NFT marketplace shuts, citing 'rampant' fakes, plagiarism problem | Hacker News Reader

NFT marketplace shuts, citing 'rampant' fakes, plagiarism problem

reuters.com

108 pointspseudolus160 comments

What does “fake” even mean in this context?

I can recognize your claim to the “original” digital image I right clicked and saved.

The version I’m selling isn’t that one, it’s this one. I’m not selling your copy. I’m selling my copy. Look - I even point to a different location on the blockchain where ownership will be recorded.

An alternative approach - I can right click, save, and then change the color of one pixel by 1%. That’s a different image! Is it also a fake?

What does “fake” even mean in this context?

An NFT minted by someone who doesn't hold the rights to the digital asset it is supposed to represent.

NFTs were advertised as a way for creators of digital content to monetize their work, but without some authority that verifies that the seller owns the copyright, the system cannot work...

>NFTs were advertised as a way for creators of digital content to monetize their work, but without some authority that verifies that the seller owns the copyright, the system cannot work...

If only there was a system, or an authority, like an independent body, that would do it's due diligence and verify the provenance of things... oh wait.

I'm tired of saying that NFTs are not a tool to verify the original property, which can't be done inside the blockchain, but to prove that the following transactions are legitimate.

Which is basically useless in the face of how trivial the initial conditions are to violate.

> Which is basically useless in the face of how trivial the initial conditions are to violate.

No, because it is possible to actively validate the initial conditions with reasonable effort.

There are in fact two initial conditions:

- Was the NFT created by person X? This is trivial to validate - check the artist's website for their key/wallet/signature, or ask your peers.

- Was an artwork (represented by the NFT) created by person X? This is equally as hard to validate as any claim to authorship, and something humanity has been able to manage for centuries.

> This is equally as hard to validate as any claim to authorship, and something humanity has been able to manage for centuries.

Tens of thousand of pieces of digital artwork being scraped by bots from DeviantArt and monetized as NFTs is a problem fairly unique to our time.

Probably not as big as people make it out to be. First, the vast majority never sees sales. Secondly, we know that a large number of artworks are used w/o permission across the web, on sites like red bubble, or to sell prints or drop ship products on Amazon. No doubt this is on the tens of thousands too.

All of these things could have been done twenty years ago without a blockchain, with digital signatures.

How pointless.

No, you can't - you need state to enable the concept of ownership. We need a way not just to verify that your signature is valid - we need to be able to deny the seller the ability to still claim a valid signature.

Then the issue is in the aforementioned institutions. What's the point in blaming the techonlogy that solves part of the problem?

This. Are we done solving all problems of the world, that we started solving non-problems?

New middle men wanted to take a cut of things so they keep popping up in the Crypto space. It isn't about getting rid of current middle men, it is about becoming the new middle men.

Meet the new boss, same as the old boss.

I hope everybody recognizes the gap here. The fantasy of a lock of blockchain stuff is that it the source of truth for ownership. But when it gets down to brass tacks, everybody recognizes that true ownership lies elsewhere.

How does that make it fake? An NFT doesn't convey ownership. I can make a website that simply has a link to Google and sell it to people. That's not a fake website, even though it links to something I don't own. Likewise, I don't need to own the Mona Lisa to sell someone a piece of paper that says "The Mona Lisa is in the Louvre."

This seems to be more about what people are imagining NFTs are than what they actually are.

This is EXACTLY EXACTLY EXACTLY the problem.

There is ownership, there is copyright, and NFT's doesn't actually say anything remotely conclusive about EITHER of those things.

>This seems to be more about what people are imagining NFTs are than what they actually are.

yes, and how people are imagining NFTs is highly dependent on how NFTs have been marketed.

Everyone knows the original artist for Mona Lisa so anyone buying your copy is paying for material rather than artistic value. If you gather arts of obscure-enough origins and sell them off as NFTs, your clientele pays for artistic values you stole, which is a fraud in spirit.

In modern internet, free, high quality, copyrighted but not copyright enforced arts are something that can be sourced at rates of almost items per second, rather than months per item as was in days Da Vinci lived. That makes such frauds extremely easy, and million dollar NFT craze only helps justify it on every aspects except ethical grounds. So it's a problem.

That last point seems to be overriding problem with anything in this space beyond basic bitcoin. I keep coming back to it with anything to do with smart contracts.

Can someone explain at least what the theoretical solution to this is? Otherwise the whole thing just sounds like a scam.

Just spitballing here. Maybe some kind of legal framework. Some legislation that controls who is allowed to create NFTs for a work. Something that judges and courts can use to enforce the right to sell an NFT. Something that bans anyone but the original creator from distribution of the work the NFT is for. Because a "fake" NFT is any NFT that doesn't control the work it is attached to, right? But NFTs are just a thing on a block chain, so we need a contract to link the NFT to the work. And we will need the same contract to be enforced by the courts.

So, we need a contract to link an NFT to a work. That contract should also spell out all the things the NFT holder can do (maybe the creator didn't want to, or isn't allowed to, sell all rights).

So contract the says who owns a work and what they can do with it, enforced by a legal framework and the courts. That us all you need to make NFTs make sense, I don't see what the problem is.

What's that? If you have the contract, why do you need an NFT? Well, what scrub would buy a paper contract with bitcoin? It's not even on a block chain!

I think a large majority of the population just think this stuff is silly and I highly doubt anyone would want to put legislation through to help these companies that arguably don't contribute much to society. I also don't think it would be popular to spend lots of tax dollars enforcing this stuff.

If it wasn't clear, I am part of that population that thinks this is all very silly. The point of my rambling was to point out that the solution to NFT/blockchain problems boil down to contracts and lawyers and courts. Things that we already have and can use without NFT/blockchain bullshit.

We have courts and lawyers and contracts. We need to use those to make NFTs work, so why are NFTs valuable again?

There is no theoretical (technical) solution. Ownership is a legal construct, not a natural phenomenon. To wit, someone only owns something because a legal jurisdiction is willing to recognize that he does. No blockchain tech can surmount this.

Basically it all comes back to monopoly on violence. If you steal my painting, police will crack open your home and take it back.

That's not the heart of it. Imagine a government just said, "Ok, this blockchain solution is what defines true ownership." Theft would be rampant, but now police reports would be met by, "Sure, it used to be your house, but the blockchain says it's his now, so we're kicking you out. He stole it fair and square."

That hasn't happened because blockchains are a bad match for how people think of ownership.

Also consensus. The thief may think they should get to keep the painting, but if most people don't agree, police or no police they'll have trouble keeping that painting. In that case to keep it they will most likely have to hide it, and then what's even the point?

A notional monopoly on violence is important, but even in a police state it just isn't enough. You must achieve a broad consensus that, even if this isn't good, it's better than the alternative, and if that ceases to be true in the minds of a great many people their alternative is going to assert itself right quick.

>even in a police state it just isn't enough. You must achieve a broad consensus that, even if this isn't good, it's better than the alternative, and if that ceases to be true in the minds of a great many people their alternative is going to assert itself right quick.

You think most people living under an oppressive regime think that there's nothing the government could do to be better? Such a state doesn't need broad consensus that there's no better alternative, it just needs to avoid the consensus that the personal cost of attempting to achieve the better alternative is worth it. That's where the monopoly on violence really helps.

I think we're on the same wavelength, but perhaps I didn't explain myself very well.

No, it comes down to people cooperating and agreeing on stuff.

Furthermore contracts - in the context that a human being wants to be rewarded for their labor - also a legal construct. Meaning smart contracts aren’t very smart at all when they go wrong and reward the wrong party through unintended glitches or computer mis-interpretation of the contract. Or straight forgery.

No there’s no solution. Not until we all fully operate in a legal realm (the/a metaverse) that validates the contract and rewards the humans who created the contract to cover their own ass. If the contract doesn’t follow the _legal_ language and intent it’s not smart at all and yes it’s totally a solution in search of a problem.

this NFT stuff is doomed to failure until we all operate in the same realm validating the identity of the contract owner, validating the legal intent of the contract, because that’s what a contract is in meat space

I can't agree. If say the US government established a central authority say "The National Federal Thingy" authority perhaps and had a registry of NFTs (or could register a decentralized blockchain ID) then it could happen as there is value in guaranteeing something is “the original” promoted by artist, twitterer, etc. However, I don't see that happening as even as such, it seems like kind of a joke and I don't see lawmakers wanting their name on something so associated with grifting.

Ownership used to be by virtue of possessing something. Sure you could steal something, which is why people protect the things they own, because possession is in fact a huge part of who owns what.

Intellectual property is another thing entirely, and not as easy to enforce, especially in the digital age.

There is no solution as far as crypto goes. People keep pretending NFTs are art. They're just a digital certificate that has no further blockchain implications. The rest of the "contact" is outside the blockchain and is as typical and problematic as all other contacts and promises in the past.

Somehow I swiped "contact" instead of "contract" multiple times and didn't notice!

NFTs can only really accrue value from the terms of their issuance. This is actually true for Bitcoin as well—issuance is provably tied to the real economic cost of computation.

As with traditional artwork, the story of the work is what accrues value, not the work itself. You can create a largely undetectable forgery of a Picasso, but you cannot forge the historical record that traces the true work back to Picasso’s paintbrush. NFTs can make this historical record cryptographically secure, at least for the token itself, but whether that means the token should accrue value or not is up to the market.

Bitcoin issuance is ultimately linked to to time not effort. Receiving those coins takes an investment indirectly tied to their hypothetical value at time of creation via a lottery.

The difference is subtle, but it is meaningful on edge cases such as around reward halving.

Would it be possible to store the creation of the artwork as I create it? So say I paint in procreate, could it accrue its value step by step?

Unless the problem is NP, it would be trivially easy to fake these steps. If you follow this line of reasoning you would eventually discover proof of work/waste

I see, so there is no silver bullet to make it work, as long as you can fake it.

Can't I just replay the steps you save with a later starting point and sell a new work that was also incrementally made with a lot of "effort"?

> Can someone explain at least what the theoretical solution to this is?

For this to work, a blockchain needs to access something outside the chain i.e an Oracle... now you have two problems.

Not unlike signed art prints, or really any work distributed by an artist. Often these are certified by the artists themselves. For further reading, see [1].

[1] - https://mirror.xyz/mattdesl.eth/eUrK8MrRfKFJYVKTwi5F4mCIBJEB...

"An NFT minted by someone who doesn't hold the rights to the digital asset it is supposed to represent."

? The owner of Dorsey's 'first tweet' does not have any 'rights' to it.

There are generally no 'rights' transferred with NFT sales.

Anyone can sell Dorsey's 'first tweet' by putting a given URL in the NFT.

The way we evaluate the 'legit' one is by tracing back to the original sale. So it's a matter of convention to determine the difference between 'real and fake'.

That's an inherent problem in the marketplace.

'It's marketed as way for content creators' etc. etc. just like Amway is marketed as a way for regular folks to sell cleaning products.

The difference being, the grift is so big, that everyone has to pay attention.

The systems may adapt and yield better mechanisms, but still, I'm wary that there is such a thing as a solution.

There are generally no 'rights' transferred with NFT sales.

Indeed. But people want it to work that way, or even assume it already does.

The systems may adapt and yield better mechanisms, but still, I'm wary that there is such a thing as a solution.

Cf zmgsabst's comment[1]. That's an example of what I was alluding to, the arthouse being the authority that could make such a system work.

[1] https://news.ycombinator.com/item?id=30312906

If there is an 'authority' then the whole point of NFT's essentially crashes.

The authority can 'buy and sell' any kinds of 'rights' it pleases, today. We don't need NFT's for that.

The whole point of NFT's is that they are inherently distributed.

It's possible to create an NFT such that the NFT owner legitimately has certain rights, but that's another level of complexity, the rights may be different in any given scenario. Even if it were standardized, it becomes a management problem, for example, if the asset is licences out to other content creators, then the NFT becomes tantamount to owning a small IP business. Again there's not much value in the NFT at that point.

Here's how I imagine such a system would work:

Some agency owns the copyright to some digital asset. It issues an exclusive usage license to the holder of the NFT, whoever that may be. The value the NFT provides is the ability to freely and verifiably trade the license without involving third parties. The value the agency provides is the ability for buyers to verify that the license is legitimate (and have someone to sue if it's not).

I have no idea if there's any worth to this in practice.

Of course there is, that's an important business function of digital clearinghouses today. The question is if crypto and the specific distributedness that NFTs enable add anything to that. Which it might, but it's also not the model bring explored with most NFTs, conferring zero other than bragging rights to the purchaser.

The question is if crypto and the specific distributedness that NFTs enable add anything to that.

So you also have no idea if there's any worth to this in practice? We seem to be in violent agreement ;)

> The value the NFT provides is the ability to freely and verifiably trade the license without involving third parties.

Except for the miners operating the network, who are involved third-parties. And the transaction fees, which make it not free.

An NFT is a pointer. Anyone can create as many pointer as they want, you don’t need rights over the thing pointed to.

An NFT is a Non-Fungible Token. This just means it's sufficiently different from others in the set to be told apart. If I give you this one, and I get another one to replace it, they're different. Minting pointers to art projects is one use of NFTs.

You can have an NFT of the number 37 for example – it doesn't have to point at anything. It just needs to follow EIP-721 (a subset of ERC-20), or any similarly-worded standard.

> This standard is inspired by the ERC-20 token standard and builds on two years of experience since EIP-20 was created. EIP-20 is insufficient for tracking NFTs because each asset is distinct (non-fungible) whereas each of a quantity of tokens is identical (fungible).

An NFT is a unique pointer, but the pointee doesn't have to be unique. You can have any number of NFTs pointing to the same object, NFTs don't inherently guarantee uniqueness of anything other than themselves. The token is non-fungible, the item the token is "for" can be fungible or non-fungible.

I’m perfectly aware of what NFTs are and nothing in your comment is in contradiction with what I said. Abstractly speaking an NFT work like a unique pointer, the thing it points to can be whatever you want (like the number 37 in your example).

In one case the number 37 is an address that represents control over a subsection of a global network. So it is actually important that the owner of it has rights to the thing pointed at (the network, not the number 37 abstractly, but the addresses with 37 in the most significant bits are allocatable by whoever holds 37. Enforced by the smart contract and a consensus rule in the software that it supports... one could fork the software and point the consensus rule at a different smart contract, but then it would not be the same network anymore.)

If yall are buying leaf NFTs that cannot mint other NFTs, then I don't think you get to own anything other than the paper it's printed on. But that does not mean that NFTs cannot be used to own real things, or to enforce ownership of those real things (like a network, insomuch as a network is a real thing.) They can, and do.

Hey thats true, is that happening? From my understanding people are also re-uploading the images their newly deployed NFTs point to

I don’t know but I wouldn’t be surprised if that was the case. That’s a clear copyright infringement, no? I don’t expect them to buy the rights in addition to their precious unique pointer.

That actually makes it funnier, if by making an NFT point to an existing copyrighted work’s link (without reuploading) that circumvents the copyright infringement because nothing was even copied.

I’m trying to think about even if the licensing issue would be circumvented or squirmed around.

I’m ready to argue that its more like selling a TV to view existing content.

An NFT pointing to the official image already uploaded officially elsewhere can neither be theft or copyright infringement, and fraud can be mitigated if it is written somewhere about who the copyright holder is.

Just to clarify my previous comment, I meant that the reupload is copyright infringement.

> I’m ready to argue that its more like selling a TV to view existing content.

That’s a really nice analogy. The television is also a pointer of some sort, but that communicates the idea nicely and sounds less technical. And naturally move the focus of the discussion to the licensing of the aired content.

I might steal the idea for future discussions :)

NFTs we’re originally created with the idea of the NFT itself would have utility (ex: the NFT itself is the game license or the TCG card), and not just point to some off-chain asset.

If the NFT isn’t accepted by the intended on-chain contracts then it’s not authentic. In this context ‘authentic’ means that it will be usable for its intended utility, and contracts will identify whether tot hit has utility in their system based on which address created the NFT.

Instead of looking at the creator’s address all the time, incorporating Decentralized Identity can make the process more human-friendly.

Alternatively, we can go buy a print from an artist and hang it on the wall. Then we have inconvenienced a single tree (-ish) and not burned through the power consumption of an American home for a week to have a thing to look at that we like.

How can I print a gif?

By using a Lenticular printing format.

You can't own it on a blockchain in any way respected by any government that you'd care about, so that's pretty immaterial.

In this case:

> because people were selling tokens of content that did not belong to them

There seems to be some lack of social consensus about whether an NFT is "supposed" to be this or is "fake" if it is not.

I am curious if any/all of these NFT market platforms make it clear in their UIs that the "rules" are you can only sell NFT's referencing content you have rights to?

But in particular, I don't think there's usually any UI about what rights you are supposed to be buying, if any, in the content referenced when you buy an NFT? Different people seem to have different assumptions.

This is one aspect of the whole thing being a ridiculous mess that many of us don't understand why people are spending billions on.

I think this story is not just "bad actors" it's, well, more-or-less intentional ambiguity on the social expectations and/or legal requirements in use of NFTs. Where do sellers on most market places promise that they own the content? Where do they agree they are selling the buyer any rights? If nowhere, then how are they even violating any rules if they don't and aren't? I think they aren't?

But the profit comes from the ambiguity, so the ambiguity is more or less intentional. Making NFTs seem like something they aren't, if you spelled it all out it would ruin the mystery, if the seller has to promise they own the rights, and agree to transfer them, in some legally enforceable way... then what's the NFT for? And why am I paying more for it than I would the legal purchase of ownership of bad art or slighty amusing cartoons in the first place?

The steelman case for NFTs:

The NFT is the legally agreed upon ledger to track rights that were originally signed away — in a way that can trace their authenticity and ease transactions.

The problem is that NFTs are deeds and a deed is only as good as the issuer. NFTs are the crypto side of the interface, but we’re currently missing the wetware side — trusted providers.

I think the long term vision is:

- artist signs over rights to digital art house

- art house sells the NFT

- valid licenses are signed by wallet privkey as proof

- DRM traces signature against blockchain

(I’m not sure I agree, but I can see uses for digital deeds — once you have reputable providers.)

That's a reasonable plan, although I'm not sure I perosnally agree about the utility of the blockchain there either, but it's not totally insane, I can see it maybe.

People are paying billions for NFT's without that in place though, and I'm not sure how many of the people buying and selling them are aware of or have even thought about that scenario.

So what do we take from that?

I don't know, you can't throw all NFTs in one size fits all. If you have “recognized” organization (whether federal, a consortium, etc.) that could vouch for a “big important” NFTs like one from a celebrity, a founder of twitter, an original digital frame from rick and Morty, etc. on a recognized blockchain you could probably get somewhere, but it will take many rounds of losers, grifters, and fakes to work through that, and I don't really see the reputation of NFTs surviving through that. It will take a monopoly or oligopoly of “authorities” that the public (or at least large group of NFT collectors) for any of this to work.

> What does “fake” even mean in this context?

Fake means the seller/creator of the NFT didn't own the content in the NFT.

If you use an image/music/book that someone has got a legal trade mark/copyright on and you reproduce it you are breaking their copyright. Copy a photo and change a pixel, or change a small part of a music track or a few words in a book and reproduce (in an NFT or not) you're breaking their copyright - selling a fake and likely will be sued.

It would be interesting if the NFT didn't contain or point to a copy of the original content (picture, tweet etc.) but just included its name (an NFT of "The first Jack Dorsey Tweet").

There are lots of similarities with the early discourse around torrenting sites and links I think. A common argument back then, was that torrenting sites were just like Google, they only contained links to files and had thus were not violating any copyright laws.

If I mint an NFT that just points to some artwork hosted on IPFS have I infringed on the copyright of said artwork? My NFT only contains URLs, not the artwork, after all.

Twitter seemed to have thought of this for their pfp implementation, they have the user upload the image rather than pulling it from the URL referenced in the NFT which puts the copyright violation onus on the user, not Twitter. It was pretty amusing when Twitter released their NFT integration and people started complaining that they weren't verifying the legitimacy of the NFT collections. Of course, the notion of a "legitimate collection" implies the existence of some centralised authority to distinguish between the real BACY and a copy.

> If I mint an NFT that just points to some artwork hosted on IPFS have I infringed on the copyright of said artwork? My NFT only contains URLs, not the artwork, after all.

I think the better question is: would you willing to host the sale of those NFTs and possibly liable to millions if a future court case finds you have infringed them.

Someone like OpenSea would be hosting the sales, no? In fact the creator of the contract could remain anonymous.

It’s also not clear at all which law in which jurisdiction this would be a violation of. It’s akin to a web link, which aren’t illegal anywhere AFAIK.

But by taking money in exchange for a transaction that persists on a blockchain that separates OpenSea from, say, Pirate Bay. It was free to create an account and upload a torrent file and then the sharing occurred off-platform. But since OpenSea operates in the same way as any web 2.0 platform — providing an API that interacts with the thing that does the hosting/sharing — it's more liable to things like copywrite infringement.

I think the analogy with the Pirate Bay actually holds up pretty well. In the end bidding on Open Sea results in a contract method being called on the blockchain which transfers the actual ownership.

Sure, just like the music/film industry targetted Pirate Bay as a central place for sharing torrent files, the same thing can happen with OpenSea.

The more important point I'm making is that the fact that anyone can deploy their own EIP-721 contract means that there has to be central agreement about which is the legitimate version of an NFT. I find this to be an amusing property for a, supposedly, decentralised system.

Conceptually, this is already correct. The NFT represents the abstract thing, not any particular set of files or url.

The Cryptopunks only contain a hash of the file. The link is just a utility so wallets can display something w/o having to support each NFT individually.

Every week, I read some new grotesque story about NFC. Every time I'm reminded of the movie Idiocracy.

We have 2 billion people in poverty. Climate change threatens our sedentary civilizations. We still have no clue what's going on in the universe and how to make sense of it.

And yet somehow enough of us participate in this circus that it make the news, and I have to witness pathetic drama stories about screenshot-ing monkey drawings, people spending 250M dollars to encode a book onto a chain, NFT marketplaces centralizing into traditional model while operating on a technology that literally and non-ironically requires "gas fees" for simple transactions because of how inept the tech is.

Gas fees. In the same world that holds COP events every year to try and get us to not self-extinct from our own waste products.

What a sad show this is.

I feel like PVP got it in one: http://pvponline.com/comic/2022-01-31

Wait, NFT creators never considered the fact that others could create NFTs from an identical digital source?

Oh, the creators did. The suckers who bought the NFTs didn't because they had sufficiently little understanding of the tech to fall for it.

That would violate NAP, so why would anyone do that?

It doesn't because it's already in my RAM. Or swap. If you're OK with it being in swap, you gotta be OK with me saving it to disk manually.

Blockchain is magic, didn't you know?

Exactly. There are strong selection pressures against anybody who thinks about anything too much here. In the POSIWID sense, the purpose of NFTs is obviously not to provide a reliable market for digital goods.

It's just the next in a long series of things one can hype (bitcoin, blockchain technology, ICOs, DAOs) such that money comes in and the promoters and speculators can divert some of that money flow into their own pockets. It doesn't have to actually work. It just has to sound good enough that suckers buy in. It's all magic beans.

There is no way for a blockchain to magically know how owns the copyright to a work. Multi-year court proceedings are sometimes necessary and people still don't agree.

It is shallow criticism that often amounts to no less than "blockchain bad because it can't do that magical thing".

NFTs cannot solve this, and therefore don't want to. Once you accept that, they work perfectly fine for their actually intended purpose!

Exactly my point. Blockchain technology is useless here; it's a bad match for the problem of ownership.

I agree with you that NFTs work perfectly fine for their true purpose. In the same way that Bitcoin, a complete failure for its stated purpose, works great for its current purpose: enabling grifts, scams, frauds, and assorted light financial crime.

Creators did. NFT shovel sellers, aka the marketplace builders, didn't care.

NFT are really just used for tax evasion and money laundering, similar to physical art scene. There is not real NFT market!

Don't forget pump and dump schemes.

But... but... wasn't all this web3 tech supposed to solve this?! I was promised non-fungible monkey jpgs! How could I have seen this coming?!

Oh no, how will we ever solve decentralized reputation systems, it's an NP hard problem! Literally impossible. We really painted ourselves into a corner this time. Oh well, we tried. Back to your scrollfeed, serf.

I’m sorry but this is a consequence of the current nature of NFTs in this space that should have been obvious to any technologist. It’s just baffling to me that this stuff has got this far.

Confusingly, it seems there really are people out there who believe rules and laws are only created because somebody is power hungry, and not because they're actually useful.

Yeah, if you're 5 idealists with the same dream you probably won't screw over each other too much, and whoever tries to set rules for everyone else probably will turn out to have some unpleasant ulterior motives for it. But large groups are very different from small groups, the dynamics are very different, and far more structure is needed for things to actually function.

Some people just have to learn that the hard way I suppose.

Ah that reminds me : “The major problem—one of the major problems, for there are several—one of the many major problems with governing people is that of whom you get to do it; or rather of who manages to get people to let them do it to them.
To summarize: it is a well-known fact that those people who must want to rule people are, ipso facto, those least suited to do it.

To summarize the summary: anyone who is capable of getting themselves made President should on no account be allowed to do the job.” (Restaurant at the end of the Universe - Douglas Adams)

It seems that the whole crypto pitch is predicated on this idea: black markets are better than regulated markets.

Legal limitations are inherently anti-engineering and not useful.

Also, a NFT marketplace can't just ignore it forever. It's a .com, it's connected to a real person who can get in trouble.

Also, no, engineering is ultimately in the service of people and has to work with human constraints in mind, including economics and law. Like they say, “Any idiot can build a bridge that stands, but it takes an engineer to build a bridge that barely stands.” -- working under such constraints is why we have engineering, rather than just piling up bricks until there's no way for the bridge to collapse.

I'm not saying it's unnecessary but forcing me to run DRM, HDCP, kernel level malware, and abide by arbitrary EULAs/copyrights is beyond the scope of the machine. My machine understands memory manipulations, not someone's-protected-memory non-manipulations. It is incorrect to burden our computer science with such trivia.

I don't think anybody said anything about that.

It's just that a marketplace based on at least theoretically selling unique copies of artwork can't really exist in this particular manner. Who made a given piece of art, and who has the right to sell it isn't an engineering issue, and makes no sense whatsoever to do in a decentralized manner.

I'm not really surprised. Every time there's an unregulated market with the potential for loads of cash, people rush in to scrape up every cent before either it gets regulated or everyone else runs out with the money.

Who says it's not exactly as they wanted it to be.

It's about profit. Things like proof of ownership means more complexity and reduces profit.

Doubtless there are a lot of cynical actors around all this, but when making frustrated generalisations I prefer to apply Hanlon’s Razor!

This was obvious to the technologists involved, right click save as memes are proof. Maybe even obvious to Paris Hilton and Jimmy Fallon when they were pumping NFTs to his audience. But probably not obvious to the ordinary people who bought in to the hype with real hard earned cash, though some were involved simply to flip to someone else for more than they paid (aka the greater fool economic theory).

Every generation thinks they are too smart to fall for scams, and every generation is wrong.

Not the first NFT marketplace to shut down; and won't be the last. Depending on the implementation, this may or may not have much of an impact on the assets being distributed and/or traded on the platform.[1]

I suspect most marketplaces that take a completely open and decentralized approach will struggle against spam, plagiarism, and regulation.

[1] - https://mattdesl.substack.com/p/hicetnunc-and-the-merits-of-...

Get in, get rich, don't get greedy, get out

I was wondering why they shut down instead of solving the problem...

The original (or current) title is "suspends," which makes more sense.

Open NFT marketplaces and free minting are a recipe for this kind of mass stupidity.

I run a major music NFT marketplace and we don’t have this problem because to create content on my platform you have to be invited and go through a contract process that includes legal assurances related to rights and clearances of anything you plan to mint. Most of that content ends up being exclusive and fans love it.

That people write off the entire NFT space based on the “fakes” issue are missing the point that there are people like me who believe the technology serves the people rather than vice versa.

Little point in an NFT if it's the legal system protecting you, the downfall of NFT's, it serves little purpose. I mean Shutterstock has been around for ages.

Yeah, really no more valuable than a dead tree format certificate with an artists' signature of authenticity on it. Much like that not worth the paper it's printed on if so one isn't enforcing it or a very large body of people agree "that's the one"

Yes, its exactly like that - and that's fine. That is how they are designed and intended.

NFT provides publicly verifiable record of ownership and limited edition-ness (aka scarcity), which has the side effect of making buyers treat digital files like tangible items.

All the decentralized posturing and politics is a distraction from actual entrepreneurs building actual real-world applications, using NFT in the same way you use SQL or HTTP

>NFT provides publicly verifiable record of ownership and limited edition-ness (aka scarcity)

Could you explain how the NFT provides the latter? Because it sounds like that's what your contract process and legal assurances ensure - those aren't happening on the blockchain, are they?

I’m not referring to ownership of the underlying copyright. I’m referring to ownership of the limited edition good! Works really well for that.

Right, I was asking about the other half of your claim: How does the NFT provide proof of the "limited edition-ness (aka scarcity)" of the good that it provides proof of ownership for? I don't see how the NFT or blockchain allows you to verify that - as far as I can tell, that must always be a matter of trusting your company, and the process it has in place before minting things, to ensure no duplicates are ever made.

A digital file isn't scarce. I can make as many copies as I want.

> NFT marketplaces and minting are mass stupidity.

There, I fixed that opening sentence for you.

Lol, the solution is a centralized governance body?

Can you share the name of your marketplace?

RCRDSHP

I'm confused why they would close over this, since what they're describing is essentially their core business and shouldn't come as a surprise to them. Could it be that they're in legal trouble?

One thing that seems important, but which is missing from the headline, is the fact that people were also selling bundles of existing NFTs on their platform.

> Hejazi highlighted three main problems: people selling unauthorised copies of other NFTs, people making NFTs of content which does not belong to them, and people selling sets of NFTs which resemble a security.

I can’t wait until all these NFT hustlers, Get-Rich-Quick shills, wannabe Crypto influencer billionaires get blown out of the market, and we get back to the days where the only people who held crypto were true techies and blockchain enthusiasts. Just them.

What a uptight, insular and silly comment. When the American West opened up due to railroads, gold mining and cheap/free land. Guess who some of the first people to really commercialize it and make it viable for all future growth were? Get rich quick shills, wannabes, hustlers and desperate people looking for a new frontier for wealth.

It's not a pretty thing, but it's how interesting frontier territories grow and later mature into something better, be they digital or physical... The early commercial internet was also full of hucksters, shills, hustlers and so forth. What happens next is anyone's clear guess, but if you really want your precious crypto bubble to turn into something useful for the world, you might want to reconsider your notions..

What good is crypto if it stays limited to a narrow circle of naval gazers?

If those end up being the only people using crypto then what would have been the point of it?

The point was never to make people obscenely rich off of speculation.

So why did they shut down?

> people selling sets of NFTs which resemble a security

Okay thats a much more valid reason to shut down, because the marketplace will get curb stomped by the SEC

How much does it cost to store the actual asset only within the actual blockchain, for the most popular chains?

Did not do the math myself, but apparently:

https://twitter.com/dominic_w/status/1490349135249035264

"Cost of storing 1 phone photo (3.3MB) on the blockchain"

ICP 1.6 cents - Solana ~$2,500 - Ethereum ~$1M

ICP looks pretty dodgy from some quick googling. The number might still be true, I have no idea...

https://www.reddit.com/r/CryptoCurrency/comments/pg3nuf/was_...

i see pee is actually good at something?

On the order of $1 per KB for Bitcoin IF it allowed transactions to embed arbitrary data, which it doesn't. Spreading bits of data over many transactions is MUCH more expensive.

A fortune. Plus once it's on a public blockchain, everyone can copy it, so not sure what does "only" mean in your question.

I've heard lots of NFTs are just links to links that starts with "https://s3.us-east-1". It makes some sense to make it any ways but not like that.

nah, nowadays they use IPFS

IPFS itself is often just a transient cache of S3 - someone has to host the content somewhere to "pin" it to the IPFS network, that somewhere is often S3.

The ability to store actual assets on the immutable public blockchain probably isn't a very desirable feature, lest some joker uploads something illegal.

Who could have foreseen this?

Oh, wait...

I wish I knew who originally called NFTs "Content-Free DRM" so I can give them appropriate credit. I think they nailed it.

Right when I was looking forward to selling my new masterpiece "Mona Lisa with 1 pixel changed".

I read comments thus far and seriouslly, so many ways to rationalise institutional scam.

I really hope that the disappointment the market will have after realizing that NFTs are just being used as a Ponzi scheme right now won't be an obstacle to other more appropriate uses.

Imagine the revolution they can bring to other old school ledger system for houses, cars, licenses...

This is the part of NFTs and crypto more broadly that I struggle to understand. What exactly about car registrations or licenses needs improving and how does a crypto token do that? A drivers license is already relatively difficult to forge, and for verification there is already a central registry of them, so where does the token come in?

It doesn't. If you really need a blockchain, an old-school permissioned one will do the job cheaper, more reliable, and, paradoxically, often even in more decentralized fashion. NFTs don't bring anything to the table, other than being a cute and wasteful collectible card equivalent that's perfect for money washing and scamming clueless people.

> crypto more broadly

Think about all of the licensing, money printing, and registration agencies to ever exist. What percentage of them have significant corruption? Blockchains provides a lot of stability in a way more traditional human organizations fail to.

At the end of the day, the vehicle registration agency still needs to issue the license, so what's the benefit of a blockchain here? You do not need a blockchain to, say, cryptographically sign something such that it can be verified as a genuine item. And blockchain won't stop corrupt minting of licenses by the agency. And even if you did need a blockchain, the ledger wouldn't be public because the data on it is private. So now it's just a database with a ton of extra steps, complexity and kneecapped performance.

They would have the same central authority problem, the real issue is to get evereyone to agree to using a system like that..

The old school ledger system is working fine. Even if I lose my blockchain private key I still own my house because the title is recorded with the county.

Have you considered the fun in losing your house because you clicked on the wrong link?

A small price to pay for being profiled in Wired as the wild-eyed technology fan who was a pioneer in getting robbed.

I'm imagining a combination of the guy who locked half a million in a smart contract with no way to get it out[1], ever, and the Libertarian Cop copypasta[2], where the crypto police is hired by an NFT marketplace to evict you from your house and set up an armed perimeter to prevent use of the house as it is now stuck in a smart contract with no exit.

[1] https://cointelegraph.com/news/blockchain-enthusiast-alleged...

[2] https://www.reddit.com/r/copypasta/comments/7iqxko/libertari...

If the title of your house was on a blockchain, the title would still be recorded in your county's system. The blockchain is just a ledger, it's up to people to come to agreement on if they trust that ledger or not. The whole point of having your house title on-chain isn't to replace the traditional courts, it's to add additional features to your title and allow you to use that asset's value in decentralized finance more easily. If you lose your keys to your title, you would have to use the traditional court system to replace the title on-chain with severe legal repercussions if you're lying. You could also include a blacklist feature in the house title's onchain contract. It doesn't matter if it's a centralized system either (even if it's on-chain), because the only point of putting it on-chain is to make illiquid assets more liquid because now those assets can be be programmed, used and traded in global decentralized financial markets in web3 24/7, globally.

What's the point? I can already get a mortgage refinance or Heloc super easy if I want to. Where are the additional features?

I often ask questions like this, and the most popular non-answers are, 1) think of the possibilities, 2) this technology is just getting started, so you can't judge it yet, and 3) unverifiable stories about some use case that is at best extremely narrow and may well be hogwash.

And when stating the imagined gains, the costs are always assumed to be zero. We know not to trust our data to a version 0.3 app, but somehow that's a fine thing to do with one's house or life savings.

It seems to be hype and speculation in its purest form. Pure as in having no actual utility. Reminds me of things like high frequency trading. Just expensive computation that extracts value and distracts people. With the difference that high frequency trading is less inherently dumb and feels more like an exploit rather than a scheme.

In fact, the profits of high frequency trading can be seen as rewards for filling the market with liquidity, so it's not strictly an exploit.

Is there much evidence that HFT yields in better results for those making economically meaningful trades? A theoretical increase in liquidity may not matter in already liquid markets, and if it does, it's not clear to me that the end-user gains are enough to justify the negative effects.

I don't get it.

If the on-chain house title isn't the real one, treated as the ultimate authority, why would anybody want to buy it? Nobody in the right mind would want to pay for something that doesn't actually confer ownership. At that point, there's no benefit over just selling your house the normal way because all crypto does is adding extra steps to an existing process.

If the on-chain house title is the ultimate authority, then the logical conclusion that any way of obtaining it is valid -- if I manage to get it, then I should be able to kick you out of your house, since now I possess the title.

The first option seems useless/fraudulent, and the second incredibly awful security-wise. Fall for a scam/virus/trojan once, and there goes all your stuff.

If implemented with even the furthest reaches of understanding and blockchain tech that I’m aware of, I feel this would be (much closer to) a dystopia.

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