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Comment by bko | Hacker News Reader

> A week after the project launch, the anonymous developer known as Evil Ape who promised that game vanished along with the project’s official Twitter account and website

That's the one thing I don't understand about NFTs. Proponents claim they're supporting real artists, but so many of them are run by totally anonymous teams. The other big issue is that OpenSea has (what I assume) are non-binding bids so you can bid up your NFT. And obviously you can buy from an alt account or have an insider buy it.

I would like to see an NFT market that burns 50% of the amount with binding bids and escrow. No one like burning tokens, but that'll make it a lot more expensive to have an insider inflate your NFT

The rug pull here is also weird, because the project was a success. Sure they may have overpromised or been in over their head, but the organization and brand has at least some value. They could have sold it and not just abandoned it since they didn't owe anyone anything

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I mean what is the value of having NFT's at all? Fraud and price inflation might be solvable problems, but it still seems like you have the core issue that there's no underlying value to the asset at all.

And that's not even a comment on the artistic merit of many of these, which is a farce in itself, but all you get is your name in a ledger. The work itself is just a file like any other.

I'm skeptical, but I can think of few use cases:

1. you could actually want to support the artist. Right now I don't think the popular NFTs are real artists, but there's no reason real public artists can't jump on board. NFT could be a flex

2. Social networks could build in NFTs. Dorsey from Twitter mentioned he wants to add NFT verification into the app, so that could be a thing. And they could give you more prominent placement. It's basically like non-commercial advertising. Kind of like a star next to your name.

3. VR could try to enforce that some objects can only be controlled by the owner. It would be difficult, but possible

1. You can already donate to an artist you like through a platform like Patreon

2. If it's a feature of a social network, don't you already need a central authority? What's the value of an NFT then rather than just an entry in a database?

3. Similar: whoever is implementing this theoretical VR environment could just be the authority of who owns what. I don't see what an NFT adds here

I think they mean that NFTs could be brought into the game or platform like Twitter. Buy a painting NFT, show it off in Second Life or the like. So the apps wouldn't control the assets, only verify them.

I'm not "for" NFTs but that seems like it could be used in cool ways.

That still requires a massive distributed investment in infrastructure to support this. Every game that you want to show off your painting in needs to a) support importing any of these "portable NFT-based items", b) actually implement the models (and any necessary supporting code) for them in their own format, whatever that happens to be, and c) implement restrictions based on checking the ownership of NFTs against some identifier for the actual items.

Again: Every game/environment that you want to bring your NFT-items to has to implement this. And they're not getting paid to do so, because your NFT money is going to whoever is brokering them. Where the hell is the incentive...?

One incentive might be that the game/environment wants to compete against other games/environments on being a platform which facilitates NFT trading. Taking their pound of flesh off the top of course.

I’m not a big crypto guy at all, but I do see the analogy with the very real digital economies you see on platforms like Steam.

But again, what's the incentive? For instance with something like CS: Go skins, the developers of the game are doing all the investment creating the asset, and they have zero incentive to make this available outside of their game?

Secondary markets increase demand for the primary market

How would that benefit them? The major game companies already have robust systems for making digital assets and selling them to people, does it really seem likely that they’d jump to give a large fraction of that revenue to someone else for the privilege of having a slow, cumbersome intermediary which would still require custom integration work for every game?

> 1. You can already donate to an artist you like through a platform like Patreon

You feel like you own something that the artist can only sell once (assuming they're honest). Also, I don't know if there is a credible receipt for a donation on Patreon that you can use to flex

> 2. If it's a feature of a social network, don't you already need a central authority? What's the value of an NFT then rather than just an entry in a database?

I guess a social network could leverage the hype behind existing NFTs rather than rolling their own. Sure there will be some that will try to have home-spun NFTs, but Twitter indicated for now they just want to use existing NFTS

> 3. Similar: whoever is implementing this theoretical VR environment could just be the authority of who owns what. I don't see what an NFT adds here

NFTs could also be transferable across platforms. Obviously platforms wouldn't like this, but as a user if I buy a virtual house, it would be better not to be tied to any one platform. So new or existing platforms could try to lure me over by saying I can bring my house with me

> You feel like you own something that the artist can only sell once (assuming they're honest). Also, I don't know if there is a credible receipt for a donation on Patreon that you can use to flex

Yeah I mean I understand the appeal of ownership, but it's just so abstract in this case. If you "own" a picasso, you have something nobody else has. If you "own" an NFT, anyone with a copy of the file has exactly what you have.

> I guess a social network could leverage the hype behind existing NFTs rather than rolling their own. Sure there will be some that will try to have home-spun NFTs, but Twitter indicated for now they just want to use existing NFTS

What would this feature/integration actually look like?

> NFTs could also be transferable across platforms. Obviously platforms wouldn't like this, but as a user if I buy a virtual house, it would be better not to be tied to any one platform. So new or existing platforms could try to lure me over by saying I can bring my house with me

Yeah but why would they? So what would my NFT "house" be? I guess this is a 3D asset, with a model, some textures, and a collision model that can be rendered inside this VR world. Basically every platform which wants to make this asset usable has to bear the costs of supporting and rendering this asset, while the NFT issuer reaps the profits. What is the incentive here?

> You feel like you own something that the artist can only sell once (assuming they're honest). Also, I don't know if there is a credible receipt for a donation on Patreon that you can use to flex

Couldn’t this be done better, at far lower cost simply by having the artist put your name on it or post a video saying “thanks @bko for supporting me!”? That’d have just as much weight, it’s more personal, and you wouldn’t be diverting a substantial amount of money away from the artists to the finance bros.

I agree. It's just that you would need a way to flex that on social media. I guess they can make a page or something on their site but honestly NFTs are super simple low tech cheap way to elicit donations with a receipt that can be easily acknowledged anywhere

NFTs are “low tech cheap”? That’s a lot of expensive infrastructure and client software to keep running just for receipts – a note on a web page or watermark on an image would be both easier and more robust since they don’t have any third-party dependencies.

I can upload a jpg, put in my wallet address and sell an NFT on opensea. I don't have to pay or maintain the infra. No charge backs, tax reporting, stripe integration, etc. I don't even need a website, just pimp it directly on my social

Your transaction fees pay for the infrastructure - and if you’re not paying taxes that’ll catch up with you if you make a habit of leaving signed public confessions around for the auditors. If you don’t generate enough fees, that grinds to a halt since unlike other applications there’s no other benefit to keeping it running.

> I mean what is the value of having NFT's at all? Fraud and price inflation might be solvable problems, but it still seems like you have the core issue that there's no underlying value to the asset at all.

I think the analogy to baseball cards works very well. Owning an NFT generally doesn't grant you copyrights over the underlying work of art. Owning a baseball card doesn't mean the athlete now works for you. They can both still have value as collectible items, if that's something that interests you.

The problem is when people start talking about NFTs as if it entitles the holder to ownership of the underlying thing. It's possible to own a work of art, either physically or in terms of copyrights. NFTs are neither.

When Dorsey sold an NFT of the first ever tweet, that didn't entitle the buyer to copyrights or even the ability to delete the tweet. It's purely a collectible that derives value from official endorsement and scarcity. That's not something that interests me personally, but it all seems above board. The problem is when I read Dorsey sold the first ever tweet. He did not. He sold an NFT.

Yeah I think it's quite different from baseball cards. There the authenticity of the physical item is quite a part of the value proposition. People want to own the the actual original which was part of the print run in whatever year. Reproductions have no value, and things like the physical condition of the card play a huge role.

With an NFT there's nothing besides the notion of ownership which separates the owner of the NFT from anyone else who has access to the digital asset.

I'm not saying there's nothing interesting about the notion of digital ownership, but someone would have to figure out a way for that ownership to actually mean something, which has not been achieved in the current iteration.

> There the authenticity of the physical item is quite a part of the value proposition.

It's exactly the same for NFTs. Dorsey's NFT sold for $2.9 precisely because it was 'issued' by him, and there's the implicit promise that he won't sell another NFT associated with that same tweet. If you or I tried to sell NFTs to that tweet, nothing would happen to the tweet, but we wouldn't find willing buyers.

> I'm not saying there's nothing interesting about the notion of digital ownership, but someone would have to figure out a way for that ownership to actually mean something, which has not been achieved in the current iteration.

Ownership of digital goods is the domain of copyright law.

> It's exactly the same for NFTs. Dorsey's NFT sold for $2.9 precisely because it was 'issued' by him, and there's the implicit promise that he won't sell another NFT associated with that same tweet. If you or I tried to sell NFTs to that tweet, nothing would happen to the tweet, but we wouldn't find willing buyers.

There's nothing tangible here What does the "owner" of the tweet actually have that nobody else has? It's an incredibly abstract sense of ownership which doesn't even have any social consensus as far as whether it actually exists or not.

> There's nothing tangible here

Tangible strikes me as an imprecise word. In a sense, all sorts of things are intangible, from copyrights to money. Does a bitcoin count as intangible?

> What does the "owner" of the tweet actually have that nobody else has?

It's plainly Dorsey's tweet, not mine, and not yours. Dorsey wrote it, published it on his account, has the ability to destroy the tweet, and presumably owns the copyright. It's the same thing with baseball cards, they're valuable because they're official, and the community has to defend against counterfeits.

> It's plainly Dorsey's tweet, not mine, and not yours. Dorsey wrote it, published it on his account, has the ability to destroy the tweet,

I think that's the point. With a baseball card, I clearly own the physical card, and can put it in the spokes of my bicycle if I want to.

You mentioned the owner of the tweet is the Dorsey and I agree. If so, then what right did the NFT owner purchase? None as far as I can tell.

Right. It doesn't entitle the holder to any rights, it's purely a collectible.

Again, owning an NFT doesn't mean you own the underlying work, and owning a baseball card doesn't mean the athlete works for you.

The idea of the floating signifier comes to mind. [0]

> With a baseball card, I clearly own the physical card, and can put it in the spokes of my bicycle if I want to.

Sure, but they both share the property of scarcity, and in the same way. The originator could in principle dilute the scarcity by issuing more (printing more baseball cards or issuing more NFTs for the same underlying asset). Is there anything of interest that changes by making it physical? I suppose the ability to destroy, but I think that's about it.

[0] https://en.wikipedia.org/wiki/Floating_signifier (not a great article in my opinion but I don't know of a better one)

Also, I made a typo earlier: Dorsey's NFT of course sold for $2.9m, not $2.9.

scarcity is only the supply side of the equation.

next year if everyone decides NFTs are nonsense then the demand side of the equation could collapse to zero.

scarce things are only valuable if there's demand for it. things which are only unique are not inherently valuable unless humans decide that uniqueness is also valuable.

> next year if everyone decides NFTs are nonsense then the demand side of the equation could collapse to zero.

...

> things which are only unique are not inherently valuable

Of course. Just like baseball cards. Put more broadly, all value is contextual; there's no such thing as inherent value. In a survival situation, a bottle of water has more value than a gold bar.

One analogy I find interesting: imagine a book signed by the author (clearly worth more than an unsigned book). Now imagine that the signature could be extracted from its physical form, and traded independently. Is it silly to value that? Maybe; but that begs the question of why people value signatures.

At any rate, there are other use cases for NFTs beyond ephemeral pseudo-ownership of art [0]. Strictly speaking, a library card is a type of "non-fungible token". The real magic happens in the social ecosystems and institutions that define relationships using those tokens (same as with fungible tokens, which are otherwise just paper).

[0] https://theblockchainsocialist.com/unlocked-the-best-leftist...

So I think the value of a signed book (which I agree in itself is dubious) is based in the provable history and scarcity of the artifact. You know that this individual copy of the book you are holding was touched by the author themself. There is something romantic about that, and you have something nobody else has.

With an NFT, your "copy" of the actual work is totally indistinguishable from every other. The whole concept of ownership here is also incredibly abstract.

I'm not saying there will never be a legitimate use case for something like an NFT, but I think we haven't seen it yet.

I'm really bullish on NFT's (for example I think I'd feel a lot more confident if my ebook or streaming library was a series of NFT's as opposed to some entries in a database owned by Amazon. I'd actually own it and could choose to resell it if I wanted too) but we're really early right now, and I think there's some learning that needs to happen. Once we reach the trough of despair, we're be able to build this stuff out with the high profile failures.

Why would you prefer the ebooks to be connected to NFTs? You’d still be relying on someone to store them for you, since the tokens don’t contain the actual work they reference. What am I missing?

> for example I think I'd feel a lot more confident if my ebook or streaming library was a series of NFT's

How would an NFT be better than a non-DRM local version?

Either the text would be available on the blockchain, in which case anyone would be able to read it, or the token would allow you to go to some central site where you put it in to access your book. In which case the site could just disappear or lock you out anyway. Unless there is some distributed platform where anyone can host copyrighted material and let you access with a token, but I doubt any publisher would allow anyone to hold and administer access to their intellectual property

Serious question: how would an NFT ebook market work? The NFTs I've seen are all based around files that anyone can access, but only one person holds the NFT. But if the file is an ebook, I can just read the ebook and not buy the NFT. Why would I buy your NFT of the ebook? It seems like you'd need a DRM scheme, and now you are back to relying on a central authority.

NFTs seem to have some value based on the prestige of being the person who holds the NFT, like being a sponsor of a park bench. Anyone can sit on the bench but only one person has their plaque on it. But with an eBook market, loads of people would own practically identical NFTs of each book.

License anyone who holds an NFT to distribute copies to other holders of the same NFT for profit. (Holding proven via cryptography)

This would allow legal torrent-style distribution where hosting generates funds like mining. (It'd probably just be a nominal fee like $.10, but hosts could choose)

How would that be enforced? The problem is cheating and the blockchain has no way for me to prevent you from buying a copy for $10 and giving the epub to all of your friends, letting them pay you some other way. The current systems wouldn’t even require that first payment — anyone on the internet can just download it - so it’s unclear why any author would offer their works this way at all.

That's already happening right now regardless.

This is a mechanism for licensing digital goods distribution. Currently, you need to sign up with a platform that will sell your thing for a significant cut, and the thing is stuck to your account and at risk of disappearing if the platform folds or decides to ban you.

With this, your works could be distributed at no cost to the creator in a way that is legal and sanctioned by the creator. This is a way to make torrenting entirely above board. Digital ownership is more durable for consumers, and distribution is cheaper for creators.

Authors might as well just sell non-DRMed digital downloads from their own websites- which they already do sometimes. I can't imagine the hosting costs for that are really a problem. They can even accept Bitcoin if they want.

I don't get what actual value the NFTs give you, it's not like I am ever called on to prove my "digital ownership" of the non-DRMed books I buy already.

The difference is that this requires the author to make their works freely available to everyone on the internet in the hopes that enough people will pay.

If you torrent stuff, you have to worry about legal repercussions (think about how many people talk about that as the main reason they use a VPN) and spending time on dodgy websites with a history of malware. This would avoid all of that risk and prevent ISP blocking since your traffic would be indistinguishable from paid downloads.

Similarly, this requires payment of not only the often considerable NFT overhead but also the maintenance of the content delivery servers because storage and bandwidth aren’t free and you can’t accept payment without the guarantee that someone will get what they paid for. That’s only “no cost to the creator” in the same sense as it is currently where it means lower net income. And, don’t forget, that means the author is paying to serve pirated copies out of their cut, which is unlikely to be a popular feature.

Finally, these are complex distributed systems to keep running. It seems far less likely that Amazon will break your Kindle library than that a blockchain network will become too expensive or even collapse.

The only thing preventing ebook resale right now is rightsholder's fear of piracy. An NFT-based system wouldn't help in that regard.

> Once we reach the trough of despair, we're be able to build this stuff out with the high profile failures.

That is one option. The other one is that we realize that it's a worthless endeavor and we stop doing it. I predict they will eventually be made illegal, like pyramid schemes have been before it.

> I'm really bullish on NFT's (for example I think I'd feel a lot more confident if my ebook or streaming library was a series of NFT's

Then you've probably misunderstood what an NFT is, because by definition creating an NFT means you are making it public and available to anybody, which when it comes to protecting your copyright is a strange things to do.

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