There has been a lot of talk about the potential of blockchain, but so far all I have seen it used for is crime and speculation. Would love to be shown I'm wrong on this.
I’m sure it’s possible to build a similar platform with a central database handling transactions and Stripe payouts, but I’m not sure it would be met with the same enthusiasm (and, despite the possibility of this with past tech, no pre-blockchain digital art marketplace has come close to meeting it in sales).
Due to the decentralization of the art tokens (via the blockchain), the community has been able to grow and evolve in a way that a centralized platform could not. For example: while the site’s contract was paused to repair a bug, artists continued to trade tokens directly peer-to-peer (no platform needed), and even build new sites and platforms that enabled trading & auctioning on the same Hicetnunc-minted tokens.
[1] https://restofworld.org/2021/inside-brazils-diy-nft-art-mark...
In other words, a lot of people probably made a very good profit operating tulip markets in Holland in the 1600's, but that doesn't mean they were creating value.
Not all may agree with these values, and perhaps this platform and it’s tokens will not persist after some years, but I’m not sure that means the project does not currently provide value to those participating in it.
Because “NFTs are dead” (according to the media) we have hopefully past the moment of tulip mania. But perhaps it will really take some more months or years for this to truly “die” — during which time the artists have a viable marketplace to distribute their art and earn revenue on it, where no prior option existed for them. Or, perhaps it will not die so quickly, if enough people continue to see value in collecting and supporting digital artists in this way. Time will tell.
The sticking point for me with your proposed value proposition is here:
> value to collectors (digital ownership over a scarce conceptual artwork)
My question would be: is it really digital ownership that collectors are interested in? Or is it the chance for future profit on the assumption that these NFTs may increase in value.
I suspect in most cases it is the latter, and in this case we don't have value creation, we have speculation. Essentially it's just a bet with a very significant downside risk. Speculation, especially in an atmosphere of irrational exuberance, is much more likely to result in the destruction of value than the creation of it.
When I buy a digital art token worth 1 XTZ (around 2-3 USD), it is closer to skipping my morning coffee for the chance to support an artist’s latest work, perhaps from an artist that I have been following for years on Twitter or Instagram without giving them any support besides Likes and Retweets (“exposure”). I have no intention of flipping or speculating on the art — but of course if there is demand for that token I may consider trading it, as it would give me even more XTZ funds to continue supporting other artists in this way.
I have not yet re-sold any Tezos NFTs, and I have bought hundreds from many different artists and illustrators. If none of these ever sell, I won’t feel like I have lost anything, because the value I see in this is not in the speculative nature of the asset.
And to your question: yes, many collectors appreciate the digital ownership aspect, and enjoy building out carefully curated galleries and showcases of their owned tokens, much like many traditional art collectors take pride in owning and displaying their collection.
Consider the fees alone: I pay monthly fees for Shopify, for art printing and shipping, pens and physical materials, hosting my domain name and studio email, and so on. Not to mention the cost of my time (replying to emails, customer support, editing my store's website, etc).
All of this to enable revenue on my primarily digital art. I do enjoy making physical art prints, but I mostly work with software and code, and the art I make is better experienced digitally. Before NFTs, there was no established mechanism to earn revenue on digital art (primarily because there was no established mechanism to 'own' digital art), so I was forced to adopt physical printing and e-commerce despite it's high costs, annoyances, and generally poor return on investment.
In contrast, I can mint an art token on Hicetnunc for less than 25c USD. These fees do not go to a central platform like Shopify, but to the blockchain that helps maintain the provenance and permanence of the tokens I am distributing.
There are many other benefits of blockchain in this digital art space, I have written about it extensively[1].
[1] - https://mattdesl.substack.com/p/subscapes-part-1-preface
That's where it breaks down when buying stuff for me personally. Prints admittedly run into the issue of "walls get full", but I have not figured out a way to regularly enjoy digital art, especially since everything comes in different sizes and scales. Plenty artists I follow (you included ;)) now are on HEN, but that has kept me from getting into any of it, even though I get the limitations of prints.
There have been combinations of screen + digital art "subscription" in the past, which I never liked because of their closed nature, but maybe some amount of standardization/embedded display hints/... towards a more open variant of that will develop.
https://news.ycombinator.com/item?id=27770605
Largely this question comes back to decentralization, trust, and a novel paradigm of digital ownership that is enabled by elliptic curve cryptography and blockchain tech.
The blockchain acts as a social consensus mechanism - we can all agree that "X public key owns Y unique token" - which is not the case with a centralized database record that can be mutated, or a file that can be easily copied/edited and shared.
So blockchain itself is completely useless here, and all the value lies in the hype. And once the hype goes away, there's nothing underwriting the value of the system.
Part of the enthusiasm around these platforms is in the idea of decentralization of art assets (which cannot be achieved with a central database). See the latter part of the post you replied to.
For example, some artists on Ethereum are deploying their own token contracts[1], without the need for a distribution platform like Hicetnunc, SuperRare, etc. Once minted, these tokens can be traded on a secondary marketplace such as OpenSea (which may not have taken part in the initial distribution). If those secondary markets fail, the source of truth still lies in the blockchain, and the tokens can still be traded via any new marketplaces that emerge, or via smart contract queries through blockchain explorers like Etherscan, or even via one's own command-line (the web merely acts as a thin interface over these distributed endpoints).
I do agree that artists on Tezos are becoming too centralized to Hicetnunc (compared to, say, NFTs on Ethereum, which tend to be very diverse), but I believe this to be a solvable problem[2].
[1] - https://www.deafbeef.com/
[2] - https://twitter.com/mattdesl/status/1412713480893960195
So what value does a distributed, anonymized ledger add, when the artists are the central authority who determine what is and isn't authentic? In the end, the value comes from the artist saying "I made this, not an impostor", which is the same as any physical artwork in history.
Do people just want to own art without being burdened by the ownership of physical goods? That sounds rather irrational even compared to normal art trades.
To your second point: much of today's art is not manifested by a single physical artefact. Conceptual art has been around for a long time; ownership of conceptual art is not new[1], but the advent of blockchain gives a new vehicle and distribution mechanism for it, in particular digital and software art.
[1] - https://www.artsy.net/article/artsy-editorial-conceptual-art...
Is there any advantage over a traditional certificate signed by PKI? I'd say the risk of X.509 PKI in its entirety disappearing is significantly lower than the risk of any individual blockchain startup failing. (How's that for decentralised redundancy!)
> To your second point: much of today's art is not manifested by a single physical artefact. Conceptual art has been around for a long time; ownership of conceptual art is not new[1] but the advent of blockchain gives a new vehicle and distribution mechanism for it, in particular digital and software art.
So we're back to hype for the sake of hype, detached from any technical merit.
But, if you were to create a PKI-enabled digital art marketplace that is able to meet the same decentralized structure and benefits of NFT technology, without the need for a distributed ledger and tokenization, I'm sure many artists and creators would welcome that.
Chinese law defines what's legitimate in China. By definition such wire transfers aren't completely legitimate. They should be IMO, but they currently aren't.
1) Imagine I have 100 USD and 100 EUR and I want to provide liquidity to a USD-EUR pair to get a cut of exchange fees. Which automated market maker do I need to contact in the space of "conventional financial technologies" to do so?
2) Imagine I have 1 BTC and I want to lend it (in a secure way) to get some return (in BTC). Who should I contact in the space of "conventional financial technologies" to do so?
3) Imagine I want to borrow 100 USD using BTC as collateral. Who should I contact in the space of "conventional financial technologies" to do so?
Do you consider any of the previously-mentioned use-cases to constitute crime and/or speculation? If yes, why?
Are people that have Bitcoin not allowed to do useful things with what they have? Does it bother you that there are actual legitimate use-cases for these things (as you seemingly admit, by not including my first example in your comment)?
Someone asked for an example, and I provided a few... perhaps you don't see value in the examples I gave, but there are people out there who do.
And, again, thanks for continuing to support my point, by failing to address the fact that the first example I gave had nothing to do with BTC.
Have a nice day.
Yet, you are the one doing unbased accusations of fraud ("stablecoins are essentially fraud"), and still haven't replied to the question I made 4 or 5 times already: What if I choose to get my returns in some asset that is pegged to USD (e.g. DAI, USDC), am I still speculating on the value of BTC?
I guess my question is inconvenient.
I'm done here, but I do hope you have a nice day. And, don't worry, I won't bite your bait ever again.
Oh come on, look at your comment above mine in this thread. You're splitting hairs and trying to find minute flaws in the arguments against you instead of actually arguing the points. It certainly makes it look like you cannot defend your actual arguments.
> Yet, you are the one doing unbased accusations of fraud ("stablecoins are essentially fraud")
I never said all stablecoins, but some certainly look like they are.
> I'm done here, but I do hope you have a nice day. And, don't worry, I won't bite your bait ever again.
Oh I'm not worried!
Was that comment addressed at you? Please point out an actual example of me engaging in bad-faith argumentation with you. This is what you said, right? That I was engaging in bad-faith argumentation with you (not a third-party: you).
> You're splitting hairs and trying to find minute flaws in the arguments against you instead of actually arguing the points.
Uh... finding flaws in other people's arguments is how rational people argue. If you have a flaw in your argument, it's not a good argument.
Again, please point out a situation in which I'm needlessly splitting hairs with you and avoiding a question you asked.
> I never said all stablecoins, but some certainly look like they are.
Ah! So now that you figured out how bad your argument is, you decide to move the goalposts. You say "stablecoins are essentially fraud", and I'm supposed to interpret that as "some stablecoins are essentially fraud", rather than "all stablecoins are essentially fraud"? Sigh.
If you're not arguing in bad faith, it sure seems like you're going out of your way to make it seem like you are.
I keep forgetting how I'm not supposed to feed the trolls... ah, well...
If it makes it any better, I can lend BTC and ask to get returns in USDC (which should be worth as much as 1 USD, if you trust Coinbase). Am I still speculating?
Regarding point 3, where is the speculation, exactly? If, at any point, the BTC I left as collateral goes below a certain level of collateralization (let's say 200% of the value of the borrowed asset), I'll just get liquidated: whoever lent me the USD will get their USD back, and I will lose my collateral (or a part of it, at least), if I fail to keep the value of my collateral over the threshold.
I think perhaps we have a very different idea of what "speculation" is supposed to be...
Either way, I guess you accept that there are use-cases that are otherwise not being provided by more traditional tech/institutions. Good.
Because if 1 BTC = 0 USD, and has no real-world utility outside of speculation, there is no compelling reason to try to acquire more BTC.
A big assumption here. I can also hypothesize that 1 USD = 0 EUR, at some point in the future, and, thus, holding or buying USD is pure speculation and there is no compelling reason to try to acquire more USD.
Under this logic, I shouldn't ever buy or hold anything (forex, stocks, etc.), lest its market value goes to zero.
Also, thanks for ignoring the rest of my point: What if I choose to get my returns in some asset that is pegged to USD (e.g. DAI, USDC), am I still speculating on the value of BTC?
For 1 BTC = 0 USD, all you need is one government, which has been the victim or ransomware attacks, to regulate BTC out of existence.
Which is a possibility (the same way that 1 BTC = 0 USD is also a possibility; just a very unlikely possibility).
> For 1 BTC = 0 USD, all you need is one government, which has been the victim or ransomware attacks, to regulate BTC out of existence.
Unfortunately, reality proves you wrong. Here [0] is an example of one government regulating BTC out of existence (or trying to)... but I'm sure you can find others.
What's the price of BTC today? (hint: not zero)
I think there's not much point in continuing this discussion, since you seem pretty convinced that the ultimate value of BTC is zero (even though you admit that there probably are legitimate use-cases for such things). If you already pre-decided that it is the case (and you are totally within your right to speculate on the value of BTC), nothing I can say will change it.
Also, thanks for ignoring the rest of my point: What if I choose to get my returns in some asset that is pegged to USD (e.g. DAI, USDC), am I still speculating on the value of BTC?
[0] https://www.cnbc.com/2021/03/15/india-plans-cryptocurrency-b...
Personally speaking, I was on the other side of this until about 3 years ago. I first learned about crypto in 2011. At one point I realized I was not looking at the facts unfolding right in front of me. I was just telling myself "look everyone are idiots, and everyone is going to crash and burn because of this. This makes no sense." Then I realized smarter and smarter people were getting in and more and more people were getting convinced and either I benefit from this or I become the person on the sidelines left behind.
1) There seems to be very credible evidence that Tether and other stablecoins are essentially fraud, and Tether makes up a massive portion of the BTC market cap
2) Ransomware is becoming increasingly prevalent, and has managed to compromise large institutions - it's not difficult to imagine regulatory action banning cryptocurrency as a result of this
3) Similarly, BTC is viewed by many as an unnecessary driver of fossil fuel consumption. Carbon regulation will necessarily get stronger in the next decades, and BTC may face harsh regulatory challenges because of this
> I think could
Who is speculating about the value of things here? Wasn't speculation supposed to be bad?
None of the things you mentioned support the hypothesis that the value of BTC is literally zero (not 0.00000000000001 USD, but literally zero).
> 1) There seems to be very credible evidence that Tether and other stablecoins are essentially fraud, and Tether makes up a massive portion of the BTC market cap
I have a hard time even parsing this ("Tether makes up a massive portion of the BTC market cap"), and it sounds more like an appeal to emotion than an actual argument. Please explain in which ways are DAI and USDC "essentially fraud". Perhaps you should contact US authorities, and complain about the fraudulent Coinbase, if you really believe that to be the case (and if you're not just engaging in unfounded speculation).
2) Yea I see this as a risk. Might reduce the value but tbd on how much. On the flip side you have entire countries trying to adopt it as currency.
3) This current change is much needed IMO for btc to evolve and I'm glad its happening sooner rather than later. BTC mining getting kicked out of China is great. If BTC can't survive without fossil fuel consumption it doesn't deserve to exist. This is forced evolution and I'm pretty optimistic about it.
My initial question still stands. At what point will you think you are wrong with regards to the value? Will you constantly move goal posts, as I did for years, or have a line in the sand after which you will adopt it.
> My initial question still stands. At what point will you think you are wrong with regards to the value? Will you constantly move goal posts, as I did for years, or have a line in the sand after which you will adopt it.
I know this is a common argumentative tactic to attempt to get people to change their mind. I don't know what would change my mind, but we're certainly not there yet as long as the risks which I cited still exist.
Even so, how do you go from "there are legal proceedings against Tether" to "there seems to be very credible evidence that Tether and other stablecoins are essentially fraud"?
Being hyperbolic does not help your argument here... it just makes it seem like you don't know what you are talking about (i.e. you don't know the difference between USDT, USDC and DAI, for example).
> I know this is a common argumentative tactic to attempt to get people to change their mind.
You seem to be under the impression that people are trying to change your mind, rather than simply pointing out the flaws, leaps-of-faith and speculation in your argumentation.
Trust me... you also did not convince anyone that the value of BTC is literally zero (except the ones that were already convinced).
This might be effective on other forums, but I'm quite confident the HN audience will not be impressed.
Ah, yes. Like the argument that "Tether is being investigated for fraud" thus "every stablecoin is essentially fraud". Seems like a water-tight argument you have there.
> However you are posting from a brand new account,
So, instead of addressing my actual arguments, you're concerned about going through my account history? Great. Note that my account is not "brand new", though: I created the account days ago, to participate in discussions that have nothing to do with "blockchain". You can check it out in my history, if you haven't already.
> continuously splitting hairs rather than confronting the argument head-on
Point one one single argument that you have made to me, that I did not respond to head-on. Just one. I'll wait.
In the meantime, while you look for it, and as a proof that you are indeed argumenting in good faith, feel free to respond head-on to the question I already made 5 times: What if I choose to get my returns in some asset that is pegged to USD (e.g. DAI, USDC), am I still speculating on the value of BTC?
Until you do, I'll keep assuming you are discussing in bad faith and refuse to reply to anything else you write.
> and generally engaging in bad-faith argumentation tactics.
There is exactly one such comment from my side (or one that could be seen as bad-faith, if you consider "pedantry" to be a sign of bad-faith), and it was not directed at you, so I'm not seeing where your complaint comes from. I re-iterate: point out a single example of me engaing in bad-faith argumentation with you. A single actual example. And then, maybe, we can continue the conversation. Until then, and as I already said, hope you have a nice day.
So you admit you were arguing in bad faith?
> Point one one single argument that you have made to me, that I did not respond to head-on. Just one. I'll wait.
> point out a single example of me engaing in bad-faith argumentation with you. A single actual example. And then.
Sure, how about this very comment?
> Ah, yes. Like the argument that "Tether is being investigated for fraud" thus "every stablecoin is essentially fraud". Seems like a water-tight argument you have there.
You're misrepresenting my statement in a way to obfuscate the very real fraud accusations against Tether and other stable-coins. I never said all stablecoins are fradulent. Why are you focused on that falsified version of my argument rather than arguing against the fact that Tether is indeed fraudulent?
> maybe, we can continue the conversation
Not interested in continuing it, thank you!
This is a common tactic to best understand if I am wasting my time. Seems like I am. Hope you have a good rest of the day.
What actual "argument" did you put forth? You brought up tether and stablecoins, which is a pretty speculative argument. Nothing concrete is happening. The other two points you mentioned I directly addressed.
> seems like you have been wasting everyone's time. A good day to you as well!
lol. How am I wasting anyone's time? You in a long winded way basically said nothing can convince you. So who's wasting whose time? I literally said BTC doesn't deserve to exist if needs to rely on fossil fuels. That's where my line is. What's yours? Nothing. So yes, I am wasting my time while you are arguing religiously with no way to convince you so you are basically wasting everyone else's time.
Also let's not forget other legendary investors like Stanley Druckenmiller don't think the risks you mentioned are substantial enough to not invest. But I'm sure you understand the risks much better than them.
2) Lending can be regulated, so might or might not be ok for you to lend - not a lawyer. What about KYC/AML etc.?
3) Aren't there specialized prime brokers that do that? (maybe Genesis?)
Exactly. So, if I want to put liquidity in EURUSD market, I have no choice but to actively manage it, since traditional financial institutions won't do it for me. That was my point... to bring up examples of use-cases that are not covered by traditional financial institutions.
> 2) Lending can be regulated, so might or might not be ok for you to lend - not a lawyer. What about KYC/AML etc.?
Sure, lending is regulated. But then the problem mostly lies with AAVE (for example), not me (they are the one lending my assets, after all, and the ones possibly subjected to KYC laws), I would assume.
My point is... even if you are willing to go through KYC, and have nothing to hide (e.g. you got your crypto-assets, or whatever you want to call them, legitimately, and file your taxes correctly), there simply is no traditional financial institution that has a "BTC savings account", for example.
> 3) Aren't there specialized prime brokers that do that? (maybe Genesis?)
Probably. But then the argument that "there is no actual use-case for blockchain outside of crime and speculation" kinda breaks down. If you consider Genesis to be part of "traditional finance", then it's clear that "traditional finance" sees value in these things (it's not just vapor). If you consider Genesis to not be part of "traditional finance", then you're just confirming what I implied: there isn't anyone in "traditional finance" providing such services.
Depending on which country you are in, things like bitcoin savings accounts are starting to emerge. Also funds might be able to invest.
And yes, traditional finance is starting to see value in providing services for these things (and has so for a while) - not strictly the same as seeing value in the underlyings, but separate point
EDIT: Just to address your edit...
> On EURUSD, you could look at currency funds (not strictly the same, but as close as it gets)
And will they be willing to talk to a person that only wants to put 100 EUR + 100 USD into it? I seriously doubt it.
Either way, thanks for the insight and information you brought to the discussion.
All this means is there is money to be made. It does not mean that any particular use-case exists. So no, this does not make it hard to hold on to the idea above - no use-cases outside of crime and speculation.
If you provide storage for people's stuff and someone wants specialized storage for tulips you probably do not care whether the tulips are worth anything or useful. You rent them the space to store their tulips if you can make money that way.
And tulips are not worthless... they just aren't as valuable as people thought they were, during the tulip mania.
Making money trading or storing something does not mean that something has a use-case (hence the tulips example). So the fact that people make money off other people who think Bitcoin is the best thing since sliced bread does not mean Bitcoin has any use-case or intrinsic value.