NFTs died a slow, painful death in 2023 as most are now worthless | Hacker News Reader

NFTs died a slow, painful death in 2023 as most are now worthless

newscientist.com

64 pointsBrajeshwar94 comments

“As most are now worthless”

No. They were always worthless. More people were just in denial thanks to their gold fever.

I think this was true a year ago too. They peaked in 2021, were dead in 2022.

For me the most impressive part is how high it peaked. This wasn’t just a flash in the pan, fleecing people for a $1000 here and there.

Beeple’s $69.3M price makes it third highest art sale by a living artist ever, for all art.

This category came out of nowhere from nothing to top 3 in the space of a couple of years. Then died just as quickly.

> The composite’s sale is not just a standout in the NFT world but in the broader art market, too. It is the third-most expensive work from a living artist ever sold at auction—behind only $90.3 million spent on a David Hockney painting in 2018 and the $91.1 million for Jeff Koons’ stainless-steel Rabbit sculpture in 2019.

Was there any 3rd-party confirmation that Beeple's sale was real and not a wash trade / self-sale?

Well it sold at Christie’s, not OpenSea or something

The best theory I’ve seen is that it was more of an attempt to generally juice the market:

https://amycastor.com/2021/03/14/metakovan-the-mystery-beepl...

True, so there was probably a commission cost, though even Christie's might have been doing it to try and establish itself in this new space.

Depends on what you call “real” but it’s going to basically be a certainty that it was someone using money borrowed from other crypto nonsense to prop up this specific crypto nonsense in the hopes that making money off crypto nonsense in general could continue for a few more months.

It’s far more likely that almost nobody ever cared about these things at all, and that nearly the entire thing was wash trading and market manipulation.

Of course there were some marks mixed in somewhere, by definition, but the premise that there was ever real demand for this from anyone is pretty dubious.

I like a comparison of NFTs to a casino. People care (cared) about the profit, and about their number winning, not necessarily about the number itself.

Having said that, I recently finally saw an art project I actually think makes sense as an NFT. Don't remember its name, but it's artist selling actual rights to their works on an auction to people that want to invest in the pieces, people trading the art NFTs, with the art piece being stored securely, and then one day if someone wants the physical piece for themselves, they can burn the NFT to request it's delivery.

Speaking of art, we did a project ~6 years ago, where we released ERC20 tokens attached to physical objects - imho this makes way more sense, because it allows for a fractional ownership of art/collectibles. Ideas like this make way more sense than NFTs.

>finally saw an art project I actually think makes sense as an NFT

I feel like the idea of NFTs representing some right of redemption or ownership in the physical world was a fairly common NFT scheme / use-case back in the day.

Am I missing something?

Yes that is the actual benefit of NFTs. It's happening.

I've been away from blockchain for the last 3 years, but from what I checked most NFTs claimed some vague attachement to a real world asset, but no actual connection. As in "here is an NFT attached to this art piece" -> "what rights does NFT actually give to you?" -> "well, sentimental rights"

It certainly sounds like a great solution for a non-problem. Why would I ever want to buy this NFT instead of the actual artwork? I guess i could speculate with the value, which, who am I kidding, is basically the only non-criminal crypto use case.

It is an actual case, a plenty of people want to buy an artwork but they don't want an actual piece in their possession - sometimes they want to just hold it for investment purposes, and sometimes they don't have the space yet, but they expect to have it sooner or later.

That's why you have storage houses for artworks, and artists often sell their artworks to collectors but keep it in possession for years. Also people own artworks but "rent out" to galleries - which makes it a win-win, and a free storage for them :)

https://www.investopedia.com/terms/g/greaterfooltheory.asp

What Is the Greater Fool Theory?

The greater fool theory argues that prices go up because people are able to sell overpriced securities to a "greater fool," whether or not they are overvalued. That is, of course, until there are no greater fools left.

Who would have said…

As much as I hate NFTs, judging by the history of crypto since 2011, the moment people start pronouncing it dead is the moment it picks up steam again :)

NFTs are collectibles built on top of crypto, though. They're not the same thing as Bitcoin/Ethereum (which have much more utility, and crucially, are fungible).

The vast, vast majority of collectibles that have ever been made are valueless, or nearly so. Just look at e.g. all the CCGs that have ever existed, vs how many of them have retained value.

Is crypto even being used for anything? There were ATMs and a few places online I could pay with BTC even a few years ago. I don’t see any of that.

It was fairly popular for international transfers but so many govts have clamped down on it in the past few years.

BTC ATMs are still wildly popular with scammers.

I use my limited holding to buy my VPN subscription, and occasionally bung a few donations to various people. I've never considered BTC an investment.

Yes.

As for international transfers - I never thought it's a good use case. Int'l wire transfers are getting cheaper and faster, so there's a diminishing market of people who want to do it.

For what it's used for - DeFi (i.e. financial instruments of all sorts) is an awesome use case, IMHO way better than the traditional system. The problem is that underlying assets are crap/virtual tokens - if it were actual shares/real world things it would dominate the market. The issue is with SEC/regulations - super hard to make a security tradeable on blockchain. Before SEC got involved (in 2012?) the majority of trading was on actual companies that paid off dividends, like the first ASIC projects, satoshi dice and so on.

The only thing good about NFTs was the free alcohol and other things I got at the parties. (I've never bought NFTs just got invited to parties and was curious. The parties generally sucked ass)

Incorrect.

NFTs used for pictures of monkeys etc are now effectively worthless.

NFTs as a technology, for tokenizing real world assets, is the far more interesting and useful part.

https://www.ledgerinsights.com/abrdn-tokenize-money-market-f...

Watching NFTs from afar and thinking it’s all just JPGs means you only have 5% of the story.

The headline of that article reads like Vogon poetry.

Indeed! On that note, if Douglas Adams were still alive he’d have cleared this entire situation up years ago. And it’s NOT that NFTs are themselves worthless…

Reading below it’s clearly a perception problem.

The fundamental concept of NFTs is profoundly useful. The fact a trivial use case (to represent ownership of JPGs) is all anyone here knows or talks about is the real problem.

I’m pretty sure the fundamental concept of NFTs is totally useless for anything other than financial speculation.

How come?

In multiple years despite huge amounts of hype and investment and trivial access to the technology by anyone on the internet no one has managed to find a single one besides “selling” “rare” “art”, which bombed spectacularly?

NFT art didn’t work. NFTs in games didn’t work. NFT shares of things didn’t work.

Enjoy your intangible beanie baby. At least those had a (small) intrinsic worth.

I am not interested in collectibles, I am talking about something much more interesting and practical.

But to entirely dismiss the category because you are only privy to slow & expensive implementations or trivial use cases is like saying no one will fly across the Atlantic or be able to transport heavy goods because the Wright Flyer can barely do 30mph.

There is a fundamental technology here that goes beyond trivial collectibles. If you need examples just ask rather than throw the baby out with the bath water.

That's like saying the Internet is totally useless for anything other than sending bits around. There's entire industries dedicated to financial speculation.

The Internet immediately solved problems people had which were unrelated to selling internet service. Even before the web launched, things like email, FTP, telnet, etc. were generating real value for organizations around the world.

NFTs haven’t had that because they solve a problem almost nobody actually has: complete trust less processing of transactions small and slow enough to be handled on a blockchain. Most real world applications necessitate trusted third parties and at that point you can use a much simpler system at considerably lower cost.

Those original internet services didn't solve problems for the vast majority of business (or people) immediately! The technology was solid from the start, but the adoption curve was far, far slower than you suggest. By a long shot.

The difference with NFTs is the concept is sound - trusted, immutable transactions recorded on a public ledger without a third-party intermediary. The difficult part is making it work efficiently and securely. Until very recently NFTs have been slow and expensive (in cost and energy) to transact. The most visible use cases being trivial (proof of ownership of JPGs). But the answer to those technical limitations IS already here and getting better, speed and costs are not a problem if you stop referring to Bitcoin and Ethereum.

The problem is, most people dismiss the entire venture (tokenisation and the larger benefits of public DLTs) because they are only looking at the mainstream projects and agreeing with lazy journalism to have their biases validated.

I’m old, I’ve been using the internet since the late 1980’s.

The web was spectacularly useful right from the beginning. You could look up airline schedules and buy tickets instead of going downtown to a travel agent. You could email someone instead of sending a letter or making an expensive long distance call. And like a million other things.

NFTs on the other hand are fucking useless. Unless you’re counting “scam others out of money with bullshit stories” to be a use case.

I too am old. I hear you. But just because you could do those things back then doesn't prove your point. Businesses took the large part of the 90s, at the very least, to really get on board with those technologies. And it wasn't though lack of desire - a lot of other factors need to come together to make the web viable in the mainstream (broadband, browser standards, TLS, countless components). None of which happened overnight.

Reading all the comments here, the sentiment over NFTs is clearly reductionist ("just monkey JPGs") and based on a very limited understanding of the fundamental benefits of the technology. Most of the real world benefits are overshadowed by this kind of sentiment and shows a clear lack of knowledge and research from the wider community.

If you truly are technically literate, you'll know the mainstream view of any nascent technology is always very weak and sensationalist (the headline in the OP a good example). If you were well versed in NFTs and DLT technology you'll know there is new ground being broken here. Your last sentence tells me that you are not well informed on the subject. If you were, you would not be saying such things and understand the computer science behind the core concepts.

So yes, whilst the NFT space is largely full of scams and is apparently useless, that doesn't mean there isn't a viable technology at play which has major benefits in multiple industries.

> If you were well versed in NFTs and DLT technology you'll know there is new ground being broken here. Your last sentence tells me that you are not well informed on the subject.

This is the key difference: you have been conspicuously unable to provide examples of a competitive service. Nobody in the 90s internet struggled to do that, and they rarely were asked to because there were so many cases where the internet did something useful that even a casual follower of the news would be aware of. There were plenty of dodgy companies but they weren’t the only ones, and existing major businesses were also jumping on board.

Yeah you could write early internet use cases on a cocktail napkin:

“Buy plane tickets”

“Find rare books”

“See movie showtimes”

“Sell unwanted items”

And so on.

You can’t do that with NFTs because the whole thing is bullshit.

Yeah, I had a ton of people who were basically switching from “we take orders/provide support over the phone/mail” to “over the internet”. It wasn’t the kind of stuff which gets you on the cover of Wired as a visionary but it sure outlasted a lot of that because it was instantly recognizable as a good move.

- The instantaneous transfer of value between two parties, without an intermediary.

- The ability to publicly and immediately prove ownership (chain of provenance) to a third party.

- Multi-signatories, the ability for one or more parties to have joint cryptographic ownership over the token. For a pre-defined number of those owners (majority, 2 of 5, all members etc) to be able revoke, change, transfer the token as required, again without an intermediary.

Here’s a discussion on the subject of the benefits of NFTs and the broader concept of tokenisation as it applies to supply chains and finance.

https://youtu.be/kNgTR5lii4M?t=25m33s

This is just one clip but the point is, referring back to the OP, the idea that NFTs have failed, that they are useless, that it’s just a load of bullshit is just another way of saying you have a very narrow understanding of tokenisation in the main.

> - The instantaneous transfer of value between two parties, without an intermediary.

This is the only one that isn't nonsense word salad. But it's simply not true.

The intermediary for a blockchain transaction is the group of people who run that blockchain.

The intermediary of PayPal is the group of people who run PayPal.

And so on. You can tell they are intermediaries because without them you can't transfer the value. There's no way to do it just between the two of you, you need this loosely organized group of people in between the two of you.

And that loosely organized group of people, it turns out, is WAY less reliable than basically every other option.

I wasn’t conspicuously avoiding anything. I didn’t see you’d asked earlier. Examples given.

You’ve linked to a company’s press releases, which rather verbosely tell us that they’re doing “tokenization” or selling shares like people have been doing for centuries. What’s omitted are the benefits from doing so – a company switching from mail/phone to internet ordering, for example, could easily show how they were saving money and shipping orders faster. For this, I’d expect to see favorable metrics for customers enjoying lower costs.

The press release was the first one that came up in my search that explained things clearly enough for the uninitiated. There are many other articles elsewhere covering these things if you care to look.

> Those original internet services didn't solve problems for the vast majority of business (or people) immediately! The technology was solid from the start, but the adoption curve was far, far slower than you suggest. By a long shot.

I was there and, no, it wasn’t. It’s true that it wasn’t universally accessible on day one but that actually makes the comparison even less favorable for NFTs because even with far lower barriers to entry they’ve had far lower adoption. Businesses got online because it was profitable within months, not decades!

Do you have any examples of meaningful real-world usage? Boosters have tried hard to make this argument but haven’t found much adoption due to the greater cost and inconvenience.

Mostly Hedera spearheading IMO, but yes:

https://www.dlapiper.com/en/insights/publications/2023/04/to...

https://www.cryptowisser.com/news/redswan-cre-builds-its-tok...

https://finance.yahoo.com/news/quarter-fractional-home-equit...

There are many other projects in various states, touching entertainment (AAA gaming), supply chain, integration remittance, carbon markets.

*international remittance

I read that page but don’t understand how that is any different/better than the current situation. How is it better?

Specifically, the money going to one set of middlemen would be going to their middlemen instead.

"How tokenisation could benefit investors The benefits of tokenisation extend to large investors as well, providing increased liquidity and the potential for additional value through asset fractionalisation.

In this way, we can take a US$100 million private equity asset, tokenise it, and turn it into 100 million US$1 tokens. These tokens can then be listed on a regulated digital securities exchange to trade on a secondary market. By doing this, the minimum investment is now affordable to the smallest investor, while the secondary market creates liquidity."

https://www.abrdn.com/en-gb/corporate/news-and-insights/expa...

That link is 404 for me.

This doesn’t seem any different, at least not spiritually, from fractional ownership. What do NFTs do in this regard that we can’t already do?

-The complete removal of intermediaries (resilience, trust, immutability) -Instantaneous transfer

Read more about Abrdn and Toko if you want to learn more.

Link is fine for me

Obligatory I'm a fan of cryptocurrency, and only a very, very small subset of them at that. Sturgeon's Law, 90% of everything is crap.

I tried to tell some of these people. What's the value proposition? People talked about artists and all this and I'm like, OK, what's the value proposition to the buyer? Then I'd hear about how they'll be useful for something some day, so OK, they're useless now? And then something something greater fool. It really was something to watch, "metaverse real estate" and all this.

I can tell you the value proposition of a handful of cryptocurrencies. You might not agree, but there's a case I can make. I can tell you Tue value proposition of ethereum. Nobody to this day has been able to give me anything concrete about NFTs or crypto gaming or any of that stuff. It's all hand wavy "this is the future" or "people are going to want this" or something like that. It was all a plainly obvious load of crap.

Uniswap V3 liquidity pools are managed as NFTs. Not your main point I know, but people often think of NFTs as simply buy and sell art on opensea. A liquidity pool has clear value.

What do you mean by "managed as NFTs"? A liquidity pool is a contract where people put their coins in and the contract gives them a percentage ownership of all assets in the contract and they get a small fee off the trades done in it. Are you saying that the proof of ownership is a non fungible token? That seems like a small technical detail, it's not the token that has value, it's the assets in the pool, you could easily do it with fungible tokens or with simply a record of ownership in the contract.

Kind of crazy since copyright laws says stuff expires like Mickey Mouse

Can you clarify how that's related?

If the rights for Micky expire, then ownership expires. And if that holds for other things, then it holds for NFTs.

However where the step misses is NFTs are a single instance, and being a single instance they're more like a Picasso painting. There is an owner of the singular object.

The Micky thing refers to his likeness. Creating a copy of his image was restricted. Selling a copy of his original tableau as a real thing is still illegal.

ownership and copyright are not the same thing. Apples and oranges.

I feel like this was eminently predictable for anyone with, you know, sense.

I would agree, except I thought they were as worthless as crypto in general — turns out I was half right.

Well, crypto has still not demonstrated any use cases. The coins are just pumping for another round of ponzi scamming.

Being able to transfer funds internationally instantaneously (or near enough), and protection from both censorship and confiscation are not use cases?

Maybe in edge cases, e.g., Ukraine where the money conversion is not a primary concern. But for any real use case beyond "illegitimate" businesses, like Scams, it seems that the censorship and confiscation is not really stoppable.

This starts and ends with the conversion from regional currency <> crypto where, e.g., a country may coerce exchanges to blacklist your wallet(s). This even has precedent in the US with wallets containing stolen assets being blacklisted from major exchanges making them hard to use at best.

If you're using an exchange, you're missing the point ;)

So it’s a fungible store of value that cannot be turned into useful currency.

Lovely.

So everyone just needs to buy enough bitcoin until every business randomly decides to start accepting bitcoin?

Can you provide any examples in history of a similar non-government currency having to wait for such a circumstance? Or a government one that wasn’t just waiting for a predetermined switch over date?

Why do you need to turn it into dollars or euros for it to be useful currency? Just transact directly.

not instantaneously, and with outrageously big fees (which will only increase due to the limited supply). And no recourse if someone manages to steal stuff? No, that is the opposite of protection.

Lightning transfers are instantaneous and low fee. No recourse is the complement of self sovereignty. It is a tradeoff to be made.

Right. That’s why the FDIC and police exists.

Society decided this 100 years ago. We don’t like the Wild West and scams. We like safety.

> transfer funds internationally

ttc fees increased since lightning became a thing.

It gains speed by compromising security. Lightning enables whole new classes of attacks. You also need to have a server or something constantly online, or trust someone to do it for you. Trust, for a supposedly trustless system.

A better way to phrase this: why has it had no real impact on the market if those claims are true? Companies like PayPal and Western Union don’t seem worried, people never suggest it for in-country transactions, etc. suggest that the marketing isn’t true and the high transaction costs and lack of security matter more.

Because it’s happening slowly and people aren’t paying attention.

If a decade and a half with many billions invested is getting such slow adoption, why do we think that’ll change?

You have oddly fast timelines for adoption. These things take time.

None of the competitors needed anything like decades. Companies like PayPal, Venmo, Square, etc. had far more usage with a year or two of launch, and nothing like the high percentage of companies who started using them and removed the option because the fraud / benefit ratio was dismal.

The iPhone came out the year before crypto.

One of them literally changed the entire world.

The other caused totally unnecessary climate change and a bunch of people lost all their money.

So, I’ll ask the question that I seem to have to ask in every thread. It’s been 15 years. How long do we have to wait? 30? 50? 100?

I got involved with bitcoin in 2010. I never expected it to take off (price-wise) so soon. I thought maybe 2050, and I still think that's a reasonable guess. Overturning the global financial system from the bottom-up takes time.

ARPANet started in 1969. The internet as we know it today didn't take off until the late 90's, and wasn't a profitable world-changing sector until the 00's.

I kinda like the distributed ledger aspect, but there are lots of ways to do that. The thing that annoys me about crypto is all the wasted compute; it's not like when we succeed in factoring a large number, that creates sufficient downstream utility to be a positive externality. A lot of the alleged advantages over other kinds of currency only make sense if you're a) paranoid enough to think governments are out to get you on general principle but b) optimistic enough to believe in society where property rights are taken seriously and digital abstractions will continue to be convertible.

You’re referring to Proof Of Work (PoW). There are other methods which aren’t energy sinks.

Some companies, e.g. Square Enix and Ubisoft, invested significant amounts of money to NFT-ify their main products. The first of these NFT games were released recently. Not sure how they are doing but the previous SE CEO was pushing crypto a lot and then he got replaced by another guy.

Wonder if they are still on this path.

Even Peter Molineux seems to have given up.

I feel like the rest were riding the hype train for investment or just looking for the next free-to-play to cash grab.

Don’t worry, always a new sucker to fleece.

I'd say sooner or later enough people would learn from others' misfortunes, but BTC is at 43K USD, so... maybe more later than soon?

I’ve been expecting “sooner” for like 10 years now. Somehow it just won’t die.

Just when it looked like crypto would finally be over someone glued on the fantasy word NFT and everything was dumb again.

It was always a scam.

tl;dr - as expected, there is nothing to see here, move along ;p

Haha - Nelson

Great. Now do AI.

Crypto is coming back. NFTs will follow. The problem is that 99%+ are worthless. There's no way to figure out which are the good ones. Funny, how they are similar in that way to baseball cards.

Read about a guy who was the head of a group that sold a set for over 50 mil. He cashed out and bought a mansion. The buyers just lost their money. I doubt they have any recourse to get their money back. We'll hear more of these stories again.

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