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I hate to admit it but I’m still struggling to understand why people would pay so much for NFTs. I feel like I fully understand what they are and why most peopl

I hate to admit it but I’m still struggling to understand why people would pay so much for NFTs. I feel like I fully understand what they are and why most people want me to believe it has value but I still don’t agree. I’m waiting for my mind to change but it hasn’t happened yet. It’s frustrating because so many people I respect are leaving their high paying jobs to work in web3 startups around NFTs and I feel dumb for not getting it.

LogonType10 5y ago
Money laundering.
- thenewewb 5y ago
  It’s not that simple.
sbierwagen 5y ago
The most plausible conspiracy theories I've heard is that the big sales ($1 million plus) are wash trades, ("sell" an object to a confederate for 500 ETH, then they transfer the money right back via another route) and some classic money laundering Now of course there's a mountain of clueless suckers kicking off a regular tulip mania-style bubble. I wonder how many more weeks it will last.
- arcticbull 5y ago
  Like this $500,000,000 flash loan backed wash trade of punk 9998. [1] [1] https://news.artnet.com/art-world/crypto-punk-500-million-sale-2028470 https://news.artnet.com/art-world/crypto-punk-500-million-sa...
  - throaway6942 5y ago
    that's not a wash trade.. it was just a publicity stunt. I know the guy who did it!
    - pama 5y ago
      I suspect that the guy who did it now owes the IRS a large commission in the form of taxes.
      - vmception 5y ago
        The tax remindooooooor haha that’s a meme in crypto space about being that guy
        arcticbull 5y ago
        So to be clear the community is encouraging criminality and attempting to brow-beat folks suggesting compliance with the law into accepting said criminality? Sounds healthy, and definitely not like a cult. It’s not a good look to be on the receiving end of government benefits and services, gloating about your lack of contribution and encouraging others not to. This may look good in crypto circles but here in the real world it makes you look pretty bad, not gonna lie. I've always wondered how those Bond villains accrued an army of employees on their remote militarized outposts helping them do crime, though I'm beginning to suspect they just slippery-sloped their way into it.
        vmception 5y ago
        So to be clear, no, that's not what the meme is about. Is your essay from GPT-3? It's about not offering anything to a discussion as they also don't even know about what tax is relevant. This person follows that rubric exactly, as they "suspect" a tax is involved, when a flash loan wash sale would just as easily not cause any tax at all and they offer no introspection into the nature of the transaction and what questions remain about how it conforms with the tax code. A person borrows money to pretend to transfer an asset to themselves and returns the money. Neither borrowing money or moving the asset to your other account are tax events. The tax remindoooooooor comes to the discussion way after the party, clueless, and says something clueless. Its predictable, its meme worthy. Pretty much everyone in crypto runs into people like them so the memes are made.
- Bombthecat 5y ago
  Or: kids who started early with crypto with no idea of wealth and worth of a coin. When you habe thousands of coins. Giving out one isnt that expensive..
  - Ekaros 5y ago
    I think for some of them it is just next step in the crypto investment/gambling. The current hotness in making money by flipping tokens after ICOs... With all of the usual FOMO and so on...
- nuerow 5y ago
  > The most plausible conspiracy theories I've heard is that the big sales ($1 million plus) are wash trades, ("sell" an object to a confederate for 500 ETH, then they transfer the money right back via another route) and some classic money laundering I'm not sure if the link between NFTs and money laundering can be downplayed as conspiracy theory. Even yesterday Reuters published a newspiece on NFTs being auctioned by the likes of Sotheby's, and where crypto-rich buyers pay NFT auctions with crypto, where a cryptocurrency lawyer was quoted as pointing out money laundering via cryptocurrencies was a "known fact." https://www.reuters.com/business/finance/new-masters-how-auction-houses-are-chasing-crypto-millions-2021-11-08/ https://www.reuters.com/business/finance/new-masters-how-auc... Using NFT transactions to launder money isn't exactly a novel idea as the art world is dominated and driven by money laundering schemes. In fact, in Mexico the art market tanked 70% once the Mexican government passed legislation requiring more info from buyers, because it's believed Mexican cartel rings were behind these transactions. https://www.artandobject.com/news/how-money-laundering-works-art-world https://www.artandobject.com/news/how-money-laundering-works...
  - soco 5y ago
    Well regular art sales are currently considered as potential wash sales, so why would be something even more cryptic (haha) considered even less.
    - vmception 5y ago
      The people that make separate higher standards for crypto are ignorant about how the thing they respect works too.
      - nuerow 5y ago
        > The people that make separate higher standards for crypto are ignorant about how the thing they respect works too. Not really, it's actually the other way around. Whataboutism aside, crypto proponents somehow try to maintain a cognitive dissonance of how crypto is designed to be unregulated and out of government's reach and at the same time show a kneejerk reaction to any comment on how crypto is used to perform transactions not allowed by regulation controlled by governments such as securities fraud and money laundering.
- deleted 5y ago
  [deleted]
- greenhatman 5y ago
  I'd be money on this actually being the case. This whole NFT craze is pure insanity.
- iszomer 5y ago
  And the kicker is, the record of your "wash trades" is now stored on an immutable blockchain, a stark contrast to actual paper trails.
can16358p 5y ago
Hype. Hoping it will become even more popular to sell it for even higher.
- thenewewb 5y ago
  Do you have any evidence to back this up? This isn’t a useful comment.
cloogshicer 5y ago
The analogy that helped me understand it (even though I would still not buy one myself and think the hype is way over the top): Think of a booth at Comic Con, where an artist hands out signed copies of their comic books. The comic book itself is nothing special, but the signature is. But there is a problem: if you ever want to sell the signed comic book, how do you prove it's a real signature? NFTs solve that problem.
- omgbear 5y ago
  How does it solve the problem? You still have to trust the physical object I hand over is the real signed copy.
  - cloogshicer 5y ago
    Sorry, I meant it solves the problem in digital space. But even in offline space, the artist or seller could transfer an NFT to your account. You could then verify its authenticity (or even before the transfer).
    - robertlagrant 5y ago
      It doesn't solve it. What if what's at the other end of the URL the NFT points to changes or vanishes?
      - yokem55 5y ago
        Higher end nft's store the images on arweave or filecoin for decentralized persistent storage.
        robertlagrant 5y ago
        Let's hope those services stick around, then?
    - captn3m0 5y ago
      In the digital space, we have signed PDFs. So a comic book artist could easily generate 100 numbered PDFs, and sign them each. Anyone could verify it's authenticity using even Adobe Acrobat Reader, which has had this functionality for decades.
mrtksn 5y ago
Like any other coins, it's simply a note useful to figure out who owns what within the framework of the community. NFT's connection to art is just a way to put a face on new coins. Instead of creating a sum of a coin brand and trade those(HN coin with total of 100K coins), you create a new coin brand each time(The most upvoted post, the post that made something famous etc.) and trade those with each other. It looks like a solution to the problem of early adopters having all the wealth. BTC up %10 or even %100 doesn't mean much, the crypto wealth was created by investments having %1,000,000 returns. Memecoins, NFT etc. serve the purpose of being able to bet like it's the early days of the BTC. The misconception of "selling JPG's for millions" appears to be as a result of thinking with the pre-blockchain mental models. I know a few people trading and chasing NFT's and none of them are into the art part, they are into the trade part and they are trying to buy NFTs that they expect to sell for a better price later. Their criteria for buying NFTs revolve around things like size of the community interested in it, promoters having the blue badge on Twitter, the age group etc.
- MaxBarraclough 5y ago
  > it's simply a note useful to figure out who owns what within the framework of the community Owning an NFT does not mean you own the underlying asset.
  - mrtksn 5y ago
    Define owning. Depending on your definition, it may mean or may not mean owning. In the NFT circles, the record on the chain indicating that you own something means you own something because ownership transfer will happen within the exact same framework. NFT is not a media to purchase rights of an artwork to print it t-shirts or something like that. These things happen within the legal framework of a jurisdiction that has legislated stuff like copyright. Blockchain is not a jurisdiction, it's simply a list record and those records are valid for those accepting the blockchain as the authoritative record.
    - meheleventyone 5y ago
      If you have to have some odd local definition of ownership you’ve already lost and know it! Compare it to physical art. If you buy physical art you take control of the object and can do what you like with it including keeping it locked up in a customs warehouse. If you buy a token you own the token not anything it points to. You can do what you like with the token but not what it points to. You own a link.
iamwil 5y ago
It's best to think of NFTs as deeds to the art (or certificate of authenticity), rather than the art itself. I wrote this a little while back, and it might help you. https://interjectedfuture.com/nfts-unbundle-ownership-from-enjoyment/ https://interjectedfuture.com/nfts-unbundle-ownership-from-e... If NFTs as deed to art isn't convincing for you, check out ENS. https://ens.domains/ https://ens.domains/ It's a name registrar that's a smart contract. Each ENS domain name is an NFT.
- sanmon3186 5y ago
  May be a dumb question but how can we certify that the same asset doesn’t exist as two or more NFTs on different block chains. There are tons of them and each can have its own monalisa.
  - meheleventyone 5y ago
    You can’t even stop copies on the same chain AFAIK. It’s decentralised after all.
    - a_f 5y ago
      I wonder if you could somehow flood the site with copies of the high value NFT images to drop the value?
      - meheleventyone 5y ago
        The markets right now are centralized platforms so you'll probably just get banned instead.
  - SideburnsOfDoom 5y ago
    > how can we certify that the same asset doesn’t exist as two or more NFTs on different block chains You can't. But surely some wise guy is pitching a blockchain for that right now. It's actually worse, the same certificate could exist on multiple blockchains, and none of them guarantee approval by the original artist; all could be legally void certificates of nothing.
samuli 5y ago
I think it is a combination of The Greater Fool Theory and fear of missing out. If you missed out on Bitcoin, now is your chance to ride the next wave.
sva_ 5y ago
I think it's mostly speculative - the expectation that you can sell for a higher price (which often turns out to be true.)
MaxBarraclough 5y ago
This topic turned up a week ago. [0] Personally I like the analogy to baseball cards. From [0]: > Owning an NFT generally doesn't grant you copyrights over the underlying work of art. Owning a baseball card doesn't mean the athlete now works for you. They can both still have value as collectible items, if that's something that interests you. [0] https://news.ycombinator.com/item?id=29050802 https://news.ycombinator.com/item?id=29050802
- tempestn 5y ago
  However with a baseball card you do own the card. With an NFT you don't even own the digital item, nor is it intrinsically associated with a blockchain entry that you can prove ownership of. You basically own a link to a url which for some period of time will hopefully point at the jpg (or whatever it is).
  - jobigoud 5y ago
    With the baseball card you own a particular print of an image. Doesn't grant you any rights over the original image, there are many other copies of it, the image can be reproduced at will by anyone, etc. It's not that different. The card might be signed by the athlete, in wich case it gains value, but that signature might be a forgery, etc. Collectible NFTs is like owning just the autograph bit.
    - tempestn 5y ago
      K, taking this analogy further, I guess if you imagine a card with no real value except for the player's signature... except instead of signing the card, the player signs a scrap of paper that you then tape to the card.
cloudking 5y ago
Think about collectables in the real world, and imagine how they could possibly work in the digital world. For example, people collect trading cards for various sports, and there is 1 owner per card who can trade/sell the card to others. How would you facilitate this idea in the digital world? Well you can't use a regular database, because it's easy for it to be hacked/shutdown, and if it's run by a third-party then even if you have entry in that database you don't technically "own" it. Turns out blockchains are a good solution for facilitating the idea of digital ownership, it can't be easily hacked/shutdown, it's run by the community, and if you own the keys to the NFT token that represents your ownership, technically you own that "database entry". You can easily sell/trade your NFT to others via smart contracts, transferring the ownership of the collectable/object they represent. The market has decided that NFTs are a good way to represent digital ownership based on the technical solution. Want to see a successful example of the trading card world gone digital with NFTs? https://nbatopshot.com/ https://nbatopshot.com/
- mrow84 5y ago
  I’ve unfortunately forgotten who it was I saw making this argument, but: why would you want that? We, as a society, finally figured out how to eliminate scarcity of (most forms of) media. New works are being produced at unprecedented rates. What is the social value of reimposing scarcity, beyond an appeal to our (possibly culturally instilled) desire for exclusive possession?
- encryptluks2 5y ago
  Except, in many cases the value isn't derived from simply owning something when it is still publicly accessible and can be copied and reupload with many people claiming original ownership. Imagine Hollywood movies in the NFT space where anyone can access them for free and share then for Profit. , or the platform where they are hosted might shutdown. And while you might in some legal sense still have rights to something you'd no longer have access to something the courts haven't really got the involved yet so there is very little case law. It would be like going to judge and saying you own something, and someone else says but they share it for free on the Internet. It would be like movie studios bootlegging their own content
- 5y ago
DanHulton 5y ago
Trust your instincts on this one. I bet you the people who couldn't figure out WTF was up with tulip bulbs felt much the same way.
e9 5y ago
I think a lot of it is to just support artists. A kind of charity from universe for artist to continue doing what they are doing. People who are making big money on NFT are already established artists. With physical art, artist sells it once and has no idea where it is. With NFTs, artists can set up royalties for every sale. With block chain, if you can verify address of artist then as a buyer you can guarantee that you are buying original work and also ensures that all (or some during resale) money goes to artist.
- nuerow 5y ago
  > I think a lot of it is to just support artists. To me that assertion, albeit convenient to paint a rosy picture, doesn't make any sense. No one needs a convoluted technical scheme to support artists as donating cash is easy and effortless. Buying the rights to a work from an artist also does not require a convoluted technical scheme, and considering that NFTs haven't been used to enforce any right then that hypothesis is also highly dubious. What NFTs offer is the ability to perform transactions, and ones which don't have any artist or provenance in consideration.
  - e9 5y ago
    Universe rewards creativity
    - nuerow 5y ago
      > Universe rewards creativity What? That means nothing at all.
      - thephyber 5y ago
        I read it as the spiritual idea that the universe is active in things like karma / prosperity gospel. I don't agree with it and I suspect this type of thinking captures lots of fools, but I would grant that it does "mean something".
        5y ago
ayngg 5y ago
I think you have to look at art and collecting art in general to get an idea of what is happening. When rich people spend big money on art, it is less about having a nice painting and more about things like flexing wealth, tax avoidance, being part of the provenance or whatever. People think that the most expensive painting ever sold, Salvator Mundi, which sold for ~450m, is sitting in storage somewhere in Switzerland. You also have to consider that for these people, it isn't actually a lot of money for them. They are the foundation for the mania that dogpiles on top. These early NFTs are going to be like the early works of an art movement, and the iconic ones are probably going to be valuable to some degree just because of their place in art history. The art world has probably been waiting for the next kind of innovative movement to come along too. It is sort of a self fulfilling prophecy in that the ones that are bought for absurd amounts of money create the buzz that solidifies them as iconic pieces of the movement. Most will probably end up being worthless. Art NFTs are like a tiny proof of concept of the idea of NFTs having value. The space, like crypto, is like a sandbox of primitives and people are just figuring things out, throwing everything at the wall and seeing what sticks. That creative environment is probably alluring to people in boring dev jobs who have the financial flexibility to explore. I think it just looks stupid to many because it is basically a completely chaotic wild west where basically nobody knows what is actually going on in terms of a big picture, and so much dumb stuff happens which the media loves talking about for clickbait so that is what everyone sees and uses to form their opinion of it.
rvz 5y ago
You don't hear about the bagholders stuck with their expensive receipts of their CryptoKitties being unsold for years, nor do you hear about the thousands of dollars of gas fees spend on approving and buying these NFTs. A lot of manipulation happens in the NFT markets which creates the illusion of a marketplace that has 'value' in NFTs that are downloadable. It is either for money laundering purposes, artificially creating volume in a NFT collection or both. There is a tiny subset of NFTs that have value and utility, but the ones that are downloadable or are audio, videos or image-based ones do not have any value, hence the NFT misconception post.
- thephyber 5y ago
  The definition of value here is what someone is willing to pay for it. If no one is willing to pay much for a CryptoKitty now that was worth a lot in Dec 2017, that means the value has changed because the market has changed. The parent says that they don't see the value in current NFTs. I tend to agree that I don't agree with their current values. But I also don't agree with the proven value (at public auctions) of baseball cards, original NES game cartridges, the vast majority of sports/concert memorabilia, most fine art, etc. But then again, value varies from person to person because we all make priority and value decisions about what we are willing to spend our scarce currency on. Some people are able to make vastly different choices about their NFT purchases because they have vastly different wealth than I do. Also, CryptoKitties are an interesting choice because they total number of kitties grows as owners breed theirs. The number of CryptoKitties has grown a lot since Dec 2017. Most NFTs I have heard about have a limited run.
koonsolo 5y ago
This is how I understand it: Baseball cards sell for millions of dollars. Do those cards provide ownership to anything or anyone? No. Are they signed by the original players? No. Do they give you any other benefit? No. It's just collector items that refers to something, and there is a limited amount of them. But that's basically it. Now you could argue that you can hold a card in your hand, and an NFT not. But that is not where that crazy value is coming from. I'm not claiming that NFT's value is justified, I have no idea about that. But to me it seems like a "collectors" thing. Because let's be serious, nobody in their right mind would pay millions of dollars for a freaking card with some baseball player at the front. Same goes for NFT's.
- yokoprime 5y ago
  With an NFT you own a token with a link to a resource, but the perception is that you own an actual artwork. Think is, the artwork (e.g. a jpg) can be copied an infinite amount of times. So the baseball card analogy falls short, at least as far as the posession of an actual item.
  - koonsolo 5y ago
    The baseball card also doesn't give you ownership of the baseball player, or over the photograph or stats of that player. You can copy the photograph and stats as much as you want (the player not so much ;)), but the card still stays the card. So conceptually: the NFT doesn't refer to the baseball card, it is the baseball card. Baseball card refers to something real, but doesn't take ownership of that thing. NFT refers to something real, but doesn't take ownership of that thing.
    - newswasboring 5y ago
      I think I might be close to getting it. But with a baseball card, I control the baseball card. Right? With the NFT, I have no control over the resource linked to from the NFT. If that server goes away, doesn't the thing that provided NFTs its value also go away? Its like if someone scratched off the photo from my baseball card, doesn't that baseball card become valueless at that point?
greenhatman 5y ago
I don't think you're actually missing anything. I think those people are just insane.
feketegy 5y ago
NFTs are not about the asset itself. 1. Ownership of the "original" - why do you pay so much for an original painting when you can buy cheap/free knockoffs? 2. Flexing - look at me I bought an expensive NFT, look at me I own this and this NFT (just like sports cards, pokemon cards, etc.) 3. Money laundering - cleaning dirty money through NFTs. 4. Legit investment / value store - if NFTs picks up more and more (see Reddit, Twitter implementing NFTs), it's a legitimate investment strategy, just like BTC or ETH 5. Hype and FOMO - why do people buy Supreme branded products? Why are lines at Apple stores when a new iPhone is released?
vmception 5y ago
The NFT collectibles are where the action is. These are more akin to trading cards than expensive one-off art in a gallery that may have made headlines earlier this year. Imagine that its the same trading card pools of capital that would have bought collections at MSRP, what would the seller’s annual revenue be? There had been no transparency in that. Instead, imagine if the seller only did a single set and everyone could verify that was the only one, the same amount of capital is squeezed i to that one set, which would push the price up. The issuer here makes more money from royalties when people trade pieces of the collection, instead of needing to continually issue that collection.
TomSwirly 5y ago
> I hate to admit it but I’m still struggling to understand why people would pay so much for NFTs. Why would someone pay _anything_ for an NFT? You only get ownership over the NFT itself, not the artwork. Someone else could create another NFT from the same artwork or the original artist could.

LogonType10 5y ago

Money laundering.

thenewewb 5y ago
It’s not that simple.

sbierwagen 5y ago

The most plausible conspiracy theories I've heard is that the big sales ($1 million plus) are wash trades, ("sell" an object to a confederate for 500 ETH, then they transfer the money right back via another route) and some classic money laundering Now of course there's a mountain of clueless suckers kicking off a regular tulip mania-style bubble. I wonder how many more weeks it will last.

arcticbull 5y ago
Like this $500,000,000 flash loan backed wash trade of punk 9998. [1] [1] https://news.artnet.com/art-world/crypto-punk-500-million-sale-2028470 https://news.artnet.com/art-world/crypto-punk-500-million-sa...
- throaway6942 5y ago
  that's not a wash trade.. it was just a publicity stunt. I know the guy who did it!
  - pama 5y ago
    I suspect that the guy who did it now owes the IRS a large commission in the form of taxes.
    - vmception 5y ago
      The tax remindooooooor haha that’s a meme in crypto space about being that guy
      - arcticbull 5y ago
        So to be clear the community is encouraging criminality and attempting to brow-beat folks suggesting compliance with the law into accepting said criminality? Sounds healthy, and definitely not like a cult. It’s not a good look to be on the receiving end of government benefits and services, gloating about your lack of contribution and encouraging others not to. This may look good in crypto circles but here in the real world it makes you look pretty bad, not gonna lie. I've always wondered how those Bond villains accrued an army of employees on their remote militarized outposts helping them do crime, though I'm beginning to suspect they just slippery-sloped their way into it.
        vmception 5y ago
        So to be clear, no, that's not what the meme is about. Is your essay from GPT-3? It's about not offering anything to a discussion as they also don't even know about what tax is relevant. This person follows that rubric exactly, as they "suspect" a tax is involved, when a flash loan wash sale would just as easily not cause any tax at all and they offer no introspection into the nature of the transaction and what questions remain about how it conforms with the tax code. A person borrows money to pretend to transfer an asset to themselves and returns the money. Neither borrowing money or moving the asset to your other account are tax events. The tax remindoooooooor comes to the discussion way after the party, clueless, and says something clueless. Its predictable, its meme worthy. Pretty much everyone in crypto runs into people like them so the memes are made.
Bombthecat 5y ago
Or: kids who started early with crypto with no idea of wealth and worth of a coin. When you habe thousands of coins. Giving out one isnt that expensive..
- Ekaros 5y ago
  I think for some of them it is just next step in the crypto investment/gambling. The current hotness in making money by flipping tokens after ICOs... With all of the usual FOMO and so on...
nuerow 5y ago
> The most plausible conspiracy theories I've heard is that the big sales ($1 million plus) are wash trades, ("sell" an object to a confederate for 500 ETH, then they transfer the money right back via another route) and some classic money laundering I'm not sure if the link between NFTs and money laundering can be downplayed as conspiracy theory. Even yesterday Reuters published a newspiece on NFTs being auctioned by the likes of Sotheby's, and where crypto-rich buyers pay NFT auctions with crypto, where a cryptocurrency lawyer was quoted as pointing out money laundering via cryptocurrencies was a "known fact." https://www.reuters.com/business/finance/new-masters-how-auction-houses-are-chasing-crypto-millions-2021-11-08/ https://www.reuters.com/business/finance/new-masters-how-auc... Using NFT transactions to launder money isn't exactly a novel idea as the art world is dominated and driven by money laundering schemes. In fact, in Mexico the art market tanked 70% once the Mexican government passed legislation requiring more info from buyers, because it's believed Mexican cartel rings were behind these transactions. https://www.artandobject.com/news/how-money-laundering-works-art-world https://www.artandobject.com/news/how-money-laundering-works...
- soco 5y ago
  Well regular art sales are currently considered as potential wash sales, so why would be something even more cryptic (haha) considered even less.
  - vmception 5y ago
    The people that make separate higher standards for crypto are ignorant about how the thing they respect works too.
    - nuerow 5y ago
      > The people that make separate higher standards for crypto are ignorant about how the thing they respect works too. Not really, it's actually the other way around. Whataboutism aside, crypto proponents somehow try to maintain a cognitive dissonance of how crypto is designed to be unregulated and out of government's reach and at the same time show a kneejerk reaction to any comment on how crypto is used to perform transactions not allowed by regulation controlled by governments such as securities fraud and money laundering.
deleted 5y ago
[deleted]
greenhatman 5y ago
I'd be money on this actually being the case. This whole NFT craze is pure insanity.
iszomer 5y ago
And the kicker is, the record of your "wash trades" is now stored on an immutable blockchain, a stark contrast to actual paper trails.

can16358p 5y ago

Hype. Hoping it will become even more popular to sell it for even higher.

thenewewb 5y ago
Do you have any evidence to back this up? This isn’t a useful comment.

cloogshicer 5y ago

The analogy that helped me understand it (even though I would still not buy one myself and think the hype is way over the top): Think of a booth at Comic Con, where an artist hands out signed copies of their comic books. The comic book itself is nothing special, but the signature is. But there is a problem: if you ever want to sell the signed comic book, how do you prove it's a real signature? NFTs solve that problem.

omgbear 5y ago
How does it solve the problem? You still have to trust the physical object I hand over is the real signed copy.
- cloogshicer 5y ago
  Sorry, I meant it solves the problem in digital space. But even in offline space, the artist or seller could transfer an NFT to your account. You could then verify its authenticity (or even before the transfer).
  - robertlagrant 5y ago
    It doesn't solve it. What if what's at the other end of the URL the NFT points to changes or vanishes?
    - yokem55 5y ago
      Higher end nft's store the images on arweave or filecoin for decentralized persistent storage.
      - robertlagrant 5y ago
        Let's hope those services stick around, then?
  - captn3m0 5y ago
    In the digital space, we have signed PDFs. So a comic book artist could easily generate 100 numbered PDFs, and sign them each. Anyone could verify it's authenticity using even Adobe Acrobat Reader, which has had this functionality for decades.

mrtksn 5y ago

Like any other coins, it's simply a note useful to figure out who owns what within the framework of the community. NFT's connection to art is just a way to put a face on new coins. Instead of creating a sum of a coin brand and trade those(HN coin with total of 100K coins), you create a new coin brand each time(The most upvoted post, the post that made something famous etc.) and trade those with each other. It looks like a solution to the problem of early adopters having all the wealth. BTC up %10 or even %100 doesn't mean much, the crypto wealth was created by investments having %1,000,000 returns. Memecoins, NFT etc. serve the purpose of being able to bet like it's the early days of the BTC. The misconception of "selling JPG's for millions" appears to be as a result of thinking with the pre-blockchain mental models. I know a few people trading and chasing NFT's and none of them are into the art part, they are into the trade part and they are trying to buy NFTs that they expect to sell for a better price later. Their criteria for buying NFTs revolve around things like size of the community interested in it, promoters having the blue badge on Twitter, the age group etc.

MaxBarraclough 5y ago
> it's simply a note useful to figure out who owns what within the framework of the community Owning an NFT does not mean you own the underlying asset.
- mrtksn 5y ago
  Define owning. Depending on your definition, it may mean or may not mean owning. In the NFT circles, the record on the chain indicating that you own something means you own something because ownership transfer will happen within the exact same framework. NFT is not a media to purchase rights of an artwork to print it t-shirts or something like that. These things happen within the legal framework of a jurisdiction that has legislated stuff like copyright. Blockchain is not a jurisdiction, it's simply a list record and those records are valid for those accepting the blockchain as the authoritative record.
  - meheleventyone 5y ago
    If you have to have some odd local definition of ownership you’ve already lost and know it! Compare it to physical art. If you buy physical art you take control of the object and can do what you like with it including keeping it locked up in a customs warehouse. If you buy a token you own the token not anything it points to. You can do what you like with the token but not what it points to. You own a link.

iamwil 5y ago

It's best to think of NFTs as deeds to the art (or certificate of authenticity), rather than the art itself. I wrote this a little while back, and it might help you. https://interjectedfuture.com/nfts-unbundle-ownership-from-enjoyment/ https://interjectedfuture.com/nfts-unbundle-ownership-from-e... If NFTs as deed to art isn't convincing for you, check out ENS. https://ens.domains/ https://ens.domains/ It's a name registrar that's a smart contract. Each ENS domain name is an NFT.

sanmon3186 5y ago
May be a dumb question but how can we certify that the same asset doesn’t exist as two or more NFTs on different block chains. There are tons of them and each can have its own monalisa.
- meheleventyone 5y ago
  You can’t even stop copies on the same chain AFAIK. It’s decentralised after all.
  - a_f 5y ago
    I wonder if you could somehow flood the site with copies of the high value NFT images to drop the value?
    - meheleventyone 5y ago
      The markets right now are centralized platforms so you'll probably just get banned instead.
- SideburnsOfDoom 5y ago
  > how can we certify that the same asset doesn’t exist as two or more NFTs on different block chains You can't. But surely some wise guy is pitching a blockchain for that right now. It's actually worse, the same certificate could exist on multiple blockchains, and none of them guarantee approval by the original artist; all could be legally void certificates of nothing.

samuli 5y ago

I think it is a combination of The Greater Fool Theory and fear of missing out. If you missed out on Bitcoin, now is your chance to ride the next wave.

sva_ 5y ago

I think it's mostly speculative - the expectation that you can sell for a higher price (which often turns out to be true.)

MaxBarraclough 5y ago

This topic turned up a week ago. [0] Personally I like the analogy to baseball cards. From [0]: > Owning an NFT generally doesn't grant you copyrights over the underlying work of art. Owning a baseball card doesn't mean the athlete now works for you. They can both still have value as collectible items, if that's something that interests you. [0] https://news.ycombinator.com/item?id=29050802 https://news.ycombinator.com/item?id=29050802

tempestn 5y ago
However with a baseball card you do own the card. With an NFT you don't even own the digital item, nor is it intrinsically associated with a blockchain entry that you can prove ownership of. You basically own a link to a url which for some period of time will hopefully point at the jpg (or whatever it is).
- jobigoud 5y ago
  With the baseball card you own a particular print of an image. Doesn't grant you any rights over the original image, there are many other copies of it, the image can be reproduced at will by anyone, etc. It's not that different. The card might be signed by the athlete, in wich case it gains value, but that signature might be a forgery, etc. Collectible NFTs is like owning just the autograph bit.
  - tempestn 5y ago
    K, taking this analogy further, I guess if you imagine a card with no real value except for the player's signature... except instead of signing the card, the player signs a scrap of paper that you then tape to the card.

cloudking 5y ago

Think about collectables in the real world, and imagine how they could possibly work in the digital world. For example, people collect trading cards for various sports, and there is 1 owner per card who can trade/sell the card to others. How would you facilitate this idea in the digital world? Well you can't use a regular database, because it's easy for it to be hacked/shutdown, and if it's run by a third-party then even if you have entry in that database you don't technically "own" it. Turns out blockchains are a good solution for facilitating the idea of digital ownership, it can't be easily hacked/shutdown, it's run by the community, and if you own the keys to the NFT token that represents your ownership, technically you own that "database entry". You can easily sell/trade your NFT to others via smart contracts, transferring the ownership of the collectable/object they represent. The market has decided that NFTs are a good way to represent digital ownership based on the technical solution. Want to see a successful example of the trading card world gone digital with NFTs? https://nbatopshot.com/ https://nbatopshot.com/

mrow84 5y ago
I’ve unfortunately forgotten who it was I saw making this argument, but: why would you want that? We, as a society, finally figured out how to eliminate scarcity of (most forms of) media. New works are being produced at unprecedented rates. What is the social value of reimposing scarcity, beyond an appeal to our (possibly culturally instilled) desire for exclusive possession?
encryptluks2 5y ago
Except, in many cases the value isn't derived from simply owning something when it is still publicly accessible and can be copied and reupload with many people claiming original ownership. Imagine Hollywood movies in the NFT space where anyone can access them for free and share then for Profit. , or the platform where they are hosted might shutdown. And while you might in some legal sense still have rights to something you'd no longer have access to something the courts haven't really got the involved yet so there is very little case law. It would be like going to judge and saying you own something, and someone else says but they share it for free on the Internet. It would be like movie studios bootlegging their own content
5y ago

DanHulton 5y ago

Trust your instincts on this one. I bet you the people who couldn't figure out WTF was up with tulip bulbs felt much the same way.

e9 5y ago

I think a lot of it is to just support artists. A kind of charity from universe for artist to continue doing what they are doing. People who are making big money on NFT are already established artists. With physical art, artist sells it once and has no idea where it is. With NFTs, artists can set up royalties for every sale. With block chain, if you can verify address of artist then as a buyer you can guarantee that you are buying original work and also ensures that all (or some during resale) money goes to artist.

nuerow 5y ago
> I think a lot of it is to just support artists. To me that assertion, albeit convenient to paint a rosy picture, doesn't make any sense. No one needs a convoluted technical scheme to support artists as donating cash is easy and effortless. Buying the rights to a work from an artist also does not require a convoluted technical scheme, and considering that NFTs haven't been used to enforce any right then that hypothesis is also highly dubious. What NFTs offer is the ability to perform transactions, and ones which don't have any artist or provenance in consideration.
- e9 5y ago
  Universe rewards creativity
  - nuerow 5y ago
    > Universe rewards creativity What? That means nothing at all.
    - thephyber 5y ago
      I read it as the spiritual idea that the universe is active in things like karma / prosperity gospel. I don't agree with it and I suspect this type of thinking captures lots of fools, but I would grant that it does "mean something".
      - 5y ago

ayngg 5y ago

I think you have to look at art and collecting art in general to get an idea of what is happening. When rich people spend big money on art, it is less about having a nice painting and more about things like flexing wealth, tax avoidance, being part of the provenance or whatever. People think that the most expensive painting ever sold, Salvator Mundi, which sold for ~450m, is sitting in storage somewhere in Switzerland. You also have to consider that for these people, it isn't actually a lot of money for them. They are the foundation for the mania that dogpiles on top. These early NFTs are going to be like the early works of an art movement, and the iconic ones are probably going to be valuable to some degree just because of their place in art history. The art world has probably been waiting for the next kind of innovative movement to come along too. It is sort of a self fulfilling prophecy in that the ones that are bought for absurd amounts of money create the buzz that solidifies them as iconic pieces of the movement. Most will probably end up being worthless. Art NFTs are like a tiny proof of concept of the idea of NFTs having value. The space, like crypto, is like a sandbox of primitives and people are just figuring things out, throwing everything at the wall and seeing what sticks. That creative environment is probably alluring to people in boring dev jobs who have the financial flexibility to explore. I think it just looks stupid to many because it is basically a completely chaotic wild west where basically nobody knows what is actually going on in terms of a big picture, and so much dumb stuff happens which the media loves talking about for clickbait so that is what everyone sees and uses to form their opinion of it.

rvz 5y ago

You don't hear about the bagholders stuck with their expensive receipts of their CryptoKitties being unsold for years, nor do you hear about the thousands of dollars of gas fees spend on approving and buying these NFTs. A lot of manipulation happens in the NFT markets which creates the illusion of a marketplace that has 'value' in NFTs that are downloadable. It is either for money laundering purposes, artificially creating volume in a NFT collection or both. There is a tiny subset of NFTs that have value and utility, but the ones that are downloadable or are audio, videos or image-based ones do not have any value, hence the NFT misconception post.

thephyber 5y ago
The definition of value here is what someone is willing to pay for it. If no one is willing to pay much for a CryptoKitty now that was worth a lot in Dec 2017, that means the value has changed because the market has changed. The parent says that they don't see the value in current NFTs. I tend to agree that I don't agree with their current values. But I also don't agree with the proven value (at public auctions) of baseball cards, original NES game cartridges, the vast majority of sports/concert memorabilia, most fine art, etc. But then again, value varies from person to person because we all make priority and value decisions about what we are willing to spend our scarce currency on. Some people are able to make vastly different choices about their NFT purchases because they have vastly different wealth than I do. Also, CryptoKitties are an interesting choice because they total number of kitties grows as owners breed theirs. The number of CryptoKitties has grown a lot since Dec 2017. Most NFTs I have heard about have a limited run.

koonsolo 5y ago

This is how I understand it: Baseball cards sell for millions of dollars. Do those cards provide ownership to anything or anyone? No. Are they signed by the original players? No. Do they give you any other benefit? No. It's just collector items that refers to something, and there is a limited amount of them. But that's basically it. Now you could argue that you can hold a card in your hand, and an NFT not. But that is not where that crazy value is coming from. I'm not claiming that NFT's value is justified, I have no idea about that. But to me it seems like a "collectors" thing. Because let's be serious, nobody in their right mind would pay millions of dollars for a freaking card with some baseball player at the front. Same goes for NFT's.

yokoprime 5y ago
With an NFT you own a token with a link to a resource, but the perception is that you own an actual artwork. Think is, the artwork (e.g. a jpg) can be copied an infinite amount of times. So the baseball card analogy falls short, at least as far as the posession of an actual item.
- koonsolo 5y ago
  The baseball card also doesn't give you ownership of the baseball player, or over the photograph or stats of that player. You can copy the photograph and stats as much as you want (the player not so much ;)), but the card still stays the card. So conceptually: the NFT doesn't refer to the baseball card, it is the baseball card. Baseball card refers to something real, but doesn't take ownership of that thing. NFT refers to something real, but doesn't take ownership of that thing.
  - newswasboring 5y ago
    I think I might be close to getting it. But with a baseball card, I control the baseball card. Right? With the NFT, I have no control over the resource linked to from the NFT. If that server goes away, doesn't the thing that provided NFTs its value also go away? Its like if someone scratched off the photo from my baseball card, doesn't that baseball card become valueless at that point?

greenhatman 5y ago

I don't think you're actually missing anything. I think those people are just insane.

feketegy 5y ago

NFTs are not about the asset itself. 1. Ownership of the "original" - why do you pay so much for an original painting when you can buy cheap/free knockoffs? 2. Flexing - look at me I bought an expensive NFT, look at me I own this and this NFT (just like sports cards, pokemon cards, etc.) 3. Money laundering - cleaning dirty money through NFTs. 4. Legit investment / value store - if NFTs picks up more and more (see Reddit, Twitter implementing NFTs), it's a legitimate investment strategy, just like BTC or ETH 5. Hype and FOMO - why do people buy Supreme branded products? Why are lines at Apple stores when a new iPhone is released?

vmception 5y ago

The NFT collectibles are where the action is. These are more akin to trading cards than expensive one-off art in a gallery that may have made headlines earlier this year. Imagine that its the same trading card pools of capital that would have bought collections at MSRP, what would the seller’s annual revenue be? There had been no transparency in that. Instead, imagine if the seller only did a single set and everyone could verify that was the only one, the same amount of capital is squeezed i to that one set, which would push the price up. The issuer here makes more money from royalties when people trade pieces of the collection, instead of needing to continually issue that collection.

TomSwirly 5y ago

> I hate to admit it but I’m still struggling to understand why people would pay so much for NFTs. Why would someone pay _anything_ for an NFT? You only get ownership over the NFT itself, not the artwork. Someone else could create another NFT from the same artwork or the original artist could.