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From a skeptical perspective, I've come to the view that these things - NFTs and the crypto ecosystem more broadly - are highly pure examples of
https://en.wikipedia.org/wiki/Veblen_good
and
https://en.wikipedia.org/wiki/Positional_good
The price of NFT art is completely divorced from both the cost of production (human labour and NFT minting fees) and any kind of use-value. You're buying the social status of a thing that nobody else has, and the use of a difficult-to-comprehend ritual surrounding the process of purchasing serves to reinforce the exclusivity.
If you want art to consume, in general, there is a huge stream of it being produced. You could spend months browsing artstation, for example. Commission prices are relatively cheap; you can get quite a lot of work for less than $100, and $1000 will get you something very professional. It tends not to have a _resale_ value, though.
NFTs however make the resale value a large part of their pitch. It rarely turns out to be true, except for the most sophisticated market participants, but that's the fantasy being sold.
To a great extent it's spending money in exchange for a certificate that you spent a lot of money, like the thousand-dollar iPhone app:
https://en.wikipedia.org/wiki/I_Am_Rich
. I sometimes wonder what the future would have been like had Apple leaned into that with increasingly expensive apps; at what point would it have stopped, and with how much acrimony?
Edit: a simple heartfelt statement from "caseyf": "I like collecting".
https://news.ycombinator.com/item?id=29403420
. That's basically it, isn't it? Some people really like the act of "having a collection". Stamps. Trading cards. Gacha games. Records. Cameras. Cars. Beanie Babies.
I think that's a very generous view. IMHO the Velben good is only a cover story told to the victims. The high prices are faked via
https://en.wikipedia.org/wiki/Wash_trade
and it's just another variant of
https://en.wikipedia.org/wiki/Pump_and_dump
.
I'm old enough to remember when Napster first came out, and for many years there were all these idealistic arguments over how copying something wasn't actually theft, and how new technology was disrupting the greedy dinosaurs of the recording/motion picture/software/whatever industries.
Now with NFTs we've come full circle: The hot new technology is all about ownership and intellectual property and all the things the vocal users of the "old" internet railed against for years.
The thing is: you can list all of the arguments against NFTs you want (and I'm not even disagreeing), we know that rationality has no say in determining the market value.
There are currently too many examples, starting from the TESLA stock price to all the meme stocks (GameStop, GME). Even the price of Bitcoin is completely irrational.
That is a specious comparison. Tesla and Gamestop stock confer legal ownership of companies that produce billions of dollars in revenue per year. An NFT is a digitally signed text file uploaded to a blockchain... there is a _massive_ difference between the two. More importantly, blockchains are massivevly inefficient when compared to digital signatures which already accomplish the ostensible value-add of NFTs.
I hope the NFT meme dies soon.
At least for some, you can ballpark it. Decentraland land is said to sell by the millions. Virtually nobody plays that game. In the hundreds of virtual worlds out there the price is maximum ~$300 per month. That doesn't compute. Of course as gambling instrument it is fun, but there is no price discovery here, just a passing fad novelty
There is going to be some actual value in the nft mechanism, but in a future version of it (apparently this already exists). Right now the nft market doesn't give long term incentives to creators to maintain the high value of their work
creators tax trade of their work and get a cut on every transaction, so there is an incentive to keep interest high in long term
>_The thing is: you can list all of the arguments against NFTs you want (and I'm not even disagreeing), we know that rationality has no say in determining the market value._
It does, when, eventually, shit gets tough and bubbles bust.
Then people fall from buildings or cry themselves to sleep for having been stupid.
On good times, sure, the sky is the limit...
How do you think people suddenly re-determine a rational price for artwork during a bust?
They don't determine anything. They just suddenly don't have money to buy it / prioritize other things, and the price drops to what still available buyers can afford (and in the case of NFTs, likely zero).
That's just a normal market operating. That doesn't demonstrate any kind of abnormal irrationality. People eat out less when they have to prioritise other things. That doesn't make restaurant prices irrational.
This isn't the gotcha you think it is.
You don’t buy a restaurant meal and expect to be able to resell it later, let alone expecting it to go up in value. You consume it. NFT is a different sort of market.
I'm pretty sure 99.99% of people are just buying them as a bit of fun. Almost nobody is seriously expecting them to be an investment.
Could you source that opinion? I’ve seen the exact opposite viewpoint propagating.
Whenever I see one of those big Twitter arguments about right-clicking, it always turns out the person is joking and just winding people up for fun.
> Almost nobody is seriously expecting them to be an investment
This one, I mean.
>_People eat out less when they have to prioritise other things. That doesn't make restaurant prices irrational._
They can be, if people see them as investment opportunities which they are not...
There is a gray market for reservations at trendy restaurants.
Which pays very soon and quite stably.
If enough people stop buying it and there's no-one left who thinks he higher than the current price the price will go to 0. NFTs have no intrinsic value.
But no artwork has any intrinsic value. How's that new or interesting or worth saying? If you think NFT's are irrational because they have no intrinsic value, then you think all artwork is irrational, which isn't a useful thing to say because it's in practice valuable because people value non-intrinsic things like art, culture, history, and that's just humanity.
Artwork is commonly hung up as decorations in houses, offices, etc.
You can also buy mass-produced artwork at stores that have zero collectible value, so the value of that is entirely intrinsic.
I'm not sure looking at your Opensea collection has the same value. While NFT owners will gladly tell you how much they enjoy looking at their collection, if the collection was all of a sudden worthless, they'd probably stop looking at it. In that scenario, right-clicking produces the exact same value.
Given that, the entire value of most NFTs is in scarcity and demand for a scarce product, which is totally fine. NFTs are still super-early as well and I have no doubt they will rapidly add more non-collectible value. Some are already doing this in building exclusive communities, events, etc. for owners and those uses for owners will continue to evolve and grow.
> Artwork is commonly hung up as decorations in houses, offices, etc.
And people 'hang up' their NFTs on their Twitter profiles.
I guess that’s useful for the crypto crowd who spend their entire day shilling on Twitter then. ;-)
>_But no artwork has any intrinsic value. How's that new or interesting or worth saying?_
Millenia of selling fine art have shown that they have some intrinsic value and can maintain it well over centuries (I don't e.g. expect a Caravaggio to drop to anywhere near cheap) - just not a use-value.
NFTs on the other hand are not "fine art", and don't have the same associate proven track record. They're closer to the pet rock and the hula hup.
In general terms, nothing has "intrinsic value", including gold and petrol. If a society doesn't use petrol (for cars, factories, etc) for example, it's value is zero.
> In general terms, nothing has "intrinsic value"
...so how are NFTs any more unusual than anything else?
In that it's not just a snapshot of current "how much people pay to buy/sell" but also "how much is this item proven historically/able to maintain price/a good idea"...
Like the proverbial tulips, NFTs don't fare well on the latter.
Doesn't have to be a distinction between god-given naturally-occuring-intristic value vs worthless junk.
There are also BS market fads.
The price of cryptocurrencies is currently massively, massively manipulated. Not just "investors with deep pockets buying and selling strategically", not just "insider trading", but outright pumping massive amounts of fake money into the markets, and dishonest exchanges.
Sure, but if the thing you are speculating with doesn't matter, why not just use something completely arbitrary instead?
For example here is an random UUID: 6f50fde3-a7f0-433b-a9b1-8ef6d665905b. How much money would you put on it?
I've never seen that UUID before in my life, it must be priceless!
I've already right clicked your UUID: 6f50fde3-a7f0-433b-a9b1-8ef6d665905b
Without a blockchain to formally prove that you own it, can anybody even own anything at all?
It's "a great copy of Mona Lisa", instead of parent comment's real Mona Lisa. Sure they look the same, maybe exactly the same, maybe binary-level same, but that's not what really matters. What matters is the social contract, minting and/or owning the original. If a celebrity generates a random GUID and puts on blockchain as an NFT, I'm pretty much sure that it will sell. A random GUID is worthless. A random original of a GUID generated by, say Elon Musk, is.
The bits are colored all different!
The Blockchain only proves the first derivative of ownership. It can't prove the user owned the object before putting it on the Blockchain.
I hereby formally claim 6f50fde3-a7f0-433b-a9b1-8ef6d665905b.
This HN comment will probably last longer than a random blockchain.
I agree, @xdennis owns it. It doesn't matter what's written on the blockchain, it's the majority (50%+1) that decides who owns what.
Even with blockchain data can be trivially copied. Ownership of data is an illusion.
Good point. He needs to own 44a81fec08e4290afb90b780e5d94e15980b08050a402374b3a7a6e59c83a736 (the SHA256) as well.
But it’s here on HN and now there’s a very clear and practical way for this user to prove he originated this UUID before anyone else who tries to claim it. What do we suppose that’s worth in dollars?
He probably right-clicked it from somewhere else.
My post on HN proves that I own it, but I am willing to sell you a share.
Yes, in the same ways society has done for thousands of years.
That's not a particularly valuable number. How about 09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0?
Oh no! You scoundrel! The Industry is ruined because of likes of you!!
Looks rare
The article isn't about market value though. It's about people cutting off business with Discord when they teased an NFT feature. And refusing to work with people who work on NFT protects in general.
Yeah I agree. BTC is severely underpriced.
If the whole thing is irrational, how can it be underpriced? Or: What makes you think the true price (if one exists) is higher than it currently goes for?
Well, the true price is the marginal cost of production, isn't it? So yeah, bitcoin seems to be overpriced. Unless it is a currency, of course, their supplies behave differently.
The underpricing is what's irrational.
But, also, there probably are ways for the blockchain to help with some quality-of-life improvements for various online communities. At the very least, it could help make online communities more self-sustainable.
I buy crypto art several days a week.
I typically spend 1 or 2 tez (so $5 or $10) for a "digital print" that offers 10 or 25 editions and a significant number of the artists that I collect from are in Indonesia, Brazil, etc.
I'm a collector and a fan and I am enjoying this so much more than Patreon and I imagine the creators are too. It's obviously so much better than giving your work away to Instagram and Twitter for likes or engagement or whatever and then struggling to make money from it by asking for tips or patreon or physical merch that nobody really wants.
I think about it like I do my indie vinyl records, art prints, and things like that.
I like supporting artists and I like collecting and I really like collecting digital things that are not locked into one person's platform. In fact, the platform I've been using since May (hicetnunc.xyz) disappeared last month when the main developer left and it only took hours for everyone to regroup. As the backend is all on-chain data and the frontend was open source, we hardly missed a beat.
> the platform I've been using since May (hicetnunc.xyz) disappeared last month when the main developer left and it only took hours for everyone to regroup
I don’t closely follow this space, but I remember “hicetnunc.xyz” being shilled on HN quite a bit.
How did the platform straight up disappear, on the whims of a single developer? Isn’t this space all “decentralized”?
I don't go looking up info on NFTs, so this might just be my self-induced ignorance, but I never hear this argument coming from artists.
Not saying one way or the other that artists like NFTs or not, but I only ever hear it from the perspective of the purchaser.
Open questions for someone who has sold _their own_ artwork as an NFT: how would _you_ compare it to platforms like Patreon, Etsy, etc? What is the minting process like and how prohibitive/easy was it for you to do so?
Hesitant to promote this even indirectly, but I've noticed some artists I follow on twitter have been fully converted to NFTs, such as
https://twitter.com/dblasphemy/
, an old-school render artist.
I get the impression that the difference is that Patreon is trying to get $10 from 1,000 people whereas NFTs are getting $10k from one or two people. dblasphemy appears to have only two buyers for the majority of his work ...
threatened to start minting NFTs of the avatars of anti-crypto furries
I presume it's the crypto equivalent of scribbling horns and mustaches on a foe's photo? Kids these days...
It's basically a "forgery". I mean it's the same image contents wrapped with a different cryptographic signature, so they _can_ be told apart, but the point is that being unique doesn't automatically make something valuable.
>the point is that being unique doesn't automatically make something valuable.
A lesson anyone who's into record collecting learns at one point or another. I have a few records from limited pressing runs which are rarer than pink dog turds and worth practically nothing.
> A lesson anyone who's into record collecting learns at one point or another. I have a few records from limited pressing runs which are rarer than pink dog turds and worth practically nothing.
Blog post on this actually in the works, but yes - the market decides the value. All those releases listed on discogs and eBay at silly prices are only worth that much if they actually sell at some point. At least with a record you can put the thing on and listen to it. NFTs though? Pure bullshit market speculation.
No, it is "I will steal your work and make money off it".
"I will prove to those anti-NFT people that.... errr... having an NFT doesn't mean you own the artwork"
Man, I must be getting old because I don’t understand any of this :(
A lot of it is just old school grifting techniques adapted to the latest tech.
The whole thing is still (temporarily) unregulated, and somewhat akin to the CA gold rush, where the stores that sold mining equipment made most of the money, but combined with modern bits of cult-ish pyramid scheme behavior like you see in Amway and Scientology.
Gold is real though. At the end of the day women frequently want it as jewelry and men will literally kill to gain access to women.
Violence underpins fiat currency as well. USG will take away everything you own and put you in jail unless you pay your taxes in USD.
NFTs' value is nearly as real as gold's though. It's a social agreement.
Decentralized trusless certificates.
You can certify monkey JPGs or you can certify a house title, a trust, a will, etc.
> trusless certificates
How exactly would it work? I mean, sure, I can verify without trusting anyone or anything that the certificate contents were, indeed, at some point of time produced by someone who had access to the private key. But how does it help me to verify that whatever the certificate says is actually true?
Maybe it's time to start selling bridges.
Right, I think there are some pieces missing here…
And then, also last week, @CryptoCobain, one of the most popular users in the pocket of the internet largely known as “crypto Twitter,” threatened to start minting NFTs of the avatars of anti-crypto furries that right-click and save people’s NFTs.
Man, if this is not a steampunk dystopia, I don't know what that is.
I work in crypto and own two NFTs (one of which is a domain name, the other of which is a 20$ fun lottery ticket / community memorabilia).
I don't think the speculative bubble around JPG makes much sense.
An interesting thought I had though, is that the traditional art market makes ""no sense"" either.
People keep insisting it's so different because you pay for something tangible that can't be easily copied. In reality, you could buy a copy of a masterpiece that would be indistinguishable to everybody except a handful of experts, for many order of magnitudes less money than the original. The world's most expensive paintings sell for hundreds of millions. The best Mona Lisa replica are auctioned (!) for hundreds of thousands, and you can buy "good enough" canvas replica for a few hundred dollars.
The reason people buy art NFTs are the same that people buy expensive real world art:
(1) patronize the artist,
(2) tax evasion,
(3) status symbol,
(4) price speculation
NFTs just takes the logic to its paroxism / logic conclusion.
Note that is specifically about "art NFTs". NFTs is a much broader category that has useful uses (e.g. the aforementionned domain name).
Your explanation only makes sense if you base the value of the art on the experience of viewing it, or the intrinsic value.
People like owning objects that have a history or story about them, like a ring worn by their great great grandmother, a medal earned by their grandfather for fighting in a war, or something their child made for them. These things have little to no intrinsic value, yet people can regard them as priceless because of the history surrounding the object.
The same can be true of paintings and other works of art. It's one thing to hang a thing on your wall that a world-famous master created and an entirely different thing for a copy made by a low-wage worker in Asia. Physically they could be identical but the history is different.
To get to NFTs specifically, I don't think an NFT as currently implemented captures this concept.
Physical artifacts do have historical value that may be hard to quantify.
For example, you can examine the "real" Mona Lisa to find out interesting (and possibly novel) things about Leonardo's technique, brush strokes, materials, etc.. MRI or X-ray imaging might reveal the underpainting, layers, glazes, possible changes to the painting (either original or restorations), etc..
How much are first-hand information or insights into the painting, painter, or era "worth?" I have no idea.
Though another painting by Leonardo would probably do as well, if you can find one. Failing that, another painting from the same era/locale would probably do, although they won't provide direct information about Leonardo himself.
But, also, there probably are ways for the blockchain to help with some quality-of-life improvements for various online communities.
There isn't. It is remains the case that every problem solved with a blockchain can be better solved without a blockchain.
(Except for crimes.)
Crimes are also not particularly well suited to the blockchain, as the whole "immutable permanent record" thing has the side-effect of leaving a trail of transactions, meaning law enforcement can follow said trail.
(Obviously things like bitcoin tumblers exist, but again, money laundering can also be solved without a blockchain)
One thing that cryptocurrencies uniquely enable is ransomware. It is not really possible to pull off on a large scale without cryptocurrencies. People tried, but it never took off until bitcoin became available.
AFAIK, the alternatives are usually centralized financial institutions - PayPal, Visa, etc. - that kinda suck (Visa blocks legal transactions over arbitrary internal rules, PayPal freezes accounts and keeps the money). I'm not 100% sold on cryptocurrency as the solution, but I'm not sure the incumbents are _better_.
NIST published a good paper describing blockchain, with a flowchart (Figure 6) to help people determine if it's a good fit for their use case:
*
https://nvlpubs.nist.gov/nistpubs/ir/2018/nist.ir.8202.pdf#p...
It asks a series of questions, and if you answer "Yes" to all of them then blockchain should be examined:
* Do you need a shared, consistent data store? (No: Consider Email / Spreadsheets.)
* Does more than one entity need to contribute data? (No: Consider database.)
* Data records, once written, are never updated or deleted? (No: Consider database.)
* Sensitive identifiers WILL NOT be written to the data store? (No: Considered encrypted database.)
* Are the entities with write access having a hard time deciding who should be in control of the data store? (No: Consider managed database.)
* Do you want a tamperproof log of all writes to the data store? (No: Consider database.)
All Yes: "You may have a useful Blockchain use case."
The incumbents, with all their issues, are _miles_ better. Cryptocurrency doesn't work, and nearly every business in the space is a scam at some level.
> I'm not 100% sold on cryptocurrency as the solution, but I'm not sure the incumbents are better.
Not exactly a stretch, as far as an investment thesis is concerned.
Bitcoin solves the problem of getting rich quick without access to a bank.
so why are there so many people using it?
does that make us criminals?
I think the implication was that you're misled or riding hype more than reality, more than criminal.
(I say this only to clarify; I endorse neither side)
No, you may very well just be using the wrong tool for the job.
Beautifully put argument against the NFT bullshit, copied from the article: “‘Digital scarcity’ is an anti human evolution ideology that imposes board game-like rules which serve no purpose than to preserve the game itself - to hide the internal contradictions of capitalism that become painfully obvious in an area of culture that has overcome scarcity.”
lol, did someone read a bit of an introduction to marxism
Saw this around big data, but now painfully realizing there will be an entire generation of tech literates who will fail to understand the newer generation.
Like this generation sold out their parents on Facebook, the new generation should show us how it is done, not the other way around. They will not get off our lawn, no matter how hard we yell, no matter how silly this doubleyou-doubleyou-doubleyou-dot thingy sounds.
“Web3.0” is not a think. No one on the web is using blockchains. They are used by a tiny minority of mad cranks
ITT we explain obvious shit about the economy like it's new