5 ms·

"designer clothes, luxury watches, and fancy cars" all have understandable limits to production and have genuine scarcity (even if that scarcity is strictly con

"designer clothes, luxury watches, and fancy cars" all have understandable limits to production and have genuine scarcity (even if that scarcity is strictly controlled). NFTs have artificial scarcity... for little to no purpose other than monetary gain. Generally I am against the concept of artificial scarcity in any industry.

tantalor 5y ago
> genuine scarcity (even if that scarcity is strictly controlled) Scarcity can't be both genuine and artificially imposed. Luxury sunglasses costing $3 to make are sold for $300.
- lottin 5y ago
  Pricing a good above its production cost is not artificial scarcity.
  - nybble41 5y ago
    Artificial scarcity is, however, a prerequisite for it, at least with that kind of margin. Otherwise you'll get competition bringing the price back down toward production cost + overhead.
    - lottin 5y ago
      Technically, I think that would be monopoly power, not artificial scarcity. The government grants a legal monopoly to producers to stamp their products with their brand name, which also prevents producers from using someone else's brand name on their products.
      - nybble41 5y ago
        A legal monopoly is artificial scarcity. However, if the provenance of an item is important to the buyer then scarcity of items from that source would be natural, not artificial—even if goods which are otherwise physically identical down to the atomic scale (including branding) are available from other sellers. That has nothing to do with any monopoly granted by a government. The trademark rules which prohibit using someone else's brand are there to protect buyers from fraud, not to create scarcity. As long as the buyer is fully informed as to the actual origins of the item there shouldn't be any concerns over fraud regardless of how it's been marked. Using someone else's mark in a misleading way to sell your own product would be fraud, though, even in the absence of trademark laws.
tshaddox 5y ago
In many cases the “limits to production” and “genuine scarcity” are functionally meaningless though, and surely have no measurable effect on the market price of the item. A cheap screen-printed t-shirt could be $7 if it’s printed with one design, and $100 if it’s printed with another design. It’s completely silly to point to “limits to production” and “genuine scarcity” as an explanation for this.
- lottin 5y ago
  I don't think anybody is trying to explain the price difference between a $7 shirt and a $100 shirt as being the result of one having a larger supply than the other.
  - tshaddox 5y ago
    That’s the most charitable interpretation I can make of the original comment: > "designer clothes, luxury watches, and fancy cars" all have understandable limits to production and have genuine scarcity (even if that scarcity is strictly controlled).
    - lottin 5y ago
      It doesn't say anything about prices... as far as I can see.
      - tshaddox 5y ago
        The entire thread is about buying and selling NFTs, so I think it’s fair to infer that we’re all talking about the merits of NFTs having a non-zero price.
        lottin 5y ago
        I don't think we have to infer anything. The comment you replied to was making a point about artificial scarcity.
afoot 5y ago
Many fashion houses literally burn their unsold products to create this scarcity or create limited runs. DeBeers have a heavy control over the diamond industry. If an artist says they'll only create unique pieces (a 1/1 collection) then while they could create more in future, they'll still have a market determined value.
- breadbreadbread 5y ago
  Fashion houses burning clothes to maintain image and Dabeers creating a diamond cartel are not good. Im not saying that artifical scarcity doesnt exist, im saying that its bad and we shouldnt build economies around it. For digital art vs physical art, there is a clear difference between "there will only ever be one mona lisa" and "I am not going to press cntrl-c cntrl-v on this image license"
  - plokiju 5y ago
    I’m all for artificial scarcity. Collectors are going to find rare things to collect. It would be better if they didn’t, but I think it’s probably a part of human nature to some degree. Personally, id be ecstatic if collectors decide they can get their fix collecting rare jpegs and Pokémon cards instead of “truly scare” ivory, furs, or blood diamonds. What’s the harm? What am I missing?
    - breadbreadbread 5y ago
      To me, TCGs are defensible because they are Games in which you are knowingly consenting to a system in which collection is a part of the experience. The manufacturers give a standard MSRP for cards during their printing period. Aftermarket cards are priced based on the utility given within a game system and that feeds into a collectors valuation. This is, I think, an acceptable outlet for the humanistic urge to collect things. I do think its exploitative but at least the messaging is clear and fair. I take issue with systems which exploit gambling urges for profit. NFT's claim to be the future of DRM for independent artists, but they are exploited into becoming pump-and-dump schemes and wildly speculative markets. They use language used to defend artistic IP but ultimately function as a game with arbitrary rules.

tantalor 5y ago

> genuine scarcity (even if that scarcity is strictly controlled) Scarcity can't be both genuine and artificially imposed. Luxury sunglasses costing $3 to make are sold for $300.

lottin 5y ago
Pricing a good above its production cost is not artificial scarcity.
- nybble41 5y ago
  Artificial scarcity is, however, a prerequisite for it, at least with that kind of margin. Otherwise you'll get competition bringing the price back down toward production cost + overhead.
  - lottin 5y ago
    Technically, I think that would be monopoly power, not artificial scarcity. The government grants a legal monopoly to producers to stamp their products with their brand name, which also prevents producers from using someone else's brand name on their products.
    - nybble41 5y ago
      A legal monopoly is artificial scarcity. However, if the provenance of an item is important to the buyer then scarcity of items from that source would be natural, not artificial—even if goods which are otherwise physically identical down to the atomic scale (including branding) are available from other sellers. That has nothing to do with any monopoly granted by a government. The trademark rules which prohibit using someone else's brand are there to protect buyers from fraud, not to create scarcity. As long as the buyer is fully informed as to the actual origins of the item there shouldn't be any concerns over fraud regardless of how it's been marked. Using someone else's mark in a misleading way to sell your own product would be fraud, though, even in the absence of trademark laws.

tshaddox 5y ago

In many cases the “limits to production” and “genuine scarcity” are functionally meaningless though, and surely have no measurable effect on the market price of the item. A cheap screen-printed t-shirt could be $7 if it’s printed with one design, and $100 if it’s printed with another design. It’s completely silly to point to “limits to production” and “genuine scarcity” as an explanation for this.

lottin 5y ago
I don't think anybody is trying to explain the price difference between a $7 shirt and a $100 shirt as being the result of one having a larger supply than the other.
- tshaddox 5y ago
  That’s the most charitable interpretation I can make of the original comment: > "designer clothes, luxury watches, and fancy cars" all have understandable limits to production and have genuine scarcity (even if that scarcity is strictly controlled).
  - lottin 5y ago
    It doesn't say anything about prices... as far as I can see.
    - tshaddox 5y ago
      The entire thread is about buying and selling NFTs, so I think it’s fair to infer that we’re all talking about the merits of NFTs having a non-zero price.
      - lottin 5y ago
        I don't think we have to infer anything. The comment you replied to was making a point about artificial scarcity.

afoot 5y ago

Many fashion houses literally burn their unsold products to create this scarcity or create limited runs. DeBeers have a heavy control over the diamond industry. If an artist says they'll only create unique pieces (a 1/1 collection) then while they could create more in future, they'll still have a market determined value.

breadbreadbread 5y ago
Fashion houses burning clothes to maintain image and Dabeers creating a diamond cartel are not good. Im not saying that artifical scarcity doesnt exist, im saying that its bad and we shouldnt build economies around it. For digital art vs physical art, there is a clear difference between "there will only ever be one mona lisa" and "I am not going to press cntrl-c cntrl-v on this image license"
- plokiju 5y ago
  I’m all for artificial scarcity. Collectors are going to find rare things to collect. It would be better if they didn’t, but I think it’s probably a part of human nature to some degree. Personally, id be ecstatic if collectors decide they can get their fix collecting rare jpegs and Pokémon cards instead of “truly scare” ivory, furs, or blood diamonds. What’s the harm? What am I missing?
  - breadbreadbread 5y ago
    To me, TCGs are defensible because they are Games in which you are knowingly consenting to a system in which collection is a part of the experience. The manufacturers give a standard MSRP for cards during their printing period. Aftermarket cards are priced based on the utility given within a game system and that feeds into a collectors valuation. This is, I think, an acceptable outlet for the humanistic urge to collect things. I do think its exploitative but at least the messaging is clear and fair. I take issue with systems which exploit gambling urges for profit. NFT's claim to be the future of DRM for independent artists, but they are exploited into becoming pump-and-dump schemes and wildly speculative markets. They use language used to defend artistic IP but ultimately function as a game with arbitrary rules.