NFT projects are just MLMs for tech elites

You’re right that this is the way many have been created so far, but that will not be the case for long. Already people have pointed NFTs to IPFS/Filecoin which will give them much more staying power. And this can be done without using a centralized platform like opensea, check out nft.storage and metaplex (1) as starting points.

1. https://github.com/metaplex-foundation/metaplex

The assets aren’t necessarily stored on OpenSea. You can see how OpenSea gets the metadata like asset url via the docs:

https://docs.opensea.io/docs/metadata-standards

If you scroll down you’ll see that the assets can be hosted on decentralised networks too like IPFS.

Also, not all NFT projects are built the same. I suggest you check out Pak’s Poets project - it’s a very exciting piece of performance art built around game theory.

Disclaimer: I don’t own any NFTs but that doesn’t mean I’m not excited by what they’re doing.

An example: If I trade oil, one barrel of oil with a certain spec[1] is fungible with another barrel of oil with the same spec. If I sell you some oil you don't care which specific barrel you get as long as it's the same kind of thing. Likewise if you borrow 10 dollars from me you can pay me back with any combination of notes up to the value of 10 dollars, you don't have to give me back the specific bills I gave you.

On the other hand, things like art are not fungible. If I loan a Van Gogh to a gallery I very much want the same piece to be sent back to me after the exhibition is done. It's not ok for them to send me something else. Even if it's "sunflowers" (since Van Gogh painted a few of those and they are quite similar), I want the actual one I loaned to be sent back to me.

Normal bitcoins or ETH are fungible whereas NFTs are non-fungible. The specific one you have matters usually because it represents a digital proof of ownership of some specific resource (a bored ape or whatever).

[1] The spec for oil types standardises particular grades and then people trade a standard barrel size (called a bbl which is short for "blue barrel" because they used to be painted blue). "Brent" and "WTI" are different grades. A barrel of brent is fungible with another barrel of brent but not with a barrel of WTI because that's a different grade.

Where are you going to immerse yourself into this universe and seeing the community and experimentation? I don't know where I'd even start with that.

For those of us old enough to have grown up with the idea of ‘buying a book’, ‘buying a toy’, ‘buying a CD’ or ‘buying a magazine’ we have a particular mental framework for ‘owning’ stuff.

But people stopped buying those things a while ago (people stopped buying toys? Not completely, but certainly some of that spend now goes on apps right?).

So for people who have grown up in a digital-subscription world, they might just have a fundamentally different mental model of ownership - one which is more compatible with NFTs as a reasonable idea than the paradigm us old ‘thing owners’ have.

Like, consider some of the things you likely have bought recently: a ‘twelve month Netflix subscription’, a ‘Steam library game’, an ‘app’… you bought those things with no expectation you could resell them later because you don’t think of those as ‘things’. And because you haven’t yet adjusted your mental model to the reality that this is what you spend your wealth on now - ephemeral digital rights you won’t be able to pass on to your kids when you’re gone.

But if you grew up digital native and the only things you’ve ever been able to buy are non transferable digital pointers to rights to use something, maybe the idea of a transferable digital rights pointer seems like a crazy innovative new idea that changes everything?

“Here’s a receipt for the Mona Lisa that says that you own this receipt of the Mona Lisa”.

So what? You can obviously right click to save the JPEG, so if the platform goes down it doesn't really matter. What you're buying is ownership of the NFT of the JPEG, not the JPEG. Even if the platform goes down, you'll still be able to see the name of the piece in the metadata.

the "centralized platform" blocking you is kind of immaterial. The point is that other people can see that the token matches. Though one difference from CoAs is that the "centralized platform" could remove the art. I don't know how opensea works, but one could in theory hash the digital content, drop it onto bittorrent (or whatever, use the bittorrent hash id) and lock that up with the token. Is that how opensea works?

Could be hilarious if you ask someone to remove it from their site. You own 1% of it? Which pixels do you want recolored? :D

Then the next tier up would store their media on IPFS, if you purchase the NFT you're expected to be responsible for pinning that IPFS content somewhere. That's not communicated too well though. The benefit there is if the original minter stops paying for IPFS hosting but you still have yours pinned, it's still available. I think most of the "Mint as a service" platforms will use IPFS by default.

Then there are projects that are storing the images entirely on chain. These are obviously more costly to create but don't require another service/protocol/platform.

To be fair, the real-life art auction world is basically all money laundering, too.

But after some time that I,um, "participate" in it, I can feel the lots of weird creative energy flowing in there, collectively. Not a thing we see often in today's world. It's quite rejuvenating, and crazy.

While you are right that the NFT is just an entry to the blockchain with a URI to the actual media file, the file is NOT stored on a centralized platform.

While it is possible to use a regular server to store the media file, it is certainly very bad practice and defeats the whole point of NFTs.

The media files are stored on IPFS, which is a decentralized peer-to-peer storage network. This ensures that the media file that a NFT represents, will always be available, since it is hosted by many people on the network.

The difference with baseball cards (apart from not being physical) is that most nft projects are combinatorial, so they make 10000 different cards, constructed from combinations of a much smaller number of "traits". That way the artist only has to draw say 25 faces, 20 hats, 20 eye glasses etc.

With baseball cards you'd instead make 100 different cards, and then print 1000s of copies of each. You could do that with NFTs, but you don't. The reason for that is probably that you can't sell NFTs in sealed packages where 95% of the cards will be uninteresting. I guess you could, but again you don't.

Unfortunately that's not the case.

NFTs are a JSON string on a proprietary entity that point to the image of a baseball card. The image can be viewed by everyone. The bragging rights of owning a JSON string depend heavily on whether or not the proprietary entity will become the dominant player in the I own a JSON string-world.

This also has zero to do with blockchains. The proprietary entity could've used any database they wanted.

It's all a ridiculous scam, but have fun trading JSON strings.

Where any number of digital copies of an asset may exist, the NFT is the “autograph” atop that asset that is unique and therefore adds the value.

(It’s worth noting that anyone can autograph any baseball card. So it’s not the autograph that makes it valuable, but _who_ autographed it. It’s the same with who minted the NFT.)

Have they really? IMHO the whole concept of intentionally creating collectibles as a market started (and IMHO became possible) only after strict IP laws that could prevent anyone from making and distributing large quantities of items that should be rare by design.

My favorite example is the fictional collectible card game Gwent in Witcher 3, where the whole concept of rare/scarce cards is ridiculous in the absence of a single organization being able to enforce a monopoly on issuing Gwent cards; the actual expected result should be like ordinary cards, where everyone gets an ace of spades in their deck or chess where both players get a queen, no questions asked; for human-created marketable collectibles (as opposed to actual collections of butterflies or the like) the scarcity can only happen if artificially enforced.

Mostly because of two persistent lies around NFTs: 1) That you buy a piece of artwork. 2) Blockchain makes it automatically watertight.

All you get is transfer rights of a single number via a blockchain, optionally (usually) with a URI pointing to some media.

Now, why is owning blockchain transfer rights to that number valuable? Because an artist was involved in creating it, and they stated somewhere that the number refers to a specific artwork.

Outside the blockchain, more things have to be trusted for this to hold up:

- The artist in question must be the seller. Sure, you bought it from "banksy44" on nftgox.com, but is that the artist? There are soft ways to verify it, and you can get all sorts of receipts, promises, or statements from semi-official authorities.

- Whatever links the number or the URI to the artwork must remain up. If it's on a regular URL, the host owner gets to decide when to delete it, or when to replace it an ad for their gambling site. If a IPFS resource goes dead, it's gone. If the number referring to the artwork is stored on a 3rd party ledger you rely on them being honest, online, and correct.

AND NOW you have two weaker links in your trust chain, on the level of "humans trusting humans", rendering the blockchain basically useless. The premise is a lie, intentional or not.

While ownership can be enforced equally well with NFTs and baseball cards, the crucial difference is that with physical cards, owners have a unique way of experiencing the card. Anyone can look at an online reproduction of it, but only if you have a physical copy can you hold it in your hand.

This is not the case for NFTs, anyone can experience the image in exactly the same way.

It's still weird to me, but it's weird in the same way other collectibles are weird to me. It's undeniable that they are valuable to others.

But a baseball card, or a Lego set have value on their own. Their collectable value stems from the fact that they are desired as such, and the scarcity makes the price of a certain type go up. Somebody might buy them just to show off or speculate, but another might be a huge Lego nerd and buy the rarest set just to feel joy by looking at it. But an NFT has no value beyond the scarcity. Nobody feels human joy by looking at an NFT beyond being able to show off that they are able to basically burn money in the "i am rich" app type of way. Thus it can only remain a toy for the rich. A van Gogh painting is most likely just a speculation and a show off object, but I might buy a painting from a local artist for $200 because I like it, and to put it on my wall so it makes me happy because it reminds of something nice. I will not buy a $200 NFT just to say I have one too.

https://www.quora.com/Why-did-the-baseball-card-market-colla...

This increases scarcity in a way that just can't happen for NFT's, what would it mean for an NFT to get damaged corners?

At this point, of you say crypto is involved with some new fad it's just a clear indicator that silicon snake oil is the real product.

A Baseball Card has some underlying value and fun, kids get baseball cards. They cannot be diluted as 'reprints' would never be accepted as substitutes.

If some people want to trade those things on the margins, fine.

A 'number' i.e. digital signature is not a collectible.

Digital signatures of any creative work are meaningless, nobody will derive satisfaction out of owning them and they'll probably just lose value over time.

It's an obvious money grab populist grift that really doesn't create net value for anyone.

The big difference with NFTs, of course, is that the true nature of the transaction is not being disguised. That makes it legal and even ethical, but whether that is enough for you to be a buyer is up to you.

The value came from the rarity of people all over buying random packs of cards, collecting them, trading them and the established rarity that came from that massive distribution coupled with holding the cards for a decade or more to see how one of these players career played out. On the off chance that you held onto a rare card of a legendary player, then congratulation...you have something of value. More so if you took good care of it.

There's none of that with NFTs. It's akin to handing out flyers on the street and asking somebody to pay for them on the basis that..."Sir, that flyer belongs only to you now. Congratulations!"

NFT's are just digital proof of an old adage.

"A fool and his money are easily parted." - Thomas Tusser # I bought the rights to the quote from an NFT

Like for art pieces, sure people can make copies and put the copies on a wall - but only I have the original to hang up my wall. There is value to most people between having a copy vs the actual thing.

There is obviously a massive disconnect with this and NFTs because anyone can save a copy of a NFT (or the image a NFT represents) and not have its value diminished because all the "copies" of the NFT are the same - since "originally" doesn't apply to digital goods.

It doesn't matter if there is some hash on a blockchain out there saying so-and-so "owns an image", I can still copy the image and get the same value. That is not the case with say having a copy of the Mona Lisa vs the actual Mona Lisa.

NFTs are worthless to me for the above reason aside from the value that other people think they have.

When you buy an NFT you're not even buying the GIF, you're buying the receipt proving you bought the GIF. What good that is without owning the GIF isn't exactly obvious to me.

To use a print analogue: a print of a photographer’s work likely holds no significant value* unless that artifact is provably signed (or otherwise approved) by the artist. To take it a step further; a convincing photocopy with a fraudulent signature will also hold no value, once it’s determined to not have come from the original creator.

* Here “value” refers to cultural and artistic significance in how it is perceived by an art market. Of course a poor photocopy of a Mona Lisa holds cultural value because of what it signifies, but a museum isn’t about to acquire that artifact from you.

This part is incorrect. Every token is signed can be verified against the content creator's public key. You can absolutely verify a "genuine" NFT.

Anyone else could print and sign a baseball card, mint an almost identical NFT. But if they come from someone besides the techno viking they won't be worth anything, because anyone could do the same thing. But the techno viking can certainly sell more to others just like a baseball player can sign a lot of cards.

Is this a solution that works long term? I'm not sure about that. It's a hard question to answer, but I'm glad someone's going for it. I would personally expect ycombinator to be more open to these kinds of ideas -- Programmatic solutions are something we can all get behind. It's a hard problem to solve but that's what drives a lot of our passion in this field, correct?

Basically yes, you'd be right. Someone has to call him out. But do you expect an automated system to handle that in a fair and ordered manner? We already have a terrible (user-wise) implementation of that -- DMCA. What's important is ascribing ownership for the long-term, even if we have to do it manually and surprise -- that's what NFTs (could) do.

I could be wrong but from what I've seen, I think DAOs could bridge that gap. These 'headless' communities create that manual self-regulation that is needed -- social verification fueled by some sort of financial incentive, driven through a very public system.

A major useful function being the ability to buy and sell with purely digital money, was that possible before?

I'm uninterested in the NFTs with big price tags, and I'm uninterested in pieces that I don't subjectively enjoy the art of.

I care, but I'm guessing you either didn't literally mean nobody cares, or you are going to brush off this counter example for whatever reason.

Not possible to trace where the money is coming from.

In fact, someone can "sell" an NFT to themself in a wash trade between two wallets they control. The last trade price of the NFT is now recorded as the transaction price, but it's possible that money never actually changed hands.

Want to have an expensive NFT? Just trade it to yourself for as much money as you have in your crypto wallet. You keep the money, you keep the NFT, but now everyone can see that someone "paid" a certain amount for it.

Unless you know who the buyers and sellers are or transaction fees are high (like an auction at Christie's), you have no idea if the sales are real, so it's pretty easy to make it look like the asset is appreciating when it's really just manufactured hype.

"Ecosystem" is a word that I believe sprung to life in the 70s, referring to the entire collection of organisms inhabiting a 'place', along with the weather conditions etc. in that place. The term was coined because without it, you need (or rather, I needed) 16 words to express it.

So it bothers me when people use the term to refer to collections of stuff that's never been alive: the Java ecosystem, the cryptocurrency ecosystem. These are not "ecosystems" - they're called "systems".

See also "epicentre".

Upvoted - I appreciate the observation about where the NFT volume comes from.

Probably 1/2 money laundering and 1/2 rich people that have too much cash and ran out of ideas.

As with everything NFT crypto, the value is all probabilistic anyways /s

Who convinces people that NFTs aren't just a fad, they're really innovative and you should consider adding them to your portfolio? Not people who don't own any.

Pyramid and MLM are related concepts, and usually MLM is pyramid. That doesn't mean all pyramids are MLMs though. Same applies for other types of scams or structures.

[1] https://support.opensea.io/hc/en-us/articles/1500009575482-H...

How about: Sign the image and generate a MAC. Then use steganography to include that information in the file. For the NFT sign create a certificate with the same key and include the MAC information. Publish that together with an IPFS link to a blockchain.

Then we can have discussions about IP law, art and what art ownership means.

High end art is more about investing, money laundering, and tax havens then status.

[0] https://en.wikipedia.org/wiki/Veblen_good

I will literally crawl on the floor to laugh at that stupidity.

https://central.ppsspp.org/whygold

All of these things end up being an exercise in cryptocurrency people in a round-about way proclaiming to the world that they don't know what a thing is.

For example: NFTs are a great idea to people who have never read an undergrad definition of what art is.

That is what people say, but what I don't understand is what ownership is actually conferred with NFTs. The only "ownership" is the ability to transfer the NFT to another person, which simply gives them the ability to transfer it to another person (which sounds a bit MLMy).

For ownership to be worth more than that, you need a legal system and a legal contract ... so back to square one.

>Note: It is important to note here that we think that NFTs as a technology hold incredible promise to help more evenly distribute financial outcomes to community users, not just community organizers. We are in the early days of exploring what digital ownership actually means and it is far too bearish to universally decry the technology. Our concern is with the following types of NFT applications.

That doesn't mean there is an infinite number of any given collection.

I'm a pretty big crypto-skeptic, and I'm especially an NFT skeptic, but this is a weird argument. It's kind of like saying there could be an infinite number of paintings, so why should Picassos be worth very much? Even more, it's possible to create extremely high quality reproductions of famous Picasso paintings, but they would have just a teeny amount of value of the original.

Reason being, with very expensive art, and other things like a signed book or baseball card, what you're really paying for is the provenance of the item, not so much the thing itself. While I'm skeptical that the NFT form of "digitally assigned provenance" will be valued similarly, I can understand the argument for why a piece of digital artwork with an associated NFT isn't that different from a piece of physical art with the artist's signature.

Consider this statement: Scarcity is fundamental to any store of value. There are an infinite number of potential cryptocurrencies.

But the reverse is not necessarily true. NFTs are just fundamentally a lot worse than cryptocurrencies. They have every problem that cryptocurrencies have, except they're also not scarce, require centralized verification mechanisms, have bad incentive structures around hoarding, are prone to link rot, etc, etc, etc...

NFTs are much harder to justify than cryptocurrencies are. They're all of the drawbacks with virtually none of the upsides. I don't know anyone who likes NFTs but dislikes cryptocurrency.

Right now, there are no mechanism for extraordinary digital artists to make their art expensive like IRL art. The best thing is you can do commissions for people, but it's hard for them to maintain their rights (both for artist and customer).

Maybe NFT will be more prominent with some "data registry" between platforms to make it global to check your rights on items, and great artists can sell their art for a more reasonable price. For now, IRL art is like a "club for friends," and digital artists are not taken as seriously as they, even when digital one draw some almost masterpieces and spent 3-6 months on every item.

There are an infinite number of made up currencies as well.

Because neither of them function as a currency then they are the same thing, the difference being, with NFT's you own some 'art' or something like that, with Crypto you own a 'number'.

The 'potential usefulness' of Crypto makes it feel like it has more material merit, but in practice, they're not useful (not yet), so they might as well be NFTs.

There are no Crypto models today that make sense in any real systematic way, other than some governments reasonable attempts to be more digital, which comes wit a bunch of scary caveats as well.

Currency is a form of social credit that is fundamentally tied to the economy in which it is used as a means of transaction, there is no escaping that reality. We can't just magically make up some thing that is independent of that underlying reality.

If we could merely overcome the kludigness of banks, and the transnational cost of VISA - and make something a little more easily internationalized ... those things would help, but those probably are going to have to be a function of 'good governance'. Maybe the experiments in New Zealand and Sweden etc. will pay off if they can find something that works, that can be expanded upon.

I'm sure we'll see much more interesting use cases for NFTs emerge over time, and I'm excited about that.

How would that even work? Supposing I bought the car and received the token, what's to stop me from selling the token and keeping the car?

> property is moved to an open database

But it's not really in most cases. Only the claim of ownership is in the database.

And the claim part is important.

> Aston martin can now have a lounge in France where only Aston Martin owners can join

What if I sell my car and don't transfer my NFT showing ownership of the car? Who will enforce the requirement that I must transfer the NFT when I sell my car?

And then there's all the times people's artwork has been straight up ripped off and minted into NFT's without their permission. The only provenance record a blockchain can authoritatively track is its own internal transactions -- it can't even prove that the original artist was involved at all; you're still relying on trust for that.

You wrap the token into the new standard if there is a new one when there is a new standard. Look at cryptopunks, they are wrapped into ERC-721.

An NFT can be some shitty gif hardly worth mentioning let alone displaying.

I own plenty of concert tickets.

An NFT is verifiable metadata that can link to any other arbitrary data, such as a PNG, JPG, MP4, or whatever. Following the standards set forth by ERC721, you can add an image, external URLs, names, and various attributes that define the item's traits in relation to a broader collection that it belongs to.

It is very common to use IPFS for hashing the contents of both the metadata and the image (or other linked media), since it's an easy standard to adopt to back up in multiple places. You can even back up IPFS files permanently using a storage solution like Arweave.

NFTs have been linked to physical items. Typically the way it's handled is the NFTs are sold, but are redeemable for the physical item by the creator. So you can either hold the NFT or redeem it for the physical item. At which point the creator will need your shipping info to get it to you.

NFTs could also be used to represent things like real estate titles and mortgages, but at some point there would need to be a centralized connection or oracle connected with a centralized entity for that use case.

They're also used to represent liquidity positions in decentralized exchanges such as Uniswap v3.

Marketing and hype? Demand increases, sales go through the roof. Hype passed? No one is buying.

With NFT situation is 1:1.

Just like people that collect stamps pay x100-x1000 for many. Do they have value? No. Scam? No.

Bzzt. No. This is what NFTs claim they do, not what they actually do.

How do you know that the person creating a NFT has the right to do that? The NFT tracks the chain of ownership for the NFT itself, if the initial person creating the NFT did not own the copyright for the art in question, then the NFT itself is useless.

Second, there is no way for the NFT chain to enforce off-chain actions. If you have the NFT for a copyrightable piece of work and you believe someone is infringing your rights, you must still go to the regular legal courts and sue over it. The NFT itself cannot enforce your IP or collect royalties on your behalf.

The real reason NFTs exist is simple. ICOs were shut down by the SEC. The SEC prosecuted a few of the total scam ICOs (the one supposedly backed by diamonds and real estate was the first). Then they sent letters to every ICO issuer in sight: "Please explain why your product is not a security offering which requires SEC registration". Most of the ICOs shut down immediately. Operating from outside the US doesn't help. If you sell into the US (or the EU, or China, or most of the developed world) some regulatory authority wants to have a word with you.

Now, part of the idea behind NFTs was to escape SEC and CFTC regulation. Because each one is different, it's not a commodity, by definition. Is it a security? The Howey test applies, as usual. An NFT which represents something that already exists is probably not a security. That's a collectable. However, there are people selling NFTs that represent land in virtual worlds that haven't been built yet. That's a security; you're funding a startup. Also, "fractional NFTs" are almost certainly a security.

So the legit use of NFTs is to monetize fame. Which is why basketball team owners and musicians are into this. If you're famous enough to sell merch, you may be able to add an NFT to your product line. People will buy, hold, and cherish your thing.

Initial offers of unknown NFTs intended to be resold at a profit are doomed to failure, for the usual pyramid-scheme reasons.

As I point out occasionally, go look at Beanie Babies on eBay. Offering prices around $5000, no bids. Then search for completed sales. Prices around $10-$50. NFT prices are like that. Mostly, you're looking at asking prices and wash sales. NFT markets, like Beanie Babies, don't crash. They stall. There's no liquidity. No market. You may have to advertise to find a buyer. Just like the leggings suckers.

[1] https://cryptopotato.com/what-are-ether-rocks/

I don’t doubt there exist people whose lives have been improved (for the time being) by the existence of cryptocurrency, but the overwhelming impact has been a disaster.

They literally do nothing of the sort. An NFT has no capability to restrict or monetize the usage of the work it is linked to, nor does its existence prove anything about the origin or authenticity of the work it is attached to. These are myths with no basis in fact.

By way of example -- I could, if I wished to, create a NFT associated with a public-domain photograph of the Mona Lisa, and assign that NFT to myself. This doesn't give me any capability to manage rights to that image, nor should it assure anyone that I painted it.