I was really hoping they were going to dunk on the technology itself, like how the media of the NFT is lost if the platform hosting it is ever compromised - only the meta data is stored on the blockchain.
Instead, they just attacked the contents of the NFTs, akin to my mom telling me my pokemon cards are a waste of money all those years ago. Value is only whatever someone is willing to pay.
The metadata is an IPFS hash in most cases that you can use to validate against the file regardless of where the file is stored. At any rate NFT market places are working on surfacing quality data to users to show them this information. Some NFTs are small enough to be embedded on-chain. Some use IPFS + Filecoin or other decentralized archive service like Arweave. Some don't. Surfacing that to users will become more important as the space evolves.
The metadata only contains an URI to where the actual information lies (says ERC-721). So as long the URI stays, the hash stays. And then you go and modify the contents of the pointed file and lo, instead of a Picasso you own now a lolcat. Or the file gets simply removed because the hoster went bankrupt or lost the backups after a crash and you're left owning... yeah.
The contents seem much more stupid than the metadata issue. If you're going to claim "ownership" over an arbitrary "thing" pointing to it with metadata is a reasonable method. Its the claiming "ownership" over arbitrary crap that's stupid.
It gives you whatever the seller decided to package: physical items, meet and greet, handwritten notes. Of course it's all in that volatile metadata, though.
It's important to remember that these people are also the kind of industry personalities that would speak at and participate in a conference run by an organization in 2004 that backdoored their crypto products for government bribes.
I'm of the belief now that those associated with the RSA conference are more interested in the publicity/reach of the conference than anything technical. They've pretty firmly positioned themselves outside of technology and far up the orifice of "industry" now. Maybe it's worth watching for policy wonks, but I skip the whole thing.
Well, the conference essentially just borrows the name, in effect. The conference is highly vendor oriented, unlike Blackhat or Defcon. The speakers, however are RSA themselves. Keep in mind that they are no longer associated with the company.
And the theme "crypto means cryptography" is a losing battle, I think.
Defcon, being in Nevada (a state owned 95%+ by the US federal government and the home of the Nevada Test Site and Area 51) has always been super friendly to the US military (including its spying apparatus) and adjacent industries.
The ArtBlocks webpage says they use the (same usual) ERC721 standard - which only stores the URI on chain. Can you please point to your information source?
> Certainly it's not harmful — some people collect coins, some people collect stamps, some people collect NFTs. If they want to pay money for this, it's fine with me.
Exactly. If someone makes some purposeless set of objects and others buy and sell them and money is lost and gained by informed adults in the process then.. nothing?
If one thinks that NFTs are inherently a BAD THING then it may be more accurate to say that it is a bad thing that humans are easily persuaded to acquire shiny things and things they think will rise in value.
If so, the problem lies in human nature.
Energy expense of NFTs is not covered in the article.
I believe there are many that don't understand that NFTs don't represent ownership in anything yet they are billed as such. From NBA Top Shot: "you get to own and show off the highlights that matter". Except, the NBA owns all the footage and the rights. Do you get to sue the NBA if they bin Top Shot? If so, what would you get? Nobody was angry with Crypto Kitties. It was clear what exactly you had. But NFTs are simply a means for people to strip the token of anything of value and yet get to market it behind a veil of complexity to prey on those who don't understand.
I think this is a good point. One of the main problems with new products and technologies is the inherent asymmetry of information: the producers know and the consumers sometimes don't.
However, this is a problem to be addressed by the FTC and it isn't something unique to NFTs. False advertising applies.
That being said, unfortunately it may be the case that many consumers are just ignorant of what they're buying in general (not including NFTs).
Because NFT's have nothing to do with collecting digital trinkets and everything to do with money laundering. The only thing that is remarkable about NFT's is how absolutely brazen they're being about it. The only positive is that hopefully it will keep them from screwing around with the housing market that has real life consequences for people although now we're just throwing away electricity rather than empty houses.
acquire Ethereum with dirty money -> buy NFT's -> sell NFTs for Ethereum -> sell Ethereum for USD -> deposit USD in bank account
I fail to understand how that is materially different from:
acquire Ethereum with dirty money -> sell Ethereum for USD -> deposit USD in bank account
Besides there being more steps with NFTs, I don't understand how it would attract less scrutiny.
In both cases, one must acquire Ethereum in the beginning with dirty money. This can be done on a foreign exchange, transfer in the Ethereum to a domestic exchange and sell it for USD.
In both cases, large deposits in bank accounts will be flagged by banks for review by the authorities. It's not a very good idea.
Arguably, USD stablecoin is a much more efficient method. Just buy them, and sell them off slowly and deposit the USD in ways to avoid scrutiny. This can't be done with Ethereum because of the volatility: you can't wait because your money might lose a ton of value.
I’m not an expert in money laundering but I’ve been waiting for a cryptocurrency version of the restaurant laundering scam.
Essentially criminal A buys a restaurant. Some sales are legit and other sales are just criminal A filling the register and making sales. Police are relatively good at investigating this because ratios between income and expenses are always dramatically off.
What if instead of pizza you just mint and buy tokens?
If wealthy people are going to use artwork to launder money, I'm happy with the original artist getting a cut. This already supposedly happens in meatspace, just with the artist making nothing after the original sale and missing out on most of the eventual value.
Agreed, would be easier to agree that they're harmless enough if the energy use aspect had been addressed.
But also isn't it a little crazy to think about how many unestablished / small-time artists are dropping $50~$150 on minting NFTs that might never even sell. And how their participation just drives the hype engine and makes the whole thing look like even more of a thing?
I think a non-zero portion of the criticism is actually a criticism of collecting in general. If you think collecting things is dumb, you will think NFTs are dumb by default.
I'm sure people will come up with a new bullet point to demonize NFTs after that. Not that there isn't a laundry list of things that are wrong with them, but the alleged environmental impact is the least of such issues yet it's the easiest to "understand" and so it overtakes any kind of discussion.
If only we had access to the internet in order to look up things we're confused about. I highlighted ETH 2.0 PoS, right clicked "search Google" and the answer to your question is the first result.
I don't mean to distract from the main conversation, but I want to talk about how insidiously evil it is that NFTs can be coded to send the original creator a percentage $ cut off of every subsequent transaction for all time.
If that's not hard coding wealth inequality and a new class of asset owners, I don't know what is. This is disturbing, along with the whole thing itself anyway.
The people receiving royalties are the artists in these cases – instead of the record companies, instagrams, and etsys of the world. I fail to see how this won't be a net positive for wealth equality when we're shifting the advantage to those who have historically been taken advantage of.
> The people receiving royalties are the artists in these cases...
This is just factually incorrect. I don't know why there's so much confusion here... it's the creator of the NFT that controls where the money goes, not the creator of the artwork. I don't know why people think that it's the artist that gets the money--that doesn't make any logical sense--how would a system like that even work?
The value of a Beeple NFT minted by a random user is exactly what the market chooses to value it as.
If it's minted by an agency that helps creators do marketing, and the agency gets the creator to say "Yes, this is a legitimate NFT created on my behalf by this agency, which has been very helpful to me in understanding NFTs, I don't understand these fancy computer things," why would the value be zero?
(This exact scenario plays out all the time in the real world. People bought "Taylor Swift's" album Fearless, which was authorized by her and contained her actual voice and songwriting and paid profits to her and was in all senses legitimate, and paid well over zero dollars for it. And then over a decade later she tells her fans that she doesn't control it and she's recording her own version of the album actually owned by her.)
What stops a record company from including a clause assigning any NFTs (and/or the revenue therefrom) created by the artist during the contract term to them?
Nothing. Just like nothing stopped Taylor Swift from rerecording her entire library to license her music herself. If artists sign their NFT rights away, that's on them.
The question is how you prove that provenance if a niche artist has created an NFT on a niche piece of art. (And, honestly, most of the people who would want to create NFTs are going to be in this category.)
Now imagine an agency whose job was simply to create a digital signature on a work that indicated what they had done to prove a particular piece of art really was produced by the artist who then goes on to sign the NFT. If the agency has an established reputation, then that signed NFT has much more solidly established provenance than an unsigned NFT. Of course that agency has non-zero costs to establish provenance. And adds a non-zero amount to the value of the NFT.
What then, can said agency reasonably charge the artist for this service?
I agree but it's worth noting that Beeple was selling JPGs for $5000+ in the mid 2010s as a commissioned artist in the music industry. So the NFTs have also brought some transparency to a successful digital artist along with the crazy valuations.
This seems like a dangerous bet to make... my take on the NFT "market" is that it's money laundering, wash trading (inflating prices to attract suckers to the market) and perhaps in a small part conspicuous consumption. Mostly fraudulent... but would you bet against a fraud?
I would take a broader bet that is not tied to Beeple (i.e. that NFTs of significant artists will have long-term value in a similar manner as a painting).
Is this because you don't have interest in it, or do you have a true justification of this?
I'm willing to take this bet. Just like art, 99% can be bought for $1 at a garage sale, but there will be the 1% that has value to someone.
You are betting against the generation who spends massive amounts on video games costumes, and puts more value into their online image (instagram) than real life image, not finding value in a form of digital scarcity & status. I find that hard to believe.
So the condition of your bet would be that all NFTs everywhere have zero long term value? So something like, by 2030, no non-fungible token will have a monetary value?
I'm not interested in taking the counter party in this bet, but if you were to take a bet in the form "The highest sale price of a NFT in calendar year 20X0 will be no more Y0% of the highest sale price of a postage stamp in that same year.", what would you fill in for X & Y?
I’m over forty and quite frankly, I’m tired of this ageist crap. This entire premise is complete fucking bullshit. Do yourself and everyone over 40 you come into contact with a favour and pretend you never believed anything so toxic.
I'm over 50 and this does not match with my observations of the world. Older people, as a general trend, do in fact seem to be resistant to new ideas. There are exceptions, of course. The trend still stands in my experience.
Then I’m sorry to say it pal, but you’ve got to get out more. Some of the most rebellious open minded people I know are in their seventies. Age is just about completely meaningless and ageism has no place in intellectual communities.
Very often things invented when we are older seem to be utterly pointless to us. We literally can't get why people are excited about them. And I see this tendency in people in my age range more than in my teenagers. I personally have to back up and go from first principles to avoid it.
Everything is exciting - innovation is exciting and new inventions are exciting. If you can't feel it, that's sad and I hope you can get it back but please don't impose your own issue upon an entire age group.
Douglas Adams was a humorist first and philosopher second, quoting him literally is borderline naive.
For starters, not everything invented when you are 15-35 is good. Take reality shows: they were indeed new and revolutionary (exciting idk), but they didn't pass the test of time. Stupid stuff is invented all the time, regardless of people's ages.
How would you know if an NFT is legitimate? There's no "legitimate" bit on the NFT that distinguishes it.
If you wanted to support the artist, wouldn't it be faster, easier, cheaper, and more reliable to support them directly, through Patreon or something similar?
But the NFT is supporting them directly, if they minted it.
I personally think NFT's are silly, but there's zero argument to be made that they aren't supporting the artist. The artist minted them in the first place.
Are pirate NFTs selling for a significant price? Clearly people are making them without permission, but are people buying them? The high-profile mega-money examples for sure are being minted by the artists.
Obviously the discussion is about NFT's the artists minted themselves.
Counterfeits isn't relevant to the discussion here. It's like complaining that tipping a server doesn't work because the cash might be counterfeit. It has nothing to do with the main point.
Generally when the artist endorses it. NFTs give you a token that represents a piece of art they made which you can move and resell independently, even if the artist is no longer around. I personally am not very likely to buy any, but I can see the appeal (it's much the same as owning the originals of any other bit of art as opposed to a copy). The current cost of creating and moving them around is unfortunate, however (and reflects the immaturity of crypto as a whole. I believe ethereum is working hard to improve their scaling with a plausible plan, so this should improve, but it is a definite problem at the moment)
This is not a property of NFTs, but rather of new, unproven technologies. If NFTs "make it big", there will be plenty of middlemen that spring up to "help" artists sell NFTs while owning the IP rights and collecting royalties.
Sure there will be middlemen trying to profit due to asymmetry of information / technical knowledge. But as technology marches along the barriers to entry of launching new things trends to zero. Smart creators are increasingly harnessing new technologies to cut out existing middlemen. Podcasts are a great example of this, anyone with a microphone can start an entertainment business now and collect money from direct relationships with advertisers.
I think the big news in Podcasts is centralization. Many new podcasts get their money either from "networks" or by being part of one of the podcast walled gardens (e.g. Spotify). I suspect traditional podcasts will go the way of blogs soon and be largely superseded by several competing commercial platforms (think Medium). See, for example, the moves by Apple to turn their Podcasts app into a subscription platform: https://www.apple.com/newsroom/2021/04/apple-leads-the-next-...
And yet plenty of middlemen exist for podcasts, too - Earwolf, Stitcher, yadda yadda. Sure, barriers to entry trend toward zero, but that doesn't mean everyone's going to see what you're selling. Many people will need to partner with someone who can help get their shit in front of people who want it, and those partners are going to want a cut.
Record labels, Instagrams and Etsys will show up to the NFT party in spades.
There's a difference between making royalties for distribution of copies of an item and making royalties for transferring a single item from one person to another. One makes sense, the other is a weird misleading way to rent to people.
Royalties apply on re-sale, not every transfer. Royalties on sales going back to the original creator is pretty normal practice in the arts and creative industries (music, writing, art, photography).
The good thing, compared to traditional markets, is that this is something that can be (loosely) enforced with smart contracts, the % rate is flexible, and the current NFT royalties are typically far better for the artists (eg: 10% NFT platform fee instead of 50% gallery fee).
What on earth are you talking about? If I buy a copyrighted work in the second-hand market I don't have to pay any royalties to the original creator. That would be extortion.
You are free to do the same (trade w/o fees) with crypto currencies, nothing stops you from sending the tokens directly from one wallet to another or doing a private sale.
But with galleries in the real world (where artists are “represented” - and the model that NFT marketplaces are emulating), the artist will receive royalties on sales.[1]
> It's simply like a real estate broker commission, gallery commission, or whatever.
Except that its not at all like that. You pay a commission to someone who helped you sell something - they did work to help you sell it and you compensate them. Paying an automatic comission fee to the artist upon sale makes no sense. What are they doing to earn that commission? You already paid for their art. It makes no sense to pay again. What this is cannot be called a "comission".
I can see a situation where the artist is paid in total a very small fraction of the total price the art was sold for. Eg in the situation someone brought up where an artist sells a painting for $10,000 and then a few years later its sold for $1 million, I can see the artist maybe getting 10% of the margin between those sales (eg 0.1*(1 million - 10,000)). But even that is dubious to me, since a sale already took place. It just seems really weird to me and I think it has to be justified further than just "this is good for artists" or "artists need more money". Certainly calling it a commission is not at all accurate.
That still doesn't make it weird or misleading or "renting". It's straightforward and clear and ownership.
You're correct in that it's not exactly the same as previous models. It's a somewhat new innovation. And isn't it great to try new things?
Perhaps you'd prefer to think of it as more like a transaction tax, which exists in many localities when you sell real estate. E.g. NYC has a 1% transaction tax on sales over $1MM. But here the tax goes to the creator rather than the government.
Sure. Its an interesting new idea. I can see that it might have reasonable use cases, but its not clear to me whether its actually an improvement over other kinds of contracts. It would also have technical problems in the case of key change - if the owner has their keys compromised and needs to transfer the record to a new address, do they pay a fee to the original creator for that? And this happens in perpetuity?
Transaction fees for the Topps MLB cards on WAX, for example, are only taken during the sale when the sale occurs on a secondary Atomic Asset marketplace. There are no royalties to trade or transfer between accounts.
These are not royalties. Royalties are paid when you buy a copy of a copyrighted work. And your not paying royalties again if the previous owner has already paid them.
I have never heard this take before, you actually think it's evil? Insidiously so? I honestly can't even conceive of what your argument is.
First off, the facts are a bit off, NFTs cannot currently contain hardcoded royalties (or whatever you call it). Right now it is voluntarily paid by the marketplaces that sell NFTs. But I think at some point it will evolve to be guaranteed. Sort of.
But either way, if it's all transparent, then why is it evil? Maybe it acts as a deterrent of sales in the future, but I like that it can be controlled by the creator. It's everyone else's choice on whether to buy it, or whether that constitutes ownership. If you don't like it, don't buy it.
Evil? Really? I don't get it at all. Not one single iota. But, willing to hear your argument for that. "Hardcoding wealth inequality" is hardly an argument. It's not like there are a ton of people creating a new superclass of rich artists. There are a few, but that isn't the way it will shake out long term. At least, any more than traditional art.
Is all wealth inherently evil to you? Maybe that's your argument? I guess that's it?
On your "imagine if cryptocurrency started doing that", I am sure there are cases where this happens. ZCash is one where 10% of mined blocks go back to the original investors and founding team. Not sure how I feel about that, I do think it's high, but I certainly don't think it's evil. If people don't like it, they won't use it, and something will take its place. No biggie.
Isn't this essentially what proof of steak is? A tax on all transactions proportional to how much you already own, but disproportionately applied to smaller users.
That last bit is key. Speaking of Ethereum for a second - the largest asset owners will be institutions which can transact off-chain, which means that fees are being payed more often by folks that don't have that kind of scale.
First we had proof of work, and it consumed all the world's processing power. Then we had proof of space, and it consumed all the world's data storage. Then we had proof of steak, and it consumed all the world's food. Thus ended humanity.
First we had gold, and the Spanish looted the New World to acquire it and found themselves no richer. Then we had real estate mortgages and used deeds to estates instead of gold, and the speculators wrote up intangible asset prices as high as possible to get more money from central banks. Then we had digital gold, and no one used it because money is credit and no one wanted to pay excessive interest to internet goldbugs.
Ideally we would recognize that issuing money is a collective problem and attempt to fix our public money system, which is based on real estate mortgages.
We can fix it by recognizing that when a home has a fixed capital replacement cost of $150,000 and broker has written the comparable sales price up to $400,000 that it is not necessary to publicly guarantee the mortgages at the comparable sales price of $400,000 only the $150,000. Or to at least cap the public mortgage guarantees at double the replacement cost ($300,000) whenever the comparable sales price ($400,000) is greater.
It perhaps goes against libertarian sensibilities to claim that if the labor and material cost of the replacing all of the structures, fixtures, equipment, appliances conveyed with an estate is $150,000 and the comparable sales prices of $400,000 that the estate has 'intrinsic value' of $150,000 rather than just subjective value of $400,000. But with federally backed mortgages the $400,000 is not a long run competitive market value, it is a number which a specific set of brokers and banks have fixed upon which the central bank then commits to backing regardless of how they pick it.
Requiring loans which expand legal tender to be issued on at least half security of the replacement cost of non-obsolete fixed capital would be a reasonable short term reform to stabilize the public money system in case private crypto money doesn't work out.
It's a shame that ecoins with proof-of-steak can't be ecofriendly. Maybe that's for the best, since you could accidentally eat your steaks and lose your money.
You can just wrap the NFT inside a holding contract, then trade access to the holding contract without triggering an actual sale. At least on ethereum you can do this.
I believe this is wrong. Creator percentage isn't coded into the Ethereum-based NFT's themselves, it's done at the marketplace level. Currently, if you bought an NFT on Foundation and sold it on Opensea, there isn't a way to encode directly into the NFT a guarantee Foundation's royalty agreement would be followed.
EIP-2981 is the draft protocol-level NFT royalty implementation, but you will note that it's opt-in and NFT marketplaces do not need to respect it (although theoretically they could be blacklisted/sued). It explicitly outlines why a non opt-in implementation wouldn't work:
> It is impossible to know which NFT transfers are the result of sales, and which are merely wallets moving or consolidating their NFTs. Therefore, we cannot force every transferFrom() call to involve a royalty payment, as not every transfer is a sale that would require such payment. We believe the NFT marketplace ecosystem will voluntarily implement this royalty payment standard to provide ongoing funding for artists and other creators, and NFT buyers will assess the royalty payment as a factor when making NFT purchasing decisions. [0]
The only non opt-in royalty percentage implementation I know of is Euler Beats, but that royalty percentage only applies to printing new NFTs through their bonding curve. If you bought an Euler Beat print through a third party, you could simply use the safeTransferFrom function and avoid royalties entirely.
As someone pointed out in this thread, this arrangement is very common for high end art already, since it helps keep incentives aligned between collectors and the artists.
I am an author of this EIP. You are correct. It is impossible to enforce unless the chain itself has NFT trading as part of a core feature. Otherwise it’s the honor system. But IMO this will be quite successful given the social pressure.
pardon my ignorance but how exactly does it force royalties to transfer? couldn't a owner just transfer the underlying etherum coin that is used for the NFT to another wallet address just like any other ethereum coin? and likewise exchange it in a new smart contract?
This is about as easy to enforce on the blockchain as it is in meatspace...
All you have to do is "wrap" the NFT in a smart contract, then move the smart contract around. The NFT itself is not moving (its owner is the smart contract) so it won't trigger the fee.
Some artists choose to attach "perks" to their NFTs – i.e. meet and greets, access to private communities. They could choose not to honor these perks for NFTs held by contracts. They could even choose to re-mint the work if the new owner is doing nefarious things with the old one (though many would see this as a dubious action)
I think that would be difficult to do trustlessly though, without a smart contract holding the NFT. How can I force you to send me the NFT if I exercise?
Can you embed a smart contract in an NFT so that if you wrap or otherwise sell outside of the initial chain, it’s null and void and the rights revert back to the creator to auction again?
Good question, I'm not sure if you can programmatically check if an address belongs to a smart contract but it wouldn't be surprising if you could, and prevent transferring ownerships to those addresses.
Artist sells painting for $1k. Buyer then sells painting for $1M. Next buyer sells for $10M. Original artist only made $1k on a $10M painting. Shouldn't the original artist be able to participate in the upside of their creation?
I'm not seeing the "evil" here. Just a way for creators to cut out the middle men. Or, just a different way of structuring a contract.
There's a lot of moralistic FUD against crypto on HN right now. Feels very much like a coordinated propaganda campaign.
Do you feel the same way with collectible cars? Every time a 69 Thunderbird is sold, Ford should get a cut in the upside? How do you feel about the inverse? If a painting goes down in value, is the artist on the hook for the downside of their creation? The answer is no, the creator handed over the creation on sale. Anything else would need to be hashed out in a contract which would drastically reduce sale price.
I don't have feelings about it either way. I think you're reading way too much into my comment. It's just a new interesting way to structure a contract. Neither good nor evil. I certainly don't think it's "evil" like the comment I replied.
Yes, I did forget the OP. I don't understand how people getting paid is evil either. Whether that comes in a huge lump sum at the beginning or in interest overtime, it doesn't really matter. There is going to be a cash flow analysis that will tell you how much one version of the contract is worth relative to the other. My comment was more that these contracts aren't new, they just aren't particularly useful because it is hard to think of a contract in perpetuity.
That's not how things are supposed to work AFAIK. I go buy a book, DVD, CD, video, etc for $10. I can then resell it for $8 or if it becomes rare for $20. The original creator only gets the first $10
Behind the scenes the NFT is just a smart contract standard. The royalty isn't really baked into the contract itself, but the platform that's using to exchange it.... So lots of projects with this perpetual royalty might get moved to another platform like opensea or rarible, and the royalty goes poof.
Also, the royalty is just artists getting commission on their work. Most NFT minting platforms worth anything allow the artist to mint from their wallet.
You can still copy the underlying data however you like - if the NFT says http://example.com/foobar.jpg you can just do `wget http://example.com/foobar.jpg`, regardless of whether you've even seen the NFT, and assuming you can access foobar.jpg at all, you can then copy it however you like.
> but I want to talk about how insidiously evil it is that NFTs can be coded to send the original creator a percentage $ cut off of every subsequent transaction for all time
First, in the real world, creators stop getting royalties after the item expires and goes into the public domain, and there's a pretty strong view that the time for that is already too long and the beneficiaries of that long period tend to be companies instead of creators. I would say that there is in fact a widespread belief that the heirs of Walt Disney are too wealthy, despite the fact that Walt himself was a creator.
Second, there's no reason to believe this won't lead to the exact sort of mechanisms that plague existing royalties - e.g., a young singer makes a (smart) contract with a recording studio to have the studio count as the "creator" of the work as far as the contract cares, and the singer is just performing work for hire, in exchange for marketing, promotion, initial funding, and connections. A singer who has absolutely no resources but their talent is probably going to say yes to that, because it's better for them in the short term than going it alone, and the odds are against them (not every talented young singer can become famous). But the profits continue to flow to the recording studio for all time.
There's another thing you're missing: First Sale Doctrine. In the world of physical goods, once you've sold a copy of something, you have no rights whatsoever to constrain what people can do with that copy. Authors don't see a dime for used book sales, for example.
Because "the IRS" (not sure which jurisdiction you're in, but here in the US, it's actually the local and state government) is an entity controlled by elections that is obligated to spend its budget in ways decided on by elections, and therefore can reasonably exist forever. The royalties are not for the benefit of the IRS. A state or local government is sort of like an offline DAO, if you're familiar with DAOs. A producer does not live forever, and the producer's heirs get to spend things as they see fit.
Also, in many cases, the local government does not get a royalty on every sale - certain sales, such as to non-profits, do not get taxed.
I'm not talking about literal royalties. If I have an item that I buy new (or used) and it's not a depreciating asset, and I sell it, then I owe income tax or capital gains, don't I? And then when the new owner sells it a few months or years later as is common in the case of collectibles, they have to pay income tax or gains on their sale as well, and this continues for the entire life span of the object.
Oh, I assumed you were talking about sales taxes, which is the most obvious case of a DAO-like organization taking money on every sale, as a percentage of the selling price.
Income taxes and capital gains taxes are on your profit, not on the sale itself, so they're less analogous. If you as a taxable entity don't net make any money, you don't owe any income taxes (more or less); if you as a taxable entity don't make any profit on an asset you bought some time ago, you don't owe any capital gains taxes (more or less). So both of those are much more reasonable than a royalty on every sale - they don't follow the asset around forever, and you only have to pay a percentage of the money you made if you're in fact making money. It seems like, if I buy an NFT at $10000 and then sell it a month later for $9000, some of that $9000 goes to the creator of the NFT and not to me.
"It seems like, if I buy an NFT at $10000 and then sell it a month later for $9000, some of that $9000 goes to the creator of the NFT and not to me."
Yes that's correct. That makes it very appealing for creators like artists. I can see how that might be off putting for you though, but I think over time this will become "priced in". Also, only ver few creators will have an active aftermarket for their work. Most will not have a single aftermarket sale.
Not quite. Copyright prevents Bob from misappropriating Alice's work. E.g., Bob purchases a painting from Alice for $100. Bob can not legally now use that painting as a source to make and resell copies.
But Bob can sell the original painting to Charlie for $200 and pocket the entire $200 from Charlie. Alice has nothing to do with that sale, and does not profit from any subsequent sale.
But if Alice sold Bob and NFT instead, when Bob sold it to Charlie, perhaps $180 of Charlie's money would go to Bob and $20 would also go to Alice.
And this would hold true for every future sale, so when Alice died and became a famous dead artist and her works sell for $200K, her estate gets $20K, etc.
To me, this is the sole redeeming value of NFTs, but only if artists can actually keep those rights and revenue streams. The usual path of such things is that middlemen insert themselves to engage in their usual rent-seeking behaviors.
just sounds like automated royalties to me (with infinite copyright). AT least when an NFT does this, it is known in advance; as opposed to legistative action changing the goal posts during the match.
Also, I suppose there can be a way to cancel the royalties by making a meta-NFT (of sorts) that "owns" the NFT which stays in one place forever so that the meta-NFT can be traded instead.
The NFT thing seems to be settling out. It's for collectables, like Magic, the Gathering cards.
I've been following this because I'm interested in virtual worlds. There are at least four virtual worlds that use some kind of NFT thing to register land ownership. Nobody does much in those worlds, and the graphics aren't all that good. It's all about trading land and speculating in some minor cryptocurrency.
The newest entrant - Zero Space.[1] The actual 3D world is promised for 2024. They already have five cryptocurrencies of their own, plus an NFT system. Their "3D world" is a simple un-shared Unreal Engine demo. They claim they will have a high-resolution metaverse, but show no indication that they have any idea how to build one.
I see NFTs as more like a gimmick which reminds me of the million dollar homepage, but pretending to be more than what they are by associating themselves with "ownership".
Even for collectables it doesn't really make any sense. It's not like you have to own a Black Lotus to sell a NFT of it. Nor is there any benefit to collectors in buying the NFT except for the possibility of finding a bigger sucker somewhere down the line to buy it off of them.
'To own the SKEPTI from this transaction or any derived transaction is to "own" 1600 Pennsylvania Avenue NW, Washington, DC 20500. (AKA the White House). #metaverse'
Pretty clear what their priority is. It's not building a good game, it's making money off of suckers.
Yes, I get that feeling. They have a long, detailed story, but it gets vague around how things actually work.
There are useful metaverse design problems cryptosystems might address. You'd like to be able to move your avatar/furniture/vehicles/house from Roblox to Minecraft to Second Life to Facebook Horizon to Dual Universe or whatever comes next. Since much of that stuff is bought, the creators don't want you to be able to duplicate and resell it. Some kind of cryptosystem might be able to make virtual asset portability work.
You'd like to have a virtual world system that has multiple servers run by different organizations, yet can talk to each other. Like the Web.
The walled gardens need portals to other walled gardens. Many of the problems doing that require permission and asset storage with no central authority.
Asset storage separate from virtual world operators could work. Arweave could potentially help with that. Arweave is a scheme where you pay about $10/GB to have a file supposedly stored forever. It's paid for by a speculation in declining storage prices. But the terms and conditions are highly inconsistent with the hype. And there seems to be a central point of failure in the way files are looked up.
Nothing I've seen from the NFT crowd seems to be addressing those hard problems. It's all Make Money Fast.
I think there are other ways to solve some of these problems of virtual ownership in walled gardens, federation, etc. but they're all forms of PR/diplomacy (relations and protocols between virtual worlds, between creators and platforms, and platforms and customers)
Pretending like a technical solution requiring no central authority is the way forward will never fly because no walled-garden owner will adopt such a scheme that cedes so much control; that doesn't let them enforce tariffs, community restrictions, bans, etc. on its own customer base.
It's the digital world and tools it comes with, and a creative player base, that draws people to the walled garden. Not technical capabilities or experiments in federation or an ICO. That's all promises with no substance. People get attracted and want to experience ... stuff. Stuff they can play with and tweak and build. But it can't be all up to them, there has to be something already there to experience and as a point of reference.
I.e. ... Little Big Planet. It's why it was successful. Powerful creative tool and community technology, but it's also an engaging all-ages experience made in said tools.
The tulip comparison strikes me as being rather specious. For starters, tulip bulbs of the same variety were absolutely fungible.
It's more like trading cards. If you own some rare rookie card, you don't actually own that baseball player, just a sort of paper token that references the baseball player. But, since people see value in the reference itself, the value of the token ends up deriving from both the player's celebrity and the rarity of the baseball card.
NFTs riff on this concept by being digital, and having it be common for there to be limited runs of only 1.
What I dont understand is what stops you from minting the same thing on multiple NFT blockchains and why is it any diferent than something centralized, and thats why I dont like all the NFT hype
There is nothing that stops you from making the same NFT on multiple blockchains. Even within the same blockchain there is nothing that stops you from creating a new NFT with the same NFT payload. NFTs are only unique in the same blockchain within the same smart contract. Which is a very narrow definition of unique.
Yeah I’m confused about this as well. Especially since tons of NFTs are images, couldn’t you just change 1 pixel to change the hash and make a new NFT?
I understand the decentralized nature of the blockchain, but couldnt I mint the same painting on multiple blockchains?
I'm not an expert, but I can see the value on cryptocurrencies and ETH and all the smart contract tech. But I can't see the same value on NFTs, as more than speculation.
Because the NFT is only as good as the blockchain it was minted on. The vast majority of (valuable) NFTs are minted on Ethereum. If someone mints the same NFT on Flow for example, it won't be as valuable because it's a copy (verifiably so) and it's secured by a centralized chain. NFTs are supposed to live on as if they were physical objects, so minting an NFT on a centralized chain has a significant risk of not existing in the future.
I get the difference between different blockchains, but what I can't see is what value I get when I buy an NFT. As I see it I only get the brag rights of "owning" something on some blockchain and the posibility of reselling that right.
It takes a particular kind of person to buy an expensive NFT. It's just not for you it sounds like. But yeah, you get the bragging rights and you own the asset through your private key. A lot of the "crypto OGs" own some of the more expensive NFTs like the cryptopunks and they use these assets to show off essentially.
You can't be serious with that link? That entire subreddit was run by one person who clearly had a mental health disorder. I remember that person very well.
edit: I'm not arguing every single point here because a lot of them aren't even relevant anymore, and frankly I just don't care enough to go through them with you. I'm not trying to win an argument. The information is freely available for all to see and people can do their own due diligence
Edit reply: you actually don't have any argument, I guess then why post? Ad hominem isn't very useful nor informative, especially without any citations
Part of the appeal of collectibles is that they hold their value through time (if they are preserved properly). It's not clear to me if an NFT of today will still exist in 50 years? I assume that it will, but it also implies that people will still be mining the same legacy blockchain then.
Pairing nfts with reality makes sense if ownership can be enforced by sole fact of having an ownership, ie:
1. for things that live in digital world (easy), or
2. weaker but probably acceptable in some cases - if physical good would be painted/printed on/made out of material containing ie. fingerprinted nanoparticles that match nft or has some unique chip that cannot be detached/duplicated – is as difficult to forge and as easy to verify as paper money
3. all ownership transfers would be verified by centralised (or whatever) system ie. government official confirming that digital and physical transfer happened correctly or ie. amazon/ebay would hold temporary custody of both digital/physical as intermediary in ownership transfer
…otherwise pairing with reality looks like “lets have this cryptographically secure thing and pretend that it means X” – if this “pretend” part can be removed or minimised to be close to zero, then it starts making more sense, without it it’s just nothing more than cargo cult like “let’s pretend” arrangement.
I still don't get it. Sure art work is artificially priced. But if I buy a Picasso original, I can hang it on the wall, show it to my friends, look at it closely, burn it, even. Yes, "bragging rights" might be part of it, but I own something physical and (probably) scarce or unique. What do I actually get when I buy an NFT?
you go to Picasso with a piece of blank ordinary paper. The paper says "Guernica" on it. You get his signature. There is a notary with you and it is notarized.
That's an NFT. You now have a signed piece of paper that refers to a piece of art that you don't actually own. You're free to go to the museum (in NFT this is IPFS, or the regular web) and see it. But so is everyone else.
Now imagine instead of Picasso signing your piece of paper, an autopen is signing it. Pumping out however many copies of that signature it wants to in a day. And instead of a notary it's the blockchain recording the transaction.
Has anyone watched the discussion? This article is, well, not sure what value I'm getting out of this: cryptographers discuss the merits of NFT...OK..."Shamir then announced plans to, at some point in the future, theoretically mint his own NFT."
The concept of NFT is fine, the problem is the implementation plus resources/energy costs, right?
The concept of NFT is basically nothing. Even if they somehow stopped wasting outrageous quantities of energy wouldn't change the fact that they're nothing but collectable receipts.
These experts are also upset that the term "crypto" now refers to "cryptocurrency" than "cryptography" and want to change that but don't seem to have a plan to do so.
NFTs are here to stay, it's a classic short-term over-appreciation and long-term under-appreciation.
Art is only a small subset of what it's going to be used as.
NFT's is a protocol for distributed exchange of digital assets whether it's a sword you spent 10 hours in a game to acquire or a skin you designed and want to sell or a piece of generative art that you are the only person in the world who can show on your digital frame via a wallet.
You can't be an expert in this as little as you can be an expert in a startup. You either have conviction in this or you don't.
Instead, they just attacked the contents of the NFTs, akin to my mom telling me my pokemon cards are a waste of money all those years ago. Value is only whatever someone is willing to pay.