Comment by jameshart | Hacker News Reader

Comment by jameshart | Hacker News Reader

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> Surely the baseball card’s value does not come from the fact that you can hold a piece of cardboard in your hand.

Oh but surely it does.

Cardboard is fragile, and degrades if not looked after. Over time, the average condition of cardboard cards will deteriorate. So, if you own a baseball card in good condition, and can look after it better than the average, over time you will end up with one of an increasingly rare class of pieces of cardboard - an old baseball card that is in good condition.

It’s not hard to imagine that in the distant future there will still be people who place value on the history of baseball who are interested in owning, for example, a collection of mint original baseball cards dating to the original era of each player, for every hall of famer who ever played for the Giants.

So the speculative value of any baseball card includes some expected value estimate based on the possibility that it might, someday, be the last of its kind, and some millionaire needs to buy it to complete a collection.

Can you really tell a similar story to yourself for why the expected future value of any NFT isn’t zero?

But then I come by and scan your card and print a fresh one. This is fairly cheap to do. Why is mine not valuable? Does this process devalue yours?

NFTs posit that the answer is that yours isn’t authentic and the process won’t devalue mine because mine is. And they offer an algorithmic mechanism to enforce and verify authenticity.

In the baseball card world, that ought to be true, but may not be. Maybe my fake is sufficiently good to fool the market.

Then at that point we realize that what is really valuable is that authenticity. We can make cards themselves infinitely cheap to copy flawlessly and the proof of authenticity remains distinct and valuable.

Your copy doesn't just lack 'authenticity', it also lacks something uncopyable, and which is only relvant to physical artifacts: 'age'.

The fact that digital copies can be perfect, and never age or deteriorate due to the inevitable march of entropy, is a fundamental difference and yes that affects how valuable 'owning' a digital artifact is versus owning a physical one.

> The fact that digital copies can be perfect

But you've hit on exact problem the blockchain solved from day 1, you can copy the image (just like you can download hi resolution scans of baseball cards) but the underlying "cardboard" cannot be copied, or copies can be detected with 100% accuracy (depending on how you look at it).

Some day, the last original 1986 Barry Bonds rookie baseball card will disappear, lost in a housefire or an alien invasion or something. There might still be high quality digital images of what that card looked like, in archives of eBay auction pages and the digitized records of the baseball hall of fame and whatever other ephemera wind up in the Svalbard vault.

And in fact, the photo reproduction on that card was already a poor 1980s print quality reproduction of an original photo of Barry Bonds, which probably - no matter how well it was looked after - will have suffered and faded with age as print tends to; and that actual original photo was probably reproduced in a bunch of other places outside of that run of baseball cards - and maybe the original negative of that film exists in some archive somewhere, with a high quality digital copy available - from which you could reproduce an even higher quality picture than was presented on that card.

But you would never be able to replace that card, because the point of the card was its physical connection to the moment in time where a legendary career started.

"Humans preserved this specific lump of matter and kept it safe over a long period of time even though that was difficult and, let's be honest, not very important" is what gives value to antique collectibles.

"Humans preserved the cryptographic chain of custody of this sequence of binary digits that reference a specific widely archived piece of digital media over a long period of time, by creating a distributed computing system that just automatically ensured it would be passed on to posterity whether posterity wanted it or not," doesn't create the same human connection.

I disagree, I think you are putting a lot of importance on the image. Think Runeacape party hats, attachment to digital goods is not theoretical.

No, I’m putting importance on the artifact.

Yes my bad, that’s what I meant

I think this is basically true. Impermanence is part of what makes possession important. I can totally see the value of all NFTs decaying on long time scales because they're just boring.

But on short time scales all age is similar and authenticity seems to be sufficient to at least toss a bunch of liquidity from place to place.

I think placing the value of baseball cards on the fact that they are made out of cardboard is mostly trying to rationalize a preconceived notion that baseball cards make sense whereas NFTs don't. But even then, similar dynamics to the one you mention also apply in the NFT world: people lose the keys to their wallets. In that sense, the NFT completely degraded. This will probably happen to many NFTs as has happened to a significant amount of bitcoins.

This is about where I got to when pondering this with regards to NBA Top Shot:

1. Is it irrational to pay large sums of money to collect NFTs? Yes. 2. Is it irrational to pay large sums of money to collect physical cards? Also yes.

Regardless, we humans are weird and will do it anyway.

Fragileness is not a requirement for rarity, you can just as easily print fewer baseball cards / NFTs to begin with to reach the desired circulating supply.

Beyond that though, keys get lost so NFTs do have a mechanism of leaving circulation.

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