14 ms·

Why NFTs are bad: the long version

99 points by NicoJuicy 5y ago

3PS 5y ago
Disclaimer: I don't really have a horse in this race, and I think most NTFs as currently bought and sold are scams. But I do strongly disagree with much of this article, and I think the underlying technology is pretty sound. > An attacker with 51% power could invalidate all new transactions for other users, and could for example slowly start limiting the transactions of other users or companies using the currency (targeted or otherwise) unless they paid a certain amount to the 51% owner. Once a currency is embedded enough in the economy, it will not be a feasible option for people to simply abandon their money and start over (and you won’t be able to sell it in such a situation). Like all such situations, an attacker would use a form of salami tactics, slowly taking a bigger and bigger cut from other people’s money via transactions whilst doing it slowly enough to stop them from moving away from the platform. Even in the event that the cryptocurrency later dies, the attacker will easily end up with more real-world currency than they started with. The idea of a single entity holding 51% of all of a circulating currency is completely at odds with the notion of a currency being "embedded enough in the economy" that people won't just dump the currency immediately and crash its exchange rate. Even the richest individuals alive have nowhere near 5%, never mind 51% of all circulating dollars. The section on Byzantine fault tolerance is particularly baffling. > Consider the aeroplane again. What motive does the sensor have to malfunction? None. As a result, we can be relatively sure that its failure would be down to one of three main causes: > Software failure > Hardware failure > Human inteference (e.g. a soldier tampering with sensors on an enemy warplane) > Byzantine fault tolerance is excellent at protecting against the first two possibilities in many systems. It is much weaker against the last possibility, because the human who sabotages the plane has a motive for the sensors to fail in a specific way which will breach the maximum fault tolerance of the system. Provided the human or humans can tamper with enough of the system, the fault tolerance breaks. This is the exact opposite of how Byzantine fault tolerance is defined. The entire point of Byzantine fault tolerance is that some of your nodes may not just be faulty, but actively adversarial. In the original Byzantine generals problem, some of the generals are active traitors. These issues made it hard for me to take the rest of the article seriously, but the author does raise good points with regard to how users are generally the weakest link in a given security model. If someone tricks you into sharing your Bitcoin credentials with them and steals everything from your wallet, good luck getting any kind of regulatory authority to recover your money. This is one of the main issues of cryptocurrencies when compared to centralized currencies - but that assumes you want to trust the central regulatory authority to begin with. Personally, while I think NFTs as a concept are fairly useless as currently applied (buying and selling URIs of random images that you may or may not actually own), they're not an inherently bad idea. For example, shares of stock in a virtual company could be minted as tradeable tokens, and then dividends could be paid out periodically to whichever accounts currently own tokens. In this case the entire concept of ownership is embedded into the token itself, so you don't need to rely on any external resources.
- NicoJuicy 5y ago
  > The idea of a single entity holding 51% of all of a circulating currency is completely at odds Euh, already happened... https://en.m.wikipedia.org/wiki/GHash.io https://en.m.wikipedia.org/wiki/GHash.io
  - 3PS 5y ago
    To finish the quote that you truncated... > The idea of a single entity holding 51% of all of a circulating currency is completely at odds with the notion of a currency being "embedded enough in the economy" that people won't just dump the currency immediately and crash its exchange rate. Certainly, 51% attacks are very viable against nascent or unpopular cryptocurrencies. This includes Bitcoin in 2014. But the author was specifically suggesting that a 51% attack could be carried out against a cryptocurrency that is firmly entrenched in the global economy. I find this very implausible.
    - NicoJuicy 5y ago
      Conclusion: it's not viable for the 2-3 largest ones and we'll ignore that China had 65% of mining capacity before the ban.
    - twelve40 5y ago
      The author's argument is a bit more subtle, where they are saying that for the sake of speeding up transactions it may be possible that newer algorithms enable less than 51% collude for a successful scam.
capableweb 5y ago
I'm glad there was a summary, but less happy about the contents of the summary. Seems the author misunderstands the core idea behind NFTs and blockchains in general. As a disclaimer: I'm generally pro-cryptocurrencies but I see zero value in today's uses of NFTs, seems mostly to be about moving funds around in a opaque way. Here is the summary they included in their post: > NFTs don’t prove ownership — ordinary legal contracts are just as good, and in fact better since they are heavily regulated and can be taken to courts for a central resolution when problems arise > Blockchains (which NFTs rely on) are in the best case no more secure than ‘normal’ relational database storage systems, and in most cases are less secure > Cryptocurrencies have no innate value and are only useful as a pyramid scheme, something big crypto influencers are knowingly using to profit from those who don’t realise it > Both cryptocurrencies and NFTs cause high environmental damage, and there are no viable systems to deal with this problem due to security considerations No one claims NFT proves ownership of entities outside of the used blockchain. But within the chosen blockchain, they do prove ownership of that particular NFT. That's a fact. Saying that blockchains are less secure than a relational database storage points towards not understanding immutable ledgers with shared state at all. They both have different use cases, that much should be obvious if you understand the basics of both blockchain and relational databases. Things that people value has value. That value is decided by what people think the value is. I don't understand art, especially not "high-art", but somehow people value it, that's fine by me, people like different things. But then I agree, cryptocurrency "influencers" are horrible. Follow the people developing the software instead, those are real and honest people (mostly). And finally: no, cryptocurrencies and NFTs doesn't cause "high environmental damage" as those are concepts, not implementations. One implementation of consensus that is used in cryptocurrencies is Proof of Work, that is harmful to the environment, at least current implementations. There are other implementations of consensus, like Proof of Stake, or Pure Proof of Stake, who have their own drawbacks but have almost no environmental impact (compared to Proof of Work).
- hartator 5y ago
  > No one claims NFT proves ownership of entities outside of the used blockchain. But within the chosen blockchain, they do prove ownership of that particular NFT. That's a fact. Is it a fact? You can just fork the full cryptopunk blockchain and reassign tokens whichever way you want. And we're just back at the exact same issue to have to go regular contracts and courts if you want to enforce ownership or legitimacy of the actual blockchain.
seibelj 5y ago
Man the anti-crypto hate on HN is stronger than usual today! > NFTs don’t prove ownership — ordinary legal contracts are just as good, and in fact better since they are heavily regulated and can be taken to courts for a central resolution when problems arise Blockchains allow strangers to transact high-value amounts across borders, quickly, securely. The fact I can move $1 billion USDC, $1 billion in BTC, or a $1 billion-valued NFT in seconds is why it leapfrogs the slow, manual, corruptible legal system. Can blockchains be a replacement for everything the courts provide? No. Can they allow moving digital goods quickly and safely across the world? Yes, because that is what they are designed to do. > Blockchains (which NFTs rely on) are in the best case no more secure than ‘normal’ relational database storage systems, and in most cases are less secure This is so fantastically incorrect the author has no business speaking authoritatively on this subject. Bitcoin is incorruptible. If you disagree, go and try! A relational database only needs a central party to fail. Does everything need a blockchain? No. Tweets go in the relational database, financial assets go on the blockchain. > Cryptocurrencies have no innate value and are only useful as a pyramid scheme, something big crypto influencers are knowingly using to profit from those who don’t realise it This book will refute the point https://www.amazon.com/Bitcoin-Standard-Decentralized-Alternative-Central/dp/1119473861 https://www.amazon.com/Bitcoin-Standard-Decentralized-Altern... TLDR Bitcoin is the hardest money ever created, politicians / society cannot manipulate it, therefore store wealth in bitcoin. > Both cryptocurrencies and NFTs cause high environmental damage, and there are no viable systems to deal with this problem due to security considerations Layer 2 solutions like Arbitrum and Optimism are live now that scale Ethereum without centralization. Proof of Stake chains like Cosmos, Avalanche, Polkadot, etc. are live now. ETH2 moving to PoS will happen soon.
- NicoJuicy 5y ago
  Sorry, i don't think any of us can relate on the difficulty of moving a billion $ daily. Lol I would think that moving it with checks & rules, would be a feature on such amount of money.
- toolz 5y ago
  > Proof of Stake chains like Cosmos, Avalanche, Polkadot, etc. are live now. ETH2 moving to PoS will happen soon. Just curious, is there a reason you've ommitted the two largest (by market cap) PoS coins (SOL, ADA) from this list?
NicoJuicy 5y ago
One of the best points he had for me, was that the lack of charge backs awards malicious actors in any of the eco-systems of NFT.
- capableweb 5y ago
  If chargebacks was something people wanted, then they would not have used systems in the first place that doesn't have chargebacks. Maybe in the future there will be another layer on top of cryptocurrencies that introduces that feature, but from hanging around in the community for a while, it doesn't seem to be that much requested.
  - NicoJuicy 5y ago
    People don't want it, because it's not used for actual sales. But for speculation.
csdvrx 5y ago
If you don't like them, don't work in the field. But NFTs have a demonstrated a wonderful product market fit, as better said in https://news.ycombinator.com/item?id=29279991 https://news.ycombinator.com/item?id=29279991 You may not like it, for many personal reasons (traditional explanation: "What didn't exist when you were 25 is an horrible heresy"), but I disagree with most of what's said. On a more personal note: you shouldn't try to force your tastes down other people throats. Say you don't personally like NFT or crypto, but not that they're "bad".
- NicoJuicy 5y ago
  What's the value in millions of these auto generated pics? Ps. Those pics are mostly avatars too... ( I think monkeys were popular)
  - rodiger 5y ago
    Community / social signalling / digitally-native proof of ownership (this part goes far beyond avatars)
    - NicoJuicy 5y ago
      Wash trading is called social signaling now? Proof of ownership of a jpeg on a Google drive means that you can proof that you own a deleted pic. Nice, but worthless.
      - rodiger 5y ago
        I agree there are tons of low value projects/grifters out there. Happy to have a good faith discussion with you, but doesn't seem like that's your intention given that response.
        NicoJuicy 5y ago
        I'm just starting the obvious. Many non tech people don't understand all of this. They think they actually own a Jpg on someone's gdrive. While there is nothing they can do if the "property owner" actually deletes it.
ccamrobertson 5y ago
This feels more stream of consciousness (hyperventilation?) rather than a coherent argument against crypto-assets. For instance, the entire section "Why cryptocurrencies don't work" seems to defy the reality that they are in fact functional (at least to some degree). E.g., because they can't be clawed back -> they don't work? What about that thing we all used 30 years ago called cash?
- NicoJuicy 5y ago
  We also had charge backs then, where you can return things based on the receipt. After >10 years, it's still not even on the road may as far as I know.
  - ccamrobertson 5y ago
    And the same would be true with a vendor who accepted Bitcoin and issued a receipt with a return policy. Generous return policies are also a modern artifact; historically most interactions with cash took place under the terms 'all sales final'. Societies functioned decently well for thousands of years this way with similar financial instruments.
    - NicoJuicy 5y ago
      And if the seller doesn't own it, you can't complain anywhere. That's not the case with cash, visa or Mastercard. You wouldn't want to get a bad rep with them. Malicious behavior isn't punished anywhere in crypto. There's an attempt for all those that are getting hacked though, despite the code=law sentiment.
    - zepto 5y ago
      Having a king also functioned decently well for thousands of years. Is that something you also want to bring back?
      - MrMan 5y ago
        Careful alot of these people will give you unexpected answers to that
sabhiram 5y ago
NFTs are silly unless the have a redeeming value. Today, folks think that this is purely monetary (trade me for more money because it's like the gold rush). However, there are valid applications as long as the bearer is entitled to "something" other than speculative value.
- SrslyJosh 5y ago
  > However, there are valid applications as long as the bearer is entitled to "something" other than speculative value. I've seen the assertion that there are "lots" of other applications for NFTs many more times than I've seen those applications actually described.
  - lostcolony 5y ago
    Infinitely more, in fact.
- andybp85 5y ago
  Totally agree with this. A guy from a band I'm into (The Disco Biscuits) just started making band-themed NFTs and he's doing private events and stuff for the owners. The band also released a free limited one (I think 420 units, because jam band) that gives the bearer access to a concert video that they're not releasing elsewhere. It definitely seems like the community aspects to NFTs is something that can be leveraged to do cool and interesting stuff. I'm not rushing to buy one but I'm pretty curious to see what else they do. And of course this isn't unique to NFTs, if you buy a Porsche there's plenty of Porsche clubs you can join.
victorvosk 5y ago
I don't even know where to begin. We are at this stage in the crypto bull market that all the smart people who refuse to believe in it are getting upset and are writing angry articles. You cannot realistically write an article dumping on NFTs and digital assets unless you also go after 95% of game developers which are making exponentially more money on microtransactions than the entire NFT marketspace. Underground gambling rings formed around CS:GO skins. People are spending thousands of dollars on ships in Start Citizen. Most of League of Legends business model is in-game skins. These are all digital assets that the users don't even really own if they read the terms of service. They are nothing more than flex pieces in game that can be taken away at any time. Don't even get me started on mobile games targeting kids. But for some reason the bridge too far is adults putting jpegs in their twitter profile pictures.
- elil17 5y ago
  The difference is that video games have a way to enforce ownership. CS:GO skins are valuable because Valve doesn’t let you just upload your own skins. I can download any NFT and use it as my own profile picture.
  - capableweb 5y ago
    > I can download any NFT and use it as my own profile picture. You cannot, unless you have a vastly different understanding of what an NFT is than what it actually is. A NFT is not a picture, it's a cryptocurrency that only has one item. You could download the data representing a NFT (it's just ascii data), but not sure what you'd get out of that.
  - tshaddox 5y ago
    If I understand NFTs correctly, anyone can verify who owns the NFT. No one is claiming the NFT is literally just the bytes of the profile picture. The NFT is the control of the token on the blockchain. Likewise, anyone could download the bytes of a 3D model of a weapon or hat in a video game. The only difference is that Valve’s software will check the canonical source of ownership, which isn’t much different than if Twitter or any other social network writes code to verify the ownership of an NFT representing some profile picture.
hartator 5y ago
You can obviously copy the JPG of any NFT; but you can also copy the full NFT blockchain and attribute any token of any JPGs to you. Who determine which blockchain is the "legitimate" one?
- capableweb 5y ago
  > Who determine which blockchain is the "legitimate" one? You! And me! And the rest of the people who chooses to use one. Maybe not you in particular, but the people. Bitcoin is only as legitimate as the people having/wanting Bitcoin makes it. Which, by judging how much it's currently is worth, seems very legitimate.
- Graziano_M 5y ago
  How can you do that? If you copy the chain you still don't own the NFTs since you don't control the private keys of the owners.
  - hartator 5y ago
    You can either clone the blockchain BEFORE the token attribution and attribute the NFT to you; or modify the rules of the blockchain to attribute you ownership. Legitimacy of the original blockchain compared to the cloned one is purely a marketing result. There is no blockchain of blockchains in other words.
InternetPerson 5y ago
People pay money for things that are pretty pointless. That's true. Paying for an NFT seems especially pointless to me (and I suspect to most people). But maybe if the crypto folks keep lecturing us all online, more and more people will start to come around...
arcticbull 5y ago
> [PoS] comes with the obvious benefit that you no longer need to expend countries worth of electricity doing redundant calculations to decide the next writer to the blockchain; however, it also comes with the problem that now those who have enough money can just sit on it forever to gain more and more money (and more and more control over the blockchain as well). This is interesting because I think in reality proof of work rounds to proof of stake at the limit. If your PoW coin becomes super valuable then using your coins to invest in miners is the same thing as staking your PoS coins right? I mean, logically, not environmentally. Then you just benefit from all transaction flow, earning free money forever. If staking is the same as buying an ownership stake in a miner then does the nothing at stake problem not also affect proof of work?
mbesto 5y ago
My favorite part about NFTs. One individual can create an endless amount of wallets and place hundreds of offers on a NFT asset making it seem like there is high demand for an item. You can also buy NFTs from yourself anonymously to make it look like an NFT has momentum value. It's hilarious how easy it is to create illegitimate value with anonymous or pseudo-anonymous actors in any market transaction.
rewgs 5y ago
There is so much noise surrounding NFTs, primarily in the form of hot takes and clickbait headlines, I’m exhausted and almost don’t even care to seek out the signal being buried by it. Common sense tells me that NFTs — in the sense that they are non-fungible, immutable entries on a blockchain that cannot reasonably be edited or changed — are brilliant for things such as copyright, ownership (say, a deed to land or a car). They are practically permanent unless the electrical grid goes out, and at that point we’d have bigger problems than proving ownership. This could also completely change the process of tracking and paying out things such as music royalties. The list goes on. Is there any thoughtful content out there regarding “why NFTs (and other blockchain tech) are good” rather than yet another Medium post on why they’re bad, actually? The pessimism is tiring.
soulofmischief 5y ago
I just want to pop in and say something, as a blockchain dev deep into this tech and pouring my heart and soul into technology that will one day help everyone whether they understand how a blockchain or NFT works or not. (How many car owners are also mechanics or auto industry experts?) The level of discourse I see on Hacker News surrounding NFTs and crypto is abysmally arrogant, misguided, ignorant and so profoundly vitriolic that it is incredibly energy-consuming to engage with the amount of misinformation. There is no hope for a reasonable discussion, everyone is coming to the table with their own opinions and not listening to what industry experts have to say. These are some of the most toxic discourses I see on HN, and some of the most fruitless. I have so much to say on the subject, one of my favorite subjects, and I'm scared and nervous to contribute anything lest I get bombarded with narrow-minded, played-out talking points. Can we as a community please improve this situation? We're forming our own crypto bubble, an anti-crypto bubble. It's just as toxic and just as misguided.
- Jensson 5y ago
  > an anti-crypto bubble HN is the only place I've seen a significant number of people who are pro NFT's. Everywhere else everyone just agrees they are scams and that is the end of the discussion. Might be some NFT communities where it is different, I'm talking about non-NFT forums here.

99 points by NicoJuicy 5y ago

3PS 5y ago

Disclaimer: I don't really have a horse in this race, and I think most NTFs as currently bought and sold are scams. But I do strongly disagree with much of this article, and I think the underlying technology is pretty sound. > An attacker with 51% power could invalidate all new transactions for other users, and could for example slowly start limiting the transactions of other users or companies using the currency (targeted or otherwise) unless they paid a certain amount to the 51% owner. Once a currency is embedded enough in the economy, it will not be a feasible option for people to simply abandon their money and start over (and you won’t be able to sell it in such a situation). Like all such situations, an attacker would use a form of salami tactics, slowly taking a bigger and bigger cut from other people’s money via transactions whilst doing it slowly enough to stop them from moving away from the platform. Even in the event that the cryptocurrency later dies, the attacker will easily end up with more real-world currency than they started with. The idea of a single entity holding 51% of all of a circulating currency is completely at odds with the notion of a currency being "embedded enough in the economy" that people won't just dump the currency immediately and crash its exchange rate. Even the richest individuals alive have nowhere near 5%, never mind 51% of all circulating dollars. The section on Byzantine fault tolerance is particularly baffling. > Consider the aeroplane again. What motive does the sensor have to malfunction? None. As a result, we can be relatively sure that its failure would be down to one of three main causes: > Software failure > Hardware failure > Human inteference (e.g. a soldier tampering with sensors on an enemy warplane) > Byzantine fault tolerance is excellent at protecting against the first two possibilities in many systems. It is much weaker against the last possibility, because the human who sabotages the plane has a motive for the sensors to fail in a specific way which will breach the maximum fault tolerance of the system. Provided the human or humans can tamper with enough of the system, the fault tolerance breaks. This is the exact opposite of how Byzantine fault tolerance is defined. The entire point of Byzantine fault tolerance is that some of your nodes may not just be faulty, but actively adversarial. In the original Byzantine generals problem, some of the generals are active traitors. These issues made it hard for me to take the rest of the article seriously, but the author does raise good points with regard to how users are generally the weakest link in a given security model. If someone tricks you into sharing your Bitcoin credentials with them and steals everything from your wallet, good luck getting any kind of regulatory authority to recover your money. This is one of the main issues of cryptocurrencies when compared to centralized currencies - but that assumes you want to trust the central regulatory authority to begin with. Personally, while I think NFTs as a concept are fairly useless as currently applied (buying and selling URIs of random images that you may or may not actually own), they're not an inherently bad idea. For example, shares of stock in a virtual company could be minted as tradeable tokens, and then dividends could be paid out periodically to whichever accounts currently own tokens. In this case the entire concept of ownership is embedded into the token itself, so you don't need to rely on any external resources.

NicoJuicy 5y ago
> The idea of a single entity holding 51% of all of a circulating currency is completely at odds Euh, already happened... https://en.m.wikipedia.org/wiki/GHash.io https://en.m.wikipedia.org/wiki/GHash.io
- 3PS 5y ago
  To finish the quote that you truncated... > The idea of a single entity holding 51% of all of a circulating currency is completely at odds with the notion of a currency being "embedded enough in the economy" that people won't just dump the currency immediately and crash its exchange rate. Certainly, 51% attacks are very viable against nascent or unpopular cryptocurrencies. This includes Bitcoin in 2014. But the author was specifically suggesting that a 51% attack could be carried out against a cryptocurrency that is firmly entrenched in the global economy. I find this very implausible.
  - NicoJuicy 5y ago
    Conclusion: it's not viable for the 2-3 largest ones and we'll ignore that China had 65% of mining capacity before the ban.
  - twelve40 5y ago
    The author's argument is a bit more subtle, where they are saying that for the sake of speeding up transactions it may be possible that newer algorithms enable less than 51% collude for a successful scam.

capableweb 5y ago

I'm glad there was a summary, but less happy about the contents of the summary. Seems the author misunderstands the core idea behind NFTs and blockchains in general. As a disclaimer: I'm generally pro-cryptocurrencies but I see zero value in today's uses of NFTs, seems mostly to be about moving funds around in a opaque way. Here is the summary they included in their post: > NFTs don’t prove ownership — ordinary legal contracts are just as good, and in fact better since they are heavily regulated and can be taken to courts for a central resolution when problems arise > Blockchains (which NFTs rely on) are in the best case no more secure than ‘normal’ relational database storage systems, and in most cases are less secure > Cryptocurrencies have no innate value and are only useful as a pyramid scheme, something big crypto influencers are knowingly using to profit from those who don’t realise it > Both cryptocurrencies and NFTs cause high environmental damage, and there are no viable systems to deal with this problem due to security considerations No one claims NFT proves ownership of entities outside of the used blockchain. But within the chosen blockchain, they do prove ownership of that particular NFT. That's a fact. Saying that blockchains are less secure than a relational database storage points towards not understanding immutable ledgers with shared state at all. They both have different use cases, that much should be obvious if you understand the basics of both blockchain and relational databases. Things that people value has value. That value is decided by what people think the value is. I don't understand art, especially not "high-art", but somehow people value it, that's fine by me, people like different things. But then I agree, cryptocurrency "influencers" are horrible. Follow the people developing the software instead, those are real and honest people (mostly). And finally: no, cryptocurrencies and NFTs doesn't cause "high environmental damage" as those are concepts, not implementations. One implementation of consensus that is used in cryptocurrencies is Proof of Work, that is harmful to the environment, at least current implementations. There are other implementations of consensus, like Proof of Stake, or Pure Proof of Stake, who have their own drawbacks but have almost no environmental impact (compared to Proof of Work).

hartator 5y ago
> No one claims NFT proves ownership of entities outside of the used blockchain. But within the chosen blockchain, they do prove ownership of that particular NFT. That's a fact. Is it a fact? You can just fork the full cryptopunk blockchain and reassign tokens whichever way you want. And we're just back at the exact same issue to have to go regular contracts and courts if you want to enforce ownership or legitimacy of the actual blockchain.

seibelj 5y ago

Man the anti-crypto hate on HN is stronger than usual today! > NFTs don’t prove ownership — ordinary legal contracts are just as good, and in fact better since they are heavily regulated and can be taken to courts for a central resolution when problems arise Blockchains allow strangers to transact high-value amounts across borders, quickly, securely. The fact I can move $1 billion USDC, $1 billion in BTC, or a $1 billion-valued NFT in seconds is why it leapfrogs the slow, manual, corruptible legal system. Can blockchains be a replacement for everything the courts provide? No. Can they allow moving digital goods quickly and safely across the world? Yes, because that is what they are designed to do. > Blockchains (which NFTs rely on) are in the best case no more secure than ‘normal’ relational database storage systems, and in most cases are less secure This is so fantastically incorrect the author has no business speaking authoritatively on this subject. Bitcoin is incorruptible. If you disagree, go and try! A relational database only needs a central party to fail. Does everything need a blockchain? No. Tweets go in the relational database, financial assets go on the blockchain. > Cryptocurrencies have no innate value and are only useful as a pyramid scheme, something big crypto influencers are knowingly using to profit from those who don’t realise it This book will refute the point https://www.amazon.com/Bitcoin-Standard-Decentralized-Alternative-Central/dp/1119473861 https://www.amazon.com/Bitcoin-Standard-Decentralized-Altern... TLDR Bitcoin is the hardest money ever created, politicians / society cannot manipulate it, therefore store wealth in bitcoin. > Both cryptocurrencies and NFTs cause high environmental damage, and there are no viable systems to deal with this problem due to security considerations Layer 2 solutions like Arbitrum and Optimism are live now that scale Ethereum without centralization. Proof of Stake chains like Cosmos, Avalanche, Polkadot, etc. are live now. ETH2 moving to PoS will happen soon.

NicoJuicy 5y ago
Sorry, i don't think any of us can relate on the difficulty of moving a billion $ daily. Lol I would think that moving it with checks & rules, would be a feature on such amount of money.
toolz 5y ago
> Proof of Stake chains like Cosmos, Avalanche, Polkadot, etc. are live now. ETH2 moving to PoS will happen soon. Just curious, is there a reason you've ommitted the two largest (by market cap) PoS coins (SOL, ADA) from this list?

NicoJuicy 5y ago

One of the best points he had for me, was that the lack of charge backs awards malicious actors in any of the eco-systems of NFT.

capableweb 5y ago
If chargebacks was something people wanted, then they would not have used systems in the first place that doesn't have chargebacks. Maybe in the future there will be another layer on top of cryptocurrencies that introduces that feature, but from hanging around in the community for a while, it doesn't seem to be that much requested.
- NicoJuicy 5y ago
  People don't want it, because it's not used for actual sales. But for speculation.

csdvrx 5y ago

If you don't like them, don't work in the field. But NFTs have a demonstrated a wonderful product market fit, as better said in https://news.ycombinator.com/item?id=29279991 https://news.ycombinator.com/item?id=29279991 You may not like it, for many personal reasons (traditional explanation: "What didn't exist when you were 25 is an horrible heresy"), but I disagree with most of what's said. On a more personal note: you shouldn't try to force your tastes down other people throats. Say you don't personally like NFT or crypto, but not that they're "bad".

NicoJuicy 5y ago
What's the value in millions of these auto generated pics? Ps. Those pics are mostly avatars too... ( I think monkeys were popular)
- rodiger 5y ago
  Community / social signalling / digitally-native proof of ownership (this part goes far beyond avatars)
  - NicoJuicy 5y ago
    Wash trading is called social signaling now? Proof of ownership of a jpeg on a Google drive means that you can proof that you own a deleted pic. Nice, but worthless.
    - rodiger 5y ago
      I agree there are tons of low value projects/grifters out there. Happy to have a good faith discussion with you, but doesn't seem like that's your intention given that response.
      - NicoJuicy 5y ago
        I'm just starting the obvious. Many non tech people don't understand all of this. They think they actually own a Jpg on someone's gdrive. While there is nothing they can do if the "property owner" actually deletes it.

ccamrobertson 5y ago

This feels more stream of consciousness (hyperventilation?) rather than a coherent argument against crypto-assets. For instance, the entire section "Why cryptocurrencies don't work" seems to defy the reality that they are in fact functional (at least to some degree). E.g., because they can't be clawed back -> they don't work? What about that thing we all used 30 years ago called cash?

NicoJuicy 5y ago
We also had charge backs then, where you can return things based on the receipt. After >10 years, it's still not even on the road may as far as I know.
- ccamrobertson 5y ago
  And the same would be true with a vendor who accepted Bitcoin and issued a receipt with a return policy. Generous return policies are also a modern artifact; historically most interactions with cash took place under the terms 'all sales final'. Societies functioned decently well for thousands of years this way with similar financial instruments.
  - NicoJuicy 5y ago
    And if the seller doesn't own it, you can't complain anywhere. That's not the case with cash, visa or Mastercard. You wouldn't want to get a bad rep with them. Malicious behavior isn't punished anywhere in crypto. There's an attempt for all those that are getting hacked though, despite the code=law sentiment.
  - zepto 5y ago
    Having a king also functioned decently well for thousands of years. Is that something you also want to bring back?
    - MrMan 5y ago
      Careful alot of these people will give you unexpected answers to that

sabhiram 5y ago

NFTs are silly unless the have a redeeming value. Today, folks think that this is purely monetary (trade me for more money because it's like the gold rush). However, there are valid applications as long as the bearer is entitled to "something" other than speculative value.

SrslyJosh 5y ago
> However, there are valid applications as long as the bearer is entitled to "something" other than speculative value. I've seen the assertion that there are "lots" of other applications for NFTs many more times than I've seen those applications actually described.
- lostcolony 5y ago
  Infinitely more, in fact.
andybp85 5y ago
Totally agree with this. A guy from a band I'm into (The Disco Biscuits) just started making band-themed NFTs and he's doing private events and stuff for the owners. The band also released a free limited one (I think 420 units, because jam band) that gives the bearer access to a concert video that they're not releasing elsewhere. It definitely seems like the community aspects to NFTs is something that can be leveraged to do cool and interesting stuff. I'm not rushing to buy one but I'm pretty curious to see what else they do. And of course this isn't unique to NFTs, if you buy a Porsche there's plenty of Porsche clubs you can join.

victorvosk 5y ago

I don't even know where to begin. We are at this stage in the crypto bull market that all the smart people who refuse to believe in it are getting upset and are writing angry articles. You cannot realistically write an article dumping on NFTs and digital assets unless you also go after 95% of game developers which are making exponentially more money on microtransactions than the entire NFT marketspace. Underground gambling rings formed around CS:GO skins. People are spending thousands of dollars on ships in Start Citizen. Most of League of Legends business model is in-game skins. These are all digital assets that the users don't even really own if they read the terms of service. They are nothing more than flex pieces in game that can be taken away at any time. Don't even get me started on mobile games targeting kids. But for some reason the bridge too far is adults putting jpegs in their twitter profile pictures.

elil17 5y ago
The difference is that video games have a way to enforce ownership. CS:GO skins are valuable because Valve doesn’t let you just upload your own skins. I can download any NFT and use it as my own profile picture.
- capableweb 5y ago
  > I can download any NFT and use it as my own profile picture. You cannot, unless you have a vastly different understanding of what an NFT is than what it actually is. A NFT is not a picture, it's a cryptocurrency that only has one item. You could download the data representing a NFT (it's just ascii data), but not sure what you'd get out of that.
- tshaddox 5y ago
  If I understand NFTs correctly, anyone can verify who owns the NFT. No one is claiming the NFT is literally just the bytes of the profile picture. The NFT is the control of the token on the blockchain. Likewise, anyone could download the bytes of a 3D model of a weapon or hat in a video game. The only difference is that Valve’s software will check the canonical source of ownership, which isn’t much different than if Twitter or any other social network writes code to verify the ownership of an NFT representing some profile picture.

hartator 5y ago

You can obviously copy the JPG of any NFT; but you can also copy the full NFT blockchain and attribute any token of any JPGs to you. Who determine which blockchain is the "legitimate" one?

capableweb 5y ago
> Who determine which blockchain is the "legitimate" one? You! And me! And the rest of the people who chooses to use one. Maybe not you in particular, but the people. Bitcoin is only as legitimate as the people having/wanting Bitcoin makes it. Which, by judging how much it's currently is worth, seems very legitimate.
Graziano_M 5y ago
How can you do that? If you copy the chain you still don't own the NFTs since you don't control the private keys of the owners.
- hartator 5y ago
  You can either clone the blockchain BEFORE the token attribution and attribute the NFT to you; or modify the rules of the blockchain to attribute you ownership. Legitimacy of the original blockchain compared to the cloned one is purely a marketing result. There is no blockchain of blockchains in other words.

InternetPerson 5y ago

People pay money for things that are pretty pointless. That's true. Paying for an NFT seems especially pointless to me (and I suspect to most people). But maybe if the crypto folks keep lecturing us all online, more and more people will start to come around...

arcticbull 5y ago

> [PoS] comes with the obvious benefit that you no longer need to expend countries worth of electricity doing redundant calculations to decide the next writer to the blockchain; however, it also comes with the problem that now those who have enough money can just sit on it forever to gain more and more money (and more and more control over the blockchain as well). This is interesting because I think in reality proof of work rounds to proof of stake at the limit. If your PoW coin becomes super valuable then using your coins to invest in miners is the same thing as staking your PoS coins right? I mean, logically, not environmentally. Then you just benefit from all transaction flow, earning free money forever. If staking is the same as buying an ownership stake in a miner then does the nothing at stake problem not also affect proof of work?

mbesto 5y ago

My favorite part about NFTs. One individual can create an endless amount of wallets and place hundreds of offers on a NFT asset making it seem like there is high demand for an item. You can also buy NFTs from yourself anonymously to make it look like an NFT has momentum value. It's hilarious how easy it is to create illegitimate value with anonymous or pseudo-anonymous actors in any market transaction.

rewgs 5y ago

There is so much noise surrounding NFTs, primarily in the form of hot takes and clickbait headlines, I’m exhausted and almost don’t even care to seek out the signal being buried by it. Common sense tells me that NFTs — in the sense that they are non-fungible, immutable entries on a blockchain that cannot reasonably be edited or changed — are brilliant for things such as copyright, ownership (say, a deed to land or a car). They are practically permanent unless the electrical grid goes out, and at that point we’d have bigger problems than proving ownership. This could also completely change the process of tracking and paying out things such as music royalties. The list goes on. Is there any thoughtful content out there regarding “why NFTs (and other blockchain tech) are good” rather than yet another Medium post on why they’re bad, actually? The pessimism is tiring.

soulofmischief 5y ago

I just want to pop in and say something, as a blockchain dev deep into this tech and pouring my heart and soul into technology that will one day help everyone whether they understand how a blockchain or NFT works or not. (How many car owners are also mechanics or auto industry experts?) The level of discourse I see on Hacker News surrounding NFTs and crypto is abysmally arrogant, misguided, ignorant and so profoundly vitriolic that it is incredibly energy-consuming to engage with the amount of misinformation. There is no hope for a reasonable discussion, everyone is coming to the table with their own opinions and not listening to what industry experts have to say. These are some of the most toxic discourses I see on HN, and some of the most fruitless. I have so much to say on the subject, one of my favorite subjects, and I'm scared and nervous to contribute anything lest I get bombarded with narrow-minded, played-out talking points. Can we as a community please improve this situation? We're forming our own crypto bubble, an anti-crypto bubble. It's just as toxic and just as misguided.

Jensson 5y ago
> an anti-crypto bubble HN is the only place I've seen a significant number of people who are pro NFT's. Everywhere else everyone just agrees they are scams and that is the end of the discussion. Might be some NFT communities where it is different, I'm talking about non-NFT forums here.