4 ms·

I'm hearing this a lot, but why do you think NFTs are a scam?

by yrral 5y ago

evergrande 5y ago
Some are and they are overfitting those cases to an entire technology. It's understandable to see that nuance get lost on Twitter, but disappointing to see on a tech forum. It's like discounting email because it enables nigerian prince scams.
- roywiggins 5y ago
  No, NFTs seem like a scam on the order of "buying a star". https://www.wired.com/2001/12/buy-a-star-but-its-not-yours/ https://www.wired.com/2001/12/buy-a-star-but-its-not-yours/ But good news! You can also get your star registered on the blockchain now. Whether that's any better than the ISR's legacy offering (a certificate and an entry in their own ledger) is up to you. https://nftevening.com/star-naming-registry-gets-an-nft-twist/ https://nftevening.com/star-naming-registry-gets-an-nft-twis... Really, both products are just selling a story- a physical ledger in a vault in Geneva in the first instance, now updated to be an entry on a distributed ledger. These blockchain NFTs just make it easier for people who don't have the infrastructure of a company like the ISR to share one big ledger and dump whatever they want on there and call it an NFT. The equivalent of email here is the blockchain ledger technology, the equivalent of Nigerian email scams are NFTs. I suppose there might be some genuinely useful or interesting non-fungible blockchain tokens, but entries on a ledger that say you own a jpeg or whatever are not any more interesting than entries in ISR's Genevan vault.
  - knownjorbist 5y ago
    NFTs are just a standard. They can be a part of scams as much as they can function as an authorization scheme in dapps.
    - roywiggins 5y ago
      Sure, they can be, but they aren't. "NFT" has become synonymous with "selling a jpeg", and that's what the big NFT marketplaces are doing. That's where all the money is. Nobody would care about NFTs if all they were being used for was as "an authorization scheme in dapps". Like, imagine if JWTs were 99% part of an MLM scheme and 1% used for authentication. People would be skeptical!
      - anon9001 5y ago
        > Nobody would care about NFTs if all they were being used for was as "an authorization scheme in dapps". Tell that to Uniswap: https://uniswap.org/blog/uniswap-v3/ https://uniswap.org/blog/uniswap-v3/
        roywiggins 5y ago
        By "nobody" I meant "nobody not deeply invested in the technical guts of how Uniswap works". In the same way nobody really cares about JWTs, people care about the stuff they enable. Solving problems inside the crypto ecosystem isn't per se useful or important unless the actual thing it's enabling (in this case Uniswap) is important. Which, okay, maybe it is. But NFTs are a technical detail. It's when people started hyping up NFTs as their own thing that stuff got weird and stupid. Like, phone numbers are useful, but vanity phone numbers definitely aren't solving any problems other than proving you have one: https://www.washingtonpost.com/news/world/wp/2018/02/13/feature/trade-a-lexus-for-a-prestigious-phone-number-in-iraq-the-best-digits-cost-a-mint/ https://www.washingtonpost.com/news/world/wp/2018/02/13/feat...
        anon9001 5y ago
        > But NFTs are a technical detail NFTs are a technical detail, but they're exciting. I'm also excited about webrtc and webauthn. These technologies enable new businesses to exist, like Uniswap. > phone numbers are useful, but vanity phone numbers definitely aren't solving any problems other than proving you have one Vanity phone numbers aren't a terrible comparison to the current NFT art craze. But also, vanity phone numbers have been popular for as long as I can remember, in every location around the world. This has been true since the invention of the telephone. It used to be that having a 212 area code number was very prestigious. That was true because it created the appearance of doing business in NYC, which meant you must be important. After all, your business exists in NYC! Also every possible analog of vanity phone numbers that I can think of has been wildly successful. Squatting domain names comes to mind, but also registering your nickname first on whatever the next hot tech service is. If your Twitter username is <4 characters, you're probably somewhat important, because at the very least it means you were early to Twitter. The article you linked about phone numbers is exactly the reason why art NFTs are working and will continue to grow. > “This number gives the impression that I am distinguished, which helps me get business, especially among officials in the state ministries who I am dealing with,” he said. “If I call them from a regular number, they wouldn’t answer my call, but when they see this number, they can’t ignore it because they know a VIP is calling them.” > “It helps me with marketing the company,” he said. “After getting one for $100, it’s helped my business grow.” > “He cherishes it,” Mohsen said. “Just like wine, the older it gets the more valuable it becomes.” This all seems like very normal human stuff to me.
  - SubiculumCode 5y ago
    I view NFT as a technology that might one day find its particular true-niche use-case years from now...especially NFT's whose data are encoded into the blockchain itself. [edit] It might be the case, like with deep learning, that something that doesn't seem useful becomes so when it can be applied at scale. If on-chain NFT's can practically start containing large sized data buckets without resorting to external links,
- neither_color 5y ago
  Recently heard Tim Ferriss/Naval discussing NFTs on a podcast and while I'm open minded to its potential, I haven't seen any useful ones yet. That said I don't think they're any worse than trading for video game skins or MMORPG collectibles. For whatever reason humans can invent a scarcity free environment in video games/metaverses but feel compelled to create scarcity anyway.
  - roywiggins 5y ago
    I don't get it, because of course the company running the MMO has total control over who gets to wear what hats, there's no decentralization introduced by NFTs beyond perhaps making it easier for people to use it for a bit of money laundering.
  - mikeiz404 5y ago
    > For whatever reason humans can invent a scarcity free environment in video games/metaverses but feel compelled to create scarcity anyway. I would encourage you to try turning on no clip or “god mode” for a game and see how much fun you have and for how long. It was my experience that it’s fun at first but then gets boring real quick. There is value in constraints as it gives you something you can work at and achieve.
  - kybernetikos 5y ago
    ENS domains follow the nft interface.
kranke155 5y ago
They aren’t. HN is super crypto resistant
faeyanpiraat 5y ago
Maybe not in a literal sense, but in a way that it’s a useless distraction wasting everyone’s time.
joeberon 5y ago
They actually facilitate no transfer of ownership of copyright, which is something that isn't even possible in many countries, and further most are sold even without explicit licensing. The NFT also does not contain the art, but mostly just a link to the art on a centralised server, and therefore is still reliant on that centralised server being up and pointing to the correct piece of art. This means that a vast majority of NFTs do not have any real meaning, and are basically just a digital coin with a fancy colour. So the vast majority of NFTs have no real meaning, then add on top of this that a vast majority of blockchains still use the insanely inefficient and environmentally damaging proof of work (a single Ethereum transaction uses 48.14 kWh of energy!!!), that the platform is used for money laundering, that many people are pressuring others into getting into it so that they buy their NFTs (it's also a Ponzi scheme), and finally that a lot of legitimate artists are having their art stolen (there's nothing stopping you from minting an NFT of someone else's art)
mikeiz404 5y ago
I’m not the parent but I have some thoughts on this. I’m of the opinion that tokens when applied to digital art typically aren’t providing much value, aside from say bragging rights / social status since digital art can be copied and viewed without owning the token. One might argue that these tokens help pay artists but 1) if that’s all one cares about then donating to them directly will give them more money since transaction fees are cheaper and 2), I haven’t looked into this directly, but it would seem token resale fees given to artists are not enforceable since they could be worked around by having a holding contract that gets traded instead. It just doesn’t seem like digital art tokens are providing much value. Now if they start to be used in some enforceable way such as in a DRMd display then this would be a form of underlying value but why not use a non DRMd display? If it’s anything like movies and music then the answer probably revolves around convenience and risk. Then there is the more general trend of treating tokens like these as investments where the value gets driven up and, appears to me, detached from any sense of underlying value. So the only way for the sale value of these tokens to hold is to have some one else willing to buy it. But if there is no underlying value then it’s not clear to me how this can continue indefinitely. But if a token is providing some underlying value like when it is exchangeable for a service or currency and the token’s value is close to it’s underlying value then I don’t think they are scams or at least less likely to be so. What are your thoughts on this yrral? For context: I was initially quite interested in the whole distributed ledger stuff from a technical perspective but stopped keeping up with it for the past couple of years or so.
- anon9001 5y ago
  > aside from say bragging rights / social status since digital art can be copied and viewed without owning the token https://upload.wikimedia.org/wikipedia/commons/e/ec/Mona_Lisa%2C_by_Leonardo_da_Vinci%2C_from_C2RMF_retouched.jpg https://upload.wikimedia.org/wikipedia/commons/e/ec/Mona_Lis... This is a pretty high resolution copy of the Mona Lisa. If I went to see it at the Louvre in person, I wouldn't be able to see this level of detail. I've never even seen the thing with my own eyes, but I know it's a pretty big flex by the French that they own it. The most common reaction I've heard from people that have seen it is that it's surprisingly small. It was insured in 2021 for $870M. > 1) if that’s all one cares about then donating to them directly will give them more money since transaction fees are cheaper It's not about donating to the artist directly, exactly. It's about putting a value on their work, which is likely more valuable to the artist than a direction donation. > 2), I haven’t looked into this directly, but it would seem token resale fees given to artists are not enforceable since they could be worked around by having a holding contract that gets traded instead. Maybe, but if you ever need to "really" own the piece for some reason, you'd have to reconcile to mainnet anyway, and the artist would get paid then. Everything else is just a promise. For example, even today, you may need a previous NFT by an artist to get in on a new drop from that artist. > Now if they start to be used in some enforceable way such as in a DRMd display then this would be a form of underlying value but why not use a non DRMd display? Actually, most artists want their work to be widely seen. This creates a virtuous cycle. You buy an artist's work, which increases the value of that work, which increase the artist's exposure, which increase the artist's perceived value, which increases the value of the work you purchased, which leads to more sales for the artist, etc. Instead of a one-time donation, the fan becomes quite literally invested in the artist. It's the same reason a musician might want to trend on TikTok by giving away 60 seconds of their song "for free" in the hopes to make it up on streaming, merch, ticket sales, and influence later. > Then there is the more general trend of treating tokens like these as investments where the value gets driven up and, appears to me, detached from any sense of underlying value. So the only way for the sale value of these tokens to hold is to have some one else willing to buy it. But if there is no underlying value then it’s not clear to me how this can continue indefinitely. I remember being much younger and seeing people buy toys, instruments, and curiosities "as an investment". Most of these didn't work out, but occasionally I see something from my childhood on ebay and think "oh, well, obviously that was going to be important, i should have bought a couple of those and put it away". Time causes some things to crystalize and other things to fade into obscurity. I suspect the same will happen with these "original" era NFTs.

I'm hearing this a lot, but why do you think NFTs are a scam?

by yrral 5y ago

I'm hearing this a lot, but why do you think NFTs are a scam?

Some are and they are overfitting those cases to an entire technology. It's understandable to see that nuance get lost on Twitter, but disappointing to see on a tech forum. It's like discounting email because it enables nigerian prince scams.

roywiggins 5y ago
No, NFTs seem like a scam on the order of "buying a star". https://www.wired.com/2001/12/buy-a-star-but-its-not-yours/ https://www.wired.com/2001/12/buy-a-star-but-its-not-yours/ But good news! You can also get your star registered on the blockchain now. Whether that's any better than the ISR's legacy offering (a certificate and an entry in their own ledger) is up to you. https://nftevening.com/star-naming-registry-gets-an-nft-twist/ https://nftevening.com/star-naming-registry-gets-an-nft-twis... Really, both products are just selling a story- a physical ledger in a vault in Geneva in the first instance, now updated to be an entry on a distributed ledger. These blockchain NFTs just make it easier for people who don't have the infrastructure of a company like the ISR to share one big ledger and dump whatever they want on there and call it an NFT. The equivalent of email here is the blockchain ledger technology, the equivalent of Nigerian email scams are NFTs. I suppose there might be some genuinely useful or interesting non-fungible blockchain tokens, but entries on a ledger that say you own a jpeg or whatever are not any more interesting than entries in ISR's Genevan vault.
- knownjorbist 5y ago
  NFTs are just a standard. They can be a part of scams as much as they can function as an authorization scheme in dapps.
  - roywiggins 5y ago
    Sure, they can be, but they aren't. "NFT" has become synonymous with "selling a jpeg", and that's what the big NFT marketplaces are doing. That's where all the money is. Nobody would care about NFTs if all they were being used for was as "an authorization scheme in dapps". Like, imagine if JWTs were 99% part of an MLM scheme and 1% used for authentication. People would be skeptical!
    - anon9001 5y ago
      > Nobody would care about NFTs if all they were being used for was as "an authorization scheme in dapps". Tell that to Uniswap: https://uniswap.org/blog/uniswap-v3/ https://uniswap.org/blog/uniswap-v3/
      - roywiggins 5y ago
        By "nobody" I meant "nobody not deeply invested in the technical guts of how Uniswap works". In the same way nobody really cares about JWTs, people care about the stuff they enable. Solving problems inside the crypto ecosystem isn't per se useful or important unless the actual thing it's enabling (in this case Uniswap) is important. Which, okay, maybe it is. But NFTs are a technical detail. It's when people started hyping up NFTs as their own thing that stuff got weird and stupid. Like, phone numbers are useful, but vanity phone numbers definitely aren't solving any problems other than proving you have one: https://www.washingtonpost.com/news/world/wp/2018/02/13/feature/trade-a-lexus-for-a-prestigious-phone-number-in-iraq-the-best-digits-cost-a-mint/ https://www.washingtonpost.com/news/world/wp/2018/02/13/feat...
        anon9001 5y ago
        > But NFTs are a technical detail NFTs are a technical detail, but they're exciting. I'm also excited about webrtc and webauthn. These technologies enable new businesses to exist, like Uniswap. > phone numbers are useful, but vanity phone numbers definitely aren't solving any problems other than proving you have one Vanity phone numbers aren't a terrible comparison to the current NFT art craze. But also, vanity phone numbers have been popular for as long as I can remember, in every location around the world. This has been true since the invention of the telephone. It used to be that having a 212 area code number was very prestigious. That was true because it created the appearance of doing business in NYC, which meant you must be important. After all, your business exists in NYC! Also every possible analog of vanity phone numbers that I can think of has been wildly successful. Squatting domain names comes to mind, but also registering your nickname first on whatever the next hot tech service is. If your Twitter username is <4 characters, you're probably somewhat important, because at the very least it means you were early to Twitter. The article you linked about phone numbers is exactly the reason why art NFTs are working and will continue to grow. > “This number gives the impression that I am distinguished, which helps me get business, especially among officials in the state ministries who I am dealing with,” he said. “If I call them from a regular number, they wouldn’t answer my call, but when they see this number, they can’t ignore it because they know a VIP is calling them.” > “It helps me with marketing the company,” he said. “After getting one for $100, it’s helped my business grow.” > “He cherishes it,” Mohsen said. “Just like wine, the older it gets the more valuable it becomes.” This all seems like very normal human stuff to me.
- SubiculumCode 5y ago
  I view NFT as a technology that might one day find its particular true-niche use-case years from now...especially NFT's whose data are encoded into the blockchain itself. [edit] It might be the case, like with deep learning, that something that doesn't seem useful becomes so when it can be applied at scale. If on-chain NFT's can practically start containing large sized data buckets without resorting to external links,
neither_color 5y ago
Recently heard Tim Ferriss/Naval discussing NFTs on a podcast and while I'm open minded to its potential, I haven't seen any useful ones yet. That said I don't think they're any worse than trading for video game skins or MMORPG collectibles. For whatever reason humans can invent a scarcity free environment in video games/metaverses but feel compelled to create scarcity anyway.
- roywiggins 5y ago
  I don't get it, because of course the company running the MMO has total control over who gets to wear what hats, there's no decentralization introduced by NFTs beyond perhaps making it easier for people to use it for a bit of money laundering.
- mikeiz404 5y ago
  > For whatever reason humans can invent a scarcity free environment in video games/metaverses but feel compelled to create scarcity anyway. I would encourage you to try turning on no clip or “god mode” for a game and see how much fun you have and for how long. It was my experience that it’s fun at first but then gets boring real quick. There is value in constraints as it gives you something you can work at and achieve.
- kybernetikos 5y ago
  ENS domains follow the nft interface.

kranke155 5y ago

They aren’t. HN is super crypto resistant

faeyanpiraat 5y ago

Maybe not in a literal sense, but in a way that it’s a useless distraction wasting everyone’s time.

joeberon 5y ago

They actually facilitate no transfer of ownership of copyright, which is something that isn't even possible in many countries, and further most are sold even without explicit licensing. The NFT also does not contain the art, but mostly just a link to the art on a centralised server, and therefore is still reliant on that centralised server being up and pointing to the correct piece of art. This means that a vast majority of NFTs do not have any real meaning, and are basically just a digital coin with a fancy colour. So the vast majority of NFTs have no real meaning, then add on top of this that a vast majority of blockchains still use the insanely inefficient and environmentally damaging proof of work (a single Ethereum transaction uses 48.14 kWh of energy!!!), that the platform is used for money laundering, that many people are pressuring others into getting into it so that they buy their NFTs (it's also a Ponzi scheme), and finally that a lot of legitimate artists are having their art stolen (there's nothing stopping you from minting an NFT of someone else's art)

mikeiz404 5y ago

I’m not the parent but I have some thoughts on this. I’m of the opinion that tokens when applied to digital art typically aren’t providing much value, aside from say bragging rights / social status since digital art can be copied and viewed without owning the token. One might argue that these tokens help pay artists but 1) if that’s all one cares about then donating to them directly will give them more money since transaction fees are cheaper and 2), I haven’t looked into this directly, but it would seem token resale fees given to artists are not enforceable since they could be worked around by having a holding contract that gets traded instead. It just doesn’t seem like digital art tokens are providing much value. Now if they start to be used in some enforceable way such as in a DRMd display then this would be a form of underlying value but why not use a non DRMd display? If it’s anything like movies and music then the answer probably revolves around convenience and risk. Then there is the more general trend of treating tokens like these as investments where the value gets driven up and, appears to me, detached from any sense of underlying value. So the only way for the sale value of these tokens to hold is to have some one else willing to buy it. But if there is no underlying value then it’s not clear to me how this can continue indefinitely. But if a token is providing some underlying value like when it is exchangeable for a service or currency and the token’s value is close to it’s underlying value then I don’t think they are scams or at least less likely to be so. What are your thoughts on this yrral? For context: I was initially quite interested in the whole distributed ledger stuff from a technical perspective but stopped keeping up with it for the past couple of years or so.

anon9001 5y ago
> aside from say bragging rights / social status since digital art can be copied and viewed without owning the token https://upload.wikimedia.org/wikipedia/commons/e/ec/Mona_Lisa%2C_by_Leonardo_da_Vinci%2C_from_C2RMF_retouched.jpg https://upload.wikimedia.org/wikipedia/commons/e/ec/Mona_Lis... This is a pretty high resolution copy of the Mona Lisa. If I went to see it at the Louvre in person, I wouldn't be able to see this level of detail. I've never even seen the thing with my own eyes, but I know it's a pretty big flex by the French that they own it. The most common reaction I've heard from people that have seen it is that it's surprisingly small. It was insured in 2021 for $870M. > 1) if that’s all one cares about then donating to them directly will give them more money since transaction fees are cheaper It's not about donating to the artist directly, exactly. It's about putting a value on their work, which is likely more valuable to the artist than a direction donation. > 2), I haven’t looked into this directly, but it would seem token resale fees given to artists are not enforceable since they could be worked around by having a holding contract that gets traded instead. Maybe, but if you ever need to "really" own the piece for some reason, you'd have to reconcile to mainnet anyway, and the artist would get paid then. Everything else is just a promise. For example, even today, you may need a previous NFT by an artist to get in on a new drop from that artist. > Now if they start to be used in some enforceable way such as in a DRMd display then this would be a form of underlying value but why not use a non DRMd display? Actually, most artists want their work to be widely seen. This creates a virtuous cycle. You buy an artist's work, which increases the value of that work, which increase the artist's exposure, which increase the artist's perceived value, which increases the value of the work you purchased, which leads to more sales for the artist, etc. Instead of a one-time donation, the fan becomes quite literally invested in the artist. It's the same reason a musician might want to trend on TikTok by giving away 60 seconds of their song "for free" in the hopes to make it up on streaming, merch, ticket sales, and influence later. > Then there is the more general trend of treating tokens like these as investments where the value gets driven up and, appears to me, detached from any sense of underlying value. So the only way for the sale value of these tokens to hold is to have some one else willing to buy it. But if there is no underlying value then it’s not clear to me how this can continue indefinitely. I remember being much younger and seeing people buy toys, instruments, and curiosities "as an investment". Most of these didn't work out, but occasionally I see something from my childhood on ebay and think "oh, well, obviously that was going to be important, i should have bought a couple of those and put it away". Time causes some things to crystalize and other things to fade into obscurity. I suspect the same will happen with these "original" era NFTs.