OpenSea valued at $13.3B in new round of venture funding
nytimes.com
nytimes.com
“I thought that as a casual investor, I could engage and help pump my bags about the project, as I normally do on here (especially with my apes; and other people who own heavy bags of other projects). But doing that caused my followers to buy more into the project.”
This is the market that OpenSea is serving. Their revenue, valuation is all a product of “pumping bags”. Maybe that has long term viability… maybe that’s worth 10s of billions. Maybe.
Edit: Ah, reading the thread I think he means that buy tweeting a lot about a particular project he could raise the secondary market values (which could be considered a good thing even if you don't cash out at those levels), but instead his followers bought in at the mint level, which he was being paid a percentage of.
In other words, he was making money from his followers buying into the project. I can see how he'd consider that differently and regret it.
https://www.themarysue.com/dont-buy-your-girlfriend-an-nft-f...
The Twitter hate on Carson's Turner buying of @JoeRogApe is just astounding.
https://twitter.com/carsonturner/status/1477520574620606465
I think we've hit peak NFT. Given that and all the verbal web3 hate I've been witnessing, I expect NFT to go south shortly.
Can anyone explain to me the utility of an NFT? I don't understand why it's anything other than some code (written on a blockchain) saying you own this. But people can just copy whatever you own (assuming it's digital like an image). And if it's a physical thing with an NFT attached to it, why is an NFT better than a certificate of ownership?
I guess a better question is: what problem does an NFT solve?
(I think Trading jpg files is stupid)
Just like Bitcoin... https://henvic.dev/posts/bitcoin/
It automates and simplifies the identification of Tusser opportunities.
For example, an NFT could be a usable as a game license. It's nice that I could trade the game license to someone else without having the game developer approve it.
Now the practical applications for this are pretty limited at the moment, largely due to the fact that the larger/more secure chains such as Ethereum are very limited in their transaction rate, and as a result transactions cost a lot. This restricts the use case to multi-thousand dollar digital assets, such as dumb rock jpegs or digital real estate.
To most reasonable people, this looks dumb. I agree that it is. However, if the transaction rate goes up dramatically (which is currently possible on layer 2), then the use cases open up dramatically to things that normal people might actually be able to use.
We aren't there yet (I do think we will get there, but really it's totally fair to criticize NFTs before we get there).
Well, no. They prove you own an NFT, but they don't prove you own anything other than the crypto asset.
That NFT might be a fake NFT, that is not issued by the artist/game themselves.
Instead, it is the central authority, of the artist themselves, that determines who actually owns the asset.
Or, in other words, you do need someone to "vouch" that you actually own the real digital asset, and that the one you have is not just a fake.
You can certainly have someone sign an NFT, or issue a certificate, and that may be valuable to someone. But whether or not this occurs, if you own a digital asset, then you can easily prove it. That's the novel invention.
It seems pretty directly related, in fact, it seems to be the only distinguishing factor between one NFT and another, without the blessing of the central authority the NFT is fundamentally interchangeable with any other ublessed NFT... making it quite fungible.
> Typically these buyers will value an NFT due to the rarity of the NFT
This is burying the lede, rarity of the NFT matters once the 3rd party is tying something to it.
Think about this for a second, what is an NFT allowing? Allowing you to prove you own the NFT. When do you prove you own the NFT? ... when someone 3rd party that asks to check it. And why do they ask to check it? Because they've added some sort of meaning to it by tying it to a non-NFT asset.
If a 3rd party does not assign some value to it... who's going to check you own the NFT? To what end will they check you own the NFT? An NFT with no 3rd party value is essentially a non-fungible cryptocurrency, and what good is a non-fungible currency?
> this is the authority that you are referencing
You know it's not. You're replying to an article about how the centralized agency that maps NFTs to non-NFT assets held by 3rd parties is now valued at 13 billion dollars.
> Now whether that asset is blessed by some third party, and whether that blessing is considered valuable, is largely unrelated.
No it is related when people are talking about if it solves an actual problem. And without that blessing you're spending money to own a token with no meaning, so there's no problem being solved. It's literally buying a receipt with no purchases written on it and then claiming "well the receipt is a purchase!"
NFTs rely on centralized systems to actually do anything. If you own a Bored Ape and get invited to a party, the people at the party don't have to let you in just because you showed them proof you own some NFT: https://www.theverge.com/22824387/bored-ape-yacht-club-nft-p...
If you use an NFT to show ownership of a video game, the publisher doesn't have to respect your ownership, if they revoke access tied to your NFT token, what difference does it make vs the pre-NFT world where you could have proven ownership with a paper receipt?
In any situation an NFT is literally a token. A widget that you can prove you own without relying on a specific 3rd party.
A widget that has no value until said specific 3rd party agrees to tie your widget to some asset. But once you rely on the 3rd party to make your widget actually do something, you've essentially recreated a digital copy of your receipt with extra steps and killed all usefulness of the decentralized aspect.
These concepts break down extremely quickly in practice.
For the above to work, the game developer would have to support all of this and code it into the game. There's nothing inherent to NFTs that makes a game license automatically transferable, nor does the game developer have to code their game such that the NFT-ed license continues working after it has been sold to someone else (all transaction history is part of the blockchain).
What would really happen, in practice, is that the game developers would almost certainly require the NFT contract to involve some kickbacks to them. For example, you can trade the NFT license, but the contract requires sending X dollars to the game developer. Do you really think game developers are eager to leave money on the table?
Not to mention, NFT transactions are bonkers expensive right now, at least on Ethereum. It's fun to think about trading game licenses on the blockchain, but if the transaction is going to set you back $50-100 USD just to make the contract go, you're not going to be trading anything on the blockchain that can be bought new for $10-$50.
Perhaps. But I think you may be jumping to conclusions there. The truth is that licenses have not been easily transferable in the past. So there's the effect here that the value of transferring the license can be accounted for by the user. If one platform (Steam/GOG) begins to utilize NFTs, then it's very possible that could cause market expectations to rapidly change.
Imagine if cars were not transferable easily, then one day they were. What do you think would happen to the car market? Certainly, I'm sure if car manufacturers could have their way, they would make it impossible to transfer used cars because it artificially constricts supply. Yet under this hypothetical I don't believe that would occur. Instead, the car makers would need to adapt to having a secondary market.
Check out Tezos, Cardano, et al.
Likewise, NFTs are records in a smart contract that has been deployed to a Turing-complete blockchain. Following the ERC721 standard (which is the most popular but not the only example), the contract must implement an interface consisting of several methods that define how rules for ownership transfer are handled and what metadata defines the NFT.
An NFT could be better than a certificate of ownership, due to the ease and universality of on-chain verification. You can observe the entire chain of ownership of something if it begun as an NFT. You can also use an NFT in software programs to provide token-gated content, or to customize the user experience. Another major benefit is worldwide markets with 24/7 liquidity. It's also trivial to fractionalize or place into the custody of a DAO (on-chain organization). By no means is this list exhaustive, but there is a few.
paired with signing messages to prove your blockchain identity, you can prove to others your identity and assets in your control
think if the contract was for movies from hbo, and by logging in you can view and download movies you own nfts of.. this is obviously not the case today, but may help highlight what the future may look like. you can of course think of and read about similar use cases for assets we ‘own’ today.
a lot of the push in blockchain is for decentralizing authority and democratizing access, where the above example is only solving the former
No, it is the case today, at least for services that sell videos. Let's say today proof of ownership is your bank statement and an email from Amazon saying you bought a movie:
You can buy a movie from Amazon Video. You can have proof of ownership. Amazon is not contending your proof of ownership. Amazon agrees you clicked "Buy" and paid money. Amazon reserves the right to pull the movie from their site.
You still have your proof of ownership, Amazon just... doesn't care. Their servers will not serve you bits of data anymore.
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Now let's replace your bank statement with an NFT:
You can buy a movie from Amazon Video. You can have proof of ownership. Amazon is not contending your proof of ownership. Amazon agrees you clicked "Buy" and paid money. Amazon reserves the right to pull the movie from their site.
You still have your proof of ownership, Amazon just... doesn't care. Their servers will not serve you bits of data anymore.
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See the difference?
As a speculative instrument, art ownership has always been a bit detached from the physical art, with many works simply sitting in storage while a certificate is traded. Anyone can view a photo of a famous painting - access in a general sense usually is not the issue with the art world, today. Moving it on-chain is just a further move towards centering the finance of it. The net outcome is that you have more artwork being made than before, since there is additional financing opened through this channel, and with more complex terms made possible by using smart contracts. (At large scale, it's hard to engage with royalty payments, etc without automation)
From there, the actual utility of the tech can be discussed. Because you can make these cheaply(Ethereum's current gas fees notwithstanding, other L1 chains like Tezos demonstrate that they can be made with truly "micro" payments), you can use them as giveaways, tickets, passes, incentives etc. So they can be multipurposed into something beyond a link to an image and turned into a form of access - they are just "unique identifiers" after all. And those parts are still developing in the background.
Of course, we're still working through the hype cycle part of it. And the art makes for a good story.
Tax evasion
Making tech bros richer
Separately, I really do wonder if it's time that places like OpenSea borrow from traditional investment and provide some warning upfront.
For example, modified from the traditional investment verbiage:
> Investments in NFTs: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in NFTs involves risks, and there is always the potential of losing money when you invest in NFTs.
(The fact that using a central verifier seems to contradict what web3 is supposedly about is not lost on me)
Yeah, this valuation is easily justifiable. First chart is OpenSea's monthly transaction volume. Multiply by 0.025 to calculate OpenSea's take.
Just go on wallstreetbets, plenty of people use brokers who use such language to make let’s say… ill advised trades.
Their valuation is essentially equivalent to their total trading volume at this point. Both are absurdly large numbers.
What's really wild, though, is how hard NFTs have been pushed as decentralized, democratized, and so on. Yet again we have a huge centralized company cleanup up in the space and, apparently, skimming enough money off of the top of the trades to warrant a $13 billion valuation.
[1] https://decrypt.co/85507/nft-marketplace-opensea-hits-10b-to...
Its like Opensea is really just a startup to modernize Tax Loops for the wealthy.
[1] https://www.reddit.com/r/Bitcoin/comments/rqg0fh/forgive_me/...
While the concept is alluring, "own a digital good", the reality is that you still need some authentication mechanism to prove someone has the right to sell the digital good in the first place. This means centralization. I am fascinated that people lack the ability to scrutinize this appropriately.
The name of the artist was revealed only after the piece was sold & there was a high chance that the person was some neighbour living close to you.
I had an absolutely delightful time browsing the art — imagining my room with some of them. I was also astonished to learn that it was the 18th event of our local chapter and this one had over 700 works for sale. They exceeded their sale target by 10%.
I had no idea it existed, but I have known what OpenSea was since about a year ago. One of my friends was complaining that her brother is wasting his time on it and gets absolutely nowhere. Since then I have only seen crypto transaction fees climb so I don't imagine there are less barriers to putting stuff out there.
I wonder in a world where we value things based on their social good and objective usefulness, how many Billions of dollars would my local anonymous art show be worth.
says who?
if the s&p 500 crashes, people are gonna want as much cash as possible to move into stable assets, so they're gonna pull money out of crypto too.
I would expect the price of precious metals will go up, as that's a trusted strategy in a bear market for many investors.
Which scammers, money launderers, and ponzi schemers love and benefit from, yes.
1: https://nwn.blogs.com/nwn/2022/01/second-life-nft-ownership-...
1. https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-...