Think about it like this It used to be that when you bought a painting, if you bought an original, you got a painting + signature showing it’s an original.
NFTs are meant to be used for digital art, where the physical object doesn’t exist, and anyone can make their own copy. So think of NFTs as when we “decoupled” the art from the signature.
So Before you bought Physical Art Print (limited) + Signature
Now you buy Digital copy (one of infinite) + Signature
Since the digital art is infinite, you’re mostly really paying for the signature.
What you’re getting with an NFT is just the signature. The art, being digital and infinitely reproducible is still out there. Curiously, what we’ve found is that if you make just a Market for digital art, where you sell only the signatures, people will come and trade them and buy them.
You might ask - well what the hell is the point of buying just signatures? To what I’ll reply that everyone has their own kink, and that it has solved a big problem for digital artists who can now make money for their art instead of having to shill for brands or make trash to fund what they really love.
Think of it as a form of DRM for digital artists, in the actual meaningful form of the term - Rights Management being the operative words here. It used to be that in order to enforce DRM on “legitimate” copies of a film for instance, Netflix runs a bunch of servers, sells you the streaming and reliable delivery of pixels to your screen. But really they are just enforcing DRM over a bunch of pixels. Same thing with indie artists today. They can do something they couldn’t do before, which is to digitally sign X amounts of their artwork and sell it on an permissionless global market.
IMO NFTs right now are little more than a good way to fund artists you like by buying digital signatures over their digital art.
Digital artists made and sold art online for a long time. There's a new way to do it, but "can now make money" is a weird way to phrase it.
It's indeed a "new" way to make money. You cannot "pirate " this signature. As for whether this signature is indeed worth the price being paid - only time will tell. My bet is that it's not worth anything, but it is possible that it's worth a lot more than i give it credit for.
You can't stop anyone else from making different nft pointing at your art and saying their nft is original. So maybe you can't pirate it, but nothing stops you from making as many nft pointing to someone else art as you want. And selling them.
Let's substitute "digital signature"/"NFT" for "tulip", or "star", or "moon crater", or "beanie baby", or "MLM beauty product". How is the market for NFTs any different from these essentially ponzi-scheme markets?
"NFTs allow digital artists to profit from their work!"
I mean, sure, but again, they are selling digital signatures with no inherent value that they need to "make a market for". The money they are making isn't because of their art, it is because their sales skills allow them to convince greater fools that inherently worthless digital signatures are actually worth something.
Would we say "selling stars enables amateur astronomers to profit from their work"? Or would we rather say selling stars enables scammers to scam people who don't know any better? Or charitably that selling stars enables charitable people to donate money to whoever is selling the "star", both parties to the transaction recognizing that there is nothing of value being exchanged.
The latter would be forgivable but it also seems highly unlikely there would be a large market of altruistic donators wanting to provide patronage specifically via NFTs. We have a large and robust financial system that is perfectly capable of facilitating low/no-cost donations. It seems more likely that illegitimate or shady capital needs ways to achieve liquidity and legitimacy. And the whole "supporting artists"/"allowing artists to prosper" narrative is a fantastic (and sufficiently complex) cloak that would achieve that while avoiding scrutiny.
tl;dr When a market for an inherently valueless, infinitely reproducible resource pops up out of nowhere and begins to rapidly inflate, it seems likely there's some sketchy stuff going on under the hood.
Yeah you lost me there we must have radically different exposures to NFT art because the stuff i see is magical. Not sure what you’re looking at but you should check out Hic Et Nunc, OBJKt and my fav - FXhash which is a generative art market on Tezos.
A lot of things you’ve said can be true and simultaneously we could also have a healthy global digital art market growing under our noses for the first time in human history.
but that market isnt selling art - it's selling the signature for a piece that is infinitely reproducible. if i was unscrupulous, i could just pirate the art, and forget about the signature, and the artist has no recourse but to sue me for piracy.
how the signature plays into this i dont know, but it seems that i can entirely ignore the signature if i want the art.
If you mean that you can just re upload the art somewhere and mint NFTs under false pretenses, I expect this to (hopefully) be solved soon.
NFTs are an authentication mechanism for provenance/authenticity but it is not meant to prevent others from looking at the art.
In the Philippines, people have been making money playing crypto games such as Axie Infinity. Before you can make money, you have to buy 3 Axie toons, which are NFT assets. Because many Filipinos can no longer afford the toons, people have created "scholar" programs where Axie owners can share usage of their inventory in return for a percentage of earnings. I could talk to Filipinos about this all day and the words "art" and "NFT" would even come up.
I think it's more correct to simply say that NFTs are simply a record on a blockchain. As with Bitcoin, it's just another application.
If you don't understand NFTs, that's fine. Maybe you're not meant to understand them. Maybe you're not the audience. Maybe there's something shady going on. We live in a big world with lots of languages and cultures. You won't understand all of them.
Sorry for the rambling reply. Christmas break hangover. ;)
And created an entirely new one: people selling other people's art for hundreds of thousands of dollars. What a great system.
It doesn't matter if it's rare card, beanie babies, or just a handfulll of pretty meaningless data. If it's rare and associated with something cool, no matter how tenuously, people will buy it.
And cryptocurrency backbone facilitates effortless resale.
So to generalize:
Introducing a limited supply to the right early adopters creates perceived exclusivity and value.
Perceived exclusivity and value draws attention.
Attention increases engagement creates FOMO.
FOMO attracts audience and grows community.
Community stabilizes value, and with enough momentum spins off new projects where the cycle starts over again and the system expands. This is often where outsiders and newcomers begin to enter.
Plug that flywheel into crypto where it not only facilitates effortless transactability, but the barriers to entry drop to the point where access is determined by who can get there first and the price of entry.
This is a huge factor in the explosive and viral growth that many NFT projects have seen.
TL;DW: it's an immutable representation of some data (usually a hyperlink), put on to a public blockchain such that ownership of this representation can be verified.
Not much different to a regular certificate just different trust assumptions (certificates use a trusted party, while NFTs use a "trusted" technology).
Think of NFTs like digital Gucci and Prada.
They are used for social status signaling. This is very important to some to show elevated importance and wealth. For example Jay-Z bought a $120K CryptoPunk NFT and used it for his Twitter profile photo.
Some NFTs can also get you into exclusive clubs and parties. Again, signaling. But now you get to hobnob with other high net worth individuals. This too has a lot of value for some.
It's a tale as old as time, just in the digital world. Maybe it's just some fad that will fizzle out. Regardless, if so then those who can afford this will move on to buy something else to signal their wealth and eliteness.
Besides all of this, they're used for speculation and money laundering.
Source: someone I know who makes and sells NFTs
But we are in a surreal world or a digital gold rush, If you say we are on the block chain selling nfts digital currency blah blah etc you, ll get interest from investors your stock might go up . news headlines on tech websites The potential return could be great and how much does it cost to make digital images put em on a private block chain etc not much A nft is simply an image jpeg etc with a digital record signature recorded on a block chain digital database that can be inspected is tamper proof as it's verified on many different computers, The mystery is why pay 1000s of dollars for a nft If you want to support an artist use patreon or pay a subscription or send them money or buy their merch
You could buy weapon skins emotes costumes 5 years ago in games without the need to use blockkchain Your items are linked to your steam psn or Xbox live username Gaming company's already have databases of all the games and items you buy online
NFT is made for digital entities not humans.
https://news.ycombinator.com/item?id=29668054
That's a good introduction.
It satisfies the desire of vanity for the consumers.
When you purchase an NFT it means people will acknowledge (backed by the blockchain) you're the only person in the world to "own" this particular item.
The need to create NFT is to get money from whatever you created, if there's anyone find it interesting and wants to "own" it.
To get copyright protection on something you may need to hire a lawyer, file some papers etc.
Maybe NFTs are more similar to a combination of letters of authenticity and a deed when you buy a painting or something at auction stating that the thing you have is real and that you are the owner.
There are indeed exceptions, but I doubt any of those exceptions are going to care about NFTs either.
I'll give you that it does allow creators to extract value from their work.
For real legitimacy of the source, you need either the author or a trusted third party.
I think people are being sold the idea that they're buying a certificate that proves they own (in some sense of the word) the artwork, but in reality they're being sold a certificate that proves they own the certificate.
- what is the name of the license covering the work of art - who is the original author - what date was the work created - what if anything was it derived from - are private or public performances allowed - is copying allowed - does the license allow for sublicenses or transfers
And, as we get into the money question: - what is the cost to play, display, or perform this work - who should be paid
I could imagine, say, iTunes being able to play NFT protected works, and being able to collect a fee from the user to be able to play it. In theory this would go directly to the rights holder, which would perhaps be the original author rather than a music publisher.
Another example I saw was that artists could create limited editions, say of 1000 of a digital image. If I wanted to display these on my TV, I would have to have own the NFT. The NFT addresses the problem of how Samsung figures out how to pay the rights holder. Usually after a work of art is sold, the original author is out of the picture. But, they could encode an NFT so that whenever the ownership is transferred, the original creator gets a slice. So, the original creator would continue to benefit from works which appreciate in value.
Where is the incentive for a company to actually bother reaching into the ledger to determine who holds royalty rights? The underlying media pointed to by the NFT is not restricted, it's infinitely reproducible and thus valueless. Why not just right-click save-as and display the media, bypassing the metadata encoded in the NFT?
It seems like there'd have to be some person or collection of persons who are responsible for enforcing that the company treat the terms of the NFT as a binding agreement. Using force, if necessary, either legal or physical. Something almost like... a legal system associated with a state. Which would be centralized. Which would beg the question, what's the value of the decentralized ledger in that case?
It is protected by copyright or other IP law, and not valueless.
I would say that the incentive is that they can access a market of digital products without fear of being sued by the rights-owner. The value of the NFT approach is that it can all be codified and automated so that a) as a creator I can get paid for my content without having to negotiate contracts with every distribution channel b) distribution channels get access to every piece of content.
Not saying that NFT's will work in the end, but that's my understanding of it.
In simple terms, though, it's just codifying the license terms, so that at least has some value as digital media grows and content creation becomes decentralized.