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I'm really curious how NFTs will play out. My first reaction is to think buying them is idiotic, but I'm starting to think they're around here to stay so maybe

I'm really curious how NFTs will play out. My first reaction is to think buying them is idiotic, but I'm starting to think they're around here to stay so maybe I'm the clown.

tjpnz 5y ago
FWIW I highly doubt you'll be remembered as the clown.
timmg 5y ago
Personally, I don't see how the NFTs of today will have any long term value. Maybe a few, simply for the history/novelty. The blockchain itself has no legal authority. It's just a transaction log. You could buy a link to an image that seller doesn't own. Then what? Now the transaction log assigns ownership to someone with no rights to it. If it ever came to it, the courts would override it. Then what happens to the block chain "asserting" that ownership? I think it's possible that the NFTs of today will be the progenitor of something that does make sense longer term. But even for that, I'm a bit skeptical.
- kranke155 5y ago
  Yep. NFTs right now are proof of concept. That doesn't make them any less interesting. They'll be A LOT more interesting when AR/XR become commonplace. I can imagine people having NFT AI companions, NFT XR art that's only distributed to token holders. Digital Fashion will also become a "Real" thing when XR becomes commonplace.
  - pupppet 5y ago
    But why do you need an NFT for user 53245 has unique item xyz? Isn’t that just…software?
    - kranke155 5y ago
      NFTs are actually a good way to enforce data portability. A big NFT website recently was deleted by its webmaster. Since everything was open source, and the JPEGs/art were hosted on IPFS, the commnity quite simply rebuilt the website frontend and nothing was lost. You can read more about this here: https://www.coindesk.com/tech/2021/11/18/what-hic-et-nuncs-resurrection-says-about-decentralized-infrastructure/ https://www.coindesk.com/tech/2021/11/18/what-hic-et-nuncs-r... This is the strength of having a decentralised open source blockchain - suddenly digital asset ownership can be "established" even if their utility for now is close to nil. But that's allowed a vibrant digital art market to explode.
      - pupppet 5y ago
        Probably an ignorant question here, but what's stopping someone from taking someone's jpg, changing a few pixels, and adding it to the blockchain. How do you know which is the original?
        kranke155 5y ago
        At this moment nothing. The more centralised markets - SuperRare, Nifty Gateway - probably do some form of KYC. That's the risk you take when using fully permissionless markets, but I'd say if you are a collector, you take 5 minutes to check whether the artist exists. I don't buy anything unless the artist is on Twitter/instagram linked to his profile. There are ways to verify identities on both Tezos and Ethereum blockchains which is usually how I look into and make sure the artist is legit. I myself own an Ethereum Name Service and Tezos domain (.eth and .tez). For a few dollars the owner of one of the main tezos scan websites also creates verified identities using Twitter profiles. Takes a bit of effort but it is worth it. Having an active twitter account is also a big thing in the NFT space, it helps enforce a minimum level of difficulty to art stealing.
        jazzyjackson 5y ago
        Blockchain records provenance : who owned the token before you, so the nft is not “I own this jpeg”, it’s “I bought this jpeg from the artist with public key X”
  - timmg 5y ago
    I don't see how AR/VR assets are any different than jpegs, etc. If enough systems integrate with the blockchains to allow transfer of ownership, maybe it will take hold. I think central authorities with interop would be a better solution. The problem with both of those solutions is how much incentive systems have for interop. I get that some people see NFTs as a way to break from the tyranny of the tech monoliths. I'm just skeptical that we'll get there. It's kinda like "Linux on the Desktop."
    - kranke155 5y ago
      Central authorities have refused to interop even on text messaging, up to the point where text messaging was possible between apps 10 years ago but has been made impossible. We went from Pidgin to 10 messaging apps that don't interop basic text. The incentives on central authorities is always to abuse their power. That's how we got Facebook. Blockchain is not a promise of an utopia, but the incentives are radically different. And in some ways, "central authorities with interop" is a description of blockchain where not everyone is running a full node.
matheusmoreira 5y ago
NFTs will be awesome if they get some legal backing. Would be awesome if buying a book, music, movie or game NFT entitled me to legally consume that content in any device or format I wanted. Until that happens there's no point since we don't really own anything.
- kranke155 5y ago
  I think that's the direction it's going. NFTs are a revolution for digital artists tho - as they allow for a global liquid marketplace that enforces automatic royalties. That's the power of smart contracts - suddenly I can make digital art that automatically reverts profit from subsequent sales to me - 10% or so at least.
  - matheusmoreira 5y ago
    Yeah, that's a totally awesome idea. I'm not exactly sure how it interacts with the realities of copyright though. NFTs currently don't give consumer any rights. They're also completely useless for enforcing artificial scarcity: you can always just download the art instead.
    - kranke155 5y ago
      ATM I would say NFTs are little else but a way to pay directly to fund digital artists. I would say they might become useful in an XR world, where XR assets might include companions/digital clothing acessories. Enforcing NFT rights in XR would be more feasible.
  - blincoln 5y ago
    The NFT itself only enforces any of that on the NFT itself (more or less the sales receipt), not the digital art. What's the incentive to jump through all of the hoops that end up with the artist receiving a percentage of the transaction? Laws? A central commercial organization? The good will of people who like the artist? Then why use a blockchain at all?
k3liutZu 5y ago
Digital data (and media by extent) is _meant_ to be cloned and distributed. Hence I can't understand NFT's either.
- kranke155 5y ago
  NFTs don't stop cloning or distribution. They just allow digital deeds/watermarks. They're a good way to support digital art. Other than that I won't speculate.
- dageshi 5y ago
  It struck me that NFT's in the context of art are basically autographs. People will pay far more than the standard value of a hardback for a hardback autographed by the author and even more for a first edition of a hardback autographed by the author than a second edition. It only becomes "special" because the author signed it. NFT's are basically digital autographs on something that's even cheaper (free) to copy than a book.
arnvald 5y ago
I think as a concept they might stay and find some use. In terms of art and collectibles though, I predict a huge crash within the next 2 years. People now pay thousands of dollars for algorithmically generated images. How many of buyers pay for the "access to the community" and how many are speculators that just want to sell them later? Most of these communities that are created around NTFs will become inactive soon and with a nearly infinite supply of new NFT series, the resale values will drop by 90%+. A limited number of communities will remain active, and maybe their NFTs will increase in value (since they offer some exclusivity). Same with people who now support graphic artists and photographers by paying $5,000 for NFT of some photo. Why people who have never commissioned anything now are paying so much for NFTs, and will they keep supporting artists when they realize that they can't make a profit anymore? I'm curious what will happen, as I believe we're entering the "Peak of inflated expectations" stage [0] [0] https://en.wikipedia.org/wiki/Gartner_hype_cycle https://en.wikipedia.org/wiki/Gartner_hype_cycle
- kranke155 5y ago
  Lots of questions here. How many of buyers pay for the "access to the community" and how many are speculators that just want to sell them later? Lots of speculators for sure. will they keep supporting artists when they realize that they can't make a profit anymore? 90% will leave. Speculation is a part of any market tho, including the art market. Look no further than the Mad Men episode where the agency owner bought a Rothko "because the price will double in 6 months". "Peak of inflated expectations" Yes. This seems like a good description. I think as a concept they might stay and find some use. Every concept of how to make NFTs more useful is actively being worked on. So yes they will stay/become more useful.
kranke155 5y ago
There are very interesting things happening in NFTs ie - https://www.fxhash.xyz/ https://www.fxhash.xyz/ - which encodes Generative Art straight onto the Tezos blockchain. Digital artists never had a liquid global permissionless marketplace. It's creating some incredible art. On long term value I have no idea. But as far as supporting digital artists, it's a novel way to do it and really cool. Lives are being changed by NFTs atm.
TrevorAustin 5y ago
Everything about NFTs is irritating. They're pure positional goods, with no real utility beyond signaling social status. They're subject to intense, irrational financial speculation. They attract insiders, hypesters, and scam artists. Their fans are prone to wildly overstating their capabilities and importance. The pieces of art they point to very often demonstrate almost no technical skill. They're built on technology with objectively terrible performance characteristics. But I've thought Facebook was stupid since 2004. Experience has taught me that I'm a weirdo and my aesthetic objections are usually anti-correlated with a project's success. I am the George Costanza of social media. If you're reading about Non-Fungible Tokens on Hacker News, I suspect you are too. These things are here to stay.
- deleted 5y ago
  [deleted]
- brandall10 5y ago
  Right there with you… but these types of observations seem to hold in crypto vs fiat currency, no? I feel that’s the vibe the op is getting at.
- kranke155 5y ago
  This is a great take. I'd recommend you read this text, or skim it, to see what happened with NFTs https://meaningness.com/geeks-mops-sociopaths https://meaningness.com/geeks-mops-sociopaths Basically sociopaths have taken over the space and they are promoting absolute crap. BUT There is real art and artists in the space if you take your time to look for it. Look at - https://www.fxhash.xyz/ https://www.fxhash.xyz/ - you'll see a remarkable thing: real innovation, Generative Art being placed right onto the blockchain. Something that would be very hard to monetize only 2 years ago is now a liquid permissionless marketplace for Generative Artists to experiment. It's like shadertoy has become an art market. You can now spend your days experimenting with shader art and make real money. That's incredible to me.
- 1cvmask 5y ago
  Isn't most real world art buying also about social signaling and the scarcity and uniqueness associated with it?
fullshark 5y ago
I thought they were idiotic, then I tried to buy one to see what the fuss was about and decided they were ridiculously idiotic, a ton of transaction fees just to get my avatar next to some Opensea listing. Bragging rights within the terminally online crypto zealot echo chamber, that's all it provides.
- kranke155 5y ago
  Try hit ec nunc on tezos. Fees are lower than a dollar. Art is much less shit. https://hicetnunc.art/ https://hicetnunc.art/ If you want something more organised, like OpenSea, again OBJKT on Tezos is great. https://objkt.com/ https://objkt.com/
JohnJamesRambo 5y ago
I think it is like most things and follows a Gartner hype cycle curve. It will cool off and the real uses will come into play later. There are many valid uses for NFTs, buying silly jpgs isn’t one of them. A good 2022 crypto bear market will separate the wheat from the chaff just like always. https://upload.wikimedia.org/wikipedia/commons/thumb/9/94/Gartner_Hype_Cycle.svg/1200px-Gartner_Hype_Cycle.svg.png https://upload.wikimedia.org/wikipedia/commons/thumb/9/94/Ga...

I'm really curious how NFTs will play out. My first reaction is to think buying them is idiotic, but I'm starting to think they're around here to stay so maybe I'm the clown.

tjpnz 5y ago

FWIW I highly doubt you'll be remembered as the clown.

timmg 5y ago

Personally, I don't see how the NFTs of today will have any long term value. Maybe a few, simply for the history/novelty. The blockchain itself has no legal authority. It's just a transaction log. You could buy a link to an image that seller doesn't own. Then what? Now the transaction log assigns ownership to someone with no rights to it. If it ever came to it, the courts would override it. Then what happens to the block chain "asserting" that ownership? I think it's possible that the NFTs of today will be the progenitor of something that does make sense longer term. But even for that, I'm a bit skeptical.

kranke155 5y ago
Yep. NFTs right now are proof of concept. That doesn't make them any less interesting. They'll be A LOT more interesting when AR/XR become commonplace. I can imagine people having NFT AI companions, NFT XR art that's only distributed to token holders. Digital Fashion will also become a "Real" thing when XR becomes commonplace.
- pupppet 5y ago
  But why do you need an NFT for user 53245 has unique item xyz? Isn’t that just…software?
  - kranke155 5y ago
    NFTs are actually a good way to enforce data portability. A big NFT website recently was deleted by its webmaster. Since everything was open source, and the JPEGs/art were hosted on IPFS, the commnity quite simply rebuilt the website frontend and nothing was lost. You can read more about this here: https://www.coindesk.com/tech/2021/11/18/what-hic-et-nuncs-resurrection-says-about-decentralized-infrastructure/ https://www.coindesk.com/tech/2021/11/18/what-hic-et-nuncs-r... This is the strength of having a decentralised open source blockchain - suddenly digital asset ownership can be "established" even if their utility for now is close to nil. But that's allowed a vibrant digital art market to explode.
    - pupppet 5y ago
      Probably an ignorant question here, but what's stopping someone from taking someone's jpg, changing a few pixels, and adding it to the blockchain. How do you know which is the original?
      - kranke155 5y ago
        At this moment nothing. The more centralised markets - SuperRare, Nifty Gateway - probably do some form of KYC. That's the risk you take when using fully permissionless markets, but I'd say if you are a collector, you take 5 minutes to check whether the artist exists. I don't buy anything unless the artist is on Twitter/instagram linked to his profile. There are ways to verify identities on both Tezos and Ethereum blockchains which is usually how I look into and make sure the artist is legit. I myself own an Ethereum Name Service and Tezos domain (.eth and .tez). For a few dollars the owner of one of the main tezos scan websites also creates verified identities using Twitter profiles. Takes a bit of effort but it is worth it. Having an active twitter account is also a big thing in the NFT space, it helps enforce a minimum level of difficulty to art stealing.
      - jazzyjackson 5y ago
        Blockchain records provenance : who owned the token before you, so the nft is not “I own this jpeg”, it’s “I bought this jpeg from the artist with public key X”
- timmg 5y ago
  I don't see how AR/VR assets are any different than jpegs, etc. If enough systems integrate with the blockchains to allow transfer of ownership, maybe it will take hold. I think central authorities with interop would be a better solution. The problem with both of those solutions is how much incentive systems have for interop. I get that some people see NFTs as a way to break from the tyranny of the tech monoliths. I'm just skeptical that we'll get there. It's kinda like "Linux on the Desktop."
  - kranke155 5y ago
    Central authorities have refused to interop even on text messaging, up to the point where text messaging was possible between apps 10 years ago but has been made impossible. We went from Pidgin to 10 messaging apps that don't interop basic text. The incentives on central authorities is always to abuse their power. That's how we got Facebook. Blockchain is not a promise of an utopia, but the incentives are radically different. And in some ways, "central authorities with interop" is a description of blockchain where not everyone is running a full node.

matheusmoreira 5y ago

NFTs will be awesome if they get some legal backing. Would be awesome if buying a book, music, movie or game NFT entitled me to legally consume that content in any device or format I wanted. Until that happens there's no point since we don't really own anything.

kranke155 5y ago
I think that's the direction it's going. NFTs are a revolution for digital artists tho - as they allow for a global liquid marketplace that enforces automatic royalties. That's the power of smart contracts - suddenly I can make digital art that automatically reverts profit from subsequent sales to me - 10% or so at least.
- matheusmoreira 5y ago
  Yeah, that's a totally awesome idea. I'm not exactly sure how it interacts with the realities of copyright though. NFTs currently don't give consumer any rights. They're also completely useless for enforcing artificial scarcity: you can always just download the art instead.
  - kranke155 5y ago
    ATM I would say NFTs are little else but a way to pay directly to fund digital artists. I would say they might become useful in an XR world, where XR assets might include companions/digital clothing acessories. Enforcing NFT rights in XR would be more feasible.
- blincoln 5y ago
  The NFT itself only enforces any of that on the NFT itself (more or less the sales receipt), not the digital art. What's the incentive to jump through all of the hoops that end up with the artist receiving a percentage of the transaction? Laws? A central commercial organization? The good will of people who like the artist? Then why use a blockchain at all?

k3liutZu 5y ago

Digital data (and media by extent) is _meant_ to be cloned and distributed. Hence I can't understand NFT's either.

kranke155 5y ago
NFTs don't stop cloning or distribution. They just allow digital deeds/watermarks. They're a good way to support digital art. Other than that I won't speculate.
dageshi 5y ago
It struck me that NFT's in the context of art are basically autographs. People will pay far more than the standard value of a hardback for a hardback autographed by the author and even more for a first edition of a hardback autographed by the author than a second edition. It only becomes "special" because the author signed it. NFT's are basically digital autographs on something that's even cheaper (free) to copy than a book.

arnvald 5y ago

I think as a concept they might stay and find some use. In terms of art and collectibles though, I predict a huge crash within the next 2 years. People now pay thousands of dollars for algorithmically generated images. How many of buyers pay for the "access to the community" and how many are speculators that just want to sell them later? Most of these communities that are created around NTFs will become inactive soon and with a nearly infinite supply of new NFT series, the resale values will drop by 90%+. A limited number of communities will remain active, and maybe their NFTs will increase in value (since they offer some exclusivity). Same with people who now support graphic artists and photographers by paying $5,000 for NFT of some photo. Why people who have never commissioned anything now are paying so much for NFTs, and will they keep supporting artists when they realize that they can't make a profit anymore? I'm curious what will happen, as I believe we're entering the "Peak of inflated expectations" stage [0] [0] https://en.wikipedia.org/wiki/Gartner_hype_cycle https://en.wikipedia.org/wiki/Gartner_hype_cycle

kranke155 5y ago
Lots of questions here. How many of buyers pay for the "access to the community" and how many are speculators that just want to sell them later? Lots of speculators for sure. will they keep supporting artists when they realize that they can't make a profit anymore? 90% will leave. Speculation is a part of any market tho, including the art market. Look no further than the Mad Men episode where the agency owner bought a Rothko "because the price will double in 6 months". "Peak of inflated expectations" Yes. This seems like a good description. I think as a concept they might stay and find some use. Every concept of how to make NFTs more useful is actively being worked on. So yes they will stay/become more useful.

kranke155 5y ago

There are very interesting things happening in NFTs ie - https://www.fxhash.xyz/ https://www.fxhash.xyz/ - which encodes Generative Art straight onto the Tezos blockchain. Digital artists never had a liquid global permissionless marketplace. It's creating some incredible art. On long term value I have no idea. But as far as supporting digital artists, it's a novel way to do it and really cool. Lives are being changed by NFTs atm.

TrevorAustin 5y ago

Everything about NFTs is irritating. They're pure positional goods, with no real utility beyond signaling social status. They're subject to intense, irrational financial speculation. They attract insiders, hypesters, and scam artists. Their fans are prone to wildly overstating their capabilities and importance. The pieces of art they point to very often demonstrate almost no technical skill. They're built on technology with objectively terrible performance characteristics. But I've thought Facebook was stupid since 2004. Experience has taught me that I'm a weirdo and my aesthetic objections are usually anti-correlated with a project's success. I am the George Costanza of social media. If you're reading about Non-Fungible Tokens on Hacker News, I suspect you are too. These things are here to stay.

deleted 5y ago
[deleted]
brandall10 5y ago
Right there with you… but these types of observations seem to hold in crypto vs fiat currency, no? I feel that’s the vibe the op is getting at.
kranke155 5y ago
This is a great take. I'd recommend you read this text, or skim it, to see what happened with NFTs https://meaningness.com/geeks-mops-sociopaths https://meaningness.com/geeks-mops-sociopaths Basically sociopaths have taken over the space and they are promoting absolute crap. BUT There is real art and artists in the space if you take your time to look for it. Look at - https://www.fxhash.xyz/ https://www.fxhash.xyz/ - you'll see a remarkable thing: real innovation, Generative Art being placed right onto the blockchain. Something that would be very hard to monetize only 2 years ago is now a liquid permissionless marketplace for Generative Artists to experiment. It's like shadertoy has become an art market. You can now spend your days experimenting with shader art and make real money. That's incredible to me.
1cvmask 5y ago
Isn't most real world art buying also about social signaling and the scarcity and uniqueness associated with it?

fullshark 5y ago

I thought they were idiotic, then I tried to buy one to see what the fuss was about and decided they were ridiculously idiotic, a ton of transaction fees just to get my avatar next to some Opensea listing. Bragging rights within the terminally online crypto zealot echo chamber, that's all it provides.

kranke155 5y ago
Try hit ec nunc on tezos. Fees are lower than a dollar. Art is much less shit. https://hicetnunc.art/ https://hicetnunc.art/ If you want something more organised, like OpenSea, again OBJKT on Tezos is great. https://objkt.com/ https://objkt.com/

JohnJamesRambo 5y ago

I think it is like most things and follows a Gartner hype cycle curve. It will cool off and the real uses will come into play later. There are many valid uses for NFTs, buying silly jpgs isn’t one of them. A good 2022 crypto bear market will separate the wheat from the chaff just like always. https://upload.wikimedia.org/wikipedia/commons/thumb/9/94/Gartner_Hype_Cycle.svg/1200px-Gartner_Hype_Cycle.svg.png https://upload.wikimedia.org/wikipedia/commons/thumb/9/94/Ga...