people have been spending money. As a person who has been a professional artist and somewhat knowledgeable about the art scene, I feel that it is a duty to warn people.
I don't mind people spending their money on newbie photoshop tricks if they know what they are doing, but I don't like people to feel like they are artists because they can apply photoshop filters to an image and mint them as NFTs. I am keeping the publicity stunts out of this conversation. The article does a great job talking about those.
Another important thing to note is that an artwork's value derives from its cultural effect. So far NFTs' cultural effect is feeding people's belief in get-rich-quick schemes. Our society has stopped valuing hard work and started valuing wealth. We don't care how you attained your wealth anymore. When an item creates wealth without providing value, it is almost always a confidence trick.
If you are going to invest in crypto currencies, at least go on the relatively safest route and invest in Bitcoin and hope that its volatility works for your favor. But know that you are gambling and don't put your life savings on the line.
Is the artwork actually stored in the token or does it contain a URL that isn't guaranteed to always exist? I'm guessing there is no mechanism to change the link if the host should go down or stop hosting the content.
Are NFT's used to recognise a transfer of ownership of the intelectual property?
* The artwork is just pointed to, it's not on the blockchain.
* The URL may or may not exist for any given length of time either. (Even some NFTs that tried to point to IPFS, actually pointed to an IPFS redirector.)
* No other rights - copyright, moral rights, reuse rights, etc - are conveyed without an explicit contractual transfer. Even the Christie's deal says, once you dig through the 33-page sales agreement, that you are just buying the token itself, and not the image pointed to.
Also, you have zero guarantee that the artist had anything to do with that particular NFT - and there's a lot of NFT grifters "minting" other people's art.
The metadata in the NFT can (and in my opinion _should_) point to an ipfs:// style URL. The websites displaying the NFT would have to use some redirector, but the actual token would have a URL that anyone could host (known as "pinning") on the IPFS network.
Remember that IPFS is functionally just BitTorrent with magnet: links. So if nobody's seeding the file ... it's not there any more. And it looks like a pile of literally the sites selling NFTs don't bother seeding the files they've sold, mere weeks later. Thread: https://twitter.com/jonty/status/1372169695277760519
Very few current NFTs exist on-chain. A handful do, and there's the interesting case of generative art where the code that makes the art lives on-chain.
There's a push to get things on Arweave, a solution that purports to be a perpetual storage solution. In the long run, I think all art NFTs will have to go in that direction to remain credible.
Are you saying the underlying asset isn't stored in the blockchain? Or that the "title" isn't stored in the blockchain?
How is the title associated with the asset? Presumably the title is something like a sha256 hash associated with a wallet. How do you know that hash means "beeple artwork"?
What even is the "asset" in a lot of cases?
People are buying Tweets, which are generated in real time by querying a database and generating some HTML and CSS. Or some UI code on native platforms. Or some JSON via an API. What is the asset? The Twitter code that generates the Tweet? A JPEG of the Tweet itself? The text of the Tweet?
If it's an image of the Tweet, does take into account whether or not my user agent is in light or dark mode?
The rabbit hole is never-ending with such questions.
Enter 40913 in tokenURI at https://etherscan.io/token/0x2a46f2ffd99e19a89476e2f62270e0a...
You will see an IPFS URI which contains the metafile.json: https://cloudflare-ipfs.com/ipfs/QmPAg1mjxcEQPPtqsLoEcauVeda...
This in turn contains a URL to the image: https://ipfsgateway.makersplace.com/ipfs/QmZ15eQX8FPjfrtdX3Q...
https://www.christies.com/img/LotImages/2021/NYR/2021_NYR_20...
Whereas the IPFS version of the image is merely 1200x1200. In this case, it really matters because the image is a mosaic that is virtually indecipherable at the 1200x1200 size.
So, it begs the question what is the person actually buying? I get that it's the concept of "ownership" that's being sold, but ownership of what exactly?
When the new owner then goes to sell "it", what do they reference? An illegible JPG?
The NFT doesn't give you jack shit. As the Conditions of Sale [0] says:
> You acknowledge that ownership of an NFT carries no rights, express or implied, other than property rights for the lot (specifically, digital artwork tokenized by the NFT).
[0] https://www.christies.com/pdf/onlineonly/ECOMMERCE%20CONDITI...
Christie's interface didn't just lead with the transaction hashes, but your conclusion is pretty far off, for now.
Try emailing them next time.
I'm understanding of the frustration, it took me a year of asking similar questions about Venezuala's Petro coin, which was even subject to pre-emptive US sanctions, before it became official that the Petro didn't exist and was never issued. Nobody could tell me the contract address and people acted like I grew two-heads for even asking, when it should have taken two seconds.
The technology allows for really basic things to be transparent, and when you don't lead with that stuff and nobody asks about that stuff, it does become pretty obvious that they aren't even using the technology.
(enter 40913 at https://etherscan.io/token/0x2a46f2ffd99e19a89476e2f62270e0a... in tokenURI)
With that said, I went through some random NFTs the other day and I saw a lot of tokenURIs pointing to a plain metadata.json on a regular server that I could access in my browser.
The whole thing relies on a weird level of trust and belief in what other people believe to be valuable.
As money accumulates in larger and larger sums, and is abstracted farther and farther from tangible real-world power and resources, you get this. Things get increasingly weird.
There's got to be some kind of equilibrium point between this stuff, and your basic anti-fiat-currency gold bug, but I'm not sure what it is, particularly since modern macroeconomics acknowledges the capacity to just print money and make it up pretty quickly in the increased economic activity that makes possible: austerity isn't really a functional solution. This crypto stuff really works by the same principle: if you get enough people into it, they CAN'T crash because the important people are too deeply enmeshed in the system and will cheat to any degree to preserve the value of their properties.
I think it depends what is done with it. With macroeconomics, you can have entire countries spurred to activity and producing goods and services because they can transact with resources. With this crypto stuff, I very much wonder if it ends up being a small number of very privileged people demanding rights to increasingly silly abstractions that are said to be the value of entire cities, or countries.
I'm not sure that's sustainable, politically. I'd ask, how convenient is it for the first crypto trillionaires to buy real-world mercenaries? Things could get very dark, albeit in a peculiarly cyberpunk sort of way that might appeal to some.
So people might be trading (as in 2008) to "own" some N-th power representation of private debt that ends up going to zero because the underlying private debt itself was not sustainable. It's different from NFT, but for each degree of distance the financial instrument moves away from the real world, it looks increasingly weird, e.g. I own a share of insurance on a fraction of a bucket of debt people took out to buy their homes. (And I still think this is better than NFT unless the NFT has some underlying real-world thing tied to it.)
The problem as I see it is that NFTs lack any potential energy. Their value is purely kinetic, and expressed in the transaction. If no one wants my NFT, it's so much binary noise.
An NFT is just a pointer. Unless you have a contract specifically transferring additional rights, you literally just bought the pointer.
Is there a stat somewhere showing that IPFS is the most common kind of URL in NFTs?
Maybe marginally better than URL but not very much IMO.
Vastly better than a URL. Content-addresses points to content that can be served from anywhere. URLs point to actual locations. Anyone can seed the content behind the IPFS hash, including the owner of the NFT.
While with a URL, you cannot change it. If the owner wants to make it work after it disappeared, they would have to buy the domain name, make the hosting work again and then setup a server there, add the file so it can be served.
While with a IPFS hash, the owner could just turn on their IPFS node and everything works as before.
Big difference.
If you're using a content-address hash, you can be sure that you can always get back the same result from that hash as when you got the NFT N years ago.
Anyone can mint an NFT that points to whatever, and the benefits you get are purely imaginary or at best speculative that a greater fool may exist and buy it from you for a higher price.
The art world while also somewhat suspect at least has physical possession/ownership.
However just on your point "Anyone can mint an NFT that points to whatever" - sure they can but those NFTs will be and should be worthless. You are able to prove an NFT came from the actual author since it would have been signed with their private key.
When all the fake demand settles we will see if there is any real demand here or not. I myself have no interest in buying any NFTs, at least not yet :).
the point, which is entirely rational from their perspective, is to attract media attention and thus new sources of unsophisticated money to crypto.
It's the standard ICO scam model, but tweaked to suit an even juicier demographic.
You own the equivalent of a museum's accession number.
But I'm much more skeptical of NFTs than I am of cryptocurrencies in general. The most persuasive argument to me has been that it's no different than other collectible items. Art is one example, but I think stamps, coins, and baseball cards are better examples.
I think it's kind of objectively stupid to ascribe a lot of value to some random stamp or coin that is rare because of a printing or manufacturing error. But if that's your thing I'm not going to stop you. And if I were very wealthy and you came to me and made an incredibly compelling case that you'd figured out how to predict the future market values of rare stamps and/or coins well enough to build a profitable trading strategy I would consider investing.
The main gimmick of NFTs seems to be that they make it possible for a digital object to be rare. So I suppose some sort of NFT market could just be another type of collectibles, no better or worse than stamps or coins.
That's the most generous argument I've been able to make to myself. Personally I still can't get over the feeling that they're really stupid.
I am not sure I follow you in associating NFT with the end of Infinite Jest. Not saying you're wrong... Could you elaborate?
[0]: https://www.newyorker.com/magazine/2009/03/09/the-unfinished
We had Duchamp with his pissoir in 1920. I remember someone exhibiting a goldfish in a blender. And now this ...
They would say that art is what happens between the artwork and the observer. But of course it is much broader than that. There is also the artist, the story, the room, the broader society and ... the market.
There have been discussions about it and its value, here on HN. Mostly people that were mad that they exchanging a fixed amount of time in a small range of price per hour for money instead of creating an unlimited number of assets and exchanging them at an unlimited range of prices.
When the works where published they were seen as scams, pranks, criminality, and insults.
People are weird is all.
Just a small correction: they are "valuable" because they are unique AND because people want them. Otherwise they have no value. Scarcity in itself isn't enough to have value, you still have to create hype around the token somehow.
("valuable" in quotes, because it's really not that clear there is any actual value in an NFT that isn't legally binding...)
Metakovan buys to lets the B20 digital fund own art assets. The B20 fund only collected like $3mm dollars and the rest is just a floated marketcap of B20 tokens.
So is Metakovan just going to pay for the art piece personally and just arbitrarily transfer the piece to the B20 address? Like basically B20 itself cannot pay for it, and the auction house isn't accepting B20 tokens.
Its cool Metakovan has so much money. There have been plenty of opportunity over the last few months to turn $3mm into $100mm, let alone over the last decade in crypto. So it isnt outside the realm of possibility that he has that much.
But if he doesnt pay, does Justin Sun get to complete the purchase and get it?
I don't know much about Metakovan's allegations of wrongdoing; but even without looking at these, it's fair to say that there are several individuals who, by just being early in crypto, have amassed the equivalent of tens, or hundreds of millions of US dollars.
It wouldn't surprise me too much if Metakovan has a net worth of hundreds of millions of dollars, and therefore can afford to spend $70M in buying this NFT.
Just over the last three months there have been hundreds of 50x gains. That’s $1,000,000 being a liquid $50,000,000.
Going through the known history of Metakovan’s businesses in the crypto space are a complete red herring to that article. Everyone that has any experience and clout in crypto would have been involved in some service that didn't do well for everyone.
Without some form of transfer tax, this breaks the royalties advantage of NFTs because the NFTs aren't being transferred yet.
I think you will accrue a lot of value and attractiveness if artists and token holders are aiming to be appealing to you and the other competing funds that pop up, if you had a way to make the residual go to the assets in your fund.
You can easily add a transfer tax to the transfer() and transferFrom() methods of the erc20 token, which gets pooled and distributed prorata to all the NFT's royalty addresses. You can even keep that as an array in the erc20 token.
Email me
Anyway: If you’ve worked with the crypto space much, you know there’s a strong undercurrent of some libertarian-esq thinking. Crypto currencies represent decentralized trust, of some kind. I mean, Bitcoin was created in large part because Satoshi didn’t trust the central authorities in charge of the money supply. In some areas you’ll hear the phrase “governance without government” (I.e. fiat). What gives this place any spirit is the drive to overcome problems of distributed trust. Take that away by forcing KYC and now you’ve lost any ideological motivation to push the space forward. It just becomes a digitization of existing societal structures. Let it grow naturally and yeah, you’ll see plenty of scams, but you leave the door open for real innovations (like zero knowledge proofs) that could be worth massively more than any mistakes along the way.
Can you not dismiss an entire space just from your surface-level view? Please? People are doing "actual research" in this space. If you were to comment in a respectful tone indicating that you're actually interested in hashing things out and learning, I'd happily point you to interesting research and experiments around distributed governance and funding of public goods (something which America has a real problem with!), etc.
But when you comment in a dismissive, derisive manner like this, all you accomplish is shutting down the conversation. That's not what we're here for.
If there was any standard practice that could force sheisters to move elsewhere without negatively affecting the rest of us, I would stand by that policy 100%. Even within our standard systems, we tolerate a certain baseline level of fraud. Banks quite regularly work with fraudsters or worse and knowingly violate regulations (see: HSBC, Wells Fargo for high-profile cases). The regulated and the regulators appear to be somewhat cozy at times. But we accept this, perhaps because the value provided by these systems seems to outweigh their flaws.
As for cryptocurrencies: do they provide value to anyone besides the sheisters? Yes. Not everyone is convinced, but at least I can claim to have performed legal transactions with Bitcoin and Ethereum that I don't regret years later and that I wouldn't have done without those currencies, and that's enough to convince myself.
Would these things exist if KYC was strictly enforced on 03/Jan/2009? No. No, there would be no Bitcoin; it would be impossible to reach the audience which embraced it in 2009-2011. The ideas would likely not have spread beyond the cypherpunks, ideas which I personally think have enriched my life.
Should we put up a fight against scammers? Absolutely. Is KYC one way to do that? Yes, but please don't underestimate the cost (previous paragraph) nor overestimate its effectiveness (take a look at the list of coins on Coinbase and Robinhood -- both of which adhere to KYC -- and tell me that these are all things that a responsible company should be promoting to its average user).
Just mind-boggling wastefulness. It doesn't make me feel hopeful about the future of the planet.
It is a scam.
I have concerns for future DRM and MPAA-lobbied legislation could make this - or similar but scales well - the foundation of digital file ownership.
IMO the most interesting problems in computer science are happening in crypto. Especially if you are interested in cryptography or distributed systems. Way more interesting than making some web app ‘scale’ with the same formula everyone uses
I have no interest in blockchain or adjacent tech because I don't see any technical challenges worth solving, so I'd be interested in learning if I was mistaken to come to that conclusion.
The technical challenges in crypto are much more interesting than that of a FANG company’s (i.e enterprise software and widgets)
- That people are only employed at FANG
- That outside of cryptocurrencies, people only work on enterprise software and widgets
- That blockchain has the only difficult distributed systems problems
- That cryptography is being advanced significantly by blockchain (I would like to see more on this if it's true. From a brief search only "zero-knowledge proofs" are brought up, and considering it's a deeply technical math area, just throwing more money at the problem won't necessitate any advancement)
But most of all, you just threw out buzzwords without giving any examples, which is a non-argument.
- How to implement robust p2p networking algorithms for sharding in a distributed system such as Ethereum (a very deep rabbit hole), as Ethereum is migrating to a "sharded" architecture
- How to solve the "data availability problem" https://github.com/ethereum/research/wiki/A-note-on-data-ava.... The current solution uses advanced cryptography known as KZG commitments https://dankradfeist.de/ethereum/2020/06/16/kate-polynomial-...
- How to solve the problem of "transaction frontrunning", in which miners have an asymmetric advantage in ordering transactions they put in blocks for their benefit, which can adversely affect users creating those transactions. This is a problem known as MEV (Miner Extractable Value) https://research.paradigm.xyz/MEV and there is some incredibly sophisticated work going into this problem. It is a deep engineering problem as well
I could go on and probably give you 20 other incredibly technical, challenging problems that are on the bleeding-edge of this technology. If you're interested, would be happy to chat more!