<i>>Why is it that Elon Musk can sell an NFT of Elon Musk's tweet, but Jeff Bezos would have a much harder time doing the same? Elon and Jeff have the same level of ability to screenshot Elon's tweet and stick it into an NFT dapp, so what's the difference? To anyone who has even a basic intuitive understanding of human social psychology (or the fake art scene), the answer is obvious: Elon selling Elon's tweet is the real thing, and Jeff doing the same is not. Once again, millions of dollars of value are being controlled and allocated, not by individuals or cryptographic keys, but by social conceptions of legitimacy.</i><p>It seems like Vitalik has stumbled into another restatement of the famous essay <i>"What Colour are your bits?"</i>[1] ... which is basically a poetic way of saying <i>"What _Provenance_ are your bits?"</i><p>Provenance matters.<p>(But I'm not claiming that NFTs will have enduring value. I can't tell if they will be a fad or not.)<p>[1] <a href="https://ansuz.sooke.bc.ca/entry/23#:~:text=Having%20identical%20bits%20means%20by,computers%2C%20are%20Colour%2Dblind" rel="nofollow">https://ansuz.sooke.bc.ca/entry/23#:~:text=Having%20identica...</a>.
A curious observation about NFTs that many on HN seems to have missed in other threads:<p>> Why is it that Elon Musk can sell an NFT of Elon Musk's tweet, but Jeff Bezos would have a much harder time doing the same? Elon and Jeff have the same level of ability to screenshot Elon's tweet and stick it into an NFT dapp, so what's the difference? To anyone who has even a basic intuitive understanding of human social psychology (or the fake art scene), the answer is obvious: Elon selling Elon's tweet is the real thing, and Jeff doing the same is not. Once again, millions of dollars of value are being controlled and allocated, not by individuals or cryptographic keys, but by social conceptions of legitimacy.
It seems that nearly every "public good" in the Ethereum ecosystem got gobbled up by VCs and pivoted to for-profit endeavors. I don't mind VCs and I don't mind people seeking profit, but this moral high ground that Ethereum has been trying to build for itself is delusional. In practice it is just a marketing gimmick.<p>An astute observer may have noticed that Vitalik has a habit of coming up with definitions that only himself and the Ethereum foundation can meet the standards of.<p>The reality is everyone is just trying to make money. I think we are better off coming to terms with that instead of living in a collective fantasy.
In this context, "legitimacy" is mostly "value from popularity". This becomes clear in the collectables market. Beanie Babies are not particularly good dolls, but through marketing, they became "collectable".<p>Collectable plates used to be a thing, back when people had large cabinets with glass-fronted doors for displaying dinnerware. You can still get them on eBay. "Lot of 3 Vintage Lena Liu Country Accents Numbered Bradford Exchange 1995 Plates Pre-Owned $24.99"[1] Zero bids. There's a vast amount of stuff like that. Nobody makes much money off of it other than the manufacturers. Even they don't do that well. Warner Bros. once bought the Franklin Mint, around the time they bought AOL and Time. That didn't work out well.<p>That's what the NFT proponents are trying to replicate - mass-market collectables. With an additional "fear of missing out" component. The high-dollar one-offs are promotional items for a projected flood of bulk collectables. (If they're even real. Those hyped multi-million dollar items, if they sell at all, do not seem to be closing as legitimate arms-length transactions where real money changes hands. See the Beeple fiasco.)<p>As a store of value, NFTs are terrible. None of this stuff is very liquid. Too many different items, and no market price. You have to put the thing up for sale and wait. Wait too long, and nobody cares. This Three Stooges collectable plate [2] can be yours very cheaply. The shipping and handling is more than the price, so the transaction cost is more than it's worth.<p>At least NFTs don't have high storage costs.<p>[1] <a href="https://www.ebay.com/itm/Lot-of-3-Vintage-Lena-Liu-Country-Accents-Numbered-Bradford-Exchange-1995-Plates/114738731393" rel="nofollow">https://www.ebay.com/itm/Lot-of-3-Vintage-Lena-Liu-Country-A...</a><p>[2] <a href="https://www.ebay.com/itm/Three-Stooges-Pop-Art-The-Franklin-Mint-Heirloom-Collector-Plate-1994-Rt-0030/313263518547" rel="nofollow">https://www.ebay.com/itm/Three-Stooges-Pop-Art-The-Franklin-...</a>
If you take something rather silly (lotteries) and donate some of the proceeds to a good cause (state lotteries supporting education) then that makes it more acceptable and respectable, and perhaps more likely to stick around, because people are less likely to turn against it. So, perhaps the same could be done with NFT’s?<p>But Vitalik says this more diplomatically than me.
The idea of NFTs is odd to me.<p>I get the idea of a digitally validated consumable (concert tickets, for example). I get the idea of owning a piece of digital art.<p>But as far as I understand, a lot of NFT transactions are for digital "ownership" without many of the rights normally associated with ownership.<p>They seem more like baseball cards than Picassos.<p>Maybe I just don't get the current frenzy, and that's that--but a lot of the buzz around NFTs make me think there are likely a ton of wash sales that fake run up the price to unload lower priced ones on speculators.<p>It just has my spider sense tingling that something shady is going on. Think of all the farmland or Bitcoin or stock in copper miners you could buy with these sums. How could the joy of ownership over a collectible compete? Or do these people really believe that these things will appreciate from these prices?
> Clearly, this expenditure pattern is a massive misallocation of resources. The last 20% of network hashpower provides vastly less value to the ecosystem than those same resources would if they had gone into research and core protocol development. So why not just.... cut the PoW budget by 20% and redirect the funds to those other things instead?<p>I would prefer probably the other way for Bitcoin: keeping at least 1% inflation for securing via proof of work would be great, but as it's immutable (unlike Ethereum), the two networks will be even more different over time. I view this as a great thing, we don't need the same system twice. I love how boring Bitcoin is just like I love to see the new UniSwap version with its great improvements.
"Clearly, this expenditure pattern is a massive misallocation of resources. The last 20% of network hashpower provides vastly less value to the ecosystem than those same resources would if they had gone into research and core protocol development. So why not just.... cut the PoW budget by 20% and redirect the funds to those other things instead?"<p>"even though we could easily identify some valuable public goods to redirect some funding to as a one-off, making a regular institutionalized pattern of such decisions carries risks of political chaos and capture that are in the long run not worth it."<p>He gets the premise entirely wrong here. The chaos in these blockchain protocols is due to there not being a clear and well defined process for doing consensus rule upgrades. PoW miners control these chains. The power over the chain by PoW miners has become centralized into increasingly smaller number of participants with their own selfish interests. No upgrade will happen without their embracing it. Overriding the miners then becomes a vague and undefined matter of 'economic consensus' which means different things to different people and is not measurable.<p>Decred has consensus rules for upgrading its consensus rules. The hybrid PoW/PoS system allows for the security and fair distribution provided by PoW while allowing PoS... the economic stakeholders with the the most to lose, to make the decisions about the future of the chain.<p>Lead Developer for Decred, Dave Collins, outlines this concept nicely.
(4 min) <a href="https://www.youtube.com/watch?v=WJs4T0WGe7k" rel="nofollow">https://www.youtube.com/watch?v=WJs4T0WGe7k</a>
> they were successfully stopped<p>ish. at best. Hive achieved it's own legitimacy, substantiated itself.<p>but there's no way i'd make a grandiose claim about legitemizability in general, that this phoenix act is repeatable or cost free. this article feels.lile it argues too strongly for forces of cohesion that i don't think exist. right now blocks all have the ability to do whatever precisely because there is low cohesion, that they could just redefine & begin using the the alt system, but that freedom to redefine eeks out of systems, they solidify & set.<p>as an engineer I find that (the ever setting nature of social systems) horrific & wish very much for social rehcohesionability, re-structyring. vitalik's example is good to see. but it feels rare. very undependable. too often legacy & history have too strong a claim on legitemacy.
Is it me or Vitalik seems to be going a bit far...<p>> The powerful social force that is creating this effect is worth understanding. As we are going to see, it's also the same social force behind why the Ethereum ecosystem is capable of summoning up these resources in the first place (and the technologically near-identical Ethereum Classic is not)<p>The dude is turning megalomaniac, and is not realizing that a portion of miners are not happy with the protocol changes. His answer to that seems to be that he is the "legitimate" source of truth? I guess it's time to short Ethereum or run from your long.<p>*: Not trading advice.
NFT minted by Elon Musk is exactly equivalent to NFT by Jeff Bezos in their primary mean: real value of them is exactly zero and it is universally stupid to exchange any viable resource (being money or anything else) for them. The only sane exchange for NFT is another NFT.
Are we forgetting to account for the lack of centralized banking and everything that comes along with it when factoring in the cost of Bitcoin? No need for tellers and bank branches, no fiat, all of these things should be included in the comparison, along with tons of stuff I can’t even think of that it takes to run a centralized banking system.<p>Heck just the absence of a federal reserve with the ability to do stupid things to the currency might pay for itself.