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Random thought dump of observations from someone who's dabbled in the space a bit (but is not a cryptobro by any means) - Here's a thing about NFTs that I've s

Random thought dump of observations from someone who's dabbled in the space a bit (but is not a cryptobro by any means) - Here's a thing about NFTs that I've seen a lot crypto evangelists and haters miss, and a sentiment that I think will grow once the novelty dies out: The "art" is irrelevant. It's no more than a thumbnail or a poster marketing it's utility, and that's exactly the actual important part - what I can do with it. Can I use it as an in-game item? Do I get access to your next podcast episode early in a patreon-like service? Do I unlock your next online course for free or get a 50% discount on your next concert? This sense of multiple applications is what I think people may or may not mean when they use the term "creator economy", but I think it fits nicely. People argue that interoperability of assets is useless because "no two games would ever want to share an item, developers don't want that". But another angle to this is that creators can give utility to a single asset across a wide variety of applications for their fans. Regardless, none of this has been realised yet and maybe this is just a pipe dream if the majority of hype in the space continues to revolve around useless, ugly ass monkeys that are shown off on twitter for some ego-inflating sense of elitism. It could go either way I guess

tw04 5y ago
None of that requires NFT though. Literally all of that can be accomplished as well if not better without crypto being involved in any way.
- udbhavs 5y ago
  Yes, that is another debate. My comment was more of a response to the many others I've seen debating whether NFT implies ownership of the art or what happens if the server hosting the image goes down (less of a problem if IPFS is utilised). My point is, it's irrelevant. And it never implied ownership of the art, so people who try to pass it off as such are woefully misunderstanding the technology and are probably scammers, and the people buying them are idiots. Cryptokitties, cryptopunks etc. are only valuable because they were the first ones doing these things, sort of like the "million dollar webpage" back in the day. There is literally no point in making an NFT without utility now, unless the minter is someone popular and in that case the NFT is a bet on their fame rising in the future and becomes a speculative asset (just like regular celebrity art).
  - rvz 5y ago
    > Cryptokitties, cryptopunks etc. are only valuable because they were the first ones doing these things, sort of like the "million dollar webpage" back in the day. Exactly. A few original JPEG NFTs will survive, but 90% of the late comers and copycats will fail. > There is literally no point in making an NFT without utility now, unless the minter is someone popular Precisely. That ship has sailed and this is why you see a popularity of copycat NFTs JPEGs upon copycat JPEGs since that they know it is a scam. They are taking advantage of the market before it collapses just like the wild west of ICO scams in 2017. Now the SEC has put a stop to that and has regulated them as securities, [0] making unregistered ICOs as illegal. Similar regulations may happen to NFTs. The only form of NFT that seems to have some value, valid use-cases and utility is a blockchain domain name which is likely to surpass the nonsense of useless NFT JPEGs. [0] https://www.sec.gov/ICO https://www.sec.gov/ICO
  - mannykannot 5y ago
    It is not a different debate, though. If, as you say, there is literally no point in making an NFT without utility now, yet being an NFT does not distinguish NFTs' utility from the alternatives, then what is the point? It is just that which follows in the quote: ...unless the minter is someone popular and in that case the NFT is a bet on their fame rising in the future and becomes a speculative asset (just like regular celebrity art).
    - udbhavs 5y ago
      Using NFTs offloads asset management to a generalized third party solution so you don't have to implement your own marketplace and trading, the decentralized claim being the main thing making it viable (otherwise you'd just be handing over the keys to your digital warehouse to some random entity). Whether that is desirable or the right fit for your application is another question, but the tech clearly has differences.
- rgbjoy 5y ago
  Web3 and its communities sure make all the above easier to setup and get working.
  - PaulHoule 5y ago
    I don't know if it is easy but it is certainly expensive (I see people paying $200 to create an NFT.)
    - mfjordvald 5y ago
      Most NFTs are still made on the Ethereum mainnet which has huge gas fees indeed. There are alternative protocols which make it cheaper but it's a pain (and expensive) to move over to those protocols. There are some projects working on reducing this though, for example zkSync is doing some really interesting work on a layer2 solution that feels like you're staying on the Ethereum mainnet but the fees are highly reduced thanks to the zkRollup algorithm. I saw my friend mint an NFT for $1.40 the other day just to showcase the work zkSync has been doing, at this cost it'd be super interesting for real world uses beyond just art provenance.
- charcircuit 5y ago
  IMO the benefit to users is the ability of self custody and the benefit to businesses is that you can easily plug in to an existing ecosystem. Do you really want to spend time developing your own version of various things like marketplaces and trading for your platform or do you want to just make an NFT and utilize the existing ecosystem around them.
  - michaelt 5y ago
    If you own the marketplace you can take an x% cut of every transaction. Seems like something that would pay for itself pretty quickly?
    - charcircuit 5y ago
      1. You may not want to dedicate resources to creating and maintaining a market place. It's much less work to just add a digital item to your game / product. There might be a better use of your time / resources. 2. There already exist NFTs that take a x% cut and give it to the creator.
  - tw04 5y ago
    >IMO the benefit to users is the ability of self custody and the benefit to businesses is that you can easily plug in to an existing ecosystem. Do you really want to spend time developing your own version of various things like marketplaces and trading for your platform or do you want to just make an NFT and utilize the existing ecosystem around them. Literally every major game company has created their own marketplace despite Steam existing. So yes: they really do want to create their own marketplaces. If NFT's somehow gain traction in mainstream games, they aren't going to allow things from some random public blockchain, they will force users onto their own. You're delusional if you think they're going to forego that revenue stream because of the one-time investment of creating a market. That's not even a rounding error in their budgets.
    - charcircuit 5y ago
      I never said that this would be good for large game companies. To me NFTs remove control from them which is not desirable. I think it fits better with smaller companies or people outside of the games space who just want to quickly add digital items to their products which are able to be bought, sold, traded, etc. Similarly self custody isn't great for all users. It's great that a company can get you back your items if you get hacked. I just gave some pros and not any cons in my previous post.
- angio 5y ago
  What if you were a journalist in Crimea and wanted to provide content behind a paywall like Substack or Patreon?
  - phainopepla 5y ago
    What it seems you're arguing is that the use-case that justifies NFTs is facilitating criminal behavior. (In this case, it's criminal behavior that you or I may deem socially or politically beneficial, but nonetheless criminal.) A decade on from The Silk Road and this is where we continue to be with crypto.
    - angio 5y ago
      It's not illegal for the journalist to receive donations and sell their work.
      - phainopepla 5y ago
        By specifying Crimea and ruling out existing payment structures for journalism based around traditional banking like Substack or Patreon, you imply that the journalist in question is in some way committing an illegal or transgressive act that requires a degree of anonymity from governmental authorities.
        angio 5y ago
        No, companies based in the US or that want to do business in the US are the ones that cannot serve the Crimea-based journalist, but the journalist is in the clear.
    - yucky 5y ago
      What if I'm a guy who is really good at picking the winner (and spread) on a football game? Or the movement of a stock or other financial instrument within a specified period of time? Now what if I'd like to sell access to that genius on a marketplace, locked behind an NFT, bid on, tracked and tied to a leaderboard etc. Now let's say I have generated Token X with the value of "TSLA Feb. 29 2022", inside of which lies the closing price of Tesla on that date, with the value being tied to my previous performance on similar picks...
Agentlien 5y ago
I just want to say that interoperability of assets makes me think of Nintendo's Amiibo system. They're little statuettes with RFID tags in the base which can be scanned by various consoles and unlocks a lot of rewards. These rewards are often tied to the specific character in question. As an example, I have the Twilight Princess Link Amiibo. In most games it gives some reward related to The Legend of Zelda in general. When I scanned it in "Yoshi's Woolly World" for the Wii U it unlocked a Yoshi looking like Link, as would any Zelda themed Amiibo. When I scanned it in The Legend of Zelda: Breath of the Wild for the Switch it instead unlocked Epona, Link's horse featured in many games, including Twilight Princess. Which can only be unlocked by that specific Amiibo and no other Zelda ones. Of course, these tags are not unique and can quite easily be cloned.
- KallDrexx 5y ago
  And like Amiibos, support across games is almost always "you get a small non-unique bonus" because implementing specific content for each amiibo is time consuming. So you end up with a complex matrix of which games actually have real support for which amiibos, and realize they aren't as interoperable as they are advertised.
  - Agentlien 5y ago
    Absolutely. I have a few Amiibos which I've gotten as gifts, I keep them as little figurines on my desk and every now and then I'll realize they are more than that and when I get a new game I like to check whether it has Amiibo support. I like them and they bring a little bit of joy when I look at them and I like the unexpected fun of having some Breath of the Wild equipment in Skyrim or a Link styled Yoshi.
- spywaregorilla 5y ago
  There's a number of reasons why amiibo are not like NFTs: * Nintendo chooses what amiibos are made. Centralized. * There are many copies of a small number of amiibo types. Fungible. * You get a physical thing. Not a token * Only nintendo games may use amiibos * The data on the amiibo is uniquely interpreted for each game. It's not a generic interface. Not all amiibos will do anything to every game. Amiibo, and pokemon (trading the pokemon) are great examples of how to trade and scale information exchanges in the real world without needing an NFT blockchain. Blockchains are terrible ideas for games.
boringg 5y ago
I would agree with you - and this is what I fear will happen. There will be gatekeeping across resources in the future that we previously didn't have formal gatekeeping (ie had different ways to monetize) and that NFTs + Crypto end up serving a gatekeeping functionality. Enough of a function that people HAVE to buy into crypto which would then raise the valuations even though it doesn't have large scale functionality. This use case isn't an appealing use case FWIW - it is a use case though. Already seen coffee with NFTs being sold (mind you its marketing BS trying to signal its modernity, no function).
- udbhavs 5y ago
  If this does happen in the future, I doubt it will be driven by large corporations looking for new ways to make money because the incentives aren't aligned. Example: Valve banning games on Steam that use crypto assets. It posed a threat to their own market of digital game items and trading cards where they enjoy a hefty cut of all transactions and maintain complete control. There is no difference between an NFT and a CSGO skin except for the fact that one is stored on a decentralized database and the other isn't.
  - boringg 5y ago
    Maybe - and that was an interesting move by Valve. In the short run keeping control of their system - in the long run TBD. The funny thing about NFTs and gaming that I find is that if you listen to VCs and other people talk about the future of gaming. They say things like people won't play games unless their getting paid (i.e. NFT like reward system). Personally I find that disturbing that the only reason people would play video games is for work/make money (dystopian). The original concept behind video games was for sheer enjoyment .. Not trying to make this a rant but the twitch monetization of gaming really changes the incentive structure and NFTs would further cement that poorly aligned structure in that video games are considered "work".
    - udbhavs 5y ago
      > They say things like people won't play games unless their getting paid (i.e. NFT like reward system) I agree that is BS. I tried out a few "Play2Earn" dApps and they are in no way a replacement for modern video games. Some of them weren't even dApps, like one game running on a discord bot where you basically had to spam commands to earn tokens that you could withdraw. Guess what happened? Discord banned the bot for gambling features and the token tanked. The server is back up somehow with some features stripped out and I'm amazed people are running back to it after countless red flags. Nobody is in it for the enjoyment because there is no "game", it's just people looking to make a quick buck. The P2E games which are "single player" necessarily have to function as a Ponzi to keep new players coming. If you try to run the game logic on chain, you will be severely limited in terms of scope which means that PvP games will need a centralized server to run the game itself in which case there's no reason not to cheat the hell out of it.
mattbrewsbytes 5y ago
To build a detailed example for the "creator economy", something that would be profitable for creators and video game studios is cross-game items, not for game play like in the twitter thread, but content creators could have in-game cosmetic items that identify a player as part of their clan/guild. There is a huge market for content creators having large fan bases that literally pay them money via subscriptions, merch, etc. while they broadcast their gaming sessions live online. The entire business model for Epic's Fortnite is all cosmetic items via season passes, in-game transactions, etc. The game is free to play. If content creators were to issue NFT's that represented a cosmetic item badge/emblem, which could be bought/sold/traded on an independent marketplace and each game studio was pressured to allow these emblems/badges across games then the content creator would profit on transactions and possibly the game studios could profit - maybe they get a cut via smart contracts if that's possible. It wasn't very long ago that cross-platform play was not allowed by Sony and Microsoft and the game studios and players pushed for it. Major games have cross-platform play now, its expected in multi-player console games. Cross-game cosmetic items could be a huge thing for studios, indie content creators and and an opportunity for always online game platforms to get income from marketing/advertising. When there's a new comic book hero movie coming out, the movie studio could release cross-game cosmetic items (i.e. look like spidey) that players could then sell/trade later on. I would agree you don't need the tech from crypto or NFT's to accomplish this but it sounds like that tech has the features needed.
- pbronez 5y ago
  I agree. Interoperability of digital goods would allow the creator economy to grow in very cools ways. NFTs only solve one part of the problem though - rights management. You still need a good way for a cosmetic designed for game X to work in game Y. That's similar to any multi-platform development challenge. There are many other economic decisions that will have to be experimented with, including tax collection, platform fees, creator fees on resale, etc. It needs to work for everyone or it won't get the reach it needs to really empower users. Whether or not NFT actually add anything here comes down to the remaining technical challenge of interoperability. Is it common for parties to agree on a common asset definition but not a common rights management platform? That's the situation where NFT help.
- 5y ago
donarb 5y ago
Here's an example of an NFT use in the real world. The NFL (football league) has started fazing out selling real paper tickets to fans. You buy a ticket digitally and the barcode is scanned on your phone. Back in the days, fans liked to have a paper ticket they could have to remember the event, maybe their birthday or some record breaking play happened. The NFL is now selling commemorative paper tickets for a specific game to fans that is essentially an NFT. The fan had to have purchased the actual ticket and attended in order to buy the commemorative ticket.
- criddell 5y ago
  What part of that requires a blockchain NFT? I just took a flight this weekend and had a ticket on my phone that let me on the plane. Is that different?
  - b112 5y ago
    Average people may think "wow, I won't ever lose it", for they have no backup strategy? (only thing I could think of)
    - mschuster91 5y ago
      In that case, given that plane tickets are bound to a specific person, you walk up to the counter, identify with your passport/drivers license, request a replacement ticket and that's it.
- alkonaut 5y ago
  What are they selling? Paper or digital? And how is it an NFT?
- spywaregorilla 5y ago
  The difference is that the fans actually get a ticket.
spywaregorilla 5y ago
> Can I use it as an in-game item? I don't know why people are so obsessed with this idea of in game items as NFTs. It's a terrible idea. Games have no reason to be decentralized. All of the information can be stored on the company's servers, like an MMO, or if it's not critical to maintain scarcity, locally on devices without the whole network, like pokemon (the pokemon themselves, which can be traded and such). You can't reasonably expect games from other companies to implement the same NFT scheme. That's just not how games work. A longsword in dnd is not a longsword in final fantasy, nor is it a longsword in dark souls, nor is it a longsword in minecraft. And even if it were, why the fuck would you want scarcity on longswords? 99% of all items in any game are typically very easy to obtain, with a few rare things standing out, and with a natural progression built in. What would it even mean to bring your 50 hour investment in a top tier perfectly slotted jrpg omni magic blue elemental Atk+++ Spd+++ Crt+++ Mag--- weapon to a game like call of duty? Even if we're just talking about a single game universe, like a dnd setting. Maybe there's now 3 baldurs gate games, for some reason not designed by the same company, but all willing to share the same exact item spec. Where is this concept useful, still? Can I bring my +10 longsword (a big deal) to the beginning of the game and just trivialize the singleplayer mode? Is it more of a multiplayer thing so we want real world wealth and status to be the primary driver of character strength?
- thesuitonym 5y ago
  >why the fuck would you want scarcity on longswords? You would want scarcity on longswords if your business model included selling loot crates that may contain longswords.
  - MagnumOpus 5y ago
    If your business model included selling loot, you would not allow NFTs from other companies from which you earn nothing. And if the token is from a previous game of your own company, you can again just use a database without all the complexity.
    - spywaregorilla 5y ago
alkonaut 5y ago
> what I can do with it. Can I use it as an in-game item? Do I get access to your next podcast episode early in a patreon-like service? Do I unlock your next online course for free or get a 50% discount on your next concert? Yes. But apart from some specific edge cases (cryptocurrencies, specific name registries where the ledger is actually the store-of-value) how would that even work? For an NFT to somehow be a proof-of-ownership it has to provide the owner of the token with some value. Access to some material, for example, like you mention. But where dooes NFTs come in? The provider of the service or product would need to agree to honor the NFT! And by that, magically, it's just like any gift card or rebate code! There is a massive divide between on the one hand a tiny number of systems where the ledger is central (E.g. a cryptocurrency) because the users have already agreed that the value is stored on the ledger. But why would a seller of hot dogs or concert tickets agree to that? And more importantly, how is it ever guaranteed? It can't be! So it's just a gift card! What am I missing?
pbronez 5y ago
I agree. NFTs are currently useless, but interoperability would change that. One of the big drawbacks of current DRM tools is that they're centralized within a single vendor. If there are multiple vendors for a digital item, you can't carry your ownership of that item between vendors. There are a few existing solutions to this. Movies Anywhere[0] consolidates your video purchases across 8 vendors[1]. It mostly works ok. The problem is that I still have to trust those vendors, and this industry consortia, to manage the property rights for me. I can't prove that I own a particular movie outside of that ecosystem. I want to download the movie and transcode it for personal use, and prove that I legally own the right to that movie file outside of their system. If I own a copy of the movie, I should be able to take that copy of the movie anywhere. Music is similar. Remember a few years ago when a bunch of music services added "upload your offline library and we'll make it available on the cloud" services? That was basically using the files on your computer (ostensibly obtained by ripping a physical CD you bought at a store) as a DRM key to unlock new features within the platform. Personally, I got burned by this when Google Music got shut down and took my uploaded music with it (backups, yes). It would make a lot more sense to have a wallet of licenses that I could present to any of these services. Finally, the BIG thing with interoperability is freedom of exchange. I want to be able to sell my digital stuff to somebody else. Or lend it to them. Or present it to a new vendor / media player / device. MOST importantly, I want to use the media myself wherever and for whatever I want, without worrying that I'm somehow breaking the law. I want to make mashups. I want to self-host. I want to dump everything in a new hosted service and see how it works. And I want to do all that knowing that it's all above board and the creator's are compensated fairly for their work. The current system works for Disney. I'm much more interested in the artisan digital economy. NFTs do not deliver on this vision today. Additional technology is needed. Content-addressed, distributed storage like IPFS would be helpful. We might even need opinionated regulation to get the big players on board. Just look at the difference between electronic bank transfers in Europe and the state of US electronic medical records to see what I'm talking about. [0] https://moviesanywhere.com/welcome https://moviesanywhere.com/welcome [1] AppleTV/iTunes, Amazon Prime Video, Fandango/Vudu, Google Play/YouTube, Microsoft Movies & TV, Xfinity, Verizon and DirectTV
nradov 5y ago
I subscribe to a couple private podcast feeds. I paid for those with a regular credit card, no NFT or cryptocurrency needed.
- udbhavs 5y ago
  Yes, but what if the podcasters wanted to give you a special episode or discount for, let's say, buying their latest course on Udemy? You can set up a flow using private posts on both platforms by figuring a way of giving out promo codes or gift cards, but the implementation basically comes down to "Show me a receipt" - and that's exactly what NFTs happen to be.
  - mad182 5y ago
    Udemy can sign a receipt with a simple cryptographic key. But what's the benefit of blockchain here?
KallDrexx 5y ago
> This sense of multiple applications is what I think people may or may not mean when they use the term "creator economy", but I think it fits nicely. People argue that interoperability of assets is useless because "no two games would ever want to share an item, developers don't want that". But another angle to this is that creators can give utility to a single asset across a wide variety of applications for their fans. I suggest you read "How Virtual Worlds work" by Raph: https://www.playableworlds.com/news/riffs-by-raph:-how-virtual-worlds-work-part-1/ https://www.playableworlds.com/news/riffs-by-raph:-how-virtu... All 5 parts (more focused on the metaverse topic than NFT, but applicable to both) show exactly why interoperability is a pipe dream by non-game developers and has zero basis in reality. Not just because game developers don't want decentralization but because even simple stuff is hard, and even if you could solve the technical aspects you can't solve the game design aspects of it.
- loceng 5y ago
  How my logic has been evolving, extrapolating to, is Epic with Unreal Engine - and Fortnite as prime example - creating all game mechanics that can interact with eachother, so if you develop your game with Unreal you have access to "all" game mechanics in your game, with the option to allow users to freely import all their Fortnite skins or perhaps for a reasonable/acceptable fee per skin (if the skin copyright holder allows it; so likely not free, but then that will create the category of buy/license options of "For Fortnite only", "For up to 3 games", "Unlimited use"). A while ago Ninja (top earning game streamer) mentioned he sees Fortnite becoming the Ready Player One universe, something I'd seen myself as they're by far the best positioned to do so.
  - KallDrexx 5y ago
    > How my logic has been evolving, extrapolating to, is Epic with Unreal Engine - and Fortnite as prime example - creating all game mechanics that can interact with eachother, so if you develop your game with Unreal you have access to "all" game mechanics in your game, with the option to allow users to freely import all their Fortnite skins or perhaps for a reasonable/acceptable fee per skin (if the skin copyright holder allows it; so likely not free, but then that will create the category of buy/license options of "For Fortnite only", "For up to 3 games", "Unlimited use"). For the most part assets in the Unreal store have to be modified (some slightly, some heavily) to work in another game. You don't get it for free because decisions are made for each game. You can't just download a helmet from the unreal store and it just magically sits on your character's head and works with all animations, because there's no clear idea of what a "head" is and how it should work. There's no way a helmet from the unreal store can provide working stats for your game because health, food, armor, etc.. all vary in fine detail from one game to another. So no, go read the link I pointed. Even what seems simple is extremely hard to do for interoperability, even if developers wanted it. Assets in the UE store are meant to give *developers* an easy integration path, it's not designed to be a trivial integration path without development involvement.
torginus 5y ago
This is an absolutely terrible idea that combines the drawbacks of existing non-blockchain based systems with the downsides of blockchain. The problems of centralized control: The game dev can decide that your skin should not be in the game for any reason - now you have a broken link The game dev can suddenly make 1000 more of your limited series skin - now the value has deflated The game dev can shut down the game permanently - what is your NFT worth now? This is combined with typical blockchain issues, like if you get scammed, or somebody hacks your account and transfers out your items, there are no backsies - no support person can help you.
KaiserPro 5y ago
> Can I use it as an in-game item? its just a URL. an expensive one. Recently cryptobros are obsessed with backporting scarcity into the "creative economy", but NFTs don't provide any primitive to do that. Its immensley amusing to see the same people who were railing against DRM in the Zune era, are now saying how brilliant NFTs are. All the while advocating for DRM but with cool glasses.
philipov 5y ago
Blockchain is not necessary to accomplish and does not enhance the utility of any of the things you've mentioned.
stnmtn 5y ago
What is the difference of a company using an NFT for tracking ownership accross multiple applications, instead of just maintaining it in their database? The NFT will still have to reference something internal to the company, and the minting costs will make this NFT prohibitive Why wouldn't a company just try to do something like steam marketplace?
thinkingemote 5y ago
It's just selling stuff to suckers. Same old industry as it ever was. Convince me that the "decentralised web" isn't just selling something and you might start to convince the average person.
dwaite 5y ago
> Here's a thing about NFTs that I've seen a lot crypto evangelists and haters miss, and a sentiment that I think will grow once the novelty dies out: The "art" is irrelevant. It's no more than a thumbnail or a poster marketing it's utility, and that's exactly the actual important part - what I can do with it. Can I use it as an in-game item? <snip> Thinking of it in terms of utility vs ownership is useful because ownership is a social/regulatory concept. The problem with utility is that that utility is still bound to the seller/market. Can I use it as a decoration in my Meta VR home if it was bought outside Meta's marketplace? Does the utility actually transfer with sale? As such, it looks like a purchase receipt of a DRM-protected good in a single centralized ecosystem, regardless if it that receipt is represented in a third party or decentralized system.
Gigachad 5y ago
As always. The most compelling use for crypto ends up being a less useful and significantly more expensive database. We already do all of those things you listed just fine with databases. All NFTs would add are transaction fees and massive power wastage.

tw04 5y ago

None of that requires NFT though. Literally all of that can be accomplished as well if not better without crypto being involved in any way.

udbhavs 5y ago
Yes, that is another debate. My comment was more of a response to the many others I've seen debating whether NFT implies ownership of the art or what happens if the server hosting the image goes down (less of a problem if IPFS is utilised). My point is, it's irrelevant. And it never implied ownership of the art, so people who try to pass it off as such are woefully misunderstanding the technology and are probably scammers, and the people buying them are idiots. Cryptokitties, cryptopunks etc. are only valuable because they were the first ones doing these things, sort of like the "million dollar webpage" back in the day. There is literally no point in making an NFT without utility now, unless the minter is someone popular and in that case the NFT is a bet on their fame rising in the future and becomes a speculative asset (just like regular celebrity art).
- rvz 5y ago
  > Cryptokitties, cryptopunks etc. are only valuable because they were the first ones doing these things, sort of like the "million dollar webpage" back in the day. Exactly. A few original JPEG NFTs will survive, but 90% of the late comers and copycats will fail. > There is literally no point in making an NFT without utility now, unless the minter is someone popular Precisely. That ship has sailed and this is why you see a popularity of copycat NFTs JPEGs upon copycat JPEGs since that they know it is a scam. They are taking advantage of the market before it collapses just like the wild west of ICO scams in 2017. Now the SEC has put a stop to that and has regulated them as securities, [0] making unregistered ICOs as illegal. Similar regulations may happen to NFTs. The only form of NFT that seems to have some value, valid use-cases and utility is a blockchain domain name which is likely to surpass the nonsense of useless NFT JPEGs. [0] https://www.sec.gov/ICO https://www.sec.gov/ICO
- mannykannot 5y ago
  It is not a different debate, though. If, as you say, there is literally no point in making an NFT without utility now, yet being an NFT does not distinguish NFTs' utility from the alternatives, then what is the point? It is just that which follows in the quote: ...unless the minter is someone popular and in that case the NFT is a bet on their fame rising in the future and becomes a speculative asset (just like regular celebrity art).
  - udbhavs 5y ago
    Using NFTs offloads asset management to a generalized third party solution so you don't have to implement your own marketplace and trading, the decentralized claim being the main thing making it viable (otherwise you'd just be handing over the keys to your digital warehouse to some random entity). Whether that is desirable or the right fit for your application is another question, but the tech clearly has differences.
rgbjoy 5y ago
Web3 and its communities sure make all the above easier to setup and get working.
- PaulHoule 5y ago
  I don't know if it is easy but it is certainly expensive (I see people paying $200 to create an NFT.)
  - mfjordvald 5y ago
    Most NFTs are still made on the Ethereum mainnet which has huge gas fees indeed. There are alternative protocols which make it cheaper but it's a pain (and expensive) to move over to those protocols. There are some projects working on reducing this though, for example zkSync is doing some really interesting work on a layer2 solution that feels like you're staying on the Ethereum mainnet but the fees are highly reduced thanks to the zkRollup algorithm. I saw my friend mint an NFT for $1.40 the other day just to showcase the work zkSync has been doing, at this cost it'd be super interesting for real world uses beyond just art provenance.
charcircuit 5y ago
IMO the benefit to users is the ability of self custody and the benefit to businesses is that you can easily plug in to an existing ecosystem. Do you really want to spend time developing your own version of various things like marketplaces and trading for your platform or do you want to just make an NFT and utilize the existing ecosystem around them.
- michaelt 5y ago
  If you own the marketplace you can take an x% cut of every transaction. Seems like something that would pay for itself pretty quickly?
  - charcircuit 5y ago
    1. You may not want to dedicate resources to creating and maintaining a market place. It's much less work to just add a digital item to your game / product. There might be a better use of your time / resources. 2. There already exist NFTs that take a x% cut and give it to the creator.
- tw04 5y ago
  >IMO the benefit to users is the ability of self custody and the benefit to businesses is that you can easily plug in to an existing ecosystem. Do you really want to spend time developing your own version of various things like marketplaces and trading for your platform or do you want to just make an NFT and utilize the existing ecosystem around them. Literally every major game company has created their own marketplace despite Steam existing. So yes: they really do want to create their own marketplaces. If NFT's somehow gain traction in mainstream games, they aren't going to allow things from some random public blockchain, they will force users onto their own. You're delusional if you think they're going to forego that revenue stream because of the one-time investment of creating a market. That's not even a rounding error in their budgets.
  - charcircuit 5y ago
    I never said that this would be good for large game companies. To me NFTs remove control from them which is not desirable. I think it fits better with smaller companies or people outside of the games space who just want to quickly add digital items to their products which are able to be bought, sold, traded, etc. Similarly self custody isn't great for all users. It's great that a company can get you back your items if you get hacked. I just gave some pros and not any cons in my previous post.
angio 5y ago
What if you were a journalist in Crimea and wanted to provide content behind a paywall like Substack or Patreon?
- phainopepla 5y ago
  What it seems you're arguing is that the use-case that justifies NFTs is facilitating criminal behavior. (In this case, it's criminal behavior that you or I may deem socially or politically beneficial, but nonetheless criminal.) A decade on from The Silk Road and this is where we continue to be with crypto.
  - angio 5y ago
    It's not illegal for the journalist to receive donations and sell their work.
    - phainopepla 5y ago
      By specifying Crimea and ruling out existing payment structures for journalism based around traditional banking like Substack or Patreon, you imply that the journalist in question is in some way committing an illegal or transgressive act that requires a degree of anonymity from governmental authorities.
      - angio 5y ago
        No, companies based in the US or that want to do business in the US are the ones that cannot serve the Crimea-based journalist, but the journalist is in the clear.
  - yucky 5y ago
    What if I'm a guy who is really good at picking the winner (and spread) on a football game? Or the movement of a stock or other financial instrument within a specified period of time? Now what if I'd like to sell access to that genius on a marketplace, locked behind an NFT, bid on, tracked and tied to a leaderboard etc. Now let's say I have generated Token X with the value of "TSLA Feb. 29 2022", inside of which lies the closing price of Tesla on that date, with the value being tied to my previous performance on similar picks...

Agentlien 5y ago

I just want to say that interoperability of assets makes me think of Nintendo's Amiibo system. They're little statuettes with RFID tags in the base which can be scanned by various consoles and unlocks a lot of rewards. These rewards are often tied to the specific character in question. As an example, I have the Twilight Princess Link Amiibo. In most games it gives some reward related to The Legend of Zelda in general. When I scanned it in "Yoshi's Woolly World" for the Wii U it unlocked a Yoshi looking like Link, as would any Zelda themed Amiibo. When I scanned it in The Legend of Zelda: Breath of the Wild for the Switch it instead unlocked Epona, Link's horse featured in many games, including Twilight Princess. Which can only be unlocked by that specific Amiibo and no other Zelda ones. Of course, these tags are not unique and can quite easily be cloned.

KallDrexx 5y ago
And like Amiibos, support across games is almost always "you get a small non-unique bonus" because implementing specific content for each amiibo is time consuming. So you end up with a complex matrix of which games actually have real support for which amiibos, and realize they aren't as interoperable as they are advertised.
- Agentlien 5y ago
  Absolutely. I have a few Amiibos which I've gotten as gifts, I keep them as little figurines on my desk and every now and then I'll realize they are more than that and when I get a new game I like to check whether it has Amiibo support. I like them and they bring a little bit of joy when I look at them and I like the unexpected fun of having some Breath of the Wild equipment in Skyrim or a Link styled Yoshi.
spywaregorilla 5y ago
There's a number of reasons why amiibo are not like NFTs: * Nintendo chooses what amiibos are made. Centralized. * There are many copies of a small number of amiibo types. Fungible. * You get a physical thing. Not a token * Only nintendo games may use amiibos * The data on the amiibo is uniquely interpreted for each game. It's not a generic interface. Not all amiibos will do anything to every game. Amiibo, and pokemon (trading the pokemon) are great examples of how to trade and scale information exchanges in the real world without needing an NFT blockchain. Blockchains are terrible ideas for games.

boringg 5y ago

I would agree with you - and this is what I fear will happen. There will be gatekeeping across resources in the future that we previously didn't have formal gatekeeping (ie had different ways to monetize) and that NFTs + Crypto end up serving a gatekeeping functionality. Enough of a function that people HAVE to buy into crypto which would then raise the valuations even though it doesn't have large scale functionality. This use case isn't an appealing use case FWIW - it is a use case though. Already seen coffee with NFTs being sold (mind you its marketing BS trying to signal its modernity, no function).

udbhavs 5y ago
If this does happen in the future, I doubt it will be driven by large corporations looking for new ways to make money because the incentives aren't aligned. Example: Valve banning games on Steam that use crypto assets. It posed a threat to their own market of digital game items and trading cards where they enjoy a hefty cut of all transactions and maintain complete control. There is no difference between an NFT and a CSGO skin except for the fact that one is stored on a decentralized database and the other isn't.
- boringg 5y ago
  Maybe - and that was an interesting move by Valve. In the short run keeping control of their system - in the long run TBD. The funny thing about NFTs and gaming that I find is that if you listen to VCs and other people talk about the future of gaming. They say things like people won't play games unless their getting paid (i.e. NFT like reward system). Personally I find that disturbing that the only reason people would play video games is for work/make money (dystopian). The original concept behind video games was for sheer enjoyment .. Not trying to make this a rant but the twitch monetization of gaming really changes the incentive structure and NFTs would further cement that poorly aligned structure in that video games are considered "work".
  - udbhavs 5y ago
    > They say things like people won't play games unless their getting paid (i.e. NFT like reward system) I agree that is BS. I tried out a few "Play2Earn" dApps and they are in no way a replacement for modern video games. Some of them weren't even dApps, like one game running on a discord bot where you basically had to spam commands to earn tokens that you could withdraw. Guess what happened? Discord banned the bot for gambling features and the token tanked. The server is back up somehow with some features stripped out and I'm amazed people are running back to it after countless red flags. Nobody is in it for the enjoyment because there is no "game", it's just people looking to make a quick buck. The P2E games which are "single player" necessarily have to function as a Ponzi to keep new players coming. If you try to run the game logic on chain, you will be severely limited in terms of scope which means that PvP games will need a centralized server to run the game itself in which case there's no reason not to cheat the hell out of it.

mattbrewsbytes 5y ago

To build a detailed example for the "creator economy", something that would be profitable for creators and video game studios is cross-game items, not for game play like in the twitter thread, but content creators could have in-game cosmetic items that identify a player as part of their clan/guild. There is a huge market for content creators having large fan bases that literally pay them money via subscriptions, merch, etc. while they broadcast their gaming sessions live online. The entire business model for Epic's Fortnite is all cosmetic items via season passes, in-game transactions, etc. The game is free to play. If content creators were to issue NFT's that represented a cosmetic item badge/emblem, which could be bought/sold/traded on an independent marketplace and each game studio was pressured to allow these emblems/badges across games then the content creator would profit on transactions and possibly the game studios could profit - maybe they get a cut via smart contracts if that's possible. It wasn't very long ago that cross-platform play was not allowed by Sony and Microsoft and the game studios and players pushed for it. Major games have cross-platform play now, its expected in multi-player console games. Cross-game cosmetic items could be a huge thing for studios, indie content creators and and an opportunity for always online game platforms to get income from marketing/advertising. When there's a new comic book hero movie coming out, the movie studio could release cross-game cosmetic items (i.e. look like spidey) that players could then sell/trade later on. I would agree you don't need the tech from crypto or NFT's to accomplish this but it sounds like that tech has the features needed.

pbronez 5y ago
I agree. Interoperability of digital goods would allow the creator economy to grow in very cools ways. NFTs only solve one part of the problem though - rights management. You still need a good way for a cosmetic designed for game X to work in game Y. That's similar to any multi-platform development challenge. There are many other economic decisions that will have to be experimented with, including tax collection, platform fees, creator fees on resale, etc. It needs to work for everyone or it won't get the reach it needs to really empower users. Whether or not NFT actually add anything here comes down to the remaining technical challenge of interoperability. Is it common for parties to agree on a common asset definition but not a common rights management platform? That's the situation where NFT help.
5y ago

donarb 5y ago

Here's an example of an NFT use in the real world. The NFL (football league) has started fazing out selling real paper tickets to fans. You buy a ticket digitally and the barcode is scanned on your phone. Back in the days, fans liked to have a paper ticket they could have to remember the event, maybe their birthday or some record breaking play happened. The NFL is now selling commemorative paper tickets for a specific game to fans that is essentially an NFT. The fan had to have purchased the actual ticket and attended in order to buy the commemorative ticket.

criddell 5y ago
What part of that requires a blockchain NFT? I just took a flight this weekend and had a ticket on my phone that let me on the plane. Is that different?
- b112 5y ago
  Average people may think "wow, I won't ever lose it", for they have no backup strategy? (only thing I could think of)
  - mschuster91 5y ago
    In that case, given that plane tickets are bound to a specific person, you walk up to the counter, identify with your passport/drivers license, request a replacement ticket and that's it.
alkonaut 5y ago
What are they selling? Paper or digital? And how is it an NFT?
spywaregorilla 5y ago
The difference is that the fans actually get a ticket.

spywaregorilla 5y ago

> Can I use it as an in-game item? I don't know why people are so obsessed with this idea of in game items as NFTs. It's a terrible idea. Games have no reason to be decentralized. All of the information can be stored on the company's servers, like an MMO, or if it's not critical to maintain scarcity, locally on devices without the whole network, like pokemon (the pokemon themselves, which can be traded and such). You can't reasonably expect games from other companies to implement the same NFT scheme. That's just not how games work. A longsword in dnd is not a longsword in final fantasy, nor is it a longsword in dark souls, nor is it a longsword in minecraft. And even if it were, why the fuck would you want scarcity on longswords? 99% of all items in any game are typically very easy to obtain, with a few rare things standing out, and with a natural progression built in. What would it even mean to bring your 50 hour investment in a top tier perfectly slotted jrpg omni magic blue elemental Atk+++ Spd+++ Crt+++ Mag--- weapon to a game like call of duty? Even if we're just talking about a single game universe, like a dnd setting. Maybe there's now 3 baldurs gate games, for some reason not designed by the same company, but all willing to share the same exact item spec. Where is this concept useful, still? Can I bring my +10 longsword (a big deal) to the beginning of the game and just trivialize the singleplayer mode? Is it more of a multiplayer thing so we want real world wealth and status to be the primary driver of character strength?

thesuitonym 5y ago
>why the fuck would you want scarcity on longswords? You would want scarcity on longswords if your business model included selling loot crates that may contain longswords.
- MagnumOpus 5y ago
  If your business model included selling loot, you would not allow NFTs from other companies from which you earn nothing. And if the token is from a previous game of your own company, you can again just use a database without all the complexity.
  - spywaregorilla 5y ago

alkonaut 5y ago

> what I can do with it. Can I use it as an in-game item? Do I get access to your next podcast episode early in a patreon-like service? Do I unlock your next online course for free or get a 50% discount on your next concert? Yes. But apart from some specific edge cases (cryptocurrencies, specific name registries where the ledger is actually the store-of-value) how would that even work? For an NFT to somehow be a proof-of-ownership it has to provide the owner of the token with some value. Access to some material, for example, like you mention. But where dooes NFTs come in? The provider of the service or product would need to agree to honor the NFT! And by that, magically, it's just like any gift card or rebate code! There is a massive divide between on the one hand a tiny number of systems where the ledger is central (E.g. a cryptocurrency) because the users have already agreed that the value is stored on the ledger. But why would a seller of hot dogs or concert tickets agree to that? And more importantly, how is it ever guaranteed? It can't be! So it's just a gift card! What am I missing?

pbronez 5y ago

I agree. NFTs are currently useless, but interoperability would change that. One of the big drawbacks of current DRM tools is that they're centralized within a single vendor. If there are multiple vendors for a digital item, you can't carry your ownership of that item between vendors. There are a few existing solutions to this. Movies Anywhere[0] consolidates your video purchases across 8 vendors[1]. It mostly works ok. The problem is that I still have to trust those vendors, and this industry consortia, to manage the property rights for me. I can't prove that I own a particular movie outside of that ecosystem. I want to download the movie and transcode it for personal use, and prove that I legally own the right to that movie file outside of their system. If I own a copy of the movie, I should be able to take that copy of the movie anywhere. Music is similar. Remember a few years ago when a bunch of music services added "upload your offline library and we'll make it available on the cloud" services? That was basically using the files on your computer (ostensibly obtained by ripping a physical CD you bought at a store) as a DRM key to unlock new features within the platform. Personally, I got burned by this when Google Music got shut down and took my uploaded music with it (backups, yes). It would make a lot more sense to have a wallet of licenses that I could present to any of these services. Finally, the BIG thing with interoperability is freedom of exchange. I want to be able to sell my digital stuff to somebody else. Or lend it to them. Or present it to a new vendor / media player / device. MOST importantly, I want to use the media myself wherever and for whatever I want, without worrying that I'm somehow breaking the law. I want to make mashups. I want to self-host. I want to dump everything in a new hosted service and see how it works. And I want to do all that knowing that it's all above board and the creator's are compensated fairly for their work. The current system works for Disney. I'm much more interested in the artisan digital economy. NFTs do not deliver on this vision today. Additional technology is needed. Content-addressed, distributed storage like IPFS would be helpful. We might even need opinionated regulation to get the big players on board. Just look at the difference between electronic bank transfers in Europe and the state of US electronic medical records to see what I'm talking about. [0] https://moviesanywhere.com/welcome https://moviesanywhere.com/welcome [1] AppleTV/iTunes, Amazon Prime Video, Fandango/Vudu, Google Play/YouTube, Microsoft Movies & TV, Xfinity, Verizon and DirectTV

nradov 5y ago

I subscribe to a couple private podcast feeds. I paid for those with a regular credit card, no NFT or cryptocurrency needed.

udbhavs 5y ago
Yes, but what if the podcasters wanted to give you a special episode or discount for, let's say, buying their latest course on Udemy? You can set up a flow using private posts on both platforms by figuring a way of giving out promo codes or gift cards, but the implementation basically comes down to "Show me a receipt" - and that's exactly what NFTs happen to be.
- mad182 5y ago
  Udemy can sign a receipt with a simple cryptographic key. But what's the benefit of blockchain here?

KallDrexx 5y ago

> This sense of multiple applications is what I think people may or may not mean when they use the term "creator economy", but I think it fits nicely. People argue that interoperability of assets is useless because "no two games would ever want to share an item, developers don't want that". But another angle to this is that creators can give utility to a single asset across a wide variety of applications for their fans. I suggest you read "How Virtual Worlds work" by Raph: https://www.playableworlds.com/news/riffs-by-raph:-how-virtual-worlds-work-part-1/ https://www.playableworlds.com/news/riffs-by-raph:-how-virtu... All 5 parts (more focused on the metaverse topic than NFT, but applicable to both) show exactly why interoperability is a pipe dream by non-game developers and has zero basis in reality. Not just because game developers don't want decentralization but because even simple stuff is hard, and even if you could solve the technical aspects you can't solve the game design aspects of it.

loceng 5y ago
How my logic has been evolving, extrapolating to, is Epic with Unreal Engine - and Fortnite as prime example - creating all game mechanics that can interact with eachother, so if you develop your game with Unreal you have access to "all" game mechanics in your game, with the option to allow users to freely import all their Fortnite skins or perhaps for a reasonable/acceptable fee per skin (if the skin copyright holder allows it; so likely not free, but then that will create the category of buy/license options of "For Fortnite only", "For up to 3 games", "Unlimited use"). A while ago Ninja (top earning game streamer) mentioned he sees Fortnite becoming the Ready Player One universe, something I'd seen myself as they're by far the best positioned to do so.
- KallDrexx 5y ago
  > How my logic has been evolving, extrapolating to, is Epic with Unreal Engine - and Fortnite as prime example - creating all game mechanics that can interact with eachother, so if you develop your game with Unreal you have access to "all" game mechanics in your game, with the option to allow users to freely import all their Fortnite skins or perhaps for a reasonable/acceptable fee per skin (if the skin copyright holder allows it; so likely not free, but then that will create the category of buy/license options of "For Fortnite only", "For up to 3 games", "Unlimited use"). For the most part assets in the Unreal store have to be modified (some slightly, some heavily) to work in another game. You don't get it for free because decisions are made for each game. You can't just download a helmet from the unreal store and it just magically sits on your character's head and works with all animations, because there's no clear idea of what a "head" is and how it should work. There's no way a helmet from the unreal store can provide working stats for your game because health, food, armor, etc.. all vary in fine detail from one game to another. So no, go read the link I pointed. Even what seems simple is extremely hard to do for interoperability, even if developers wanted it. Assets in the UE store are meant to give *developers* an easy integration path, it's not designed to be a trivial integration path without development involvement.

torginus 5y ago

This is an absolutely terrible idea that combines the drawbacks of existing non-blockchain based systems with the downsides of blockchain. The problems of centralized control: The game dev can decide that your skin should not be in the game for any reason - now you have a broken link The game dev can suddenly make 1000 more of your limited series skin - now the value has deflated The game dev can shut down the game permanently - what is your NFT worth now? This is combined with typical blockchain issues, like if you get scammed, or somebody hacks your account and transfers out your items, there are no backsies - no support person can help you.

KaiserPro 5y ago

> Can I use it as an in-game item? its just a URL. an expensive one. Recently cryptobros are obsessed with backporting scarcity into the "creative economy", but NFTs don't provide any primitive to do that. Its immensley amusing to see the same people who were railing against DRM in the Zune era, are now saying how brilliant NFTs are. All the while advocating for DRM but with cool glasses.

philipov 5y ago

Blockchain is not necessary to accomplish and does not enhance the utility of any of the things you've mentioned.

stnmtn 5y ago

What is the difference of a company using an NFT for tracking ownership accross multiple applications, instead of just maintaining it in their database? The NFT will still have to reference something internal to the company, and the minting costs will make this NFT prohibitive Why wouldn't a company just try to do something like steam marketplace?

thinkingemote 5y ago

It's just selling stuff to suckers. Same old industry as it ever was. Convince me that the "decentralised web" isn't just selling something and you might start to convince the average person.

dwaite 5y ago

> Here's a thing about NFTs that I've seen a lot crypto evangelists and haters miss, and a sentiment that I think will grow once the novelty dies out: The "art" is irrelevant. It's no more than a thumbnail or a poster marketing it's utility, and that's exactly the actual important part - what I can do with it. Can I use it as an in-game item? <snip> Thinking of it in terms of utility vs ownership is useful because ownership is a social/regulatory concept. The problem with utility is that that utility is still bound to the seller/market. Can I use it as a decoration in my Meta VR home if it was bought outside Meta's marketplace? Does the utility actually transfer with sale? As such, it looks like a purchase receipt of a DRM-protected good in a single centralized ecosystem, regardless if it that receipt is represented in a third party or decentralized system.

Gigachad 5y ago

As always. The most compelling use for crypto ends up being a less useful and significantly more expensive database. We already do all of those things you listed just fine with databases. All NFTs would add are transaction fees and massive power wastage.