One of the major fundamental issues with NFTs at the moment is the ones that offer them as "tickets to the metaverse" as their value proposition. Essentially, you pay one time, up front, and then you are promised a lifetime membership to ... something. Something that doesn't exist yet, and most importantly, something that will be built not just by the people who sold you your NFT, but also a bunch of third parties. The idea is that your Bored Ape, or your Axie, or your Crypto Punk, etc, etc, is going to be your all-access pass to all these experiences that are going to honor it. But where is the incentive going to come from for all these third parties to spend time and money and labor building exclusive VIP experiences for people who already plunked down several thousand dollars and have high expectations?
If you look at actual Yacht clubs and country clubs, they charge recurring membership subscriptions, and then they provide you the exclusive membership services and perks.
Instead we have a business model that is a one time up front fee in exchange for a lifetime of recurring benefits, many of which are supposed to be delivered by somebody else. And yeah, they sometimes take fees when the NFTs are transferred, but most of the money is made on that big initial buy-in.
That's without even getting into all the other stuff.
For comparison, Patreon supports connecting your Discord account so when you support a creator there, you can join that creator's online community. Once someone creates an authentication protocol for "verify that entity X owns badge Y", I expect Patreon will set something up so that anyone who wants to flaunt their verified patronage of a creator (for the bragging rights) will be able to do so.
Its just artificial artificial scarcity. The worse kind. We need to be spreading the abundance afforded by technology, not creating more artificial scarcity
I don't see this as solving ANY problem. You could even more easily slap a copyright on an image you purchase from the creator than make it an NFT. That gives you both the craved sense of ownership AND legal ownership. IMHO, that doesn't make it much of a "use".
To quote Danny Glover in Lethal Weapon, “I’m too old for this sh**”. I’m also an American woman and therefore have never found excitement in baseball cards, video games or anime. This whole discussion is depressing and seems like it must be related to the “low T” problem advertised on TV, but is it causal or just correlated?
I kind of enjoy the idea of a bunch of crypto bros losing scads of $, except if it ends up funding North Korea. Then it’s not funny. Could Satoshi Nakamoto be a North Korean long grift?
The "we're selling you NFT pictures of women, but unlike the others we are doing it in a feminist, women-owned way" is the subject of many defunct NFT schemes (which are still for any by bros).
So is "if you buy this we will later make something out of it that will retroactively justify the money you are giving us." Once you pay the money, why do they need to do anything with it?
So I don't see anything in Galverse as culturally or financially distinct from nearly identical NFT busts.
People also still collect and grow exotic tulips. That doesn't mean that the price of a bulb (as compared to wages or whatever other benchmark you want to use) is _ever_ going to go back to the heights of Tulip Mania.
And people collect and trade Pokemon, by way of a trusted intermediary, in Pokemon Go.
This really is your absolute worst "take", Noah. You need to invest the time to understand what about distributed blockchain systems is _different_ from other ways of tracking identity and ownership using public key cryptography. Because if you did understand that, you'd see that there's no there there. The difference with the distributed model is that _if you own all of your keys and hardware_, then you can dispense with having any kind of trusted intermediary, which is kind of a neat technical innovation. But it costs an immense amount of time and energy. (And "proof of stake" isn't a solution, it has its own class of problems -- it basically builds in accelerating inequality). And in any case, it turns out that _virtually nobody_ wants to actually manage their own keys and hardware. So _anything_ that you can do on a distributed blockchain, will be a better business if you just use an intermediary. You can come up with co-op-like ways to manage the intermediary if you want, and do database replication across the globe to make it robust against attack, and even let anyone that wants to host a replica, and use consensus mechanisms that _somewhat_ resemble distributed blockchain to do that. But you don't need the full model where there is no central authority, and by dispensing with it, you bring the cost of a transaction down by _orders of magnitude_.
The one cool thing about digital collectables is that they can be generated quickly and easily for specific events AND they don't take up physical space. You don't need the blockchain but having some sort of authentication that can be transferred is good. I did a lot of baseball card collecting in the '80s and '90s and basically stopped once the special gimmick cards took over. I didn't like the gimmicks because it became about chasing rarity instead of the players and game themselves but I obviously was in the minority.
I definitely would pay more for a physical collectable but, in the long run, might buy a higher volume of them overall if they're digital (and have a digital frame cycle through them). And it supports digital art as a medium. Yeah, I could do that even if I didn't actually own the item but it seems kinda dumb to just have a random internet photo displayed as art without any context.
I still have minimal interest in the financial or investment aspects of crypto or NFTs (just like I had no interest in the double super platinum special cards) but they would scratch my itch to curate things without making my house messy.
"In other words, people are willing to pay a lot for the fun they derive from being the exclusive owner of something rare and desired."
I think this is skipping past a fundamental assumption: the size of the potential NFT market is a function of (a) wealth inequality and (b) the NFT market's ability to appeal to the super-rich.
The NFT market can only go up if people with extraordinary disposable income find them appealing. The art market is, in this sense, a strong point of comparison. But, since the population of excessively-rich barely changes from year to year, we should probably view NFTs as an extension to or competitor against the art market. The wealthy either buy a painting or an NFT. The vast majority of the public buys neither, and never will.
Understood in that light, what's noteworthy is just how far the likely trajectory of NFTs departs from the public claims that they are the beginning of a new, "distributed" web.
I'm not sure that this idea of "owning something unique" actually applies to NFTs, though. In theory, yeah, you got thousands of unique pieces of art, but in reality, those artworks are all trivial variations on the same image of an uninterested monkey, to all intents and purposes every one is equivalent to every other. Somehow NFTs even fail at being non-fungible.
The whole NFT idea reminds me of "Tulipmania" in 17th century Holland. Good luck to the last people getting out. The problem with any fiat currency or similar concept is the only thing determining its value is the faith of the holders. Once that faith is eroded, the value of the item disappears. The same problem exists for the U.S. dollar. It is only backed by the "Full faith and credit" of the US government. When, not if the world loses faith in the ability or desire of America to pay its bills, the dollar will drop in value and probably no longer be the world's reserve currency. This problem came to light when the fight over raising the debt ceiling came down to the wire, and the ability of America to pay its bills on time was questioned. If we elect another president like DJT, who just walked out of several international agreements, the value and usefulness of the dollar will be questioned again.
“…but you always have to wonder if at some point the organization will just decide to clone your rare software object. Maybe there are laws telling them not to do this, but your ownership is always at the mercy of an outside organization”
This is also kinda true with NFTs?
First, on a chain level, your “rare software object” is at the mercy of the whales who might decide to fork the chain your NFT was on (with your NFT on the “wrong” fork)…or on a chain that falls out of fashion and eventually withers away. I’m not sure how likely this would be.
Second, I’m still not convinced that the “object” in question derives *all* of its value only from its receipt.
I mean, I know we might smugly assume that a person who bought NFT #7,342 (of 20,000) of a procedurally generated, poorly rendered, anthropomorphic orangutan, wouldn’t really care if the image (permanently linked to their wallet) changed from the orangutan to, say, porn…but I think they might care, actually.
Please remember that anything off-chain is “at the mercy of an outside organization.”
And it’s crazy expensive to put things on (mature, trusted) chains, because they’re fundamentally designed to not scale well.
So, in a regulated market, what’s the incentive for putting things on these chains?
Anyway we’re talking about “trust” ultimately, I think.
Might some of the perceived value for a “rare software object” also come from the relationship the creator had with it? The trust that comes from knowing provenance.
I guess if you don’t trust the creators (I mean that’s why we’re using blockchain yeah?), then you probably don’t like the art anyway, and are just there to speculate on the new hotness.
If you do trust the artist, and have some trust in the regulated market the artist works in, then do you really need blockchain?
Could your anime example work without blockchain?
The creators could just decide to sell exclusive limited digital art and not use blockchain at all. Send you a regular receipt. In a regulated market that recognizes receipts.
You’d have to trust the artist of course…but isn’t that part of the value of that relationship?
Sidebar: There’s actually been a platform doing digital exclusives/collectibles without blockchain for over a decade.
One of the major fundamental issues with NFTs at the moment is the ones that offer them as "tickets to the metaverse" as their value proposition. Essentially, you pay one time, up front, and then you are promised a lifetime membership to ... something. Something that doesn't exist yet, and most importantly, something that will be built not just by the people who sold you your NFT, but also a bunch of third parties. The idea is that your Bored Ape, or your Axie, or your Crypto Punk, etc, etc, is going to be your all-access pass to all these experiences that are going to honor it. But where is the incentive going to come from for all these third parties to spend time and money and labor building exclusive VIP experiences for people who already plunked down several thousand dollars and have high expectations?
If you look at actual Yacht clubs and country clubs, they charge recurring membership subscriptions, and then they provide you the exclusive membership services and perks.
Instead we have a business model that is a one time up front fee in exchange for a lifetime of recurring benefits, many of which are supposed to be delivered by somebody else. And yeah, they sometimes take fees when the NFTs are transferred, but most of the money is made on that big initial buy-in.
That's without even getting into all the other stuff.
For comparison, Patreon supports connecting your Discord account so when you support a creator there, you can join that creator's online community. Once someone creates an authentication protocol for "verify that entity X owns badge Y", I expect Patreon will set something up so that anyone who wants to flaunt their verified patronage of a creator (for the bragging rights) will be able to do so.
Its just artificial artificial scarcity. The worse kind. We need to be spreading the abundance afforded by technology, not creating more artificial scarcity
Tried to fig out NFT's; failed completely, even and especially having read a bunch of Noah's obviously (!) outstanding screeds on the subject. Sigh
On second thought, who actually owns the copyright on an NFT? Tehhe https://en.wikipedia.org/wiki/Berne_convention makes copyright automatic.
I don't see this as solving ANY problem. You could even more easily slap a copyright on an image you purchase from the creator than make it an NFT. That gives you both the craved sense of ownership AND legal ownership. IMHO, that doesn't make it much of a "use".
To quote Danny Glover in Lethal Weapon, “I’m too old for this sh**”. I’m also an American woman and therefore have never found excitement in baseball cards, video games or anime. This whole discussion is depressing and seems like it must be related to the “low T” problem advertised on TV, but is it causal or just correlated?
I kind of enjoy the idea of a bunch of crypto bros losing scads of $, except if it ends up funding North Korea. Then it’s not funny. Could Satoshi Nakamoto be a North Korean long grift?
The "we're selling you NFT pictures of women, but unlike the others we are doing it in a feminist, women-owned way" is the subject of many defunct NFT schemes (which are still for any by bros).
So is "if you buy this we will later make something out of it that will retroactively justify the money you are giving us." Once you pay the money, why do they need to do anything with it?
So I don't see anything in Galverse as culturally or financially distinct from nearly identical NFT busts.
People also still collect and grow exotic tulips. That doesn't mean that the price of a bulb (as compared to wages or whatever other benchmark you want to use) is _ever_ going to go back to the heights of Tulip Mania.
https://oldhousegardens.com/store/category/Tulip
And people collect and trade Pokemon, by way of a trusted intermediary, in Pokemon Go.
This really is your absolute worst "take", Noah. You need to invest the time to understand what about distributed blockchain systems is _different_ from other ways of tracking identity and ownership using public key cryptography. Because if you did understand that, you'd see that there's no there there. The difference with the distributed model is that _if you own all of your keys and hardware_, then you can dispense with having any kind of trusted intermediary, which is kind of a neat technical innovation. But it costs an immense amount of time and energy. (And "proof of stake" isn't a solution, it has its own class of problems -- it basically builds in accelerating inequality). And in any case, it turns out that _virtually nobody_ wants to actually manage their own keys and hardware. So _anything_ that you can do on a distributed blockchain, will be a better business if you just use an intermediary. You can come up with co-op-like ways to manage the intermediary if you want, and do database replication across the globe to make it robust against attack, and even let anyone that wants to host a replica, and use consensus mechanisms that _somewhat_ resemble distributed blockchain to do that. But you don't need the full model where there is no central authority, and by dispensing with it, you bring the cost of a transaction down by _orders of magnitude_.
The Galverse projects sounds like a Kickstarter with extra steps. Many indie games have given backers rights name or design characters.
The one cool thing about digital collectables is that they can be generated quickly and easily for specific events AND they don't take up physical space. You don't need the blockchain but having some sort of authentication that can be transferred is good. I did a lot of baseball card collecting in the '80s and '90s and basically stopped once the special gimmick cards took over. I didn't like the gimmicks because it became about chasing rarity instead of the players and game themselves but I obviously was in the minority.
I definitely would pay more for a physical collectable but, in the long run, might buy a higher volume of them overall if they're digital (and have a digital frame cycle through them). And it supports digital art as a medium. Yeah, I could do that even if I didn't actually own the item but it seems kinda dumb to just have a random internet photo displayed as art without any context.
I still have minimal interest in the financial or investment aspects of crypto or NFTs (just like I had no interest in the double super platinum special cards) but they would scratch my itch to curate things without making my house messy.
"In other words, people are willing to pay a lot for the fun they derive from being the exclusive owner of something rare and desired."
I think this is skipping past a fundamental assumption: the size of the potential NFT market is a function of (a) wealth inequality and (b) the NFT market's ability to appeal to the super-rich.
The NFT market can only go up if people with extraordinary disposable income find them appealing. The art market is, in this sense, a strong point of comparison. But, since the population of excessively-rich barely changes from year to year, we should probably view NFTs as an extension to or competitor against the art market. The wealthy either buy a painting or an NFT. The vast majority of the public buys neither, and never will.
Understood in that light, what's noteworthy is just how far the likely trajectory of NFTs departs from the public claims that they are the beginning of a new, "distributed" web.
I'm not sure that this idea of "owning something unique" actually applies to NFTs, though. In theory, yeah, you got thousands of unique pieces of art, but in reality, those artworks are all trivial variations on the same image of an uninterested monkey, to all intents and purposes every one is equivalent to every other. Somehow NFTs even fail at being non-fungible.
The whole NFT idea reminds me of "Tulipmania" in 17th century Holland. Good luck to the last people getting out. The problem with any fiat currency or similar concept is the only thing determining its value is the faith of the holders. Once that faith is eroded, the value of the item disappears. The same problem exists for the U.S. dollar. It is only backed by the "Full faith and credit" of the US government. When, not if the world loses faith in the ability or desire of America to pay its bills, the dollar will drop in value and probably no longer be the world's reserve currency. This problem came to light when the fight over raising the debt ceiling came down to the wire, and the ability of America to pay its bills on time was questioned. If we elect another president like DJT, who just walked out of several international agreements, the value and usefulness of the dollar will be questioned again.
“…but you always have to wonder if at some point the organization will just decide to clone your rare software object. Maybe there are laws telling them not to do this, but your ownership is always at the mercy of an outside organization”
This is also kinda true with NFTs?
First, on a chain level, your “rare software object” is at the mercy of the whales who might decide to fork the chain your NFT was on (with your NFT on the “wrong” fork)…or on a chain that falls out of fashion and eventually withers away. I’m not sure how likely this would be.
Second, I’m still not convinced that the “object” in question derives *all* of its value only from its receipt.
I mean, I know we might smugly assume that a person who bought NFT #7,342 (of 20,000) of a procedurally generated, poorly rendered, anthropomorphic orangutan, wouldn’t really care if the image (permanently linked to their wallet) changed from the orangutan to, say, porn…but I think they might care, actually.
Please remember that anything off-chain is “at the mercy of an outside organization.”
And it’s crazy expensive to put things on (mature, trusted) chains, because they’re fundamentally designed to not scale well.
So, in a regulated market, what’s the incentive for putting things on these chains?
Anyway we’re talking about “trust” ultimately, I think.
Might some of the perceived value for a “rare software object” also come from the relationship the creator had with it? The trust that comes from knowing provenance.
I guess if you don’t trust the creators (I mean that’s why we’re using blockchain yeah?), then you probably don’t like the art anyway, and are just there to speculate on the new hotness.
If you do trust the artist, and have some trust in the regulated market the artist works in, then do you really need blockchain?
Could your anime example work without blockchain?
The creators could just decide to sell exclusive limited digital art and not use blockchain at all. Send you a regular receipt. In a regulated market that recognizes receipts.
You’d have to trust the artist of course…but isn’t that part of the value of that relationship?
Sidebar: There’s actually been a platform doing digital exclusives/collectibles without blockchain for over a decade.
Neonmob: https://www.neonmob.com/
(my old puck rock friend used to work for them after his record label, Lookout Records, went out of business!)
I’m curious to see if soulbound NFTs will emerge and create a more diverse ecosystem. Not just one based on who paid the most.