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Comment by DavidPiper | Hacker News Reader

> ... the NFT community is not interested in remaining a subculture. NFT community leaders believe that they are just early to understand that the future lies in virtual worlds, and that normies will embrace the metaverse in good time.

An alternative explanation is that they _are_ the normies who have bought into the techno-grift in exchange for social status in a small community of believers.

> Like, right now, if I have a sword in a video game, I only have it in one game. But if we had a metaverse, then I could take it anywhere, and it would still be mine. And maybe it’s like, the only sword in the whole world that could kill a certain monster. That would be really cool.

The idea that game companies will allow players to share resources between games with NFTs is both technically questionable and financially absurd.

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If you can spare the time, I highly recommend watching Line Goes Up - The Problem with NFTs: https://www.youtube.com/watch?v=YQ_xWvX1n9g . It's a bit long-winded, and I suspect I'm preaching to the choir regardless, but it's worth it.

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I suppose if (insert luxury fashion label here, let's say... Gucci) has an online store on Zuckverse, and also has one on TimCookVerse (where the plebian green bubble people don't come), they would allow owners of virtual Gucci bags free copies of their virtual bag on 2 different platforms.

Yeah, it's a ridiculous idea of the future, where people who currently walk around with $5000 purses ($20 for the utility of "it carries my things", $4800 for the brand name) will in the future be pixels on your VR googles walking around with $5000 pixel representation of purses, which you can right click, click "Properties" and confirm the digital certificate of. I've so far been an NFT-ignorant, but are those NFT exchanges the ones who want to be the digital certificate authorities? Couldn't Zuck or Cook just roll out their own?

They absolutely will roll their own and charge Gucci for the privilege. There's plenty of historical precedent. The Sims Online somewhat controversially contained McDonalds kiosks, paid for by McDonalds.

Yeah. I imagine there being "metaverse clients" that don't enforce any NFT DRM and will allow you to copy whatever 3D asset you see as well. I would definitely connect with a jailbroken client / choose the "Indie Metaverse" in which none of the NFT nonsense is enforced.

Joining an indie metaverse seems like insanity, I'd rather just keep socializing in the real world. Damn, have I reached "Get off my lawn"-age?

The rich and famous would still hang out in the "officially sanctioned" metaverse(s) though, but I guess going into the indie ones would be like going to the dodgy parts of town. Where the famous Hollywood/Netflix/Onlyfans/Twitch stars have alternative logins to go incognito.

And maybe the sanctioned metaverses will have exploits so "hackers" can still participate in it. My imagination of this future is a lame imitation the Matrix movies.

> An alternative explanation is that they _are_ the normies who have bought into the techno-grift in exchange for social status in a small community of believers.

I don’t think it’s just a small community. And I say this as a heavy skeptic of cryptocurrency and NFTs.

I think the article’s author has a point. With or without NFTs, conspicuous consumption of digital goods is already a normalized thing of minor social consequence in the form of video game cosmetics. It started out as a freemium monetization model, but games like Fortnite, Destiny, etc. have solidly cemented the link between spending real money and digital self expression, including the implied social status that comes with specific rarer cosmetics vs. more accessible ones. And to some extent the social status part follows you back into the real world if you all know each other in person.

I don’t think it’s a large leap to a scenario where people pay for designer avatars to bring into digital spaces if online, immersive socialization in some grand unified space becomes a thing. I don’t like that idea, but I think it’s not that much of a stretch.

> I don’t think it’s just a small community.

it’s the smallest of communities:

> Between late February and November [2021], there were 360,000 NFT owners holding 2.7m NFTs between them. Of those, about 9 per cent — or 32,400 wallets — held 80 per cent of the value of the market, Chainalysis found.

from: https://www.ft.com/content/e95f5ac2-0476-41f4-abd4-8a99faa77...

> I don’t think it’s a large leap to a scenario where people pay for designer avatars to bring into digital spaces if online,

This already happens routinely for VRChat, a popular VR socialization platform. In their defense, users mostly don't care about NFTs, they just trade avatar design services (sans NFT) or design their own monstrosities. Tbh, for many in VRChat making their own avatar could be the first time ever that they use a computer for a creative endeavor of any kind, and they may even learn about "textures" "normal maps" and "non-photorealistic shaders". So, not the worst outcome ever.

Absolutely, my point was that the social phenomenon of paying money for digital conspicuous consumption is already here with or without NFT's, though I'm solidly in the camp that NFT's don't add value in this interaction.

Taking what I had intended to say one step further, if you look at the denominator of "people who participate in digital conspicuous consumption," the NFT people that this article discusses is just a niche/fringe in a movement that already has lots of momentum.

Personally, I hope the digitization leads to far more people becoming creators and not just consumers, but I'm not holding my breath for that outcome.

> conspicuous consumption of digital goods

Yes, and I think this is a big part of how big the flashpoint is. We're about to hit a big economic squeeze, especially for energy costs, and people for whom everyday consumption of food, housing and energy is becoming less affordable are going to be really unimpressed with the new virtual yacht class.

Smaller cosmetics seem to have become OK, in the way that people will generally not begrudge each other wearing branded sports gear that's surprisingly expensive. Multi-thousand-dollar ugly profile pics though are entirely out of reach.

I second your recommendation. I've been following the Folding Ideas channel for a while, and deeply enjoy his long form video format. Where most online videos like to do a brief touch on a topic, covering the surface level detail before moving on, the guy behind that channel goes deeeeep in a way I find very satisfying.

I could see there eventually being some NFT project that gets implemented kind of like a shared library in a bunch of games, but I agree that it won't be most NFT projects (probably just one or two "winners", and probably no existing project that's out there right now, I'm betting, most are profile pic centered and not object/weapon-centered) and it certainly won't be all games that do it. There could come a time where it makes good marketing sense to include support for certain ones, though.

I agree that right now it would not make much financial sense as there's a lot of vehement hatred of NFTs out there and I don't think any project is yet big enough to recoup the time and investment spent, unless it's on some really basic level, like supporting importing of the images and putting them on the walls of a house or something (I've seen something similar like that already).

I do agree that people buying these things thinking everything they're buying they'll be able to take to every single virtual place they go to and be able to hold a 3d model of it and wield it in the future are likely just deluding themselves, unless there's eventually some software library that builds these things automatically without artists having to manually build them or developers having to put code in to support, it in the future.

And even then it will likely butt heads with various limitations of the game engine unless controlled, like number of polygons it can handle and not clipping through environments/animations, not being able to be much more than a static model without more metadata included/manual effort involved, etc.

Although perhaps for anything manual that is involved that person that owns the NFT could hire someone to adjust things so it works better in the game they're wanting to play, assuming there are tools included with the game to do so. Like there's already NFT projects out there making 3D models of certain NFTs specific for certain game worlds using their existing tools, or the owners currently commissioning new art based on their NFT art, etc.

Just taking it as it is currently on a profile pic level, we see that Twitter supports NFTs officially now with Twitter Blue, and Discord seems to be on the verge of supporting it, and possibly more sites in the future, and even if other sites don't support it officially, unofficially you could use an NFT as a picture anywhere (even those you don't own of course, but most people in these spaces do seem to stick with those they own). That's taking an NFT and using it in multiple platforms, and companies having a financial incentive to include support for it, right there.

It's not that much of a stretch to see that happening for some games in the future, especially those built with support of high levels of customization or with prior knowledge of the NFT space and trying to incorporate it from the start of development, which some of these metaverse-like games are definitely doing with Decentraland and Sandbox (albeit right now at the detriment of gameplay, imo. They're pretty boring spaces at the moment, mostly just run around and talk to people).

> I agree that right now it would not make much financial sense as there's a lot of vehement hatred of NFTs out there

I would consider that it's less “vehement hatred” rather than “clear understanding of the limitations”. The backlash comes from proposing NFTs where they don't provide an advantage. For example:

> Although perhaps for anything manual that is involved that person that owns the NFT could hire someone to adjust things so it works better in the game they're wanting to play, assuming there are tools included with the game to do so.

The problem here is that the person who owns the NFT doesn't own the rights to the assets. If the people who do want to grant permission to modify and reuse those assets, they can do so without paying significant amounts of money to a third-party.

Similarly:

> Just taking it as it is currently on a profile pic level, we see that Twitter supports NFTs officially now with Twitter Blue, and Discord seems to be on the verge of supporting it, and possibly more sites in the future, and even if other sites don't support it officially, unofficially you could use an NFT as a picture anywhere (even those you don't own of course, but most people in these spaces do seem to stick with those they own). That's taking an NFT and using it in multiple platforms, and companies having a financial incentive to include support for it, right there.

This is like Gravatar except that it costs hundreds of dollars, and it actually doesn't give the companies a financial incentive to include support for it unless they start selling NFTs. If they wanted to charge you to upload a profile picture, they could do that already and it's unclear why anyone else would want to encourage that.

> I would consider that it's less “vehement hatred” rather than “clear understanding of the limitations”.

Check pretty much any articles about NFTs on Kotaku, there's plenty of vehement hatred on there by both the writers and most of the commenters. Here on HN it's a bit more nuanced, sure.

> The problem here is that the person who owns the NFT doesn't own the rights to the assets.

Depends on the NFT project. But it doesn't grant copyright by default, correct.

"Indeed, it seems like the NFT space is bifurcating into two camps: projects where creators control the IP and Creative Commons projects, or CC0s, as folks are calling them...The big CC0 projects are CrypToadz, NounsDAO and Vine co-founder Dom Hoffman’s Blitmap. These projects are the most open, with no rights reserved to anyone. Bored Apes offers a more limited set of rights, only to the holder of the Ape, who can profit from the art and make derivatives."[1]

This isn't mentioned out of ignorance or possibly intentionally by most anti-NFT articles, including all of Kotaku's articles and from what I've heard (haven't sat down to watch it yet, but I intend to) the Line Goes Up documentary, so understandably most people not following these things just assume no one but the creator has the copyright, like with most other products. But the NFT space has evolved differently.

> This is like Gravatar except that it costs hundreds of dollars, and it actually doesn't give the companies a financial incentive to include support for it unless they start selling NFTs.

I already said why they might have a financial incentive and you're skipping over that again: marketing. Companies do all sorts of shit and spend tens of millions of dollars for the sake of marketing, and eventually (not yet, eventually) there could come a time where it makes sense from a marketing perspective, even if the company doesn't mint NFTs themselves.

I don't know when that will be the case, it could be 10-20 years out for all I know. And again I don't see there ever being the case where all games support all (or even any) of these projects, but some games supporting some projects I definitely see (and already see on a much smaller scale).

I would also agree that right now the starting price for most NFTs are ridiculous. There are cheap or free NFTs out there (I've gotten a couple to support some friends of mine for around $20-30. Considering I can easily spend that much on lunch, that's not super crazy to me), but they're unlikely to be projects that will get incorporated into these various things. Like Clone X might eventually be used in several games, and I could have gotten one at 2.5 ETH (almost $7.5k at the time, which is insane). And yet now, a month later, if I did happen to buy one then I could sell it for a minimum of 14 ETH or ~$43k, which is even more insane.

Almost all of that is speculation and that should calm down over the next 5-ish years once a lot of novelty wears off and as people get a better feel for what these can realistically offer. In the meantime there's definitely a greater fool effect going on, where people are buying expecting to sell to a greater fool at a higher price later.

Hopefully the projects that do become mainstream and integrated into all of these things end up with more reasonable price tags, at least for the common items (maybe some rares will be stupid expensive still). Considering way back in 2007 there's a World of Warcraft character that sold for $10,000[2], which is also something I would consider nuts, and farming WoW virtual gold to sell to people used to be a valid full-time profession for hundreds of thousands of people in some countries[3], I don't really forsee a future where there won't be any NFTs with crazy price tags to them.

[1]: https://thedefiant.io/bored-apes-yacht-club-cryptopunks-copy...

[2]: https://www.engadget.com/2007-09-17-wow-character-sells-for-...

[3]: https://en.wikipedia.org/wiki/Gold_farming

If I understood that something was a scam, and kept getting it pushed on me by a wide variety of people both credulous and crafty, I would probably develop a reaction that would be pretty close to "vehement hatred", too.

Fair enough. Wasn't trying to argue that it there shouldn't be hatred against these things necessarily, especially as they exist right now, just that there is currently, so companies might decide to stay away for the time being.

You've got to ask marketing to who though? For example supporting BAYC only nets you 10,000 people at the very most after all. Which is less than 1/5 of the peak concurrent users on Second Life.

Also looking at where NFTs are supported Twitter Blue takes an expansive view. As long as you've minted on a platform they support you get the PFP. That means people can easily clone others paid for pictures which has already caused friction. So owners of expensive NFTs don't really get the exclusivity they might feel entitled too.

And ultimately even if the holder does get a broad IP license they still need to actively defend it for it to mean anything.

> You've got to ask marketing to who though? For example supporting BAYC only nets you 10,000 people at the very most after all. Which is less than 1/5 of the peak concurrent users on Second Life.

That's just that one collection, and the BAYC community already spills out into at least one more collection, MAYC, which has 11k owners and people buying in to that for a cheaper price than a BAYC (although I wouldn't be surprised if at least 60% of MAYC holders also hold a BAYC). I'm sure they'll create another collection (or two, or three) in the future as well, adding new users to the community with each one.

Regardless, there's no inherent limit to how restricted an NFT collection has to be. Sandbox has 137k items for example (only 19k owners though, but that could go up in time as more items are created and sold to new people). Town Star has the highest number of owners on OpenSea right now with 38k owners. That's almost 80% of your peak concurrent users on Second Life in your first point. Still might not be high enough yet (or the right project), but something else could come along in the next few years that does get enough owners. There's multiple new projects being released every week right now, by then there will almost certainly be hundreds more projects out there, one of which might break into the mainstream (or nearly so).

> ...So owners of expensive NFTs don't really get the exclusivity they might feel entitled too.

If I'm understanding you correctly, you're referring to the thing with Twitter Blue that people can mint a copy of a picture from a different NFT collection cheaply, and Twitter Blue will still show it as a verified NFT because it doesn't distinguish between official collections or not, just that "it's an NFT that was minted". People can click the PFP and see that it belongs to a fake collection. Or Twitter Blue can be changed so it will display a checkmark for official collections or something over the icon, just like OpenSea does it.

There's fake shit all over the internet. Hell I get emails every day of people pretending to be legit services I use, trying to get me to click their fake links and steal my identity, that looks legit except for the link. It's just something you need to be aware of. And if people aren't? Well that sucks, but what can you really do than educate people. I've had to sit through phishing education online classes every year at every corporation I've worked at.

> And ultimately even if the holder does get a broad IP license they still need to actively defend it for it to mean anything.

But they don't have to actively get permission to make derivative works, which was the main point. And a lot of these being CC0 means they're pretty much effectively public domain anyway, so yeah, there's no copyright to defend.

Copyright doesn't stop people from copying your shit. I say this as someone who has a video game I released, where I kept the copyrights, and have over the years discovered several people clone that video game (including the name half the time) and put it up on various app stores. Even C&D's don't stop people sometimes.

Hell, it's even been used in A.I. classes at least a couple of times, and included in an Adobe Press book without credit. I actually thought those were kind of cool (although it would have been nice to be credited), but they didn't ask for permission ahead of time, I found out after the fact (for the classes I actually had students hunting me down to ask me for help with their assignments). For another example, just look at the hundreds of Wordle clones and derivatives out there already (many posted to this very site). Copyright is a luxury for corporations and people with lawyers in this day and age.

> That's almost 80% of your peak concurrent users on Second Life in your first point.

Which is still miniscule if you think of the number of users you need to have that many people online at once (it's a lot more). And Second Life is hardly massively popular. Like you say the effort -> reward is way off.

> If I'm understanding you correctly, you're referring to the thing with Twitter Blue that people can mint a copy of a picture from a different NFT collection cheaply, and Twitter Blue will still show it as a verified NFT because it doesn't distinguish between official collections or not, just that "it's an NFT that was minted". People can click the PFP and see that it belongs to a fake collection. Or Twitter Blue can be changed so it will display a checkmark for official collections or something over the icon, just like OpenSea does it.

Right so poor UX and centralized authorities again.

> But they don't have to actively get permission to make derivative works, which was the main point. And a lot of these being CC0 means they're pretty much effectively public domain anyway, so yeah, there's no copyright to defend.

Well not if you own a BAYC image or anything not CC0.

And the point about your game is exactly what I mean the effort to actually enforce the license you bought is not trivial and really only available to companies. So why buy the thing in the first place?

> Which is still miniscule if you think of the number of users you need to have that many people online at once (it's a lot more). And Second Life is hardly massively popular. Like you say the effort -> reward is way off.

Yeah, it's not there yet. I've said as much. It might in the future. It could even be those same communities you've said if they grow their communities and add NFTs to match.

You couldn't buy bitcoin at an ATM or buy it from an exchange or to DeFi applications or have smart contract support (which required a different coin, Ethereum, but still that wouldn't have existed without bitcoin) or use it to pay your taxes or as legal tender in some countries or all sorts of shit when it first was created. The financial incentive wasn't there until the community and ecosystem grew to the point that it became desirable to do so.

Some of the people buying these things today believe (possibly incorrectly) that it's equivalent to buying a bitcoin before it could do these things, and positioning themselves to benefit once those things exist (I've literally seen a tweet that building for the metaverse is the equivalent of buying a $1 bitcoin). There are builders and coders actively working to try to make that a reality as much as possible. Will it succeed to the extent these NFT buyers are predicting? Most likely not. But will there be a much bigger community and ecosystem in five years than there is today, I'm relatively certain there will be.

> Right so poor UX and centralized authorities again.

I don't think most people care about decentralization or good UX as you think. Yes that's a selling point a lot of people make about Web 3, but it doesn't seem to matter that much. And I don't think we're ever getting to the point where everything is on the blockchain, because it just requires too much data and resources. So people are going to have to accept some form of centralization. Less centralization than Web 2 perhaps, but some centralization nonetheless.

I can see benefits to some decentralization without having to go whole hog and make everything decentralized.

> Well not if you own a BAYC image or anything not CC0.

What's your point? Yeah some people don't have the copyrights to their NFTs and those people can't legally make new things with them and/or games will need to get permission to include them in their games, just like the rest of the world works for everything right now. I've said from the beginning not every NFT will be integrated into every application (at least not legally).

> And the point about your game is exactly what I mean the effort to actually enforce the license you bought is not trivial and really only available to companies. So why buy the thing in the first place?

On integration with a game or app they can check that an NFT belongs to a specific collection and not the fake collection. Or not, depending on how they do it. It's just data and code, how do we keep track of real or fake digital items for anything else? I can right-click save a picture of a digital video game cover also, but without a verification code it won't unlock a downloadable copy in my Nintendo Switch.

>The idea that game companies will allow players to share resources between games with NFTs is both technically questionable and financially absurd.

I don't think that's necessarily absurd.

The sword in question would just have to be converted to work with the game itself, or you get a representation of it. Some games like RPGs have item budgets that determine how many stats are associated with it. So your NFT's "value" could convert to this item budget. Maybe instead of being a literal sword in a sci-fi game, it becomes a ship or a gun with the same name/description.

I think game companies are going to try it. It's not like they haven't tried charging players for silly things in the past.

> I don't think that's necessarily absurd.

> The sword in question would just have to be converted to work with the game itself, or you get a representation of it.

“just” is doing a lot of work in that sentence. For that to happen, you need all of the following to be done:

1. The second game's developers need to license the rights to use the first game's assets, which may not be possible at any price short of taking a controlling interest in the first game's owner.

2. The developers need to convert the assets into a format used by their engine: converting images, animations, sounds to the format they use (e.g. the major game engines don't even agree on which direction is up); things like 3-D meshes need to be imported and adjusted to the right size; sounds need to be normalized to match the rest of the game's assets.

3. Any custom behaviors (which are often why you care about this thing in the first place) need to be implemented and tested.

4. The item needs to be balanced so it's not too weak (the “owner” won't like that) or too powerful (everyone else won't like pay-to-win).

5. Game B needs to know that you hold that item in game A, and yank it if you sell it.

All of that costs real money, which means that the developers of game B are going to need to charge you even though you already paid a premium for it in game A. The part that NFTs can do is by far the easiest part and can be done far more cheaply in any scenario where step #1 has happened. If you do the easiest one (cosmetic only), it's still more expensive in terms of artist time than almost anyone is going to want to pay.

In all cases, the big question is opportunity cost: if game B's developers are going to spend a million dollars implementing something, do they spend it chasing items which game A's made the profit on hoping they can convince whatever fraction of the people who own game A but were unlikely to buy game B to change their minds, or do they build something they can sell to as many people as possible without having to share the profits?

And why wouldn’t the game developers issue these rare swords rather than a foreign non gaming) entity whose sole value is in creating made up scarcity. Game developers can do this themselves without grifters.

How would a game know how to render this foreign element ? Assets and all and for each “supported” NFT.

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