Our Take on NFTs
jbr-holdings.com
jbr-holdings.com
I simply do not agree with this characterization. At a minimum, the vast majority of NFT transactions do not allow people to buy and sell ownership of digital art. They allow people to buy and sell ownership of the NFT itself. Unless you consider the token itself art, this is a very different proposition.
People come up with all sorts of complicated metaphors for what NFTs are, but at the end of the day, they are digital tokens. That's it. An NFT is not the digital art that it may be notionally connected to.
The reality is that NFTs are vehicles for money laundering and gambling. They really have nothing to do with the art.
> For more information on NFTs and the terminology used in this article, the OpenSea NFT Bible is the current de-facto document for NFT knowledge
Like buying the rights of an old album; an album for which the original is lost. I might receive some piece of paper that says the songs are now mine. Of course, there are already thousands of copies of the songs, but (somehow) now the songs are mine, and I can certify it.
> but at the end of the day, they are digital tokens
I can simplify everything up to the point of saying that the 10 bucks bill you have in your pockets is just a piece of paper, but we all know it's more complicated than that.
Would be really interesting to actually see that challenged in a court.
But if the problem is legal (and not technological) then it may be just a matter of time, given enough adoption. Much like Bitcoins (now running as an official currency of El Salvador).
Perhaps it's a matter of establishing we run on this or that blockchain to make NFTs completely traceable?
[1] http://www.linusakesson.net/scene/a-mind-is-born/nft.php [2] https://opensea.io/assets/0xa7702e0769c5d408ebf2b056d7c3cc0a...
But the reason why this is such a great example for me is because the token actually contains something substantial. This song is now permanently a part of the blockchain, as opposed to just some link to an image host that might not exist in a decade.
Now of course, if there's a contract that says "whoever owns this baseball card owns this baseball player" then you get an ownership, but that's unlikely. Same with NFT, unless there's recognition and contract in place that designates ownership of actual work, you won't own the work itself.
This is just as multiple baseball cards pointing to the single baseball player.
Thing is, what’s “non-fungible” here is (arguably) the token itself, not the thing it points to.
It's an overly simple example of course, but now carry that out to trade secrets, future stock prices, gambling picks, private videos etc. The "art" on the outside isn't really relevant. It's just an indication of what it is you're owning. It might be just that art, or it might be something else depending on the contract. You're seeing the box, not what is in the box. You have to own it to get the contents of the box.
The use of NFTs for tracking subscriptions, memberships, or other credentials is an interesting idea in its own right, but let's not confuse the issue by claiming that these external services keyed to NFT ownership are somehow "inside" the NFT. They're a hybrid of centralized services with decentralized access control. Everything "inside" an NFT is a matter of public record on some blockchain; the nature of the system precludes storing any hidden information. Ownership of an NFT can serve as credentials for accessing information on some other server, but then you're forever dependent on whoever runs that server.
Of course if you're dependent on a particular centralized server for the content anyway then that server could just keep track of the ownership itself and avoid the overhead of a blockchain, but there could be cases where multiple services want to share the same access control in a decentralized, market-oriented way.
I have no idea if any NFT is encoded this way though.
Sure, but that just moves the problem around; instead of secret data you have a secret private key to manage. The cyphertext can be stored anywhere—on the blockchain, in IPFS—but the private key to decrypt it remains separate from the NFT: If you put it in the NFT then everyone would have it.
> Selling such piece of data would mean decrypting it with old owner's private key and re-encrypting it with new owner's public key.
Any protocol such as this would require out-of-band communication and carry counterparty risk. What happens if someone sells the NFT but refuses to hand over the data, or claims not to have it? The smart contract can't deal with this as that would require making the key public. I'm not seeing any way that an NFT improves the process over simply paying someone to give you a copy of the secret.
> NFTs can be resold on-chain, whereas unlockable content are items that live off-chain, and therefore cannot carry on to future owners on the blockchain.
That pretty much says all you need to know about "unlockable content". Simply put, if you buy the NFT through their platform they'll give you something extra. This bonus content isn't actually part of the NFT at all and is indistinguishable from any paid digital download, apart from being bundled with the purchase of an NFT.
> So, in conclusion, NFTs are a cool idea. If there ever becomes a day where its possible to buy and sell digital art easily and legitimately, it will be of great benefit to artists and consumers alike. And while the blockchain does get us closer to that path, the technology is simply not there yet for it to be viable. It is for this reason that JBR does not recommend its artists to use NFTs as a point of revenue.
They seem to be some sort of consulting company that helps artists make a living by selling their art.
Humans just want to be feel cool and part of something exclusive. It's dumb to buy digital art receipts for 6-7 figures, its dumber to pay that much and then 5 figures on a yearly basis to play golf.
People with money want their own club though, so something like that will always be around.
It’s membership cards.
Any golf club can host the masters, all you need is some well-maintained grass. but Augusta will always be exclusive to the power brokers of society.
Augusta, like NFT is an exclusionary club only meant for rich people. Both are useless, and probably harmful to society at large, but fulfill a basic human need.
Once again, you can actually play golf there. It's not useless. NFTs are useless. Bad analogy.
1) "I was rich enough to buy a Bored Ape NFT". This is for status relative to people outside the club.
2) "I was rich enough to buy a super-expensive Bored Ape NFT". This is for status within the club, it lets them all know how rich you are.
It's all yuck to me, but people have different motivations.
Another analogy I use for friends who ask (I have a sizable NFT 'bag'(investment)):
I say why do people buy Rolex watches and Gucci purses? Status. So you can't show off a 'real' Rolex well in the digital world. NFT's are that. Provably scarce. Verifiable.
The luxury industry is massive and people crave to have status and/or 'belong' to something. NFTs are no different and they are not going anywhere. It is early.
In other words, the energy we see in crypto has nothing to do with the actual technical capabilities. It’s people enjoying playing an emergent game produced by the particular crypto low level mechanics.
It may continue to go on for a long time just the same as any game or gambling web site stays popular.
It uses the honor system instead of crypto, just like those "Are you 18 or older? (Yes) (No)" age verification popups.
To generate an NFTHC "Toke'n", the centralized server asks you: "Did you just burn some weed? (Yes) (No)".
If you answer "Yes", then Shazam! Bob's your Uncle: it instantly and efficiently generates your unique NFTHC "Toke'n" without burning any coal or gas.
Other than the fact that it's based on getting wasted instead of wasting energy, using truly green renewable resources whose production actually takes CO2 out of the atmosphere instead of burning coal that causes cancer and heart disease, designed for honorable stoners who just want to get high and relax instead of greedy money launderers and tax dodgers and scammers shilling shady get-rich-quick pyramid schemes who want to viciously cheat gullible victims out of their life savings while carelessly destroy the environment, NFTHCs are totally green, natural, organic, and aromatic, and they don't require wasting energy and burning stinky carcinogenic coal, so Proof of Weed based NFTHCs are otherwise totally indistinguishable from "traditional" Proof of Waste based NFTs.
Just my two cents.
Fine Art is about story and provenance. NFTs do provide both.
In his article on Web3, Moxie Marlinspike wrote this:
> So as an experiment, I made an NFT that changes based on who is looking at it, since the web server that serves the image can choose to serve different images based on the IP or User Agent of the requester. For example, it looked one way on OpenSea, another way on Rarible, but when you buy it and view it from your crypto wallet, it will always display as a large [poop] emoji. What you bid on isn’t what you get. There’s nothing unusual about this NFT, it’s how the NFT specifications are built. Many of the highest priced NFTs could turn into [poop] emoji at any time; I just made it explicit.
User david_ar had this great comment about IPFS and permanence:
> You shouldn't read "permanent" as "eternal", but as "not temporary" --- in the same sense as "permanent address" or "permanent employment". HTTP is temporary in the sense that you're relying on a single server to actively continue serving a file for it to remain available. IPFS is permanent in the sense that, so long as the file exists somewhere in the network, it will remain available to everyone.
> Edit: If you want to ensure your content remains available, you still need to host it somewhere (your own server, convincing/paying someone else to, etc). IPFS isn't so much about storage as it is about distribution.
IPFS ensures the file won't change but says nothing about availability.
As to permanence, IPFS makes it easy to pin any available data on your own node to ensure it stays around. Even if it disappears from the network for a time it can be re-added with the same content ID as long as someone retains a copy. Just make sure you save it somewhere, preferably before spending money on the NFT. If the file completely disappears your NFT won't be worth much.
An IPFS url is a commitment to a file. It’s only the commitment that’s important really.
Fine art is about being aesthetically pleasing. A JPG can do this on its own, without an NFT.
Maybe you mean the value of art is determined by, among other things, story and provenance? Sure, NFTs provide those two. What they don’t provide, which in my opinion is the most important part, is a unique piece of art. Some think a unique record in a blockchain that points to a non-unique copy of a JPG is equivalent, but it is not.
“Nothing”. Except, that we can prove Leonardo painted it as we have the history of ownership. The fact the jpeg isn’t unique isn’t the problem. It’s who minted the NFT. If you know it’s the artist, then only that “copy” is the real one. It’s all bullshit I know but there is an approximation of the above question.
Your last sentence seems to be describing a DRM problem which, AFAIK, is an entirely different class of problem.
i have never bought art so i can't imagine how that trade used to happen say till 20 years ago or even 10 years ago before all this? is it the same? different?
The major difference I see is the signature, which artists often use as a control mechanism to create lower-cost versions for sale (e.g. unsigned or pseudonym copies) of original pieces. It's technically impossible to get an inexpensive unsigned NFT and then have it signed later (this often costs one thousand+ dollars for paintings). Since an unsigned piece doesn't have "provenance", it has little-to-no resale value. But if you like the artist and want to support their work it's a great way to get started.
For what it's worth, most physical art investment isn't much better than that.
The amount of art that is (essentially) forever locked up in "toll and tax free warehouses" (Zollfreilager, no idea about the actual English word) is immense - alone in the warehouses of Geneva, there are over 120.000 pieces of art worth many billions of dollars [1]. No one can visit or see them, they are only tokens and change owners at auctions for ever higher and higher prices.
Art loses its meaning that way, it's yet another enjoyment that has been hijacked and completely transformed by hyper-capitalism and money laundering, not to mention looting, theft [2] and Raubkunst (art pieces confiscated by the Nazi regime mostly from Jews, ending up sold on the open market or being kept by Nazi officials and museums).
[1]: https://oe1.orf.at/artikel/644453/Monumente-verschwindender-...
We can discuss it everyday for the next year, but the trend will continue regardless of how rational or irrational HN's scruples are.
The discussion can still be interesting either way.
However, as a former artist, that has sold a few works, the concept of "original art" is important. That's how we can sell photographs, made with film, as the actual film is an "original." I know that when I sold my works, I did not explicitly sell the rights to reproduce. I was young and naive, but I think that the law was already sort of on my side. That meant that the buyers couldn't make money by selling prints of the paintings that I sold them.
Digital work kind of blows a hole under the waterline of "original art." Digicams are now prevalent. I think a few pro photographers use film cameras, but they are quite rare. Even Annie Liebovitz uses digicams. I know that camera companies have tried in-camera digital watermarking, but I also know that these have all been successfully hacked.
And then, we have 3D/pure digital art, which can be awesome, and can take as long as any master oil painting. One example that I use, is Worth Enough, by Radoxist[0]. He spent over a year on it (It's a 3D rendering). I think that Floating Bazar, by Emilis Baltrusaitis, took a lot less time[1] (I think it is a 2D work), but is still an impressive work. There's a lot more stuff out there. Those who sniff at digital media, are probably short-changing their worldview (of course, a huge market for 3D models, are "undressable" male and female mannikins).
I'm not sure that NFTs are the solution to establishing "originals." They just seem to be a way of proving that something was paid for. The artist and the customer need to word the contract carefully; just like they have had to do, for decades. I seem to remember reading about students of great masters, making copies and paintings in the style of their mentor, and selling it as the main artist's work, and we always know about unscrupulous art dealers, selling copies.
Note that Radoxist also sells "other views" of Worth Enough[2]-[5]
[0] https://www.deviantart.com/radoxist/art/Worth-enough-7324787...
[1] https://www.artstation.com/artwork/QYdK3
[2] https://www.deviantart.com/radoxist/art/worth-enough-add-sho...
[3] https://www.deviantart.com/radoxist/art/worth-enough-add-sho...
[4] https://www.deviantart.com/radoxist/art/worth-enough-add-sho...
[5] https://www.deviantart.com/radoxist/art/worth-enough-add-sho...
However, NFTs are more than digital art, and frankly have nothing to do with art. Art is just a very superficial and speculative application, and has become synonymous with NFT, fueled by craze and media attention. It's akin to someone saying an electronic device is another word for tamagotchi.
I know this tech gets a lot of hate on HN, and I resonate with a lot of it, but I'm also trying to see beyond this gold rush. What I find interesting and promising is the ability to give uniqueness to THINGS in the digital world (not art necessarily), and to do so in a decentralized manner so that anyone can build applications that integrate those things in a certified and safe way thanks to trustless authenticity and consensus.
That's hashes you're thinking of. NFTs require hashes, but hashes don't require NFTs.
Whenever any cryptocurrency-related thing seems useful, you're seeing the potential of the underlying cryptography. Not the potential of the cryptocurrency thing.
A blockchain is actually more centralised than the underlying distributed network; it introduces centralisation-related problems that wouldn't otherwise exist.
1. Being a liquidity provider to get a cut of exchange fees (https://docs.uniswap.org/protocol/concepts/V3-overview/conce...)
2. Flashloans for arbitrage (https://aave.com/flash-loans/)
3. Autonomous governance for protocol updates (https://compound.finance/governance)
4. Decentralized perpetual contracts (https://www.perp.com/)
5. Decentralized mutual insurance (https://nexusmutual.io/)
Many/all of these depend on speculation to derive value, but there's added value nonetheless
Whether the URL is verifiable with the domain's key is HTTPS and still doesn't do what you claim.
That's not real though. Any scarcity in the digital world is people pretending that they have some sort of unique object. Just look at the number of people who post "bored ape" JPEGs in the comments on any story about NFT ownership - very obviously there is no uniqueness or scarcity or even ownership there.
Abundance is a fundamental property of digital data. It's trivially copyable at basically no cost. You can't remove that property and still share whatever the thing is with people.
So DRM. Laundered through jargon to seem cool to some techies.
The limitless perfect replicability of digital things is one of the key benefits of beeing digital. Imposing uniqueness is an artificial limitation.
Cryptocurrencies and the very most-boring versions of "smart contracts" are the only things blockchains can do. Any time you're dealing with anything that's not:
1. Tokens themselves 2. Rules for transferring the tokens themselves
blockchain is purely worse than a non-blockchain alternative. Because you're necessarily involving 3rd-party trust, which is antithetical to the reason blockchain exists.