I tried to explain NFTs and crypto to family on Thanksgiving, but I don't think I was able to get it across across. I should have mentioned that many years before NFTs you could buy land on the Moon and get a certificate of ownership. There is no legal framework for owning land on the Moon, but that doesn't have to stop you from setting up a market for Moon land with your friends and trading your Moon acres for goods and services. As long as a group of people decided to use Moon land as money, they can use it as a way of enabling transactions. Like Monopoly money, it's essentially a way of keeping score of who owns what. Like casino chips, you might even be able to exchange them for dollars if the market owner (the casino) finds it profitable to maintain the illusion that they are real money. Just don't try to buy groceries with casino chips.<p>The operative phrase is "There is no legal framework," so if the Chinese decide to build a moon base on your land you're out of luck because you never really owned any land on the Moon.<p>Any day now someone will try to sell an NFT of the Brooklyn Bridge. In other words, NFTs are just another vehicle to extract money from suckers.
You're correct. NFTs are unenforceable certificates of ownership for publicly available digital assets (at least as they are used currently). It's possible to make NFTs that connect to real world activities like tickets for concerts and whatnot but no one has done that yet or at least I haven't heard of it yet.
The problem with NFTs is that they often don't have good provenance, and so are ripe for fraud.<p>Suppose we have a well-known photo of the Brooklyn Bridge. It was scanned twice and separate NFTs were created and sold. The data & hash is different because the scanner had different dust patterns on the glass each time. But visually - it's the same photo. And they were sold with the promise that they were unique in the world. Which is technically true (the math proves it), but a reasonable person would not think so.<p>A legit source like the NYC Museum of Modern Art would be trusted to sell NFTs that are unique and collectible. However "Bob's online NFT Shop" has a really nice website & sales brochure and so far has relied on his Terms of Use to quash any rumors of selling dupes.
In broad strokes it's accurate. The only difference is that back in the day the people selling moon acres could just sell the same moon acre multiple times, thus destroying the value anyone placed in their certificates. With NFTs, there is some public list that shows who owns which plots of the moon and if someone tries to double sell a moon plot, you can say "I'm not paying for that." But it doesn't confer any more property rights than the previous setup.<p>That said, NFTs are no more and no less irrational than buying the right to have your name slapped on anything else. Plenty of people will give money to have their name placed on a wing of a building or a park bench or what have you. NFTs allow you to have your name placed in a public ledger. If you value having your name in some specific public ledger, more power to you. But yeah if you wouldn't pay some random dude named Jim to declare you "Jim's Certified Owner of the Brooklyn Bridge" why would you pay him for "Jim's Brooklyn Bridge NFT"?
The Dutch Tulip craze seems the most relevant example, but at least somewhere at the bottom of all the financialization in that case, there were some actual tulip bulbs that could be planted to yield flowers.
> Am I wrong?<p>For trying to explain NFTs to your family? Probably. If your family trusts you with technology, the best way to actually talk about it would be implicitly imparting your opinion as a passing topic. Something like "you hear about those chumps spending real life money on randomly-generated pixel art?" If they show interest, chase it down and indulge their curiosity. If they don't really care, cauterize the topic with a joke or a banal comment like "I didn't know the public could <i>get</i> any dumber!" In any case, I'd bet the last thing <i>anyone</i> wants to do is launch into a blockchain-based seminar when they really just want you to pass the mashed potatoes.
> The operative phrase is "There is no legal framework,"<p>This isn’t really the salient point. You can buy and sell useful things with no legal framework (and people do all the time) and that doesn’t make it a scam or a scheme designed to sucker people. The difference is that NFTs have no inherent, tangible value. In that sense it’s more akin to something like baseball cards, or art. Things that have no inherent value, and are easily reproduced, but can be verified to be “authentic”.
NFTs are legal contracts with an assignable role of the beneficiary (generally to the owner of the NFT).<p>They are currently being used for digital proof of ownership to digital memorabilia, but in the future expected to be used for real things (like licensing rights, representation of a gym membership etc).<p>They are legal (unenforceable or not is not the point), as much as if you wrote on a piece of paper in college to your roommate that you agree to answer, everytime he calls you on the phone and asks "Who's your daddy", with "Jeremy", is legal.<p>When you are buying a tweet, you're essentially buying a digital memorabilia. When you're buying Linkin Park's Mike Shinoda's doodles, you're buying digital patronage (as in, Mike Shinoda will always acknowledge the owner of the NFT as the patron of his doodle).
It's a lot of complicated technology backing unique digital trading cards. The difference between NTFs and bitcoin is bitcoin is (mostly) fungible.
The value of the NFT (EIP-721) standard is not the currency you may or may not extract from the representation (picture) of the code on the network.<p>The value is that it allows for ownership of a specific asset that cannot be argued against. It is immediately accessible, communicable, and you can verify ownership of said asset.<p>Instead of making nfts for land on the moon, replace the asset with property deeds. And replace/automate whatever you can cost efficiently in the property deeds process and infrastructure with blockchain.
I recently wrote a short article about NFTs, how they work and how to get started. Might be of some interest to your family: <a href="https://medium.com/@contact_9164/how-to-create-your-first-nft-illustrated-with-shitty-stock-photos-bec48c91b4b9" rel="nofollow">https://medium.com/@contact_9164/how-to-create-your-first-nf...</a>
You're wrong. Look at the history of digital gaming and people trading in game items for real money. Look at the whole swath of digital art, music, nba game moments, etc that could not be certified and now can be. Look at how major game studios were silent about NFTs and now all announced in their recent earnings reports that they are at least investigating blockchain and NFT and soon incorporating them into their futures. If you do any bit of shallow research, you'll stumble into several multi billion and soon to be multi trillion dollar market cap plays.<p>Look back at this comment in five years.