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The problem is that NFTs doesn't solve a problem that existed. NFTs supposedly allow you to prove who owns something. However they don't actually form a contra

The problem is that NFTs doesn't solve a problem that existed. NFTs supposedly allow you to prove who owns something. However they don't actually form a contract for the thing that you think you are buying. You are buying the NFT, not the artwork them selves. This is the main problem, so if you get scammed, or you try and assert what you think your rights are, you have no support. To translate it to business, its like buying the sole share in some company, but its not actually the sole share, its a letter that says you've bought a receipt for a sole share from person x. There is no assertion that you own the actual thing the bit of paper says its a receipt for, or indeed that the person selling it to you owned it in the first place.

dnautics 5y ago
> NFTs supposedly allow you to prove who owns something This is fundamentally wrong. NFTs allow you to show off who "owns"[0] something. [0] for some generalized, possibly meaningless definition of "own". I say possibly meaningless, then again, what is property really, just a government-managed, non-fungible, token? Don't gaze too hard at the abyss, unless you are willing to let the abyss to gaze back.
- dnautics 5y ago
  oh wait, I forgot my proudhon. Property is theft!
- lobocinza 5y ago
  NFTs are synthetic scarcity.
  - dnautics 5y ago
    So is money (or else it wouldn't work)
    - newacct583 5y ago
      Only in a specious sense. The point to money isn't "scarcity", the point to money is TRUST. You trust that $1 is going to be worth $1 tomorrow, and that it will be worth $1 to the shopkeeper and the bank and your family and everyone else. So anywhere you want to trade for something, you can do it in dollars. It's true that to provide that stability you have to control the supply, so money is "scarce". But only in the sense that the economy it represents is finite. NFTs don't provide that, therefore they aren't a good medium of exchange. They aren't "scarce" in the way that money is or has to be. They're also a Tulip bubble, but that's a different thing.
      - dnautics 5y ago
        > It's true that to provide that stability you have to control the supply... Doesn't sound specious to me. The artificial scarcity is real, and has real consequences for real people. While trust is the primary property of money, scarcity-at-any-point-in-time is a fundamentally necessary (but not sufficient) to be a money. Do you have a different definition of specious?
- cslarson 5y ago
  Property is social consensus. Blockchains offer a more convenient and useful way to record that social consensus.
latentpot 5y ago
Succinct and specific. Thank you.
mattdesl 5y ago
Similar lack of rights when you buy a signed print. At no point in that transaction is a copyright transferred to you.
- krsdcbl 5y ago
  This is a very accurate perspective i think: NFTs are "digital prints" of an artwork, not originals
  - meheleventyone 5y ago
    I'd go further. Only NFTs that have the image stored on chain are signed digital copies. It's the association between the signature and the actual data that's important and if that can rot it's bad. Which only leads on to the next problem of how you associate the signature with a real human.
  - have_faith 5y ago
    All digital artwork are "prints" when you save or transfer the work. There's really no concept of "original" in digital as they are indistinguishable. NFT's attempt to add time as a metric of scarcity (this artwork exists on this blockchain at this point in time, regardless of copies). It relies very heavily on a social and cultral decision to place value on this new form of provenance.
    - podgaj 5y ago
      If there is no original than all digital artwork is worthless because it can be endlessly copied which would diminish its value. Rarity is what dictates price, not only social decisions. If I make an NFT of my photograph and sell it to someone, what is stopping me from making copies and selling it to someone else again? Or giving it away? Nothing. This will crash the price of an NFT if the NFT's value was dictated by the artwork. So NFT's are just bitcoin, another scam.
      - have_faith 5y ago
deleted 5y ago
[deleted]
Cthulhu_ 5y ago
An NFT is a certificate of authenticity, but it applies to something easily copied. If you think the certificate of authenticity is worth something, great; if you think it gives you ANY kind of legal rights or protection, or any kind of DRM or digital anti-copying protection, you're in for a surprise. TL;DR: NFT's are a money laundering and tax evasion scheme. There is no value for average consumers, unless the NFT appreciates in value over time and there remains a buyer's market for them. But that's highly volatile and uncertain.
- gjs278 5y ago
  completely wrong, there is nothing tax evasion or money laundering involved with NFTs they couldn’t be done with just direct crypto transfers.
- sabellito 5y ago
  I get the possible tax evasion schemes, but how would one launder money with NFTs?
  - tsujamin 5y ago
    my understanding was that you'd buy an NFT at some inflated price using cryptocurrency to be laundered, and on-sell it (having affected its perceived value with the previous inflated sale) but I could be off. The other use I read about recently was using them as a proxy for buying some sort of illicit good or service, i.e "here's $600,000 for that wink NFT wink I wanted". Not my space though so might be off by a mile :')
    - sabellito 5y ago
      In this case there would still be a very simple trail of the NFT purchase for the asking price.
      - aj3 5y ago
        So what? Say you have an account X which holds funds from criminal operations (e.g. ransomware payments). If you cash it out directly there's no doubt you're a criminal. But if you use that money to pay yourself for an NFT, now you can possibly deny that you have any knowledge about source of X income. Better yet send money from X through a bunch of privacy oriented tokens like monero, tumblers and mixing services, losing 20-50% in the process and consolidating the rest in account Y. Now you have plausibly clean money but you can't pay taxes yet as there's no paper trail for this income. Solution is easy, buy an NFT from yourself, declare it, pay taxes and buy a new yacht.
Zababa 5y ago
> The problem is that NFTs doesn't solve a problem that existed. In a way they do, they solve the problem that crypto was only about fungible stuff (money) before, now there's also non-fungible stuff. I think the point of NFTs is not exactly to prove that you own something, but to offer people an easy and non-fungible token to exchange with other people. The goal is not ownership but exchange (some would say speculation). At least that's how I understand it.
- auggierose 5y ago
  How do you exchange something that neither of you own? Beyond bragging rights, you will need some way to establish legal ownership of something because you own the corresponding NFT. So why not sell that ownership directly without the level of indirection that is the NFT? I guess the reason is that you have decoupled ownership and the ability to sell that ownership, making it easier to speculate independently of legal domains like countries. Really, it's just adding a level of indirection, as always :-)
  - Zababa 5y ago
    > I guess the reason is that you have decoupled ownership and the ability to sell that ownership, making it easier to speculate independent of legal domains like countries. > Really, it's just adding a level of indirection, as always :-) Yeah, that's basically how I see NFTs currently.
  - superbaconman 5y ago
    If Nvidia provided an nft for every graphics card they sold, and every online marketplace like ebay required that you provide that nft to resell the card, then that truck of stolen graphics cards becomes much harder to move.
    - ori_b 5y ago
      So, like serial numbers, but more fragile?
bsedlm 5y ago
because NFTs are built in (and for) digital artifacts. In the digital world the actual "artifact" (the object of art) is digital. NFTs 'solve' this problem by not caring about the fact that the artwork can (and will) be freely copied with no cost. Maybe it is better to think about NFTs as public official (blockchain-backed) certificates of donation (or support) rather than assets.
- brutusborn 5y ago
  If the NFTs don't care that the artwork can be copied, what is their use case? If I own the NFT for a digital file that other people have copies of, what do I actually use the NFT for? The only thing I can think is proof of authorship, but private key cryptograph already solves that. Edit: after reading some other replies I've come to the conclusion that NFTs provide a way to prove who put a file on the blockchain first. Thus the use case is trustless transfer of the ownership of this fact of "being first", which is where the scarcity of the NFT comes from and thus the value.
  - bsedlm 5y ago
    I suppose their "utility" is that they can be traded.
    - web2sucks 5y ago
      And they can be used as collateral in defi smart contracts.
  - zrail 5y ago
    The purpose of NFTs is to extract as much money out of people willing to trade them as possible before the whole thing falls apart. The end.
  - deleted 5y ago
    [deleted]
  - moron4hire 5y ago
    My understanding is that people don't even mint whole files due to the cost of minting scaling with the size of the data, so they are minting links to the files, which you then have to hope always point to that file.
friendzis 5y ago
NFTs do not solve a problem, period. This has been said time and time again about each and every "blockchain/defi" project for the past 10+ years: all the guarantees of blockchain protocols are within the blockchain. The very moment you try to put literally anything relating to outside of blockchain all you have is extremely inefficient append-only database - nothing more, nothing less. NFTs are datums with an URL. That is all there is to an NFT. It's not a receipt for art, it has absolutely nothing to do with an art in question. To translate it to business it is a receipt for an entry to the Louvre with a URL pointing to an image of Mona Lisa. It does not prove your ownership of Mona Lisa. Anyone can access said URL without the receipt. There can be unlimited number of different unique receipts with same/similar URLs to same/similar image on Mona Lisa. It is merely an overly complicated way of transferring cryptotokens.
- PretzelPirate 5y ago
  The problem is that people don’t understand what NFTs are and talk about them with the idea that they are about representing digital art. NFTs are about representing non-fungible digital assets. For some reason, NFT art took off (which I don’t understand), but that wasn’t what NFTs were built for. NFTs can represent digital assets that exist fully on a blockchain and aren’t tied to off-chain assets. A digital ID, a in-game asset, a digital license, a ENS name, etc… are all NFTs and don’t need to reference any odd-chain URLs or images.
  - dwater 5y ago
    Can you explain what non-fungible digital assets are? Because the reason I think NFTs are a scam is that I think of digital assets as inherently fungible.
    - paraknight 5y ago
      E.g. a digital concert ticket
      - pornel 5y ago
tsss 5y ago
> You are buying the NFT, not the artwork them selves. You can not buy ownership of a digital artwork because the whole concept of owning a digital work is nonsensical. Ownership in the world of physical goods is not a law of nature but a legal concept. Ownership is essentially the right to control some resource. A collective of people agree that you have the right to control (by force) some physical thing, which is useful because otherwise everyone would be fighting violently for the possession of that thing. In the typical case the sovereign enforces the property rights. In the digital world this makes no sense because you can't possess information and you can't enforce property rights. Anyone can make a copy and everyone can have that information without anybody else losing anything. NFT is only a record that tells you who supposedly owns something but ownership means nothing without possession. NFT is like buying a land deed from a dysfunctional state: Yeah, everyone who beliefs in that state may agree that you are the owner but what use is it to you if a bunch of guys with guns are squatting on "your" land and you can do nothing about it? That is ownership without possession.
crypot 5y ago
NFTs, like bitcoin and other blockchains, are another step on the road to digital property rights. They don't work yet and no one has figured out how they will work. One thing to remember is that the first stage of a technological advancement is the bubble stage that leads to an influx of capital to build out the infrastructure. Eventually we will be able to use this infrastructure to build out businesses with more economic value.
- rip_netrunner 5y ago
  Bitcoin IS a fungible token! NFT literally is "non-fungible token". Do you even know what you are talking about? Please go take a casual 5 minutes to google a topic you are unfamiliar with before spouting off about it.
  - cslarson 5y ago
    NFTs and Bitcoin are both forms of tokens, which represent digital property rights. The parent comment almost certainly understands this and was talking more broadly about forms of digital ownership. So your blasting them was kind of cringe.
  - koonsolo 5y ago
    Bitcoin is definitely not fully fungible, because you can easily trace its origins. And so you could "stain" certain bitcoins. "We don't accept bitcoins coming from transaction X" Monero for example is fully fungible.
- snarf21 5y ago
  They can't ever work. You can't prove digital rights to a non digital asset. It doesn't matter what the blockchain says owns a property when the county courthouse says you do. They tried the same thing for "produce on the blockchain". "You can prove that this crate of apples was grown organic in Kenya". But all you can really prove is that someone put that claim on the blockchain and attached the hash to some paperwork. You are still trusting something and someone not on the blockchain. And how do you make sure this crate isn't swapped for another crate of apples that this isn't true for. You are trusting that no one did that during its transit. Blockchain can't work for anything that isn't a self-referencing currency. It only ever exists on chain so the chain can be trusted.
dgellow 5y ago
And anyone can create their own NFT for the same artwork. Now we just need a (centralized) registry of "official NFTs" to know which one you're supposed to consider, from a trusted authority :)

dnautics 5y ago

> NFTs supposedly allow you to prove who owns something This is fundamentally wrong. NFTs allow you to show off who "owns"[0] something. [0] for some generalized, possibly meaningless definition of "own". I say possibly meaningless, then again, what is property really, just a government-managed, non-fungible, token? Don't gaze too hard at the abyss, unless you are willing to let the abyss to gaze back.

dnautics 5y ago
oh wait, I forgot my proudhon. Property is theft!
lobocinza 5y ago
NFTs are synthetic scarcity.
- dnautics 5y ago
  So is money (or else it wouldn't work)
  - newacct583 5y ago
    Only in a specious sense. The point to money isn't "scarcity", the point to money is TRUST. You trust that $1 is going to be worth $1 tomorrow, and that it will be worth $1 to the shopkeeper and the bank and your family and everyone else. So anywhere you want to trade for something, you can do it in dollars. It's true that to provide that stability you have to control the supply, so money is "scarce". But only in the sense that the economy it represents is finite. NFTs don't provide that, therefore they aren't a good medium of exchange. They aren't "scarce" in the way that money is or has to be. They're also a Tulip bubble, but that's a different thing.
    - dnautics 5y ago
      > It's true that to provide that stability you have to control the supply... Doesn't sound specious to me. The artificial scarcity is real, and has real consequences for real people. While trust is the primary property of money, scarcity-at-any-point-in-time is a fundamentally necessary (but not sufficient) to be a money. Do you have a different definition of specious?
cslarson 5y ago
Property is social consensus. Blockchains offer a more convenient and useful way to record that social consensus.

latentpot 5y ago

Succinct and specific. Thank you.

mattdesl 5y ago

Similar lack of rights when you buy a signed print. At no point in that transaction is a copyright transferred to you.

krsdcbl 5y ago
This is a very accurate perspective i think: NFTs are "digital prints" of an artwork, not originals
- meheleventyone 5y ago
  I'd go further. Only NFTs that have the image stored on chain are signed digital copies. It's the association between the signature and the actual data that's important and if that can rot it's bad. Which only leads on to the next problem of how you associate the signature with a real human.
- have_faith 5y ago
  All digital artwork are "prints" when you save or transfer the work. There's really no concept of "original" in digital as they are indistinguishable. NFT's attempt to add time as a metric of scarcity (this artwork exists on this blockchain at this point in time, regardless of copies). It relies very heavily on a social and cultral decision to place value on this new form of provenance.
  - podgaj 5y ago
    If there is no original than all digital artwork is worthless because it can be endlessly copied which would diminish its value. Rarity is what dictates price, not only social decisions. If I make an NFT of my photograph and sell it to someone, what is stopping me from making copies and selling it to someone else again? Or giving it away? Nothing. This will crash the price of an NFT if the NFT's value was dictated by the artwork. So NFT's are just bitcoin, another scam.
    - have_faith 5y ago

deleted 5y ago

[deleted]

Cthulhu_ 5y ago

An NFT is a certificate of authenticity, but it applies to something easily copied. If you think the certificate of authenticity is worth something, great; if you think it gives you ANY kind of legal rights or protection, or any kind of DRM or digital anti-copying protection, you're in for a surprise. TL;DR: NFT's are a money laundering and tax evasion scheme. There is no value for average consumers, unless the NFT appreciates in value over time and there remains a buyer's market for them. But that's highly volatile and uncertain.

gjs278 5y ago
completely wrong, there is nothing tax evasion or money laundering involved with NFTs they couldn’t be done with just direct crypto transfers.
sabellito 5y ago
I get the possible tax evasion schemes, but how would one launder money with NFTs?
- tsujamin 5y ago
  my understanding was that you'd buy an NFT at some inflated price using cryptocurrency to be laundered, and on-sell it (having affected its perceived value with the previous inflated sale) but I could be off. The other use I read about recently was using them as a proxy for buying some sort of illicit good or service, i.e "here's $600,000 for that wink NFT wink I wanted". Not my space though so might be off by a mile :')
  - sabellito 5y ago
    In this case there would still be a very simple trail of the NFT purchase for the asking price.
    - aj3 5y ago
      So what? Say you have an account X which holds funds from criminal operations (e.g. ransomware payments). If you cash it out directly there's no doubt you're a criminal. But if you use that money to pay yourself for an NFT, now you can possibly deny that you have any knowledge about source of X income. Better yet send money from X through a bunch of privacy oriented tokens like monero, tumblers and mixing services, losing 20-50% in the process and consolidating the rest in account Y. Now you have plausibly clean money but you can't pay taxes yet as there's no paper trail for this income. Solution is easy, buy an NFT from yourself, declare it, pay taxes and buy a new yacht.

Zababa 5y ago

> The problem is that NFTs doesn't solve a problem that existed. In a way they do, they solve the problem that crypto was only about fungible stuff (money) before, now there's also non-fungible stuff. I think the point of NFTs is not exactly to prove that you own something, but to offer people an easy and non-fungible token to exchange with other people. The goal is not ownership but exchange (some would say speculation). At least that's how I understand it.

auggierose 5y ago
How do you exchange something that neither of you own? Beyond bragging rights, you will need some way to establish legal ownership of something because you own the corresponding NFT. So why not sell that ownership directly without the level of indirection that is the NFT? I guess the reason is that you have decoupled ownership and the ability to sell that ownership, making it easier to speculate independently of legal domains like countries. Really, it's just adding a level of indirection, as always :-)
- Zababa 5y ago
  > I guess the reason is that you have decoupled ownership and the ability to sell that ownership, making it easier to speculate independent of legal domains like countries. > Really, it's just adding a level of indirection, as always :-) Yeah, that's basically how I see NFTs currently.
- superbaconman 5y ago
  If Nvidia provided an nft for every graphics card they sold, and every online marketplace like ebay required that you provide that nft to resell the card, then that truck of stolen graphics cards becomes much harder to move.
  - ori_b 5y ago
    So, like serial numbers, but more fragile?

bsedlm 5y ago

because NFTs are built in (and for) digital artifacts. In the digital world the actual "artifact" (the object of art) is digital. NFTs 'solve' this problem by not caring about the fact that the artwork can (and will) be freely copied with no cost. Maybe it is better to think about NFTs as public official (blockchain-backed) certificates of donation (or support) rather than assets.

brutusborn 5y ago
If the NFTs don't care that the artwork can be copied, what is their use case? If I own the NFT for a digital file that other people have copies of, what do I actually use the NFT for? The only thing I can think is proof of authorship, but private key cryptograph already solves that. Edit: after reading some other replies I've come to the conclusion that NFTs provide a way to prove who put a file on the blockchain first. Thus the use case is trustless transfer of the ownership of this fact of "being first", which is where the scarcity of the NFT comes from and thus the value.
- bsedlm 5y ago
  I suppose their "utility" is that they can be traded.
  - web2sucks 5y ago
    And they can be used as collateral in defi smart contracts.
- zrail 5y ago
  The purpose of NFTs is to extract as much money out of people willing to trade them as possible before the whole thing falls apart. The end.
- deleted 5y ago
  [deleted]
- moron4hire 5y ago
  My understanding is that people don't even mint whole files due to the cost of minting scaling with the size of the data, so they are minting links to the files, which you then have to hope always point to that file.

friendzis 5y ago

NFTs do not solve a problem, period. This has been said time and time again about each and every "blockchain/defi" project for the past 10+ years: all the guarantees of blockchain protocols are within the blockchain. The very moment you try to put literally anything relating to outside of blockchain all you have is extremely inefficient append-only database - nothing more, nothing less. NFTs are datums with an URL. That is all there is to an NFT. It's not a receipt for art, it has absolutely nothing to do with an art in question. To translate it to business it is a receipt for an entry to the Louvre with a URL pointing to an image of Mona Lisa. It does not prove your ownership of Mona Lisa. Anyone can access said URL without the receipt. There can be unlimited number of different unique receipts with same/similar URLs to same/similar image on Mona Lisa. It is merely an overly complicated way of transferring cryptotokens.

PretzelPirate 5y ago
The problem is that people don’t understand what NFTs are and talk about them with the idea that they are about representing digital art. NFTs are about representing non-fungible digital assets. For some reason, NFT art took off (which I don’t understand), but that wasn’t what NFTs were built for. NFTs can represent digital assets that exist fully on a blockchain and aren’t tied to off-chain assets. A digital ID, a in-game asset, a digital license, a ENS name, etc… are all NFTs and don’t need to reference any odd-chain URLs or images.
- dwater 5y ago
  Can you explain what non-fungible digital assets are? Because the reason I think NFTs are a scam is that I think of digital assets as inherently fungible.
  - paraknight 5y ago
    E.g. a digital concert ticket
    - pornel 5y ago

tsss 5y ago

> You are buying the NFT, not the artwork them selves. You can not buy ownership of a digital artwork because the whole concept of owning a digital work is nonsensical. Ownership in the world of physical goods is not a law of nature but a legal concept. Ownership is essentially the right to control some resource. A collective of people agree that you have the right to control (by force) some physical thing, which is useful because otherwise everyone would be fighting violently for the possession of that thing. In the typical case the sovereign enforces the property rights. In the digital world this makes no sense because you can't possess information and you can't enforce property rights. Anyone can make a copy and everyone can have that information without anybody else losing anything. NFT is only a record that tells you who supposedly owns something but ownership means nothing without possession. NFT is like buying a land deed from a dysfunctional state: Yeah, everyone who beliefs in that state may agree that you are the owner but what use is it to you if a bunch of guys with guns are squatting on "your" land and you can do nothing about it? That is ownership without possession.

crypot 5y ago

NFTs, like bitcoin and other blockchains, are another step on the road to digital property rights. They don't work yet and no one has figured out how they will work. One thing to remember is that the first stage of a technological advancement is the bubble stage that leads to an influx of capital to build out the infrastructure. Eventually we will be able to use this infrastructure to build out businesses with more economic value.

rip_netrunner 5y ago
Bitcoin IS a fungible token! NFT literally is "non-fungible token". Do you even know what you are talking about? Please go take a casual 5 minutes to google a topic you are unfamiliar with before spouting off about it.
- cslarson 5y ago
  NFTs and Bitcoin are both forms of tokens, which represent digital property rights. The parent comment almost certainly understands this and was talking more broadly about forms of digital ownership. So your blasting them was kind of cringe.
- koonsolo 5y ago
  Bitcoin is definitely not fully fungible, because you can easily trace its origins. And so you could "stain" certain bitcoins. "We don't accept bitcoins coming from transaction X" Monero for example is fully fungible.
snarf21 5y ago
They can't ever work. You can't prove digital rights to a non digital asset. It doesn't matter what the blockchain says owns a property when the county courthouse says you do. They tried the same thing for "produce on the blockchain". "You can prove that this crate of apples was grown organic in Kenya". But all you can really prove is that someone put that claim on the blockchain and attached the hash to some paperwork. You are still trusting something and someone not on the blockchain. And how do you make sure this crate isn't swapped for another crate of apples that this isn't true for. You are trusting that no one did that during its transit. Blockchain can't work for anything that isn't a self-referencing currency. It only ever exists on chain so the chain can be trusted.

dgellow 5y ago

And anyone can create their own NFT for the same artwork. Now we just need a (centralized) registry of "official NFTs" to know which one you're supposed to consider, from a trusted authority :)