5 ms·

NFTs means the future value of art is zero

ImportOllie 5y ago
I'll be interested to read the article that actually addresses the title of this linked article. I feel like comparing digital art to digital media like books and music is a bit apples to oranges. Additionally, the 2nd hand market for books and music is pretty bottomed out so I think it's a fair assumption that if a blockchain marketplace actually takes off over just pirating cracked copies, then the price of 2nd hand digital media would be begin to bottom out. So, given that one can pirate an ebook fairly easily and there's still a market for ebooks, is a 2nd hand marketplace for digital nft media a valid concern?
- usrbinbash 5y ago
  The point is, there is no such thing as a "2nd hand digital asset". 2nd hand exists for physical items only, because they are subject to wear&tear, they degrade, and copying them means creating something new from scratch that didn't exist before...a copy of a wardrobe is a new wardrobe that happens to look the same as another one. And if someone sells me his old wardrobe, then he no longer has it. The same isn't true for digital information. A file can be copied 10 times, 10000 times or 10E10 times, it doesn't matter...the original is not degraded in the process, and all copies are exactly the same and the same as the original. And if A sends the file to B, A can still have a copy of the file, indistinguishable from the one B now has.
  - ImportOllie 5y ago
    Wear & Tear is a good point, along with the inconvenience of selling physical goods, and the burden of having too many physical goods. As well as the applicability, the author raises another point which is when you're finished with your digital media, why hold onto it? Especially on the assumption you can just buy it back for what you sold it for or less. I do wonder though whether all of this sits within a paradigm that needn't be the one that plays out. I suppose my questions around the subject are... are we saying that a 2nd marketplace for digital media such as books, films and music shouldn't/won't exist because if it did, it would devastatingly disrupt digital capitalism? Could there be a paradigm where we can have a 2nd hand marketplace? I'm particularly interested to observe how the digital fashion space evolves. Major fashion brands are engaging with NFTs and digital wardrobes. Which like digital art (and unlike books/films?) lend themselves well to being sold in limited runs, can be seasonal and could be useful... So I could see being a workable market for a digital 2nd hand market, outside the hyped up beanie-baby-esque investor marketplace that's dominating the nft landscape right now.
    - egypturnash 5y ago
      when you're finished with your digital media, why hold onto it? Have you heard of this little site called Spotify? It streams music instead of selling it. It’s pretty obscure, but it’s got a few competitors. Something with the even more absurd name of Youtube Music? They run on a subscription basis, or just throw ads at you if you don’t wanna pay. There’s a few sites like that for movies and TV shows, too.
      - ImportOllie 5y ago
        Sure, why own anything digital when you can stream or pirate?
    - AnIdiotOnTheNet 5y ago
      > Could there be a paradigm where we can have a 2nd hand marketplace? For items that can be copied identically for basically nothing and never degrade? The only reason we even still have a first hand market for these things is that we want to compensate the producers of the work who still need to earn money to put food on the table. To do that we use the ridiculous concept of "intellectual property" to allow those producers to work within a system not designed for a post-scarcity space. I cannot conceive of a 'second hand' market ever making sense here without just piling on even more perverse concepts.
      - ImportOllie 5y ago
        Thanks for your reply. If artificial scarcity is perverse, does that mean also mean things like limited art print runs are also perverse? Because it seems to me an artist who has the potential to print there work unlimited times but chooses to set the price at X for N prints would fall into that. But then, either because it's been accepted as a thing or otherwise, it's a common practice and personally, i've not seen it as a negative.
        AnIdiotOnTheNet 5y ago
        > If artificial scarcity is perverse, does that mean also mean things like limited art print runs are also perverse? Yes, especially if the prints are basically free to produce. Artificial scarcity is bullshit we only tolerate because our economic system is built on scarcity. It's a hack and I would rather not encourage it. What is the point in digital anything if we're just going to limit it like it were a physical good?
josephd79 5y ago
This isn't entirely true. You can collect royalties every time the NFT is sold if you want. You can even have NFT's that degrade over time.
beardyw 5y ago
The title should read "digital arts" because this has no impact on physical art (does it?) That an NFT should confer the right to hear or watch something seems reasonable. But ... For audio, my Spotify subscription lets me listen to whatever I like. I no longer have the agony of what I should buy. Why would I go back to that? For video, companies currently hold our "bought" right to watch. Why would they let go of that right into an open marketplace? Sounds like an uphill struggle. I think NFTs will eventually find a problem to solve, but not convinced this is it.
EricE 5y ago
Most art - at least of modern vintages anyway - are mainly a venue for money laundering anyway. Think of all the ways you can really go to town with that in the digital space! Ironically just don't use Crypto or eventually you will get exposed. I love it when people think Crypto and the blockchain will keep them anonymous - when every transaction is out there in the public and there are only a fixed number of points where you can convert your crypto into something useful like cash. Are they really dark patterns if all transactions are out there, in the open and fully visable?
- CryptoPunk 5y ago
  >>Most art - at least of modern vintages anyway - are mainly a venue for money laundering anyway. Is there any evidence at all for this extremely inflammatory claim?
  - Dma54rhs 5y ago
    No there isn't. While money laundry certainly happens in the art world the anti - crypto people learned It all from an article released few years and now parrot it everywhere. At this point I can't decide who are more annoying - cryptobros or the anti cryptobros.
  - whythre 5y ago
    Yes. It is a known problem/financial shortcut for people with the connections and wealth to pull it off. https://www.artandobject.com/news/how-money-laundering-works-art-world https://www.artandobject.com/news/how-money-laundering-works...
    - CryptoPunk 5y ago
      The only evidence provided is highly circumstantial and geographically limited: >>Consider that when the Mexican government passed a law in the early 2010s to require more information about buyers, and how much cash could be spent on a single piece of art, the market cratered, as sales dipped 70 percent in less than a year. Much of Mexico's economy, even the legitimate markets, is controlled by cartels, so operates very differently than most economies. It might not even be the law's impediment to money laundering that caused sales to crater - it may be simply that in a country with a large outlaw faction that has thoroughly infiltrated government agencies, people with means will not want to be easily tracked/identified by attaching their identity to large purchases of luxury items.
mech987 5y ago
>But it only takes one person to decide that they want to sell their copy for free - and the floor becomes zero That's not quite right. If we plot out all the bids and asks, the price floor only becomes zero if the seller with a $0 ask has enough volume to flood the market. Otherwise If the Red Hot Chili Peppers decide to release only 300,000 copies of an NFT album, then the limited distribution would keep the price floor above zero. Even without a limited distribution there's a pretty good chance that most people wouldn't part with their copy unless they got enough money for the trouble.
spicy_tendies 5y ago
You are assuming the only way to listen to an album would be to own the NFT, which I doubt will be the case.
Adrox 5y ago
This person clearly has zero understanding of the concept of "Supply and demand". Not only the same thing he says: "In the future, I could buy an eBook for £15 and then sell it for £14.99. Given enough competition, this means the price should drop to zero." Could also happen to any physical good: CD's and DVD's, collectible cards. Do they always go down in price? The truth is: it simply does not happen that the value always goes down. There is several edition CD and Vinyls that are very sought by collectors that have gone up in price because they are rare (just like art). Some people could also really want that eBook (with very few people selling it) and offer to buy it for £16, raising the prices again... It also doesn't help "explain" prices in real NFT marketplaces not going to zero, just take a look at www.nbatopshot.com (licensed by both the NBA and the players association) or any other digital collectible...
- xyzzy123 5y ago
  I think the author's conclusion is true if you allow for several unstated assumptions. Also this conclusion applies only to nfts with potentially infinite supply, NOT "art". The first assumption is that the transaction costs of buying and selling a copy of an album or ebook nft will be zero (including hassle and book-keeping costs). The second assumption is that there is infinite supply, forever, at some ceiling price (e.g. someone will always sell you a "new" beatles album nft for $10). The third is that there are no "sinks", e.g. the copies are never consumed or degraded by loss, incompatibility, releases of better quality, etc. Also, the argument requires the copies are more or less "fungible". But I think yeah, logically, if I can buy a new X at $10 which lasts forever and is infinitely tradeable with zero transaction costs, eventually the secondary market price of X would tend towards zero. Effectively the whole world would be purchasing floating licenses until supply > demand and eventually that condition is permanent. In practice, owners of copyrighted works have a lot of ways to avoid this situation and I expect they will act to license their works in ways that avoid this.
TheDesolate0 5y ago
tata71 5y ago
The future value of existing art, without adding an accompanying authenticity NFT, is lower. Seems fairer.

I'll be interested to read the article that actually addresses the title of this linked article. I feel like comparing digital art to digital media like books and music is a bit apples to oranges. Additionally, the 2nd hand market for books and music is pretty bottomed out so I think it's a fair assumption that if a blockchain marketplace actually takes off over just pirating cracked copies, then the price of 2nd hand digital media would be begin to bottom out. So, given that one can pirate an ebook fairly easily and there's still a market for ebooks, is a 2nd hand marketplace for digital nft media a valid concern?

usrbinbash 5y ago
The point is, there is no such thing as a "2nd hand digital asset". 2nd hand exists for physical items only, because they are subject to wear&tear, they degrade, and copying them means creating something new from scratch that didn't exist before...a copy of a wardrobe is a new wardrobe that happens to look the same as another one. And if someone sells me his old wardrobe, then he no longer has it. The same isn't true for digital information. A file can be copied 10 times, 10000 times or 10E10 times, it doesn't matter...the original is not degraded in the process, and all copies are exactly the same and the same as the original. And if A sends the file to B, A can still have a copy of the file, indistinguishable from the one B now has.
- ImportOllie 5y ago
  Wear & Tear is a good point, along with the inconvenience of selling physical goods, and the burden of having too many physical goods. As well as the applicability, the author raises another point which is when you're finished with your digital media, why hold onto it? Especially on the assumption you can just buy it back for what you sold it for or less. I do wonder though whether all of this sits within a paradigm that needn't be the one that plays out. I suppose my questions around the subject are... are we saying that a 2nd marketplace for digital media such as books, films and music shouldn't/won't exist because if it did, it would devastatingly disrupt digital capitalism? Could there be a paradigm where we can have a 2nd hand marketplace? I'm particularly interested to observe how the digital fashion space evolves. Major fashion brands are engaging with NFTs and digital wardrobes. Which like digital art (and unlike books/films?) lend themselves well to being sold in limited runs, can be seasonal and could be useful... So I could see being a workable market for a digital 2nd hand market, outside the hyped up beanie-baby-esque investor marketplace that's dominating the nft landscape right now.
  - egypturnash 5y ago
    when you're finished with your digital media, why hold onto it? Have you heard of this little site called Spotify? It streams music instead of selling it. It’s pretty obscure, but it’s got a few competitors. Something with the even more absurd name of Youtube Music? They run on a subscription basis, or just throw ads at you if you don’t wanna pay. There’s a few sites like that for movies and TV shows, too.
    - ImportOllie 5y ago
      Sure, why own anything digital when you can stream or pirate?
  - AnIdiotOnTheNet 5y ago
    > Could there be a paradigm where we can have a 2nd hand marketplace? For items that can be copied identically for basically nothing and never degrade? The only reason we even still have a first hand market for these things is that we want to compensate the producers of the work who still need to earn money to put food on the table. To do that we use the ridiculous concept of "intellectual property" to allow those producers to work within a system not designed for a post-scarcity space. I cannot conceive of a 'second hand' market ever making sense here without just piling on even more perverse concepts.
    - ImportOllie 5y ago
      Thanks for your reply. If artificial scarcity is perverse, does that mean also mean things like limited art print runs are also perverse? Because it seems to me an artist who has the potential to print there work unlimited times but chooses to set the price at X for N prints would fall into that. But then, either because it's been accepted as a thing or otherwise, it's a common practice and personally, i've not seen it as a negative.
      - AnIdiotOnTheNet 5y ago
        > If artificial scarcity is perverse, does that mean also mean things like limited art print runs are also perverse? Yes, especially if the prints are basically free to produce. Artificial scarcity is bullshit we only tolerate because our economic system is built on scarcity. It's a hack and I would rather not encourage it. What is the point in digital anything if we're just going to limit it like it were a physical good?

josephd79 5y ago

This isn't entirely true. You can collect royalties every time the NFT is sold if you want. You can even have NFT's that degrade over time.

beardyw 5y ago

The title should read "digital arts" because this has no impact on physical art (does it?) That an NFT should confer the right to hear or watch something seems reasonable. But ... For audio, my Spotify subscription lets me listen to whatever I like. I no longer have the agony of what I should buy. Why would I go back to that? For video, companies currently hold our "bought" right to watch. Why would they let go of that right into an open marketplace? Sounds like an uphill struggle. I think NFTs will eventually find a problem to solve, but not convinced this is it.

EricE 5y ago

Most art - at least of modern vintages anyway - are mainly a venue for money laundering anyway. Think of all the ways you can really go to town with that in the digital space! Ironically just don't use Crypto or eventually you will get exposed. I love it when people think Crypto and the blockchain will keep them anonymous - when every transaction is out there in the public and there are only a fixed number of points where you can convert your crypto into something useful like cash. Are they really dark patterns if all transactions are out there, in the open and fully visable?

CryptoPunk 5y ago
>>Most art - at least of modern vintages anyway - are mainly a venue for money laundering anyway. Is there any evidence at all for this extremely inflammatory claim?
- Dma54rhs 5y ago
  No there isn't. While money laundry certainly happens in the art world the anti - crypto people learned It all from an article released few years and now parrot it everywhere. At this point I can't decide who are more annoying - cryptobros or the anti cryptobros.
- whythre 5y ago
  Yes. It is a known problem/financial shortcut for people with the connections and wealth to pull it off. https://www.artandobject.com/news/how-money-laundering-works-art-world https://www.artandobject.com/news/how-money-laundering-works...
  - CryptoPunk 5y ago
    The only evidence provided is highly circumstantial and geographically limited: >>Consider that when the Mexican government passed a law in the early 2010s to require more information about buyers, and how much cash could be spent on a single piece of art, the market cratered, as sales dipped 70 percent in less than a year. Much of Mexico's economy, even the legitimate markets, is controlled by cartels, so operates very differently than most economies. It might not even be the law's impediment to money laundering that caused sales to crater - it may be simply that in a country with a large outlaw faction that has thoroughly infiltrated government agencies, people with means will not want to be easily tracked/identified by attaching their identity to large purchases of luxury items.

mech987 5y ago

>But it only takes one person to decide that they want to sell their copy for free - and the floor becomes zero That's not quite right. If we plot out all the bids and asks, the price floor only becomes zero if the seller with a $0 ask has enough volume to flood the market. Otherwise If the Red Hot Chili Peppers decide to release only 300,000 copies of an NFT album, then the limited distribution would keep the price floor above zero. Even without a limited distribution there's a pretty good chance that most people wouldn't part with their copy unless they got enough money for the trouble.

spicy_tendies 5y ago

You are assuming the only way to listen to an album would be to own the NFT, which I doubt will be the case.

Adrox 5y ago

This person clearly has zero understanding of the concept of "Supply and demand". Not only the same thing he says: "In the future, I could buy an eBook for £15 and then sell it for £14.99. Given enough competition, this means the price should drop to zero." Could also happen to any physical good: CD's and DVD's, collectible cards. Do they always go down in price? The truth is: it simply does not happen that the value always goes down. There is several edition CD and Vinyls that are very sought by collectors that have gone up in price because they are rare (just like art). Some people could also really want that eBook (with very few people selling it) and offer to buy it for £16, raising the prices again... It also doesn't help "explain" prices in real NFT marketplaces not going to zero, just take a look at www.nbatopshot.com (licensed by both the NBA and the players association) or any other digital collectible...

xyzzy123 5y ago
I think the author's conclusion is true if you allow for several unstated assumptions. Also this conclusion applies only to nfts with potentially infinite supply, NOT "art". The first assumption is that the transaction costs of buying and selling a copy of an album or ebook nft will be zero (including hassle and book-keeping costs). The second assumption is that there is infinite supply, forever, at some ceiling price (e.g. someone will always sell you a "new" beatles album nft for $10). The third is that there are no "sinks", e.g. the copies are never consumed or degraded by loss, incompatibility, releases of better quality, etc. Also, the argument requires the copies are more or less "fungible". But I think yeah, logically, if I can buy a new X at $10 which lasts forever and is infinitely tradeable with zero transaction costs, eventually the secondary market price of X would tend towards zero. Effectively the whole world would be purchasing floating licenses until supply > demand and eventually that condition is permanent. In practice, owners of copyrighted works have a lot of ways to avoid this situation and I expect they will act to license their works in ways that avoid this.

TheDesolate0 5y ago

tata71 5y ago

The future value of existing art, without adding an accompanying authenticity NFT, is lower. Seems fairer.