30 ms·

Metakovan, the mystery Beeple art buyer, and his NFT/DeFi scheme

211 points by davidgerard 6y ago

lazycrazyowl 6y ago
Nas Daily Video on Metakovan - https://youtu.be/TDpF2S9HY7g https://youtu.be/TDpF2S9HY7g
iamacyborg 6y ago
Nothing to see here > What’s interesting is that Beeple, the creator of the artwork, is actually a business partner of MetaKovan’s. He owns 2% of all the B20 tokens. I’m sure there is no conflict of interest here
- newsclues 6y ago
  Art + money laundering + crypto = nft
  - habitue 6y ago
    Art + money laundering = regular fine art world[1] So really this is just adding crypto to the mix, because "everything's a little bit better when you sprinkle crypto on it" [1] https://www.cnn.com/2020/07/29/business/art-money-laundering-sanctions-senate/index.html https://www.cnn.com/2020/07/29/business/art-money-laundering...
    - rmrfrmrf 6y ago
      So it's "everything's better with bacon" for the 2020s? Gross!
      - iamacyborg 6y ago
        Hopefully no one comes out with nft lube...
- TigeriusKirk 6y ago
  It's a bit much to say someone who owns some B20 tokens is a "business partner" of MetaKovan's. Are all the token holders "business partners"? Obviously not. It's enough to point out that MetaKovan has a financial interest in increasing the value of Beeple's art. That alone lessens the impact of this auction, and I'm a NFT booster. Using auctions to increase the value of your holdings is one of the questionable things that happen in the high end art world. Check out the Mugrabi family Warhol collection sometime.
  - tlb 6y ago
    Every art buyer has a financial interest in increasing the value of the art they've bought. One reason that Christies can charge substantial fees is that it serves as a guarantee that the transaction is somewhat real. If an artwork changed hands privately between friends for $1M, there'd be no reason to believe that price. But when they're paying a 15%+ fee to an auction house, there must be something valuable.
    - TigeriusKirk 6y ago
      Private sales affect market values all the time.
- vmception 6y ago
  Sounds more art guild-like than impropriety. But of course, without any governance or rights. B20 tokens launched on January 23rd. Beeple has been on Clubhouse and other NFT spaces for months. It is common in the crypto space (and everywhere) to give an influencer an "advisor" share of the project. Their pie-chart says 11% of the tokens are to collaborators. So really its 13% but Beeple is the influencer that is worth having his own separate piece of the pie, for advertising. "You know its legit because Beeple is involved", and its working because now I know to bet on winners! This token is up 2,000% in a month and a half, and I didn't know about it before and have been searching for the right way to get exposure to the NFT space, and these are the winners! They got Christie's involved and the whole world! I'm absolutely going to try to partner with them as I have more clout in the crypto space. The real discussion is on whether there could be a more community oriented token distribution schedule, or a similar project without the massive team/advisor share. So there is a market to compete in this regard.
Traster 6y ago
So NFTs are valuable because they’re unique- but this guy has created a fractional ownership screen so an unlimited number of people can own 1 NFT. Oh and he’s lying about his identity and business relationships.
- dgellow 6y ago
  > So NFTs are valuable because they’re unique- Just a small correction: they are "valuable" because they are unique AND because people want them. Otherwise they have no value. Scarcity in itself isn't enough to have value, you still have to create hype around the token somehow. ("valuable" in quotes, because it's really not that clear there is any actual value in an NFT that isn't legally binding...)
  - ahepp 6y ago
    Not clear that it's scarce either, since the guy owns 59% of them. Seems like a classic trick to jack up the "market cap"
    - ketamine__ 6y ago
      This is an industry where a startup launches and a few days later has a $400 million market cap.
echelon 6y ago
I can't believe people are getting excited over collectable barcodes. Of course this is a scam. I can create NFTs for Beeple's art too. I can create NFTs for Jack Dorsey's first tweet. I'll sell you a hundred of them if you want. This is exactly like buying a spot on million dollar homepage, except anyone can make a million dollar homepage and nobody will honor your purchase because they don't have incentive to care.
- dcl 6y ago
  I really don't understand this. What mechanism is there to ensure an NFT was created by the 'right person/people'? (whatever this means). I could make an NFT for Mickey Mouse, and it _should_ be worthless, but if Disney created one then maybe it could be worth something?
  - detaro 6y ago
    The mechanism that the "right people" communicate which minting wallets are the "legit" ones. I.e. even in the less-crazy levels (i.e. not thousands of dollars), you'll see artists announce their wallet key on Twitter/Instagram/their website, and it's on the buyer to check that what they buy has the right source. (If people think that your bootleg mickey mouse NFT has value and pay for it, well that's their decision, they just might not find anyone who agrees later)
  - capableweb 6y ago
    Seems you answered your own question. Yeah, anyone can create Mickey Mouse NFT but unless Disney officially releases it themselves, people will not be (as) interested in buying.
    - tantalor 6y ago
      How do you suggest verifying the token is "official"? Call up Disney?
      - hanniabu 6y ago
dcl 6y ago
I've got some dumb questions about this whole NFT thing... Is the artwork actually stored in the token or does it contain a URL that isn't guaranteed to always exist? I'm guessing there is no mechanism to change the link if the host should go down or stop hosting the content. Are NFT's used to recognise a transfer of ownership of the intelectual property?
- captn3m0 6y ago
  Almost always a URL.
  - dcl 6y ago
    I see. So what would you even really own once that URL goes down. The whole thing relies on a weird level of trust and belief in what other people believe to be valuable.
    - smitty1e 6y ago
      My limited understanding is the blockchain data are distributed enough to get past the "that URL" issue. You'd need to destroy "that unknown collection of URLs" to eradicate the NFT. The problem as I see it is that NFTs lack any potential energy. Their value is purely kinetic, and expressed in the transaction. If no one wants my NFT, it's so much binary noise.
    - davidgerard 6y ago
      The same thing you "owned" before: the token. An NFT is just a pointer. Unless you have a contract specifically transferring additional rights, you literally just bought the pointer.
    - Applejinx 6y ago
      In this way it's like the stock market to the Nth power. As money accumulates in larger and larger sums, and is abstracted farther and farther from tangible real-world power and resources, you get this. Things get increasingly weird. There's got to be some kind of equilibrium point between this stuff, and your basic anti-fiat-currency gold bug, but I'm not sure what it is, particularly since modern macroeconomics acknowledges the capacity to just print money and make it up pretty quickly in the increased economic activity that makes possible: austerity isn't really a functional solution. This crypto stuff really works by the same principle: if you get enough people into it, they CAN'T crash because the important people are too deeply enmeshed in the system and will cheat to any degree to preserve the value of their properties. I think it depends what is done with it. With macroeconomics, you can have entire countries spurred to activity and producing goods and services because they can transact with resources. With this crypto stuff, I very much wonder if it ends up being a small number of very privileged people demanding rights to increasingly silly abstractions that are said to be the value of entire cities, or countries. I'm not sure that's sustainable, politically. I'd ask, how convenient is it for the first crypto trillionaires to buy real-world mercenaries? Things could get very dark, albeit in a peculiarly cyberpunk sort of way that might appeal to some.
gigatexal 6y ago
I find it hard to believe that all this hype and these huge dollar figures of these NFTs and art being at the center that none of this is being fueled my money laundering. Jack’s first tweet? What value is there in that? The Beeple “art”, same question. All of this seems like a scam.
- skyzadev 6y ago
  NFTs are HIGHLY inflated right now - paying $2mil for a tweet is NOT real demand. It's marketing by people with a stake in the industry. Justin Sun who bid $2mil for Jack Dorsey's tweet runs a blockchain network called Tron. I think NFTs will stabilize at some point but it isn't going to go away that's for sure.
  - rblatz 6y ago
    So from the outside looking in this looks very silly, not highly inflated. In fact on the surface it looks clearly like a scam with a lot of hand waving and philosophical nonsense tacked on to confuse people. Anyone can mint an NFT that points to whatever, and the benefits you get are purely imaginary or at best speculative that a greater fool may exist and buy it from you for a higher price. The art world while also somewhat suspect at least has physical possession/ownership.
    - skyzadev 6y ago
      There likely is some foul play involved in some cases yes that's for sure. For example this Beeple thing looks like it's a scam to pump a token which Beeple has a stake in so that they can then offload the token at high prices to new unsuspecting buyers. However just on your point "Anyone can mint an NFT that points to whatever" - sure they can but those NFTs will be and should be worthless. You are able to prove an NFT came from the actual author since it would have been signed with their private key. When all the fake demand settles we will see if there is any real demand here or not. I myself have no interest in buying any NFTs, at least not yet :).
- la_fayette 6y ago
stevesimmons 6y ago
So the actual cost net of related party transactions was not $60m + $9m auction fees, but just the $9m in fees. And who knows whether Christie's keeps all that, or part/most finds it way back to Beeple/MetaKovan/Sundaresan in other ways.
- stevesimmons 6y ago
  Oh, at least good to read that MetaKovan/Sundaresan is a YC alumni...
  - vmception 6y ago
    MetaKovan/Sundaresan email me, my email is listed in my profile, I have other NFT projects for you and your fund, and also some recommendations for the B20 token.
gomoon 6y ago
great article!
- amycastor 6y ago
  Thank you!
daenz 6y ago
I feel like I'm saying "the emperor has no clothes", but doesn't anyone else think this NFT art thing is bullshit? Everything about it screams "scam": they're asking you to spend your real, hard-earned money on some digital "asset", pumped by celebrity influencers and hype entrepreneurs. Everyone is drawn to the big multi-million dollar figures of these high profile artists, figures that you will never see for your "assets", and do nothing but serve as a siren's call to everyone around. These high profile sales are marketing, nothing more. They are serving their purpose to kick start the mainstream adoption of this scam, because everyone thinks they can make a quick buck buying some digital signature. What's more is the pseudo-intellectual justifications for it all. As soon as you bring up value, proponents put on their philosophy hat and ponder "what is value? money is just paper, maaaaan, we just believe it has value." Or we hear that owning a digital "asset" is actually the same thing as a physical "asset" because they're both unique things that can't be copied. It's all smoke and mirrors, and you know that when you have to hide behind vague philosophical assertions about "well nothing really has any value", then you have no actual argument supporting the value of the thing you're defending. It's a new illusion, pumped by hype, and they're trying to justify its existence by pointing to other illusions. Thanks but count me out.
- nerdponx 6y ago
  Huh? Buying art with an NFT is just a way to give artists and/or art auctioneers money for their art. That's it. Oh and it can be used for other things like event ticketing, software license keys, etc. An NFT is just a way to record (in an immutable distributed ledger) that a specific, uniquely-identifiable token was transferred from A to B. People have always paid stupid amounts of money for art, and in the last 100 years increasingly art that doesn't require years of training/practice and advanced craftsmanship. Why is this any different? It sounds like you just don't want to be involved in the art market, which nobody in their right mind wants to be involved in anyway. Complaining about NFTs is like complaining about "blockchain" or "the internet" or whatever.
  - stickfigure 6y ago
    > Why is this any different? Because if you buy a painting, you can hang it on your wall.
cammikebrown 6y ago
I'm surprised nobody has brought up the absurd energy requirements of NFT. Yeah, it's been beaten to death here, but a single transaction can be equivalent to one person's household energy consumption for several months. And yes, I'm aware Ethereum is working away from that, but it's taking a long time and it's not there yet. In the meantime, I find it highly immoral. Just mind-boggling wastefulness. It doesn't make me feel hopeful about the future of the planet.
throwaway4good 6y ago
I just love to see art being pushed forward. We had Duchamp with his pissoir in 1920. I remember someone exhibiting a goldfish in a blender. And now this ... They would say that art is what happens between the artwork and the observer. But of course it is much broader than that. There is also the artist, the story, the room, the broader society and ... the market.
- UncleMeat 6y ago
  But notice how virtually zero of this discussion is about the content of the work. Just its sale mechanism. Even the banana on the wall had people discussing its nature as art.
  - vmception 6y ago
    For me that piece is hard to see. There have been discussions about it and its value, here on HN. Mostly people that were mad that they exchanging a fixed amount of time in a small range of price per hour for money instead of creating an unlimited number of assets and exchanging them at an unlimited range of prices.
  - throwaway4good 6y ago
    50 years later when they were taught about it in high school, people discussed its nature as art. When the works where published they were seen as scams, pranks, criminality, and insults.
epinephrinios 6y ago
This is how Ethereum is competing with Bitcoins in terms of "store of value".
- drcode 6y ago
  One of the many ways
achimlittlepage 6y ago
NFTs is the unwritten chapter of Infinite Jest that eventually led to DFW committing suicide. Start with something decentralized, layer a bunch of centralized entities on top of it and, Voila, you have, you have no idea what you have.
- ChainOfFools 6y ago
  The Center For Decentralization would like to offer you a thought leadership position. /s(/s)
- simonebrunozzi 6y ago
  DFW = David Foster Wallace. He committed suicide in 2008 [0]. I am not sure I follow you in associating NFT with the end of Infinite Jest. Not saying you're wrong... Could you elaborate? [0]: https://www.newyorker.com/magazine/2009/03/09/the-unfinished https://www.newyorker.com/magazine/2009/03/09/the-unfinished
kotaKat 6y ago
Change my view, NFTs should require full AML KYC for the artists and buyers/bidders.
- wallacoloo 6y ago
  Seems like a great way to start a flame war. Anyway: If you’ve worked with the crypto space much, you know there’s a strong undercurrent of some libertarian-esq thinking. Crypto currencies represent decentralized trust, of some kind. I mean, Bitcoin was created in large part because Satoshi didn’t trust the central authorities in charge of the money supply. In some areas you’ll hear the phrase “governance without government” (I.e. fiat). What gives this place any spirit is the drive to overcome problems of distributed trust. Take that away by forcing KYC and now you’ve lost any ideological motivation to push the space forward. It just becomes a digitization of existing societal structures. Let it grow naturally and yeah, you’ll see plenty of scams, but you leave the door open for real innovations (like zero knowledge proofs) that could be worth massively more than any mistakes along the way.
  - Traster 6y ago
    How is that disginguishable from "What gives this place any spirit is sheisters.. Take that away by forcing <standard practices>"...
    - wallacoloo 6y ago
      > How is that distinguishable from "What gives this place any spirit is sheisters.. Take that away by forcing <standard practices>"... If there was any standard practice that could force sheisters to move elsewhere without negatively affecting the rest of us, I would stand by that policy 100%. Even within our standard systems, we tolerate a certain baseline level of fraud. Banks quite regularly work with fraudsters or worse and knowingly violate regulations (see: HSBC, Wells Fargo for high-profile cases). The regulated and the regulators appear to be somewhat cozy at times. But we accept this, perhaps because the value provided by these systems seems to outweigh their flaws. As for cryptocurrencies: do they provide value to anyone besides the sheisters? Yes. Not everyone is convinced, but at least I can claim to have performed legal transactions with Bitcoin and Ethereum that I don't regret years later and that I wouldn't have done without those currencies, and that's enough to convince myself. Would these things exist if KYC was strictly enforced on 03/Jan/2009? No. No, there would be no Bitcoin; it would be impossible to reach the audience which embraced it in 2009-2011. The ideas would likely not have spread beyond the cypherpunks, ideas which I personally think have enriched my life. Should we put up a fight against scammers? Absolutely. Is KYC one way to do that? Yes, but please don't underestimate the cost (previous paragraph) nor overestimate its effectiveness (take a look at the list of coins on Coinbase and Robinhood -- both of which adhere to KYC -- and tell me that these are all things that a responsible company should be promoting to its average user).
patentatt 6y ago
> What’s interesting is that Beeple, the creator of the artwork, is actually a business partner of MetaKovan’s. He owns 2% of all the B20 tokens. I’m sure there is no conflict of interest here. And they're basically selling it off to 'investors.' So it was really just an elaborate marketing ploy for some shady crypto currency? I'm surprised an institution like Christie's was willing to lend their reputation to such an endeavor. Or were they conned too? Or did they actually net that $9m 'fee' which is enough to buy Christie's reputation?
- vmception 6y ago
  Private equity funds participate in art auctions all the time, crypto in this case just makes it easier to make something analogous to an ETF.
- ed25519FUUU 6y ago
  To get an idea of what’s selling for $70 million, take a look at: > https://mobile.twitter.com/beeple/status/1347406074685566977 https://mobile.twitter.com/beeple/status/1347406074685566977 There’s too much money being pumped. Crypto is a symptom not a solution.
christiansakai 6y ago
You guys are thinking too hard. It is a scam.
jonas21 6y ago
For me, the weirdest part is that you apparently place a $70,000,000 bid at Christie's the same way you'd place a $70 bid for a used phone on eBay. https://twitter.com/justinsuntron/status/1370227566125096961 https://twitter.com/justinsuntron/status/1370227566125096961
- trhway 6y ago
  For people placing $70M bids those money are probably less important than $70 for somebody who buys a used phone. Wrt. the people trying to question what value NFT has - well what value a piece of a paper with a black square has? I'd guess close to $0 or less - a ruined piece of paper. Until of course it is said to be done by Kandinsky. The value of the most of the art is in that information, not in the material artifact. NFT is just a distillation of that idea. Reminds a recent Russian meme - a photo of Kandinsky with a bubble "Everybody can paint the same. Not everybody can sell the same way."
- ALittleLight 6y ago
  Also weird that at around 1:55 in this video the user seems to be trying to place a bid for 70 million and can't for some reason. Is this a bug in their auction UI costing someone 10 million dollars? https://twitter.com/justinsuntron/status/1370227566125096961 https://twitter.com/justinsuntron/status/1370227566125096961
  - Grustaf 6y ago
    Was he using RobinHood?
ur-whale 6y ago
Yeah, NFTs are utter BS, but not much more than people who collect actual original art pieces when you could simply hang a replica of the original for a millionth of the price. People are weird is all.
vmception 6y ago
MetaKovan/Sundaresan I think transfers of the B20 token should somehow also result in royalties to all the artists in the B20 porfolio. Without some form of transfer tax, this breaks the royalties advantage of NFTs because the NFTs aren't being transferred yet. I think you will accrue a lot of value and attractiveness if artists and token holders are aiming to be appealing to you and the other competing funds that pop up, if you had a way to make the residual go to the assets in your fund. You can easily add a transfer tax to the transfer() and transferFrom() methods of the erc20 token, which gets pooled and distributed prorata to all the NFT's royalty addresses. You can even keep that as an array in the erc20 token. Email me
paulpauper 6y ago
This sounds like a great way to facilitate money laundering . I put up a smileyface NFT for $10 million and then someone, that person being myself, 'buys' it for $10 millions, funds change wallets, with receipt of payment on blockchain.
- X6S1x6Okd1st 6y ago
  That sounds like a good way to layer, but that in and of itself doesn't launder the money
  - jtsiskin 6y ago
    Why not - what is missing? You know have a “legitimate” reason to have the money. Is the problem that the buyer was anonymous?
    - vmception 6y ago
      You can, but if you look at the Christie’s auction requirements, it forces bidders to use specific KYC’d financial institutions. That auction house’s lawyers were only made comfortable with that, but it is not a resolved legal requirement. You can totally sell an NFT to yourself in crypto.
X6S1x6Okd1st 6y ago
For HN there sure are a lot of people completely ignorant of the technical details commenting below.
exdsq 6y ago
Having spent around 18 months of my life working on a top 5 blockchain, it's pretty disheartening to see so many comments on HN suggesting I'm some sort of MLM Ponzi Scammer when I'm actually just a guy who's interested in various CS subjects and few industries involve them all the same way blockchains do...
- ashkankiani 6y ago
  What was some of the interesting technical CS challenges you had to face in doing so? I have no interest in blockchain or adjacent tech because I don't see any technical challenges worth solving, so I'd be interested in learning if I was mistaken to come to that conclusion.
  - str33t_punk 6y ago
    Game theory? Distributed systems? Cryptography? The technical challenges in crypto are much more interesting than that of a FANG company’s (i.e enterprise software and widgets)
    - ashkankiani 6y ago
      There's a lot of assumptions in this comment: - That people are only employed at FANG - That outside of cryptocurrencies, people only work on enterprise software and widgets - That blockchain has the only difficult distributed systems problems - That cryptography is being advanced significantly by blockchain (I would like to see more on this if it's true. From a brief search only "zero-knowledge proofs" are brought up, and considering it's a deeply technical math area, just throwing more money at the problem won't necessitate any advancement) But most of all, you just threw out buzzwords without giving any examples, which is a non-argument.
  - rauljordan2020 6y ago
    Quite surprised at this comment. The reason I got into blockchain was _because_ of the incredibly difficult technical challenges it poses. Among the few I get to work on: - How to implement robust p2p networking algorithms for sharding in a distributed system such as Ethereum (a very deep rabbit hole), as Ethereum is migrating to a "sharded" architecture - How to solve the "data availability problem" https://github.com/ethereum/research/wiki/A-note-on-data-availability-and-erasure-coding https://github.com/ethereum/research/wiki/A-note-on-data-ava.... The current solution uses advanced cryptography known as KZG commitments https://dankradfeist.de/ethereum/2020/06/16/kate-polynomial-commitments.html https://dankradfeist.de/ethereum/2020/06/16/kate-polynomial-... - How to solve the problem of "transaction frontrunning", in which miners have an asymmetric advantage in ordering transactions they put in blocks for their benefit, which can adversely affect users creating those transactions. This is a problem known as MEV (Miner Extractable Value) https://research.paradigm.xyz/MEV https://research.paradigm.xyz/MEV and there is some incredibly sophisticated work going into this problem. It is a deep engineering problem as well I could go on and probably give you 20 other incredibly technical, challenging problems that are on the bleeding-edge of this technology. If you're interested, would be happy to chat more!
Grustaf 6y ago
Of all the hilariously stupid things coming out of the scammy world of crypto, NFTs take the biscuit. I've been hearing A16Z and other VC podcast breathlessly talk about the brave new world they enable. Now you can have digital assets in games, people can buy them with real money! Finally, because that's of course not possible without The Blockchain (tm). And people can use them to prove ownership of physical things, TRUSTLESSLY. Because it's so much safer to have decentralised system of digital bearer shares, than a central registry run by the government or a bank, right? Oh but it's for third world countries where the state is not to be trusted. Of course that also means you can't trust them to enforce your digital bearer shares either, but that shouldn't be a big problem. We'll just get all the farmers and villagers to agree on using one particular blockchain bases system to keep track of who owns what land. What could be simpler. And if you thought that was stupid, enter NFTs for digital art. Yes let's use advanced technology to create digital tokens that can't be copied, and use them to track the ownership of digital art that can be copied indefinitely. Brilliant.
bogwog 6y ago
This is all so fucked. BTC is at like $60k right now, and there are something like 18.4 billion BTC in circulation, which translates to over a trillion dollars in "value". Yet if any of these bitcoin (or ETH or whatever) billionaires tried to cash out their massive reserves, the bubble would burst. So stunts like this NFT thing, where a "humble artist" becomes a millionaire overnight, serves to just further inflate the bubble, and help those bitcoin billionaires become real billionaires without crashing the market. I wonder how many of these bitcoin billionaires are doing this (possibly colluding), or are actually so deluded that they believe $60k is the real intrinsic value of their BTC. Or maybe it's neither, and this bubble is still nowhere near the bursting point yet. Either way, it's all fucked and I hate it.
- siwatanejo 6y ago
  This reaction sounds very analogous to me to when someone complains about what two consenting same-sex adults do in their bedroom.
  - SwimSwimHungry 6y ago
    Well... you're kinda wrong, because now many retirement accounts and such have indirect exposure to cryptocurrencies (MSTR and TSLA's silly Bitcoin buys come to mind, and I know TSLA is part of the S&P500), whether we like it or not. So we do have a dog in this fight, and we'd prefer not to be a part of any of these shenanigans. What two consenting adults do in the bedroom has zero affect on me. What a cabal of opportunists do with cryptocurrencies and then a possible epic black swan event could cause a domino effect that could even be considered catastrophic across the entire economy. Then a select few run off with their bags of real money while the rest of us take the hit. That's no good, if you ask me.
    - siwatanejo 6y ago
      > Then a select few run off with their bags of real money while the rest of us take the hit. What you seem to be describing here, precisely, sounds like the Cantillon effect (which wouldn't happen in a bitcoin-based economy, actually).
sterlinm 6y ago
I don't get NFTs, but then I've never really gotten Bitcoin either. If I'd bought a Bitcoin every time I told someone Bitcoin was overvalued I would have made quite a lot of money. But I'm much more skeptical of NFTs than I am of cryptocurrencies in general. The most persuasive argument to me has been that it's no different than other collectible items. Art is one example, but I think stamps, coins, and baseball cards are better examples. I think it's kind of objectively stupid to ascribe a lot of value to some random stamp or coin that is rare because of a printing or manufacturing error. But if that's your thing I'm not going to stop you. And if I were very wealthy and you came to me and made an incredibly compelling case that you'd figured out how to predict the future market values of rare stamps and/or coins well enough to build a profitable trading strategy I would consider investing. The main gimmick of NFTs seems to be that they make it possible for a digital object to be rare. So I suppose some sort of NFT market could just be another type of collectibles, no better or worse than stamps or coins. That's the most generous argument I've been able to make to myself. Personally I still can't get over the feeling that they're really stupid.
- sterlinm 6y ago
  There does seem to be a lot of sketchy grifters floating around the space. I think that's compatible with thinking of them as collectibles. From movies and books, it seems like a lot of cons revolve around absurdly expensive collectibles (art, coins, jewelry, etc.)
_carbyau_ 6y ago
In it's current form NFTs don't seem very compelling. I have concerns for future DRM and MPAA-lobbied legislation could make this - or similar but scales well - the foundation of digital file ownership.
vmception 6y ago
I don't understand how Metakovan has $69mm, like the accounting doesnt match up. Metakovan buys to lets the B20 digital fund own art assets. The B20 fund only collected like $3mm dollars and the rest is just a floated marketcap of B20 tokens. So is Metakovan just going to pay for the art piece personally and just arbitrarily transfer the piece to the B20 address? Like basically B20 itself cannot pay for it, and the auction house isn't accepting B20 tokens. Its cool Metakovan has so much money. There have been plenty of opportunity over the last few months to turn $3mm into $100mm, let alone over the last decade in crypto. So it isnt outside the realm of possibility that he has that much. But if he doesnt pay, does Justin Sun get to complete the purchase and get it?
- vmception 6y ago
  I think he will just release a new token
- simonebrunozzi 6y ago
  Good, legit question. I don't know much about Metakovan's allegations of wrongdoing; but even without looking at these, it's fair to say that there are several individuals who, by just being early in crypto, have amassed the equivalent of tens, or hundreds of millions of US dollars. It wouldn't surprise me too much if Metakovan has a net worth of hundreds of millions of dollars, and therefore can afford to spend $70M in buying this NFT.
  - vmception 6y ago
    There are many more people who made hundreds of millions without being early in crypto. Just over the last three months there have been hundreds of 50x gains. That’s $1,000,000 being a liquid $50,000,000. Going through the known history of Metakovan’s businesses in the crypto space are a complete red herring to that article. Everyone that has any experience and clout in crypto would have been involved in some service that didn't do well for everyone.
- ffggvv 6y ago
  i wonder if beeple just returned 68 million with a pre arranged scheme
yigitcakar 6y ago
I have seen pyramid schemes that are sounder than NFTs. It is sad that a lot of people are spending their hard earned money on NFTs thinking they are going to be professional artists. They don't recognize that they are only becoming crypto-coin investors. I have spent hours sifting through the crypto-art space and amazed at the "so called" artworks people have been spending money. As a person who has been a professional artist and somewhat knowledgeable about the art scene, I feel that it is a duty to warn people. I don't mind people spending their money on newbie photoshop tricks if they know what they are doing, but I don't like people to feel like they are artists because they can apply photoshop filters to an image and mint them as NFTs. I am keeping the publicity stunts out of this conversation. The article does a great job talking about those. Another important thing to note is that an artwork's value derives from its cultural effect. So far NFTs' cultural effect is feeding people's belief in get-rich-quick schemes. Our society has stopped valuing hard work and started valuing wealth. We don't care how you attained your wealth anymore. When an item creates wealth without providing value, it is almost always a confidence trick. If you are going to invest in crypto currencies, at least go on the relatively safest route and invest in Bitcoin and hope that its volatility works for your favor. But know that you are gambling and don't put your life savings on the line.

211 points by davidgerard 6y ago

Nas Daily Video on Metakovan - https://youtu.be/TDpF2S9HY7g https://youtu.be/TDpF2S9HY7g

Nothing to see here > What’s interesting is that Beeple, the creator of the artwork, is actually a business partner of MetaKovan’s. He owns 2% of all the B20 tokens. I’m sure there is no conflict of interest here

newsclues 6y ago
Art + money laundering + crypto = nft
- habitue 6y ago
  Art + money laundering = regular fine art world[1] So really this is just adding crypto to the mix, because "everything's a little bit better when you sprinkle crypto on it" [1] https://www.cnn.com/2020/07/29/business/art-money-laundering-sanctions-senate/index.html https://www.cnn.com/2020/07/29/business/art-money-laundering...
  - rmrfrmrf 6y ago
    So it's "everything's better with bacon" for the 2020s? Gross!
    - iamacyborg 6y ago
      Hopefully no one comes out with nft lube...
TigeriusKirk 6y ago
It's a bit much to say someone who owns some B20 tokens is a "business partner" of MetaKovan's. Are all the token holders "business partners"? Obviously not. It's enough to point out that MetaKovan has a financial interest in increasing the value of Beeple's art. That alone lessens the impact of this auction, and I'm a NFT booster. Using auctions to increase the value of your holdings is one of the questionable things that happen in the high end art world. Check out the Mugrabi family Warhol collection sometime.
- tlb 6y ago
  Every art buyer has a financial interest in increasing the value of the art they've bought. One reason that Christies can charge substantial fees is that it serves as a guarantee that the transaction is somewhat real. If an artwork changed hands privately between friends for $1M, there'd be no reason to believe that price. But when they're paying a 15%+ fee to an auction house, there must be something valuable.
  - TigeriusKirk 6y ago
    Private sales affect market values all the time.
vmception 6y ago
Sounds more art guild-like than impropriety. But of course, without any governance or rights. B20 tokens launched on January 23rd. Beeple has been on Clubhouse and other NFT spaces for months. It is common in the crypto space (and everywhere) to give an influencer an "advisor" share of the project. Their pie-chart says 11% of the tokens are to collaborators. So really its 13% but Beeple is the influencer that is worth having his own separate piece of the pie, for advertising. "You know its legit because Beeple is involved", and its working because now I know to bet on winners! This token is up 2,000% in a month and a half, and I didn't know about it before and have been searching for the right way to get exposure to the NFT space, and these are the winners! They got Christie's involved and the whole world! I'm absolutely going to try to partner with them as I have more clout in the crypto space. The real discussion is on whether there could be a more community oriented token distribution schedule, or a similar project without the massive team/advisor share. So there is a market to compete in this regard.

Traster 6y ago

So NFTs are valuable because they’re unique- but this guy has created a fractional ownership screen so an unlimited number of people can own 1 NFT. Oh and he’s lying about his identity and business relationships.

dgellow 6y ago
> So NFTs are valuable because they’re unique- Just a small correction: they are "valuable" because they are unique AND because people want them. Otherwise they have no value. Scarcity in itself isn't enough to have value, you still have to create hype around the token somehow. ("valuable" in quotes, because it's really not that clear there is any actual value in an NFT that isn't legally binding...)
- ahepp 6y ago
  Not clear that it's scarce either, since the guy owns 59% of them. Seems like a classic trick to jack up the "market cap"
  - ketamine__ 6y ago
    This is an industry where a startup launches and a few days later has a $400 million market cap.

echelon 6y ago

I can't believe people are getting excited over collectable barcodes. Of course this is a scam. I can create NFTs for Beeple's art too. I can create NFTs for Jack Dorsey's first tweet. I'll sell you a hundred of them if you want. This is exactly like buying a spot on million dollar homepage, except anyone can make a million dollar homepage and nobody will honor your purchase because they don't have incentive to care.

dcl 6y ago
I really don't understand this. What mechanism is there to ensure an NFT was created by the 'right person/people'? (whatever this means). I could make an NFT for Mickey Mouse, and it _should_ be worthless, but if Disney created one then maybe it could be worth something?
- detaro 6y ago
  The mechanism that the "right people" communicate which minting wallets are the "legit" ones. I.e. even in the less-crazy levels (i.e. not thousands of dollars), you'll see artists announce their wallet key on Twitter/Instagram/their website, and it's on the buyer to check that what they buy has the right source. (If people think that your bootleg mickey mouse NFT has value and pay for it, well that's their decision, they just might not find anyone who agrees later)
- capableweb 6y ago
  Seems you answered your own question. Yeah, anyone can create Mickey Mouse NFT but unless Disney officially releases it themselves, people will not be (as) interested in buying.
  - tantalor 6y ago
    How do you suggest verifying the token is "official"? Call up Disney?
    - hanniabu 6y ago

dcl 6y ago

I've got some dumb questions about this whole NFT thing... Is the artwork actually stored in the token or does it contain a URL that isn't guaranteed to always exist? I'm guessing there is no mechanism to change the link if the host should go down or stop hosting the content. Are NFT's used to recognise a transfer of ownership of the intelectual property?

captn3m0 6y ago
Almost always a URL.
- dcl 6y ago
  I see. So what would you even really own once that URL goes down. The whole thing relies on a weird level of trust and belief in what other people believe to be valuable.
  - smitty1e 6y ago
    My limited understanding is the blockchain data are distributed enough to get past the "that URL" issue. You'd need to destroy "that unknown collection of URLs" to eradicate the NFT. The problem as I see it is that NFTs lack any potential energy. Their value is purely kinetic, and expressed in the transaction. If no one wants my NFT, it's so much binary noise.
  - davidgerard 6y ago
    The same thing you "owned" before: the token. An NFT is just a pointer. Unless you have a contract specifically transferring additional rights, you literally just bought the pointer.
  - Applejinx 6y ago
    In this way it's like the stock market to the Nth power. As money accumulates in larger and larger sums, and is abstracted farther and farther from tangible real-world power and resources, you get this. Things get increasingly weird. There's got to be some kind of equilibrium point between this stuff, and your basic anti-fiat-currency gold bug, but I'm not sure what it is, particularly since modern macroeconomics acknowledges the capacity to just print money and make it up pretty quickly in the increased economic activity that makes possible: austerity isn't really a functional solution. This crypto stuff really works by the same principle: if you get enough people into it, they CAN'T crash because the important people are too deeply enmeshed in the system and will cheat to any degree to preserve the value of their properties. I think it depends what is done with it. With macroeconomics, you can have entire countries spurred to activity and producing goods and services because they can transact with resources. With this crypto stuff, I very much wonder if it ends up being a small number of very privileged people demanding rights to increasingly silly abstractions that are said to be the value of entire cities, or countries. I'm not sure that's sustainable, politically. I'd ask, how convenient is it for the first crypto trillionaires to buy real-world mercenaries? Things could get very dark, albeit in a peculiarly cyberpunk sort of way that might appeal to some.

gigatexal 6y ago

I find it hard to believe that all this hype and these huge dollar figures of these NFTs and art being at the center that none of this is being fueled my money laundering. Jack’s first tweet? What value is there in that? The Beeple “art”, same question. All of this seems like a scam.

skyzadev 6y ago
NFTs are HIGHLY inflated right now - paying $2mil for a tweet is NOT real demand. It's marketing by people with a stake in the industry. Justin Sun who bid $2mil for Jack Dorsey's tweet runs a blockchain network called Tron. I think NFTs will stabilize at some point but it isn't going to go away that's for sure.
- rblatz 6y ago
  So from the outside looking in this looks very silly, not highly inflated. In fact on the surface it looks clearly like a scam with a lot of hand waving and philosophical nonsense tacked on to confuse people. Anyone can mint an NFT that points to whatever, and the benefits you get are purely imaginary or at best speculative that a greater fool may exist and buy it from you for a higher price. The art world while also somewhat suspect at least has physical possession/ownership.
  - skyzadev 6y ago
    There likely is some foul play involved in some cases yes that's for sure. For example this Beeple thing looks like it's a scam to pump a token which Beeple has a stake in so that they can then offload the token at high prices to new unsuspecting buyers. However just on your point "Anyone can mint an NFT that points to whatever" - sure they can but those NFTs will be and should be worthless. You are able to prove an NFT came from the actual author since it would have been signed with their private key. When all the fake demand settles we will see if there is any real demand here or not. I myself have no interest in buying any NFTs, at least not yet :).
la_fayette 6y ago

stevesimmons 6y ago

So the actual cost net of related party transactions was not $60m + $9m auction fees, but just the $9m in fees. And who knows whether Christie's keeps all that, or part/most finds it way back to Beeple/MetaKovan/Sundaresan in other ways.

stevesimmons 6y ago
Oh, at least good to read that MetaKovan/Sundaresan is a YC alumni...
- vmception 6y ago
  MetaKovan/Sundaresan email me, my email is listed in my profile, I have other NFT projects for you and your fund, and also some recommendations for the B20 token.

gomoon 6y ago

great article!

amycastor 6y ago
Thank you!

daenz 6y ago

I feel like I'm saying "the emperor has no clothes", but doesn't anyone else think this NFT art thing is bullshit? Everything about it screams "scam": they're asking you to spend your real, hard-earned money on some digital "asset", pumped by celebrity influencers and hype entrepreneurs. Everyone is drawn to the big multi-million dollar figures of these high profile artists, figures that you will never see for your "assets", and do nothing but serve as a siren's call to everyone around. These high profile sales are marketing, nothing more. They are serving their purpose to kick start the mainstream adoption of this scam, because everyone thinks they can make a quick buck buying some digital signature. What's more is the pseudo-intellectual justifications for it all. As soon as you bring up value, proponents put on their philosophy hat and ponder "what is value? money is just paper, maaaaan, we just believe it has value." Or we hear that owning a digital "asset" is actually the same thing as a physical "asset" because they're both unique things that can't be copied. It's all smoke and mirrors, and you know that when you have to hide behind vague philosophical assertions about "well nothing really has any value", then you have no actual argument supporting the value of the thing you're defending. It's a new illusion, pumped by hype, and they're trying to justify its existence by pointing to other illusions. Thanks but count me out.

nerdponx 6y ago
Huh? Buying art with an NFT is just a way to give artists and/or art auctioneers money for their art. That's it. Oh and it can be used for other things like event ticketing, software license keys, etc. An NFT is just a way to record (in an immutable distributed ledger) that a specific, uniquely-identifiable token was transferred from A to B. People have always paid stupid amounts of money for art, and in the last 100 years increasingly art that doesn't require years of training/practice and advanced craftsmanship. Why is this any different? It sounds like you just don't want to be involved in the art market, which nobody in their right mind wants to be involved in anyway. Complaining about NFTs is like complaining about "blockchain" or "the internet" or whatever.
- stickfigure 6y ago
  > Why is this any different? Because if you buy a painting, you can hang it on your wall.

cammikebrown 6y ago

I'm surprised nobody has brought up the absurd energy requirements of NFT. Yeah, it's been beaten to death here, but a single transaction can be equivalent to one person's household energy consumption for several months. And yes, I'm aware Ethereum is working away from that, but it's taking a long time and it's not there yet. In the meantime, I find it highly immoral. Just mind-boggling wastefulness. It doesn't make me feel hopeful about the future of the planet.

throwaway4good 6y ago

I just love to see art being pushed forward. We had Duchamp with his pissoir in 1920. I remember someone exhibiting a goldfish in a blender. And now this ... They would say that art is what happens between the artwork and the observer. But of course it is much broader than that. There is also the artist, the story, the room, the broader society and ... the market.

UncleMeat 6y ago
But notice how virtually zero of this discussion is about the content of the work. Just its sale mechanism. Even the banana on the wall had people discussing its nature as art.
- vmception 6y ago
  For me that piece is hard to see. There have been discussions about it and its value, here on HN. Mostly people that were mad that they exchanging a fixed amount of time in a small range of price per hour for money instead of creating an unlimited number of assets and exchanging them at an unlimited range of prices.
- throwaway4good 6y ago
  50 years later when they were taught about it in high school, people discussed its nature as art. When the works where published they were seen as scams, pranks, criminality, and insults.

epinephrinios 6y ago

This is how Ethereum is competing with Bitcoins in terms of "store of value".

drcode 6y ago
One of the many ways

achimlittlepage 6y ago

NFTs is the unwritten chapter of Infinite Jest that eventually led to DFW committing suicide. Start with something decentralized, layer a bunch of centralized entities on top of it and, Voila, you have, you have no idea what you have.

ChainOfFools 6y ago
The Center For Decentralization would like to offer you a thought leadership position. /s(/s)
simonebrunozzi 6y ago
DFW = David Foster Wallace. He committed suicide in 2008 [0]. I am not sure I follow you in associating NFT with the end of Infinite Jest. Not saying you're wrong... Could you elaborate? [0]: https://www.newyorker.com/magazine/2009/03/09/the-unfinished https://www.newyorker.com/magazine/2009/03/09/the-unfinished

kotaKat 6y ago

Change my view, NFTs should require full AML KYC for the artists and buyers/bidders.

wallacoloo 6y ago
Seems like a great way to start a flame war. Anyway: If you’ve worked with the crypto space much, you know there’s a strong undercurrent of some libertarian-esq thinking. Crypto currencies represent decentralized trust, of some kind. I mean, Bitcoin was created in large part because Satoshi didn’t trust the central authorities in charge of the money supply. In some areas you’ll hear the phrase “governance without government” (I.e. fiat). What gives this place any spirit is the drive to overcome problems of distributed trust. Take that away by forcing KYC and now you’ve lost any ideological motivation to push the space forward. It just becomes a digitization of existing societal structures. Let it grow naturally and yeah, you’ll see plenty of scams, but you leave the door open for real innovations (like zero knowledge proofs) that could be worth massively more than any mistakes along the way.
- Traster 6y ago
  How is that disginguishable from "What gives this place any spirit is sheisters.. Take that away by forcing <standard practices>"...
  - wallacoloo 6y ago
    > How is that distinguishable from "What gives this place any spirit is sheisters.. Take that away by forcing <standard practices>"... If there was any standard practice that could force sheisters to move elsewhere without negatively affecting the rest of us, I would stand by that policy 100%. Even within our standard systems, we tolerate a certain baseline level of fraud. Banks quite regularly work with fraudsters or worse and knowingly violate regulations (see: HSBC, Wells Fargo for high-profile cases). The regulated and the regulators appear to be somewhat cozy at times. But we accept this, perhaps because the value provided by these systems seems to outweigh their flaws. As for cryptocurrencies: do they provide value to anyone besides the sheisters? Yes. Not everyone is convinced, but at least I can claim to have performed legal transactions with Bitcoin and Ethereum that I don't regret years later and that I wouldn't have done without those currencies, and that's enough to convince myself. Would these things exist if KYC was strictly enforced on 03/Jan/2009? No. No, there would be no Bitcoin; it would be impossible to reach the audience which embraced it in 2009-2011. The ideas would likely not have spread beyond the cypherpunks, ideas which I personally think have enriched my life. Should we put up a fight against scammers? Absolutely. Is KYC one way to do that? Yes, but please don't underestimate the cost (previous paragraph) nor overestimate its effectiveness (take a look at the list of coins on Coinbase and Robinhood -- both of which adhere to KYC -- and tell me that these are all things that a responsible company should be promoting to its average user).

patentatt 6y ago

> What’s interesting is that Beeple, the creator of the artwork, is actually a business partner of MetaKovan’s. He owns 2% of all the B20 tokens. I’m sure there is no conflict of interest here. And they're basically selling it off to 'investors.' So it was really just an elaborate marketing ploy for some shady crypto currency? I'm surprised an institution like Christie's was willing to lend their reputation to such an endeavor. Or were they conned too? Or did they actually net that $9m 'fee' which is enough to buy Christie's reputation?

vmception 6y ago
Private equity funds participate in art auctions all the time, crypto in this case just makes it easier to make something analogous to an ETF.
ed25519FUUU 6y ago
To get an idea of what’s selling for $70 million, take a look at: > https://mobile.twitter.com/beeple/status/1347406074685566977 https://mobile.twitter.com/beeple/status/1347406074685566977 There’s too much money being pumped. Crypto is a symptom not a solution.

christiansakai 6y ago

You guys are thinking too hard. It is a scam.

jonas21 6y ago

For me, the weirdest part is that you apparently place a $70,000,000 bid at Christie's the same way you'd place a $70 bid for a used phone on eBay. https://twitter.com/justinsuntron/status/1370227566125096961 https://twitter.com/justinsuntron/status/1370227566125096961

trhway 6y ago
For people placing $70M bids those money are probably less important than $70 for somebody who buys a used phone. Wrt. the people trying to question what value NFT has - well what value a piece of a paper with a black square has? I'd guess close to $0 or less - a ruined piece of paper. Until of course it is said to be done by Kandinsky. The value of the most of the art is in that information, not in the material artifact. NFT is just a distillation of that idea. Reminds a recent Russian meme - a photo of Kandinsky with a bubble "Everybody can paint the same. Not everybody can sell the same way."
ALittleLight 6y ago
Also weird that at around 1:55 in this video the user seems to be trying to place a bid for 70 million and can't for some reason. Is this a bug in their auction UI costing someone 10 million dollars? https://twitter.com/justinsuntron/status/1370227566125096961 https://twitter.com/justinsuntron/status/1370227566125096961
- Grustaf 6y ago
  Was he using RobinHood?

ur-whale 6y ago

Yeah, NFTs are utter BS, but not much more than people who collect actual original art pieces when you could simply hang a replica of the original for a millionth of the price. People are weird is all.

vmception 6y ago

MetaKovan/Sundaresan I think transfers of the B20 token should somehow also result in royalties to all the artists in the B20 porfolio. Without some form of transfer tax, this breaks the royalties advantage of NFTs because the NFTs aren't being transferred yet. I think you will accrue a lot of value and attractiveness if artists and token holders are aiming to be appealing to you and the other competing funds that pop up, if you had a way to make the residual go to the assets in your fund. You can easily add a transfer tax to the transfer() and transferFrom() methods of the erc20 token, which gets pooled and distributed prorata to all the NFT's royalty addresses. You can even keep that as an array in the erc20 token. Email me

paulpauper 6y ago

This sounds like a great way to facilitate money laundering . I put up a smileyface NFT for $10 million and then someone, that person being myself, 'buys' it for $10 millions, funds change wallets, with receipt of payment on blockchain.

X6S1x6Okd1st 6y ago
That sounds like a good way to layer, but that in and of itself doesn't launder the money
- jtsiskin 6y ago
  Why not - what is missing? You know have a “legitimate” reason to have the money. Is the problem that the buyer was anonymous?
  - vmception 6y ago
    You can, but if you look at the Christie’s auction requirements, it forces bidders to use specific KYC’d financial institutions. That auction house’s lawyers were only made comfortable with that, but it is not a resolved legal requirement. You can totally sell an NFT to yourself in crypto.

X6S1x6Okd1st 6y ago

For HN there sure are a lot of people completely ignorant of the technical details commenting below.

exdsq 6y ago

Having spent around 18 months of my life working on a top 5 blockchain, it's pretty disheartening to see so many comments on HN suggesting I'm some sort of MLM Ponzi Scammer when I'm actually just a guy who's interested in various CS subjects and few industries involve them all the same way blockchains do...

ashkankiani 6y ago
What was some of the interesting technical CS challenges you had to face in doing so? I have no interest in blockchain or adjacent tech because I don't see any technical challenges worth solving, so I'd be interested in learning if I was mistaken to come to that conclusion.
- str33t_punk 6y ago
  Game theory? Distributed systems? Cryptography? The technical challenges in crypto are much more interesting than that of a FANG company’s (i.e enterprise software and widgets)
  - ashkankiani 6y ago
    There's a lot of assumptions in this comment: - That people are only employed at FANG - That outside of cryptocurrencies, people only work on enterprise software and widgets - That blockchain has the only difficult distributed systems problems - That cryptography is being advanced significantly by blockchain (I would like to see more on this if it's true. From a brief search only "zero-knowledge proofs" are brought up, and considering it's a deeply technical math area, just throwing more money at the problem won't necessitate any advancement) But most of all, you just threw out buzzwords without giving any examples, which is a non-argument.
- rauljordan2020 6y ago
  Quite surprised at this comment. The reason I got into blockchain was _because_ of the incredibly difficult technical challenges it poses. Among the few I get to work on: - How to implement robust p2p networking algorithms for sharding in a distributed system such as Ethereum (a very deep rabbit hole), as Ethereum is migrating to a "sharded" architecture - How to solve the "data availability problem" https://github.com/ethereum/research/wiki/A-note-on-data-availability-and-erasure-coding https://github.com/ethereum/research/wiki/A-note-on-data-ava.... The current solution uses advanced cryptography known as KZG commitments https://dankradfeist.de/ethereum/2020/06/16/kate-polynomial-commitments.html https://dankradfeist.de/ethereum/2020/06/16/kate-polynomial-... - How to solve the problem of "transaction frontrunning", in which miners have an asymmetric advantage in ordering transactions they put in blocks for their benefit, which can adversely affect users creating those transactions. This is a problem known as MEV (Miner Extractable Value) https://research.paradigm.xyz/MEV https://research.paradigm.xyz/MEV and there is some incredibly sophisticated work going into this problem. It is a deep engineering problem as well I could go on and probably give you 20 other incredibly technical, challenging problems that are on the bleeding-edge of this technology. If you're interested, would be happy to chat more!

Grustaf 6y ago

Of all the hilariously stupid things coming out of the scammy world of crypto, NFTs take the biscuit. I've been hearing A16Z and other VC podcast breathlessly talk about the brave new world they enable. Now you can have digital assets in games, people can buy them with real money! Finally, because that's of course not possible without The Blockchain (tm). And people can use them to prove ownership of physical things, TRUSTLESSLY. Because it's so much safer to have decentralised system of digital bearer shares, than a central registry run by the government or a bank, right? Oh but it's for third world countries where the state is not to be trusted. Of course that also means you can't trust them to enforce your digital bearer shares either, but that shouldn't be a big problem. We'll just get all the farmers and villagers to agree on using one particular blockchain bases system to keep track of who owns what land. What could be simpler. And if you thought that was stupid, enter NFTs for digital art. Yes let's use advanced technology to create digital tokens that can't be copied, and use them to track the ownership of digital art that can be copied indefinitely. Brilliant.

bogwog 6y ago

This is all so fucked. BTC is at like $60k right now, and there are something like 18.4 billion BTC in circulation, which translates to over a trillion dollars in "value". Yet if any of these bitcoin (or ETH or whatever) billionaires tried to cash out their massive reserves, the bubble would burst. So stunts like this NFT thing, where a "humble artist" becomes a millionaire overnight, serves to just further inflate the bubble, and help those bitcoin billionaires become real billionaires without crashing the market. I wonder how many of these bitcoin billionaires are doing this (possibly colluding), or are actually so deluded that they believe $60k is the real intrinsic value of their BTC. Or maybe it's neither, and this bubble is still nowhere near the bursting point yet. Either way, it's all fucked and I hate it.

siwatanejo 6y ago
This reaction sounds very analogous to me to when someone complains about what two consenting same-sex adults do in their bedroom.
- SwimSwimHungry 6y ago
  Well... you're kinda wrong, because now many retirement accounts and such have indirect exposure to cryptocurrencies (MSTR and TSLA's silly Bitcoin buys come to mind, and I know TSLA is part of the S&P500), whether we like it or not. So we do have a dog in this fight, and we'd prefer not to be a part of any of these shenanigans. What two consenting adults do in the bedroom has zero affect on me. What a cabal of opportunists do with cryptocurrencies and then a possible epic black swan event could cause a domino effect that could even be considered catastrophic across the entire economy. Then a select few run off with their bags of real money while the rest of us take the hit. That's no good, if you ask me.
  - siwatanejo 6y ago
    > Then a select few run off with their bags of real money while the rest of us take the hit. What you seem to be describing here, precisely, sounds like the Cantillon effect (which wouldn't happen in a bitcoin-based economy, actually).

sterlinm 6y ago

I don't get NFTs, but then I've never really gotten Bitcoin either. If I'd bought a Bitcoin every time I told someone Bitcoin was overvalued I would have made quite a lot of money. But I'm much more skeptical of NFTs than I am of cryptocurrencies in general. The most persuasive argument to me has been that it's no different than other collectible items. Art is one example, but I think stamps, coins, and baseball cards are better examples. I think it's kind of objectively stupid to ascribe a lot of value to some random stamp or coin that is rare because of a printing or manufacturing error. But if that's your thing I'm not going to stop you. And if I were very wealthy and you came to me and made an incredibly compelling case that you'd figured out how to predict the future market values of rare stamps and/or coins well enough to build a profitable trading strategy I would consider investing. The main gimmick of NFTs seems to be that they make it possible for a digital object to be rare. So I suppose some sort of NFT market could just be another type of collectibles, no better or worse than stamps or coins. That's the most generous argument I've been able to make to myself. Personally I still can't get over the feeling that they're really stupid.

sterlinm 6y ago
There does seem to be a lot of sketchy grifters floating around the space. I think that's compatible with thinking of them as collectibles. From movies and books, it seems like a lot of cons revolve around absurdly expensive collectibles (art, coins, jewelry, etc.)

_carbyau_ 6y ago

In it's current form NFTs don't seem very compelling. I have concerns for future DRM and MPAA-lobbied legislation could make this - or similar but scales well - the foundation of digital file ownership.

vmception 6y ago

I don't understand how Metakovan has $69mm, like the accounting doesnt match up. Metakovan buys to lets the B20 digital fund own art assets. The B20 fund only collected like $3mm dollars and the rest is just a floated marketcap of B20 tokens. So is Metakovan just going to pay for the art piece personally and just arbitrarily transfer the piece to the B20 address? Like basically B20 itself cannot pay for it, and the auction house isn't accepting B20 tokens. Its cool Metakovan has so much money. There have been plenty of opportunity over the last few months to turn $3mm into $100mm, let alone over the last decade in crypto. So it isnt outside the realm of possibility that he has that much. But if he doesnt pay, does Justin Sun get to complete the purchase and get it?

vmception 6y ago
I think he will just release a new token
simonebrunozzi 6y ago
Good, legit question. I don't know much about Metakovan's allegations of wrongdoing; but even without looking at these, it's fair to say that there are several individuals who, by just being early in crypto, have amassed the equivalent of tens, or hundreds of millions of US dollars. It wouldn't surprise me too much if Metakovan has a net worth of hundreds of millions of dollars, and therefore can afford to spend $70M in buying this NFT.
- vmception 6y ago
  There are many more people who made hundreds of millions without being early in crypto. Just over the last three months there have been hundreds of 50x gains. That’s $1,000,000 being a liquid $50,000,000. Going through the known history of Metakovan’s businesses in the crypto space are a complete red herring to that article. Everyone that has any experience and clout in crypto would have been involved in some service that didn't do well for everyone.
ffggvv 6y ago
i wonder if beeple just returned 68 million with a pre arranged scheme

yigitcakar 6y ago

I have seen pyramid schemes that are sounder than NFTs. It is sad that a lot of people are spending their hard earned money on NFTs thinking they are going to be professional artists. They don't recognize that they are only becoming crypto-coin investors. I have spent hours sifting through the crypto-art space and amazed at the "so called" artworks people have been spending money. As a person who has been a professional artist and somewhat knowledgeable about the art scene, I feel that it is a duty to warn people. I don't mind people spending their money on newbie photoshop tricks if they know what they are doing, but I don't like people to feel like they are artists because they can apply photoshop filters to an image and mint them as NFTs. I am keeping the publicity stunts out of this conversation. The article does a great job talking about those. Another important thing to note is that an artwork's value derives from its cultural effect. So far NFTs' cultural effect is feeding people's belief in get-rich-quick schemes. Our society has stopped valuing hard work and started valuing wealth. We don't care how you attained your wealth anymore. When an item creates wealth without providing value, it is almost always a confidence trick. If you are going to invest in crypto currencies, at least go on the relatively safest route and invest in Bitcoin and hope that its volatility works for your favor. But know that you are gambling and don't put your life savings on the line.