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There’s a lot of confusion here about why NFTs are valuable if the buyer doesn’t get to own the image copyright. This should not feel mysterious - NFTs are just

There’s a lot of confusion here about why NFTs are valuable if the buyer doesn’t get to own the image copyright. This should not feel mysterious - NFTs are just like baseball cards. If you buy a Barry Bonds baseball card for $1,000, you don’t own the artistic rights to the image on the card. All you own is the card itself, which has negligible manufacturing cost. It would be trivial for any card company to produce a million functionally equivalent Barry Bonds cards. When you buy a Barry Bonds baseball card, you hope that the card company won’t dump a million more on the market. You also hope that if another baseball card company springs up and prints their own Barry Bonds cards, people won’t be as interested in that brand of cards. Attention and scarcity drive value; the nuance is that other speculators must care about scarcity along the same dimension that you possess it (in this case: the brand of the baseball card company and the year the card was made). There are a hundred tokens functionally equivalent to Bitcoin, but none approach Bitcoin’s value - purely because Bitcoin sustains more consumer and media attention. This position is fairly stable because attention has strong positive feedback loops. There has always been interest in speculative collectibles. A purely digital collectible solves a lot of practical problems related to exchange: you don’t have to wait a week to receive the item in the mail, you don’t have to worry about its condition because it does not degrade with time or use, there is minimal counterparty risk due to online escrow contracts, and counterfeits are harder to fake (along the relevant dimension of scarcity, which is the origin address). People have been speculating on collectibles for thousands of years. Crypto just makes it easier to trade them back and forth.

tdeck 5y ago
When you have a baseball card, the first sale doctrine means that you at least have the legal right to display and transfer that card. With NFTs, even that is not necessarily the case because displaying the content of the NFT is making a copy, and you may not have a license to do that.
- highfrequency 5y ago
  If you own an NFT, you have the ability to write someone else’s address on a socially recognized ledger of ownership. That is all that matters. If the NFT and the ledger have wide interest, this ability to transfer ownership has value regardless of any legal subtleties.
  - chinathrow 5y ago
    > If you own an NFT, you have the ability to write someone else’s address on a socially recognized ledger of ownership If that "socially recognized ledger of ownership" ceases to exist, then what?
    - miracle2k 5y ago
      Either there remains interest and social consensus around this ledger, in which case it can be rebooted on a different network, for example, or even by a centralized party; or maybe you are the only one with an interest in your NFT collection, in which case you can keep a copy of the ledger yourself.
      - chinathrow 5y ago
        I'm not convinced. Art galleries are easy to launch, even in 500 years time. What you're describing is hard to do.
        Tenoke 5y ago
        I can fork a centralized copy of a chain much more easily than I can start a gallery.
        chinathrow 5y ago
        Sure you can do that right now. But my point was more: physical objects can be traded easily in the far future. We can hardly rebuild stuff from source after 20years time, so I'm pretty sure you will not be able to revive long dead blockchains as easy as renting a space to trade physical objects of collectible value.
        miracle2k 5y ago
        My point here was more akin to saying: Sure, if no one cares about your NFT, or the chain it is on, then yes, it's worthless. If you want to be the last one to care, keep a copy of the chain. The physical equivalent is a worthless painting that no one cares about and your grandchildren throw out.
ido 5y ago
If not for the energy costs NFTs would be just like you describe above - a somewhat pointless but harmless hobby for enthusiasts (what good does speculating on baseball cards do in the world? What good does speculating on art do for that matter? As far as I can tell "little to none" for both of these). Unfortunately that's not the case.
- capableweb 5y ago
  > If not for the energy costs NFTs NFTs themselves don't have any energy costs. Depending on what network you're using for buying/minting/trading NFTs, there might be energy cost associated with it, but not all NFTs are equal. NFTs based on Proof-of-Stake networks won't have the same energy cost as NFTs based on Proof-of-Work networks. Unfortunately, it seems that most NFTs are based on the Ethereum platform, which is currently Proof-of-Work. Fortunately, Ethereum is moving to Proof-of-Stake slowly but surely. But the point still stands, NFTs themselves have no energy costs, only the transactions on the network where they live have that.
- ikt 5y ago
  > If not for the energy costs Feel free to quote this and laugh at me but by this time next year I doubt this will be a topic The latest updates for anyone interested: https://blog.ethereum.org/2021/09/28/finalized-no-29/ https://blog.ethereum.org/2021/09/28/finalized-no-29/
  - knorker 5y ago
    What will come first though, POS or fusion power dominating power generation? Every estimate so far has been wrong.
  - iamevn 5y ago
    this has been "a few months away" or "later this year" for at least two years now
- dtagames 5y ago
  There's no energy cost to spawning a million algorithmic penguins. They have no inherent cost or value. The sunk costs of obtaining something rare or difficult to get (like titanium) is a factor only for the next person who desires titanium. Since there is no cost to see or copy a jpg, there is no "extra value" added in an NFT. Not even energy costs. The end product still has zero value. A simple corrolary is wine. Swill stored expensively doesn't acquire new use values from the storage. The expense of storage doesn't accumulate to the value of the NFT. Whereas the expense of obtaining real goods like metals is exactly what sets their value.
WA 5y ago
NFTs are not like baseball cards. NFTs are a JSON string on a proprietary entity that point to the image of a baseball card. The image can be viewed by everyone. The bragging rights of owning a JSON string depend heavily on whether or not the proprietary entity will become the dominant player in the I own a JSON string-world. This also has zero to do with blockchains. The proprietary entity could've used any database they wanted. It's all a ridiculous scam, but have fun trading JSON strings.
- eoo 5y ago
  An NFT is a virtual title of ownership on a blockchain, that's it. You don't own neither a string or an image or a JSON. https://eips.ethereum.org/EIPS/eip-721 https://eips.ethereum.org/EIPS/eip-721
  - techdragon 5y ago
    It’s a very expensive, publicly broadcasted and “socially agreed upon” (by everyone who thinks they are worth money) version of calling “dibs”.
  - imtringued 5y ago
    It's actually simpler than that. It's just an entry in a database with your name attached to it. It's like an autograph. Why do database entries have value? Well, usually because there are processes attached to them. Often it is as simple as having a court enforce the process. I don't know why but the whole cryptocurrency space feels like a philosophical parody of the real world. Money without people. Contracts without enforcement. Ownership without property.
    - ThomPete 5y ago
      thats too simple, its more than that given some people attach varying value to it.
    - tnzm 5y ago
      >I don't know why but the whole cryptocurrency space feels like a philosophical parody of the real world. Money without people. Contracts without enforcement. Ownership without property. The common denominator between these being: process without purpose. And this is why the parody works so well. The world is already like you describe, though it's hard to notice if you view it through the rose-tinted glasses that the ever-shrinking in-group is more than happy to sell to you for good "old" fiat money. (If 50 years ago is old.) Neoliberal "infinite growth" capitalism is already an inter-generational MLM, sanctioned by a global monopoly on violent enforcement. All power grows out of the barrel of a gun, and we have all become so delightfully non-violent... The logical conclusion: Oceania, Eurasia and Eastasia locked in perpetual war upon the background of a collapsed ecosystem? Well, fuck that. Techno-capitalistic nation-states are an early-stage performance optimization. And since violent uprisings lead nowhere, we're doing the sane thing. We're refactoring 'em the fuck out of existence. If "having a court enforce [a] process" is "simple", how come so many people already have "avoid courts", "distrust lawyers" as rules of thumb, and "don't side with authority" as a general life principle? For the marginalized majority, every state is a failed state, and every system is hostile and oppressive. The thing everyone's getting out of crypto is the same thing they've been getting out of all the other silly pyramid schemes, from Tupperware to contraband. Which is to say, the same things they've been aggressively denied by the state-sanctioned economic mainstream. Hope. Opportunity. A voice. A functioning parody of existing economical processes gives people the hope that there's a better economic system right around the corner. Maybe we just have to collectively sort of stumble into it. Of course, it's only that simple if you have a simplified view of human creativity. But that's OK, too. Every invention that truly revolutionized our way of life was a somewhat accidental result of thousands upon thousands person-hours of organized research. And that's exactly what we're doing here - about as haphazardly as virtually any other kind of software development, but at the same time crowdfunded on a global scale. Today, we're offering people the same sort of economic "junk food" that the current system has gotten them addicted to for the better part of the 20th century. Tomorrow, someone finally sneaks distributed consensus technology into the mainstream, and makes the world a little less corrupt. It's beautiful.
MontagFTB 5y ago
This is a great explanation. I’ve understood NFTs slightly differently, where they are akin to an _autographed_ baseball card. In that case, regardless of how many copies of that card exist in the world, you have a rendition of that card authorized by a special party (the autographer) that causes it to be unique. Where any number of digital copies of an asset may exist, the NFT is the “autograph” atop that asset that is unique and therefore adds the value. (It’s worth noting that anyone can autograph any baseball card. So it’s not the autograph that makes it valuable, but _who_ autographed it. It’s the same with who minted the NFT.)
- asenna 5y ago
  There's another aspect to this analogy - It's like an autographed baseball card + the person / entity autographing the card has declared (by code) that there won't be another one of these autographed series ever (eg - 10k CryptoPunks series).
PeterisP 5y ago
> People have been speculating on collectibles for thousands of years. Have they really? IMHO the whole concept of intentionally creating collectibles as a market started (and IMHO became possible) only after strict IP laws that could prevent anyone from making and distributing large quantities of items that should be rare by design. My favorite example is the fictional collectible card game Gwent in Witcher 3, where the whole concept of rare/scarce cards is ridiculous in the absence of a single organization being able to enforce a monopoly on issuing Gwent cards; the actual expected result should be like ordinary cards, where everyone gets an ace of spades in their deck or chess where both players get a queen, no questions asked; for human-created marketable collectibles (as opposed to actual collections of butterflies or the like) the scarcity can only happen if artificially enforced.
- noiwillnot 5y ago
  This is one of my main gripes with MtG. It just feel like a scam, a 90s loot boxes situation. I do not want to contribute to the business model, even if the product is solid. I will probably sell my collection and print some proxies.
  - MintsJohn 5y ago
    Unlike NFTs there is at least a (physical) product. (And even in the digital version, you have a limited digital item in a verified/trusted (digital) environment, backed/supervised by an entity (company). In crypto you're backed by a concept (an algorithm)) To me this whole crypto stuff seems like a bigger and better incarnation of the tulip mania (https://en.m.wikipedia.org/wiki/Tulip_mania https://en.m.wikipedia.org/wiki/Tulip_mania), very little crypto stuff /coins are backed by anything of intrinsic value. In a way it's the ultimate decadence.
  - OOPMan 5y ago
    MTG is kind the original lootbox, but I guess at least there is a reasonably good game behind it. I dumped my MTG in the early 2000s, these days I'll only buy into a card game using the LCG/ECG model. It's not necessarily cheaper but it is less scummy.
Deestan 5y ago
> There’s a lot of confusion here about why NFTs are valuable if the buyer doesn’t get to own the image copyright. Mostly because of two persistent lies around NFTs: 1) That you buy a piece of artwork. 2) Blockchain makes it automatically watertight. All you get is transfer rights of a single number via a blockchain, optionally (usually) with a URI pointing to some media. Now, why is owning blockchain transfer rights to that number valuable? Because an artist was involved in creating it, and they stated somewhere that the number refers to a specific artwork. Outside the blockchain, more things have to be trusted for this to hold up: - The artist in question must be the seller. Sure, you bought it from "banksy44" on nftgox.com, but is that the artist? There are soft ways to verify it, and you can get all sorts of receipts, promises, or statements from semi-official authorities. - Whatever links the number or the URI to the artwork must remain up. If it's on a regular URL, the host owner gets to decide when to delete it, or when to replace it an ad for their gambling site. If a IPFS resource goes dead, it's gone. If the number referring to the artwork is stored on a 3rd party ledger you rely on them being honest, online, and correct. AND NOW you have two weaker links in your trust chain, on the level of "humans trusting humans", rendering the blockchain basically useless. The premise is a lie, intentional or not.
- miracle2k 5y ago
  I will not disagree that there is confusion and bad arguments on both sides of the debate, which is why you are essentially arguing within the wrong framing. At the same time, people buying NFTs are generally quite a bit less confused about what you consider "lies" than you seem to think. Importantly, the blockchain is not useless because they have to exist within the universe's rules of impermanence. You may want to ponder the differences and shared properties between something like seditionart.com, MASS MoCA's ownership of Sol Le Witt wall paintings, and an NFT on a blockchain. Finally, let me point out that the URI issue is very much a misunderstanding that is widespread within the NFT community as well. It helps to think of the URI as a convenience feature rather than someone implying anything about the value of the token. There are fascinating experiments with tokens that have no url, tokens that have no visual representation, tokens with changing urls, or arbitrary urls; tokens that point to the same url. There are of course tokens that use data uris, and have the image-representation on-chain, or generate it dynamically; or they do so but not in URL form. There are technical implementations where the database of urls is separate from the ledger of tokens; there are early experiments by artists with blockchains (many years before anyone cared about NFTs) where there is no ability to store a URL in the first place. Cryptopunks, a really early project, simply stored a hash to a file containing the assembled images, and that is all that is needed.
Grustaf 5y ago
This is partly true, but you are missing one important aspect: While ownership can be enforced equally well with NFTs and baseball cards, the crucial difference is that with physical cards, owners have a unique way of experiencing the card. Anyone can look at an online reproduction of it, but only if you have a physical copy can you hold it in your hand. This is not the case for NFTs, anyone can experience the image in exactly the same way.
quickthrower2 5y ago
NFTs are more like paper products in general. Buying a typical NFT is like owning a single sheet from a standard ream of 500 A4 laser printer sheets.
lucumo 5y ago
Thank you. That made it click for me. I get it now. It's still weird to me, but it's weird in the same way other collectibles are weird to me. It's undeniable that they are valuable to others.
locallost 5y ago
There are various vague touching points of NFTs and real world collectables like baseball cards, but they are not the same. Artificial scarcity is one of them, e.g. there is no reason why there couldn't be a billion baseball cards of the most expensive kind (which would make them stop being the most expensive). Somebody else could create fake ones, but they would have little value for the fact that they are not genuine, which can be verified. You can make the very same arguments for an NFT, including that they are genuine based on who issued them. But a baseball card, or a Lego set have value on their own. Their collectable value stems from the fact that they are desired as such, and the scarcity makes the price of a certain type go up. Somebody might buy them just to show off or speculate, but another might be a huge Lego nerd and buy the rarest set just to feel joy by looking at it. But an NFT has no value beyond the scarcity. Nobody feels human joy by looking at an NFT beyond being able to show off that they are able to basically burn money in the "i am rich" app type of way. Thus it can only remain a toy for the rich. A van Gogh painting is most likely just a speculation and a show off object, but I might buy a painting from a local artist for $200 because I like it, and to put it on my wall so it makes me happy because it reminds of something nice. I will not buy a $200 NFT just to say I have one too.
- 356234236 5y ago
  > e.g. there is no reason why there couldn't be a billion baseball cards of the most expensive kind (which would make them stop being the most expensive) This is a hilarious contradiction. You are saying there can be a billion baseball cards of the most expensive kind that are at the same time not the most expensive kind.
- indigochill 5y ago
  Yeah, I follow Peter Mohrbacher who's a surrealist fantasy artist. I've bought some physical prints from him (not even originals or anything, just normal art prints) because I like his art and wanted to have it on my wall and preferred to pay him for a proper print than print a digital copy myself. He also at some point made some NFT sales and I really tried to find a reason to get excited but just couldn't. I can understand why he was, though, because on his particular platform, artists get a cut of future resale of their art. So he sells a piece for $100, someone later sells it for $200, and he gets a 5% cut (made-up number, I don't remember what exactly it was) for an extra 10 bucks, and so on (but it's still always just a digital token, not a physical piece). But that doesn't require NFTs to happen. Since it was a proprietary platform, a plain old database could have done the exact same thing.
pmorici 5y ago
Baseball cards are exactly what they are and baseball cards were historically viewed as worthless until a craze in the 80’s that in turn caused over production and has made them a pretty poor investment. https://www.quora.com/Why-did-the-baseball-card-market-collapse https://www.quora.com/Why-did-the-baseball-card-market-colla...
chollida1 5y ago
The one thing that gets lots in the card analogy is that 99% of cards will get destroyed and the ones that are left will mostly get damaged. This increases scarcity in a way that just can't happen for NFT's, what would it mean for an NFT to get damaged corners?
- hanklazard 5y ago
  It’s thought that something like 20% of BTC are “lost” (1) (ie, private key is lost). This will certainly happen to NFTs as well since people will inevitably fail to back-up their wallets. 1. https://static1.squarespace.com/static/5d580747908cdc0001e6792d/t/5e98dde5558a587a09fac0cc/1587076583519/research+note+4.17.pdf https://static1.squarespace.com/static/5d580747908cdc0001e67...
OOPMan 5y ago
The difference between baseball cards and NFTs is that if I'm cold I can make a bonfire from baseball cards, whereas I certainly can't do the same with NFTs. At this point, of you say crypto is involved with some new fad it's just a clear indicator that silicon snake oil is the real product.
nonameiguess 5y ago
They're nothing at all like baseball cards. Very few baseball cards are worth anything at all, and the ones that are don't promise to be rare in some hypothetical future. They're cards that were created decades ago and are actually rare and can't possibly be recreated. If you have a rookie Willie Mays in mint condition, it took half a century for that to become valuable, as all but maybe one or two in the world disappeared and you have the only one left. Nobody mints a brand new baseball card right now, pinky swears it will remain the only of its kind forever, and then sells it for millions immediately.
jollybean 5y ago
NFT's are not like Baseball Cards, they are more like Pet Rocks. A Baseball Card has some underlying value and fun, kids get baseball cards. They cannot be diluted as 'reprints' would never be accepted as substitutes. If some people want to trade those things on the margins, fine. A 'number' i.e. digital signature is not a collectible. Digital signatures of any creative work are meaningless, nobody will derive satisfaction out of owning them and they'll probably just lose value over time. It's an obvious money grab populist grift that really doesn't create net value for anyone.
mannykannot 5y ago
If we are going to approach the issue through analogies, here's an alternative one: selling an NFT is like the old scam of selling a bill of goods (this is where the victim thinks he has bought a number of tangible things, but the contract actually says that all he has bought is the document listing the goods.) The big difference with NFTs, of course, is that the true nature of the transaction is not being disguised. That makes it legal and even ethical, but whether that is enough for you to be a buyer is up to you.
eli 5y ago
I personally don't think baseball cards are a good investment either
brightball 5y ago
The difference with baseball cards is that nobody ever had the option to just "buy the Barry Bonds card" out of the gate. The value came from the rarity of people all over buying random packs of cards, collecting them, trading them and the established rarity that came from that massive distribution coupled with holding the cards for a decade or more to see how one of these players career played out. On the off chance that you held onto a rare card of a legendary player, then congratulation...you have something of value. More so if you took good care of it. There's none of that with NFTs. It's akin to handing out flyers on the street and asking somebody to pay for them on the basis that..."Sir, that flyer belongs only to you now. Congratulations!" NFT's are just digital proof of an old adage. "A fool and his money are easily parted." - Thomas Tusser # I bought the rights to the quote from an NFT
ausbah 5y ago
I think your point on scarcity and attention are well put, but can't apply to NFTs in the way as physical commodities because I think there has to be some notion of originality intertwined. Like for art pieces, sure people can make copies and put the copies on a wall - but only I have the original to hang up my wall. There is value to most people between having a copy vs the actual thing. There is obviously a massive disconnect with this and NFTs because anyone can save a copy of a NFT (or the image a NFT represents) and not have its value diminished because all the "copies" of the NFT are the same - since "originally" doesn't apply to digital goods. It doesn't matter if there is some hash on a blockchain out there saying so-and-so "owns an image", I can still copy the image and get the same value. That is not the case with say having a copy of the Mona Lisa vs the actual Mona Lisa. NFTs are worthless to me for the above reason aside from the value that other people think they have.
baby 5y ago
This is the best explanation of what NFTs are. Everything you said is correct.

tdeck 5y ago

When you have a baseball card, the first sale doctrine means that you at least have the legal right to display and transfer that card. With NFTs, even that is not necessarily the case because displaying the content of the NFT is making a copy, and you may not have a license to do that.

highfrequency 5y ago
If you own an NFT, you have the ability to write someone else’s address on a socially recognized ledger of ownership. That is all that matters. If the NFT and the ledger have wide interest, this ability to transfer ownership has value regardless of any legal subtleties.
- chinathrow 5y ago
  > If you own an NFT, you have the ability to write someone else’s address on a socially recognized ledger of ownership If that "socially recognized ledger of ownership" ceases to exist, then what?
  - miracle2k 5y ago
    Either there remains interest and social consensus around this ledger, in which case it can be rebooted on a different network, for example, or even by a centralized party; or maybe you are the only one with an interest in your NFT collection, in which case you can keep a copy of the ledger yourself.
    - chinathrow 5y ago
      I'm not convinced. Art galleries are easy to launch, even in 500 years time. What you're describing is hard to do.
      - Tenoke 5y ago
        I can fork a centralized copy of a chain much more easily than I can start a gallery.
        chinathrow 5y ago
        Sure you can do that right now. But my point was more: physical objects can be traded easily in the far future. We can hardly rebuild stuff from source after 20years time, so I'm pretty sure you will not be able to revive long dead blockchains as easy as renting a space to trade physical objects of collectible value.
      - miracle2k 5y ago
        My point here was more akin to saying: Sure, if no one cares about your NFT, or the chain it is on, then yes, it's worthless. If you want to be the last one to care, keep a copy of the chain. The physical equivalent is a worthless painting that no one cares about and your grandchildren throw out.

ido 5y ago

If not for the energy costs NFTs would be just like you describe above - a somewhat pointless but harmless hobby for enthusiasts (what good does speculating on baseball cards do in the world? What good does speculating on art do for that matter? As far as I can tell "little to none" for both of these). Unfortunately that's not the case.

capableweb 5y ago
> If not for the energy costs NFTs NFTs themselves don't have any energy costs. Depending on what network you're using for buying/minting/trading NFTs, there might be energy cost associated with it, but not all NFTs are equal. NFTs based on Proof-of-Stake networks won't have the same energy cost as NFTs based on Proof-of-Work networks. Unfortunately, it seems that most NFTs are based on the Ethereum platform, which is currently Proof-of-Work. Fortunately, Ethereum is moving to Proof-of-Stake slowly but surely. But the point still stands, NFTs themselves have no energy costs, only the transactions on the network where they live have that.
ikt 5y ago
> If not for the energy costs Feel free to quote this and laugh at me but by this time next year I doubt this will be a topic The latest updates for anyone interested: https://blog.ethereum.org/2021/09/28/finalized-no-29/ https://blog.ethereum.org/2021/09/28/finalized-no-29/
- knorker 5y ago
  What will come first though, POS or fusion power dominating power generation? Every estimate so far has been wrong.
- iamevn 5y ago
  this has been "a few months away" or "later this year" for at least two years now
dtagames 5y ago
There's no energy cost to spawning a million algorithmic penguins. They have no inherent cost or value. The sunk costs of obtaining something rare or difficult to get (like titanium) is a factor only for the next person who desires titanium. Since there is no cost to see or copy a jpg, there is no "extra value" added in an NFT. Not even energy costs. The end product still has zero value. A simple corrolary is wine. Swill stored expensively doesn't acquire new use values from the storage. The expense of storage doesn't accumulate to the value of the NFT. Whereas the expense of obtaining real goods like metals is exactly what sets their value.

WA 5y ago

NFTs are not like baseball cards. NFTs are a JSON string on a proprietary entity that point to the image of a baseball card. The image can be viewed by everyone. The bragging rights of owning a JSON string depend heavily on whether or not the proprietary entity will become the dominant player in the I own a JSON string-world. This also has zero to do with blockchains. The proprietary entity could've used any database they wanted. It's all a ridiculous scam, but have fun trading JSON strings.

eoo 5y ago
An NFT is a virtual title of ownership on a blockchain, that's it. You don't own neither a string or an image or a JSON. https://eips.ethereum.org/EIPS/eip-721 https://eips.ethereum.org/EIPS/eip-721
- techdragon 5y ago
  It’s a very expensive, publicly broadcasted and “socially agreed upon” (by everyone who thinks they are worth money) version of calling “dibs”.
- imtringued 5y ago
  It's actually simpler than that. It's just an entry in a database with your name attached to it. It's like an autograph. Why do database entries have value? Well, usually because there are processes attached to them. Often it is as simple as having a court enforce the process. I don't know why but the whole cryptocurrency space feels like a philosophical parody of the real world. Money without people. Contracts without enforcement. Ownership without property.
  - ThomPete 5y ago
    thats too simple, its more than that given some people attach varying value to it.
  - tnzm 5y ago
    >I don't know why but the whole cryptocurrency space feels like a philosophical parody of the real world. Money without people. Contracts without enforcement. Ownership without property. The common denominator between these being: process without purpose. And this is why the parody works so well. The world is already like you describe, though it's hard to notice if you view it through the rose-tinted glasses that the ever-shrinking in-group is more than happy to sell to you for good "old" fiat money. (If 50 years ago is old.) Neoliberal "infinite growth" capitalism is already an inter-generational MLM, sanctioned by a global monopoly on violent enforcement. All power grows out of the barrel of a gun, and we have all become so delightfully non-violent... The logical conclusion: Oceania, Eurasia and Eastasia locked in perpetual war upon the background of a collapsed ecosystem? Well, fuck that. Techno-capitalistic nation-states are an early-stage performance optimization. And since violent uprisings lead nowhere, we're doing the sane thing. We're refactoring 'em the fuck out of existence. If "having a court enforce [a] process" is "simple", how come so many people already have "avoid courts", "distrust lawyers" as rules of thumb, and "don't side with authority" as a general life principle? For the marginalized majority, every state is a failed state, and every system is hostile and oppressive. The thing everyone's getting out of crypto is the same thing they've been getting out of all the other silly pyramid schemes, from Tupperware to contraband. Which is to say, the same things they've been aggressively denied by the state-sanctioned economic mainstream. Hope. Opportunity. A voice. A functioning parody of existing economical processes gives people the hope that there's a better economic system right around the corner. Maybe we just have to collectively sort of stumble into it. Of course, it's only that simple if you have a simplified view of human creativity. But that's OK, too. Every invention that truly revolutionized our way of life was a somewhat accidental result of thousands upon thousands person-hours of organized research. And that's exactly what we're doing here - about as haphazardly as virtually any other kind of software development, but at the same time crowdfunded on a global scale. Today, we're offering people the same sort of economic "junk food" that the current system has gotten them addicted to for the better part of the 20th century. Tomorrow, someone finally sneaks distributed consensus technology into the mainstream, and makes the world a little less corrupt. It's beautiful.

MontagFTB 5y ago

This is a great explanation. I’ve understood NFTs slightly differently, where they are akin to an _autographed_ baseball card. In that case, regardless of how many copies of that card exist in the world, you have a rendition of that card authorized by a special party (the autographer) that causes it to be unique. Where any number of digital copies of an asset may exist, the NFT is the “autograph” atop that asset that is unique and therefore adds the value. (It’s worth noting that anyone can autograph any baseball card. So it’s not the autograph that makes it valuable, but _who_ autographed it. It’s the same with who minted the NFT.)

asenna 5y ago
There's another aspect to this analogy - It's like an autographed baseball card + the person / entity autographing the card has declared (by code) that there won't be another one of these autographed series ever (eg - 10k CryptoPunks series).

PeterisP 5y ago

> People have been speculating on collectibles for thousands of years. Have they really? IMHO the whole concept of intentionally creating collectibles as a market started (and IMHO became possible) only after strict IP laws that could prevent anyone from making and distributing large quantities of items that should be rare by design. My favorite example is the fictional collectible card game Gwent in Witcher 3, where the whole concept of rare/scarce cards is ridiculous in the absence of a single organization being able to enforce a monopoly on issuing Gwent cards; the actual expected result should be like ordinary cards, where everyone gets an ace of spades in their deck or chess where both players get a queen, no questions asked; for human-created marketable collectibles (as opposed to actual collections of butterflies or the like) the scarcity can only happen if artificially enforced.

noiwillnot 5y ago
This is one of my main gripes with MtG. It just feel like a scam, a 90s loot boxes situation. I do not want to contribute to the business model, even if the product is solid. I will probably sell my collection and print some proxies.
- MintsJohn 5y ago
  Unlike NFTs there is at least a (physical) product. (And even in the digital version, you have a limited digital item in a verified/trusted (digital) environment, backed/supervised by an entity (company). In crypto you're backed by a concept (an algorithm)) To me this whole crypto stuff seems like a bigger and better incarnation of the tulip mania (https://en.m.wikipedia.org/wiki/Tulip_mania https://en.m.wikipedia.org/wiki/Tulip_mania), very little crypto stuff /coins are backed by anything of intrinsic value. In a way it's the ultimate decadence.
- OOPMan 5y ago
  MTG is kind the original lootbox, but I guess at least there is a reasonably good game behind it. I dumped my MTG in the early 2000s, these days I'll only buy into a card game using the LCG/ECG model. It's not necessarily cheaper but it is less scummy.

Deestan 5y ago

> There’s a lot of confusion here about why NFTs are valuable if the buyer doesn’t get to own the image copyright. Mostly because of two persistent lies around NFTs: 1) That you buy a piece of artwork. 2) Blockchain makes it automatically watertight. All you get is transfer rights of a single number via a blockchain, optionally (usually) with a URI pointing to some media. Now, why is owning blockchain transfer rights to that number valuable? Because an artist was involved in creating it, and they stated somewhere that the number refers to a specific artwork. Outside the blockchain, more things have to be trusted for this to hold up: - The artist in question must be the seller. Sure, you bought it from "banksy44" on nftgox.com, but is that the artist? There are soft ways to verify it, and you can get all sorts of receipts, promises, or statements from semi-official authorities. - Whatever links the number or the URI to the artwork must remain up. If it's on a regular URL, the host owner gets to decide when to delete it, or when to replace it an ad for their gambling site. If a IPFS resource goes dead, it's gone. If the number referring to the artwork is stored on a 3rd party ledger you rely on them being honest, online, and correct. AND NOW you have two weaker links in your trust chain, on the level of "humans trusting humans", rendering the blockchain basically useless. The premise is a lie, intentional or not.

miracle2k 5y ago
I will not disagree that there is confusion and bad arguments on both sides of the debate, which is why you are essentially arguing within the wrong framing. At the same time, people buying NFTs are generally quite a bit less confused about what you consider "lies" than you seem to think. Importantly, the blockchain is not useless because they have to exist within the universe's rules of impermanence. You may want to ponder the differences and shared properties between something like seditionart.com, MASS MoCA's ownership of Sol Le Witt wall paintings, and an NFT on a blockchain. Finally, let me point out that the URI issue is very much a misunderstanding that is widespread within the NFT community as well. It helps to think of the URI as a convenience feature rather than someone implying anything about the value of the token. There are fascinating experiments with tokens that have no url, tokens that have no visual representation, tokens with changing urls, or arbitrary urls; tokens that point to the same url. There are of course tokens that use data uris, and have the image-representation on-chain, or generate it dynamically; or they do so but not in URL form. There are technical implementations where the database of urls is separate from the ledger of tokens; there are early experiments by artists with blockchains (many years before anyone cared about NFTs) where there is no ability to store a URL in the first place. Cryptopunks, a really early project, simply stored a hash to a file containing the assembled images, and that is all that is needed.

Grustaf 5y ago

This is partly true, but you are missing one important aspect: While ownership can be enforced equally well with NFTs and baseball cards, the crucial difference is that with physical cards, owners have a unique way of experiencing the card. Anyone can look at an online reproduction of it, but only if you have a physical copy can you hold it in your hand. This is not the case for NFTs, anyone can experience the image in exactly the same way.

quickthrower2 5y ago

NFTs are more like paper products in general. Buying a typical NFT is like owning a single sheet from a standard ream of 500 A4 laser printer sheets.

lucumo 5y ago

Thank you. That made it click for me. I get it now. It's still weird to me, but it's weird in the same way other collectibles are weird to me. It's undeniable that they are valuable to others.

locallost 5y ago

There are various vague touching points of NFTs and real world collectables like baseball cards, but they are not the same. Artificial scarcity is one of them, e.g. there is no reason why there couldn't be a billion baseball cards of the most expensive kind (which would make them stop being the most expensive). Somebody else could create fake ones, but they would have little value for the fact that they are not genuine, which can be verified. You can make the very same arguments for an NFT, including that they are genuine based on who issued them. But a baseball card, or a Lego set have value on their own. Their collectable value stems from the fact that they are desired as such, and the scarcity makes the price of a certain type go up. Somebody might buy them just to show off or speculate, but another might be a huge Lego nerd and buy the rarest set just to feel joy by looking at it. But an NFT has no value beyond the scarcity. Nobody feels human joy by looking at an NFT beyond being able to show off that they are able to basically burn money in the "i am rich" app type of way. Thus it can only remain a toy for the rich. A van Gogh painting is most likely just a speculation and a show off object, but I might buy a painting from a local artist for $200 because I like it, and to put it on my wall so it makes me happy because it reminds of something nice. I will not buy a $200 NFT just to say I have one too.

356234236 5y ago
> e.g. there is no reason why there couldn't be a billion baseball cards of the most expensive kind (which would make them stop being the most expensive) This is a hilarious contradiction. You are saying there can be a billion baseball cards of the most expensive kind that are at the same time not the most expensive kind.
indigochill 5y ago
Yeah, I follow Peter Mohrbacher who's a surrealist fantasy artist. I've bought some physical prints from him (not even originals or anything, just normal art prints) because I like his art and wanted to have it on my wall and preferred to pay him for a proper print than print a digital copy myself. He also at some point made some NFT sales and I really tried to find a reason to get excited but just couldn't. I can understand why he was, though, because on his particular platform, artists get a cut of future resale of their art. So he sells a piece for $100, someone later sells it for $200, and he gets a 5% cut (made-up number, I don't remember what exactly it was) for an extra 10 bucks, and so on (but it's still always just a digital token, not a physical piece). But that doesn't require NFTs to happen. Since it was a proprietary platform, a plain old database could have done the exact same thing.

pmorici 5y ago

Baseball cards are exactly what they are and baseball cards were historically viewed as worthless until a craze in the 80’s that in turn caused over production and has made them a pretty poor investment. https://www.quora.com/Why-did-the-baseball-card-market-collapse https://www.quora.com/Why-did-the-baseball-card-market-colla...

chollida1 5y ago

The one thing that gets lots in the card analogy is that 99% of cards will get destroyed and the ones that are left will mostly get damaged. This increases scarcity in a way that just can't happen for NFT's, what would it mean for an NFT to get damaged corners?

hanklazard 5y ago
It’s thought that something like 20% of BTC are “lost” (1) (ie, private key is lost). This will certainly happen to NFTs as well since people will inevitably fail to back-up their wallets. 1. https://static1.squarespace.com/static/5d580747908cdc0001e6792d/t/5e98dde5558a587a09fac0cc/1587076583519/research+note+4.17.pdf https://static1.squarespace.com/static/5d580747908cdc0001e67...

OOPMan 5y ago

The difference between baseball cards and NFTs is that if I'm cold I can make a bonfire from baseball cards, whereas I certainly can't do the same with NFTs. At this point, of you say crypto is involved with some new fad it's just a clear indicator that silicon snake oil is the real product.

nonameiguess 5y ago

They're nothing at all like baseball cards. Very few baseball cards are worth anything at all, and the ones that are don't promise to be rare in some hypothetical future. They're cards that were created decades ago and are actually rare and can't possibly be recreated. If you have a rookie Willie Mays in mint condition, it took half a century for that to become valuable, as all but maybe one or two in the world disappeared and you have the only one left. Nobody mints a brand new baseball card right now, pinky swears it will remain the only of its kind forever, and then sells it for millions immediately.

jollybean 5y ago

NFT's are not like Baseball Cards, they are more like Pet Rocks. A Baseball Card has some underlying value and fun, kids get baseball cards. They cannot be diluted as 'reprints' would never be accepted as substitutes. If some people want to trade those things on the margins, fine. A 'number' i.e. digital signature is not a collectible. Digital signatures of any creative work are meaningless, nobody will derive satisfaction out of owning them and they'll probably just lose value over time. It's an obvious money grab populist grift that really doesn't create net value for anyone.

mannykannot 5y ago

If we are going to approach the issue through analogies, here's an alternative one: selling an NFT is like the old scam of selling a bill of goods (this is where the victim thinks he has bought a number of tangible things, but the contract actually says that all he has bought is the document listing the goods.) The big difference with NFTs, of course, is that the true nature of the transaction is not being disguised. That makes it legal and even ethical, but whether that is enough for you to be a buyer is up to you.

eli 5y ago

I personally don't think baseball cards are a good investment either

brightball 5y ago

The difference with baseball cards is that nobody ever had the option to just "buy the Barry Bonds card" out of the gate. The value came from the rarity of people all over buying random packs of cards, collecting them, trading them and the established rarity that came from that massive distribution coupled with holding the cards for a decade or more to see how one of these players career played out. On the off chance that you held onto a rare card of a legendary player, then congratulation...you have something of value. More so if you took good care of it. There's none of that with NFTs. It's akin to handing out flyers on the street and asking somebody to pay for them on the basis that..."Sir, that flyer belongs only to you now. Congratulations!" NFT's are just digital proof of an old adage. "A fool and his money are easily parted." - Thomas Tusser # I bought the rights to the quote from an NFT

ausbah 5y ago

I think your point on scarcity and attention are well put, but can't apply to NFTs in the way as physical commodities because I think there has to be some notion of originality intertwined. Like for art pieces, sure people can make copies and put the copies on a wall - but only I have the original to hang up my wall. There is value to most people between having a copy vs the actual thing. There is obviously a massive disconnect with this and NFTs because anyone can save a copy of a NFT (or the image a NFT represents) and not have its value diminished because all the "copies" of the NFT are the same - since "originally" doesn't apply to digital goods. It doesn't matter if there is some hash on a blockchain out there saying so-and-so "owns an image", I can still copy the image and get the same value. That is not the case with say having a copy of the Mona Lisa vs the actual Mona Lisa. NFTs are worthless to me for the above reason aside from the value that other people think they have.

baby 5y ago

This is the best explanation of what NFTs are. Everything you said is correct.