NFTs Are a Dangerous Trap

NFTs make perfect sense for representing a claim on things that can be used, like event tickets or in-game virtual goods. But as certificates layered on top of collectibles... I&#x27;m not so sure.<p>With something like CryptoKitties, you can do something with the tokens (play a virtual pet game). But with something like CryptoPunks you&#x27;re essentially paying for digital beanie babies, which are worse than real ones since anyone can display and enjoy the image you paid for.<p>You can brag about owning such-and-such an image, but only as long as enough other people desire images from that particular set. When a set&#x27;s popularity wanes, so does your token&#x27;s value, and your ability to show it off.<p>I&#x27;m always happy to see artists being paid for their work, and if they can make some money during this craze - more power to them. Beyond a few creators being rewarded, it seems like this is going to be 90% bubble (with plenty of hucksters), and 10% real use cases that stand the test of time.

Pretty bad take on NFTs.<p>There are numerous configurations, networks, and commercial structures that can be created for NFT offerings that can mitigate &quot;problems&quot; described in the OP and accommodate for different tradeoffs.<p>A simple retort would point to the many alternative NFT networks that don&#x27;t use POW-based consensus algorithms or the NFT offerings that enable value add offerings very differently than purchasing art or baseball cards.<p>Evaluating the capabilities of NFTs against the value offerings of something like rare art is an apples to oranges comparison. Of course the market for digital assets offered via NFT is immature and speculative; this is a new market, based on an alternative technology paradigm, that has a long way to go before it settles into a more usable and valuable structure.<p>Ultimately, the idea of using key-pairs pegged to widely accessible peer-to-peer public networks as a mechanism for tracking ownership of digital (or near digital or at times even physical) assets is incredibly novel. It turns the conventional model of third-party hosted digital assets on its head and enables really interesting mechanisms of distribution, ownership, access, and value consumption and creation that does not compare well with traditional mechanisms. And in saying it doesn&#x27;t compare well I mean to acknowledge its limitations and its potential at the same time. However, the critique in the OP is pretty bland and doesn&#x27;t seem to acknowledge the full scope of the situation.

NFT&#x27;s are Bullshit: <a href="https:&#x2F;&#x2F;samim.io&#x2F;p&#x2F;2021-03-05-non-fungible-tokens-nft-are-bullshit&#x2F;" rel="nofollow">https:&#x2F;&#x2F;samim.io&#x2F;p&#x2F;2021-03-05-non-fungible-tokens-nft-are-bu...</a><p>In Summary: 1. The NFT doubles down on the worst of copyright, the property metaphor, &amp; tries to impose old ideas of scarcity &amp; exclusion on the digital realm, where both are obsolete.<p>2.NFTs are an absolute ecological disaster

There seems to be a mix of legit use cases and mania going on with the NFT craze. I can see use cases like NBA Top Shot being legit, here you have essentially the digitization of trading cards (a proven collectable market) backed by a major sports league. The top shot &quot;moments&quot; have some unique advantages over traditional trading cards in that they can&#x27;t be damaged&#x2F;stolen&#x2F;lost, can be traded instantly online, and may be more interesting to fans since they are videos vs pictures. You can see the transaction history of a moment, and in some cases NBA players themselves are trading them adding to the value for die hard fans. Being backed the NBA and unique content created specifically for the purpose of trading via NFT, I could see them having a long term value &amp; market <a href="https:&#x2F;&#x2F;www.nbatopshot.com" rel="nofollow">https:&#x2F;&#x2F;www.nbatopshot.com</a><p>Then there are ideas leaning more towards mania, essentially trying to make &quot;NFT for X&quot; by adding a token to every piece of digital data. For example, NFTs for tweets: <a href="https:&#x2F;&#x2F;v.cent.co&#x2F;tweet&#x2F;20" rel="nofollow">https:&#x2F;&#x2F;v.cent.co&#x2F;tweet&#x2F;20</a> (current bid is 2.5 million for Jack Dorsey&#x27;s first tweet). I suppose these tokens have value as long there is a market for them, but at certain price points I question if they can sustain long term and if they are more trying to cash in on the mania.<p>Debate on this topic here: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=26370866" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=26370866</a>

So, lets think, we have following issues:<p>- Climate change<p>- Artificial general intelligence<p>- Biotechnology risk<p>- Ecological collapse<p>- Molecular nanotechnology<p>- Nuclear holocaust<p>- Overpopulation<p>- Global pandemic<p>- ...<p>Most of them caused by way we use our energy and time.<p>Oh, yes we also have excess of computing power ... hm what shell we do?<p>Solution: Let spend even more energy on large calculations in order to create meaningless random numbers.

If Alice buys art from Bob, and that art goes up in value due to the open-market activity of anonymous [Carol?, ...], then Alice can donate that now expensive art to a digital museum for a tax write off. Where could Alice get the NFTs appraised? Is the open market activity sufficient?<p>It&#x27;s almost like the NFT system allows proles to do fancy tax write-offs like their bourgeoisie cousins.

Key quote for me:<p>&gt; The trap, then, is that creators can get hooked on creating these. Buyers with a sunk cost get hooked on making the prices go up, unable to walk away. And so creators and buyers are then hooked in a cycle, with all of us up paying the lifetime of costs associated with an unregulated system that consumes vast amounts of precious energy for no other purpose than to create some scarce digital tokens.<p>Tangentially, this resembled me of troubled financial markets (minus energy expenditure). Companies are hooked on making their stock go up, even if it requires distorting reality to hide fundamental problems. Like creators who become more about NFTs and their value than art, companies become more concerned with inflating valuations than actual business. Stock buyers are hooked on making stocks go up, not selling even if fundamental indicators are suffering to the point where viability of the business should be in question. Banks are hooked on making stocks go up… A vicious circle all around.

Hitchhikers guide to the galaxy:<p>Earth - a small planet in the outer reaches of spiral galaxy M7529, so far the only planet on record that the semi-intelligent biped inhabitants managed to overheat so badly that they became extinct. Overheating has happened before, of course, however the method of overheating is unique - the inhabitants invented a method of identifying uniqueness by making large calculations and attaching small drawings to the calculations, they then proceeded to trade these tokens as something of value, using more and more energy and creating a runaway green house effect. This has been used as an example to disprove the existence of god.

The huge USD value of this market seems odd. It either points to how rich these cryptocurrency holders are, or how illiquid their market is.<p>It’s all very well having 18.78Ꮆ (gorgcoins; ~$687,441) but if all you can do with them is buy 18.78Ꮆ of Cryptotchotchkees then it doesn’t seem like such a big deal.<p>I guess, if you’re stuck with an exit, what you really need to do is to make some kind of a market for some new product that can only be bought using gorgcoin. Then you’ll finally be able to sell your gorgcoin for USD, and buy a lambo &#x2F; Patek &#x2F; heart operation.

NFTs, the new way to spin a copyright or incorporate into DRMs, but since it pumps and is bullish for crypto, all cool kids are lovin it.

It’s easy for a famous entrenched artist who mass produces their work thanks to legacy infrastructure to talk down on this but I’m seeing lots of independent creator artist friends making some money for their work

&gt;CREATORS may rush to start minting NFTs as a way to get paid for what they’ve created. Unlike alternative digital currencies which are relatively complicated to invent and sell, it’s recently become super easy to ‘mint’ an NFT. [...] The more time and passion that creators devote to chasing the NFT, the more time they’ll spend trying to create the appearance of scarcity and hustling people to believe that the tokens will go up in value. They’ll become promoters of digital tokens more than they are creators. [...]<p>&gt;BUYERS of NFTs may be blind to the fact that there’s no limit on the supply. In the case of baseball cards, there are only so many rookies a year. In the case of art, there’s a limited number of famous paintings and a limited amount of shelf space at Sotheby’s.<p>How do these make NFTs signficantly different from the art trade and collectibles market? In both cases, creators could fall prey to focusing too much on selling things, and in both cases, the creators at any time could decide to put out a ton more. (I don&#x27;t get why the case of baseball cards is treated differently: nothing stops them from suddenly deciding to print many more cards.)<p>---<p>I think the externality of the power usage of proof-of-work blockchains is a significant issue though, and that maybe NFTs should be discouraged on that basis until we have NFTs working through environmentally-friendly solutions like proof-of-stake. I think this is way more of an issue than whatever possibility of a downside exists from artists maybe deciding to focus too much on making sellable tokens instead of art.

NFTs seem like an amazing opportunity to extract some money from people who got rich fast with crypto currencies ;)

Why can&#x27;t NFTs be done without a blockchain? Please explain. Just add multiple hash, public&#x2F;private-key cryptography, downsample discrete cosine transform, etc. You can just create a file format and a protocol. Why do you need to dump tons of CO2 into the atmosphere just for this purpose?

Short term view NFTs look like a scam or a joke.<p>Long term view we will need digital ownership especially when it comes to content or individual data&#x2F;items.<p>When the augmented reality spectacle takes over and everyone is looking through AR glasses, rather than through a small device but through their own eyes, digital collectibles will have more value.<p>Shared spaces with others will have collectibles that only exist in the virtual space, but also with AR a shared virtual reality. Sitting in your room you can have layers of digital collectables that you can swap out: art, sports&#x2F;gaming, music, landscapes etc that others can also see and experience. Availability and exclusivity are always part of the market and the augmented world will have similar in many areas.<p>Eventually consumption will have to move mostly digital with carbon neutral energy generation to prevent overuse of resources, people can collect much more in the digital space. Hoarding digital&#x2F;augmented content is not as problematic as hoarding in the real world.<p>Everyone knows this is coming and NFTs seem to be an early iteration of digital ownership to make unique collectibles.<p>Making games let you know that many players just like to collect things, obsessed with it. Digital collectibles already are a massive market.<p>When that market changes to an augmented world, where people will share spaces virtually or play games in the real world overlaid with fun elements like games, scenery, educational content, history, events and more. This is when digital content ownership will make more sense when it comes to the unique experiences and items that people will need to make money and a market. This will only grow with more augmented spaces, events, experiences, games, entertainment, education, history and more.<p>Rather than tie these digital items to a platform, ownership outside the platform is better in terms of being a standard. NFTs might not be the final form, but digital content uniqueness is actually something that can help the planet once the power usage is improved or neutral. If you think about it in the long term, where more people will be viewing augmented experiences from their own eyes (Apple Glasses and more) suddenly it makes more sense, then some items may only exist in that augmented layer.

The arguments made by people around NFTs strike me as suffering from the same maximalism that people apply to decentralization and inflation.<p>Digital is not always better than physical. Decentralized is not always better than centralized. Deflationary is not always better than inflationary.<p>All of these exist in a continuum, each with costs and benefits depending on a number of other external factors.

NFT: non-fungible token. <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Non-fungible_token" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Non-fungible_token</a><p>Expand your acronyms, peeps.

Consider baseball cards. I own 5000 cards with a total value of about $50.<p>A few NFT’s will be very very valuable. The first one George Clooney sells. The first one ever created. The 6 Banksy sells under a pseudonym that no one realizes for a year. The song Taylor Swift limits to 1 copy.<p>But almost all of them will be worthless.<p>The difference between baseball cards and NFT’s is that for generations, no one really cared about baseball cards. It wasn’t until the 80’s that people realized they had significant collectible value. By comparison, NFT’s have tremendous cultural hype.<p>Some people will do very well with this bubble, as a few do in every bubble. But it will be very few.

Regarding the energy use: Since the 1st of March Cardano has native tokens (you can create your own token without the need for a smart contract) and multi-assets (wallets and transactions can contain more than one asset). The blockchain is using Proof-of-Stake and a full node runs on a raspberry pi 4. So it is completely possible to have NFTs without the massive energy consumption of Ethereum and without the very high gas fees problem. You can transfer for example 10 different tokens in one single transaction for just 0.16ADA (around 16cents at current price).<p>I still don’t understand why someone would buy a tweet or the ownership of an image, but you can do it in a more sustainable way if that’s something important for you…

What prevents someone from creating another NFT platform for tweets and do the same thing? The tweet is only unique on the Cent Valuables platform, not on the blockchain itself. Or am I missing something?

When cryptocurrency became popular, it was hard to imagine a more poorly designed system. Generating random numbers, continuous guessing, to verify a ledger? That’s the culmination of decades of algorithm and performance knowledge?<p>Then smart contracts took the stage, and we realized they were an even worse idea than cryptocurrency. Permanently lose access to your money by locking it into a buggy computer program? How could we lose?<p>And now NFTs are the new worst idea. It’s somehow made the fundamentally terrible random number generation idea of cryptocurrency worse.<p>The collapse can’t come soon enough.

Maybe NFTs for collectibles isnt ideal but Im wondering if there are some more - lets say - utilitarian uses of this concept that we havent discussed yet. The other day I tried buying a bike. Id really like to know it wasnt stolen, and somehow being able to tie a real world representation into a virtual single item good would be somewhat useful.

OK, so what happens if, say, the worlds energy demands jump 100x in 2-3 years due to out-of-control feedback loops like crypto?<p>Energy prices go up. People suffer. There are two possible responses:<p>- Regulation&#x2F;laws to stop the feedback loop<p>- Investment + deployment of new energy technologies to increase supply<p>Will be interesting to see which of the two scenarios above happen, or if the fears of this crypto wave leading to insane energy cost increases just don&#x27;t happen.

&quot;It’s an ongoing waste that creates little in ongoing value and gets less efficient and more expensive as time goes on. For most technological innovations the opposite is true.&quot;<p>Reminds me of another cryptographic novelty that&#x27;s come back into vogue lately.

Has anyone done an analysis of NFTs being used for money laundering? Seem like they&#x27;d have most of the benefits of art plus most of the benefits of crypto.<p>I suspect NFTs will continue gaining in popularity, if only for this alone.

The articles is to simplistic and the author doesn’t understand the technology.<p>The author claims it’s easier to mint an NFT than a currency...for all intents and purposes it’s no different to mint a erc20 token vs erc721, so the we shouldn’t pretend NFTs are somehow the lowest common denominator while “alternative currencies” are inherently complex. A shit coin is a shit going whether it represents a digital image or nothing at all other than a store of value people collectively agree on.<p>What everyone ignores is that not all NFTs can be described as representing a jpeg (the digital baseball card). sure many are that, but others actually include a transfer of the intellectual property they represent. Others have a “public” representation but have embedded files accessible only to the owner. Others represent ownership of digital items that can be used in various DApps across the ethereum blockchain.<p>And even assuming all NFTs were just digital baseball cards, if baseball cards were your thing, then I think you could acknowledge how valuable it is to be able to trace every baseball card that exists and otherwise be connected to a marketplace that include the ability to buy&#x2F;trade&#x2F;sell directly with other persons without a centralized authority regulating those transactions.

Problems I see with NFTs: - What prevents anyone from launching a competing chain and re-tokenize the same assets ? - As other chains: if you lose the access to your private key, you&#x27;re done. - For real world assets (like a house), you have to enforce that the token is equivalent to the asset. That is: ownership of one implies the ownership of the other. Legally, it looks like a hell of a thorny problem: high-frequency house trading anyone ?

Tip the artists you love. If you want you can send them money by paying for prints, or buying originals, but ultimately just send them money. There&#x27;s no need for it to be transactional. If there are artists in the world that make things a little more beautiful for you, you can just pay them for that, without any need for it to be tied to something concrete.

This article by the author&#x2F;podcaster Seth Godin [1] highlights the issues with Non-Fungible Tokens (NFT) [2], built on the Ethereum cryptocurrency. It extends the ideas introduced in an Everest Pipkin post [3]:<p>&gt; Cryptocurrencies and NFTs are an absolute disaster for so many more reasons than the ecological.<p>The ecological issue is due to the energy consumption required to perform (some^) cryptocurrency computations.<p>[1] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Seth_Godin" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Seth_Godin</a><p>[2] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Non-fungible_token" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Non-fungible_token</a><p>[3] <a href="https:&#x2F;&#x2F;everestpipkin.medium.com&#x2F;but-the-environmental-issues-with-cryptoart-1128ef72e6a3" rel="nofollow">https:&#x2F;&#x2F;everestpipkin.medium.com&#x2F;but-the-environmental-issue...</a><p>^EDIT: added “(some)” cryptocurrency computations based on Tenoke’s comment

Regardless of what you think of NFTs, you have to recognize that the author&#x27;s only counterargument against NFTs is that they&#x27;re bad for the &quot;rest of us&quot; due to externalities that everyone else has to pay.<p>The &quot;rest of us&quot; don&#x27;t pay for the electricity use. The ETH miners are paying for it directly. And creators and buyers are paying for it indirectly through ETH usage. It isn&#x27;t an externality. That&#x27;s like saying the physical art world shouldn&#x27;t exist because it uses physical real estate, electricity, and raw materials to be made on -- and the rest of us pay for those things.<p>Is it a good use of electricity? Maybe, maybe not. That&#x27;s for people to decide individually, unless we&#x27;d want to go down the moral rabbit hole of judging every single use of electricity.

I don&#x27;t quite get this post, it somehow seems to make a case FOR nfts and then try to make the point that these are not look likr stocks (which is rather obvious).<p>The whole point of nfts is to create uniqueness among endlessly duplicatable media, and provide the possibility for digital art to be handled like physical art.<p>Just like the Mona Lisa, you can look at endless photos of it without restriction, but only one person can actually own it - the article correctly points out that nfts enable the same principle to hold true for digital goods, and then goes on to argue that this is bad because doesn&#x27;t provide any passive return to the collector, which holds true for physical collectibles all the same ...

The possibilities of NFTs fascinate me, especially for portable, digital identities and assets that transcend any specific virtual realm and can&#x27;t be arbitrarily erased by any central authority.<p>But I also won&#x27;t put a single sat in any of them right now.

Really? The latest random string of numbers for a gazillion dollars isn&#x27;t a wise long-run investment?... Look, I know this isn&#x27;t very HN-ish, but the Pope is a dangerous Catholic, and the woods are full of dangerous shitting bears.

I agree that most NFTs will be mostly useless outside of certain conditions. Ie. If I want to play a blockchain-based game NFTs in that game will be valuable because my client and other player client to the game is forced to accept that toke legitimacy. But outside of the blockchain-world? What&#x27;s the point of a NFTs? I guess this who care to brag that they overpaid for a png or mp3...<p>But I feel this post is another excuse to accuse cryptoassets of wasting energy. Up until 10 years of so ago detractors tried to tarnish cryptoassets reputations by associating it with traditional crime. Now they do it by trying to associate it with climate crime.

With ETH based NFT markets (which is the majority as far as I can tell) there seems to be a lot of sticker shock around ETH gas fees [1].<p>Fundamental transactions like minting new NFTs or buying&#x2F;selling can be expensive depending on network conditions at the moment. It&#x27;s not uncommon to see gas fees of $40-$60 to make a single NFT purchase [2].<p>[1] <a href="https:&#x2F;&#x2F;ethgasstation.info&#x2F;" rel="nofollow">https:&#x2F;&#x2F;ethgasstation.info&#x2F;</a><p>[2] <a href="https:&#x2F;&#x2F;coingeek.com&#x2F;the-ridiculously-high-cost-of-gas-on-ethereum&#x2F;" rel="nofollow">https:&#x2F;&#x2F;coingeek.com&#x2F;the-ridiculously-high-cost-of-gas-on-et...</a>

It would be really awesome if there was a digital exchange that dealt in multi use media. I would love to be able to buy an album, image, movie, 3D model, etc directly from the creators and then own the rights to use for whatever their content license allows. And then I could then resell that content and the original content creator would get an originator fee from the transactions. Some new data formats may need to exist because I would like to share my media with my license and the content creators license&#x2F;copywrite intact.

As many others here have pointed out, we stumble upon a fundamental issue with blockchains here. The thing that&#x27;s inside the blockchain can be verified but as long as it points to something in the physical world or to be more precise, outside the chain, you have a weak link. People can ignore to respect the NFT, or simply choose to reject it. Tokens in themselves have no intrinsic value, unlike a painting, a commodity (like gold or even uranium). Of course, there is one exception to this; money. That&#x27;s why bitcoin was a slightly better idea (but it suffers from different problems in my opinion). The ultimate conclusion for me at least is this one, ownership, art, justice (legal blockchains, smart contracts), these are all social problems and they cannot be solved with mere technology. Technology may help of course, but in the end I strongly believe that social problems require social solutions, not technical ones. For instance, consider bitcoin, with a 51% attack you could gain control over the chain, with PoS big stakers have control, this means you just traded the bankers of today with some other bankers. In the case of NFT, you could have a token that indicates you&#x27;re the owner of a painting, but if that painting is stolen and sold by people who don&#x27;t care about your NFT, what&#x27;s the point? Stealing, in this case is a social problem, not a technological one.

I&#x27;ve seen articles in the news try to compare an NFT with signature of an artist. This feels like a romantic concept, which supports the idea of unique value.<p>If I start to think about NFTs as a receipt, some of the latest bit stories start to gain a new perspective.<p>Someone has a receipt for buying the first Twitter message for $2.5m dollars.<p>It feels like stupidity, because it&#x27;s a clear case of the tail wagging the dog.<p>--<p>On the other hand, there&#x27;s a hug amount of utility in the idea of a transactions (receipts) being stored on a blockchain.

Just a technical question about NFTs and physical ownership. Are NFTs just a cryptographic key that points to digital goods or do they somehow encode them? If the former then the image is &quot;on the cloud&quot; and therefore actually on someone else&#x27;s physical network, and the key will only be able to access the goods as long as a third party keeps the encrypted goods on their network. Once money has been exchanged what is in it for the third party keep hosting?

The electricity argument is flawed. The electricity used is to power the ethereum proof of work blockchain. All its doing is checksumming hashes.<p>It doesn&#x27;t matter if you buy 0, 1, or 100 NFTs: your marginal impact on the electricity usage is zero.<p>The argument of marginal gas fees is also going away in July, with the network upgrade no longer paying gas fees to miners but burning them instead.

Anything that is marketed as a collectable is not a good investment. The thing must have some other use, a use that causes some (hopefully most) of them to be damaged or destroyed. The one exception to this seems to be sports trading cards, because, as the article says, there are only so many rookies every year. And even fewer who become superstars.

&gt; BUYERS of NFTs may be blind to the fact that there’s no limit on the supply. In the case of baseball cards, there are only so many rookies a year. In the case of art, there’s a limited number of famous paintings and a limited amount of shelf space at Sotheby’s. NFTs are going to be more like Kindle books and YouTube videos.<p>Well, this is just flat out wrong. You can mint limited editions. And there are unlimited worthless paintings in real life which do not affect .<p>The author got so swept up in the NFT craze, wanting to write a trendy blog post that rides the hype wave while pretending not to, that they didn&#x27;t actually do their due research before trying to distill a topic and worse, paint a biased, negative portrait.<p>&gt; Let’s walk away from this one.<p>Let&#x27;s not write ill-researched analytical blog posts with a narrative in mind before getting familiar with the subject, and then try and convince others to stay behind so we aren&#x27;t the only ones missing out.

What happens when someone actually starts going after IP rights on these things? I suspect that&#x27;s when the &quot;popping&quot; starts.<p>3D-ified pokemon card, no way the creator licensed the trademarked character or the copyrighted text: <a href="https:&#x2F;&#x2F;app.rarible.com&#x2F;token&#x2F;0xd07dc4262bcdbf85190c01c996b4c06a461d2430:92710:0x6db61f5439076d033bd566d1e989c3b51c52ba39?tab=history" rel="nofollow">https:&#x2F;&#x2F;app.rarible.com&#x2F;token&#x2F;0xd07dc4262bcdbf85190c01c996b4...</a><p>Knock-off CryptoPunk where someone just ran a filter on the original image (that someone else &quot;owns&quot;), and apparently sold it for 0.11 ETH: <a href="https:&#x2F;&#x2F;opensea.io&#x2F;assets&#x2F;0x495f947276749ce646f68ac8c248420045cb7b5e&#x2F;48497653429620658773205982024257630375343700601731022526389776664110133411841" rel="nofollow">https:&#x2F;&#x2F;opensea.io&#x2F;assets&#x2F;0x495f947276749ce646f68ac8c2484200...</a>

I’m curious as to how NFTs will compare to a sales contract from a legal point of view.<p>E.g. if say an artist sells the rights to a digital artwork via both an NFT and via a normal sales contract. Both buyers claim ownership to the artwork and end up in court.<p>Who wins? And what implications will a legal presedence have for the vaule of NFTs one way or the other?

Seemed like a good start to an argument. I don&#x27;t see the blockchain power use as a consequential issue for NFTs. From what i understand its just a concept that can exist on any blockchain based system. Also, the vicious cycle he refers to would apply to a small niche of the digital market. The race to put out content is real in any new market. I hope this becomes a sustainable way for artist to make a living. At this point it seems open ended in where this lead to. I can imagine NFT&#x27;s being a thing in games like Destiny, Warframe, etc(whatever genera bucket fits) where devs can release unique assets. I wonder what an NFT from 2021 will mean in 2121. Is this a fad or the beginning of new paradigms? Will that peice of digital art exist 100yrs from now or even be verifiable?

Independent film&#x2F;animation&#x2F;interactive studio here-<p>NFT&#x27;s are a cool new space we are very excited about experimenting in. I usually like Seth Godin&#x27;s stuff but that blog post feels like an old rich man yelling at a cloud that exists in a dimension he doesn&#x27;t understand.<p>Doesn&#x27;t he know all the NFT stuff is going on in Ethereum which is transitioning to POS which mitigates the whole &quot;crypto mining is the death star stealing all the earths electricity and killing baby animals&quot; narrative?<p>If you want to yell at the electricity cloud then yell at Bitcoin, though we are using that to pay a composer in Venezuela for our new film and produce a novelist in Brazil so Bitcoin is cool too :0

This is on the assumption that the original buyers are only buying to make a profit.<p>What if NFTs are simply patreon for whales? In that context I think they&#x27;re a great idea, allowing people with plenty of spare money to support creators they love while having a token they can use to show how big of a fan they are.<p>In response to energy use: what powered these networks before decentralization? Many humans all over the world, expending energy to distribute these goods and ensure they are legitimate. This wasn&#x27;t free energy, these people could have spent their time on other things. It&#x27;s simply more visible and calculatable now that computers are doing that work.

I was disappointed to see many of the artists I follow on social media filling my timeline with talk of &#x27;crypto art&#x27; and NFTs. I understand that art is hard to monetize, especially when original designs can be stolen and reproduced by some anonymous faker.<p>But digital-only art is already expensive, and adding this NFT stuff on top of it feels pointless. Who but the artist thinks this adds an element of unique-ness to the product? Nobody will be buying crypto kitties at Sotheby&#x27;s to impress their friends at their abode in the Hamptons. And impressing others with your taste is half the point when it comes to collecting expensive stuff.

&gt; The more time and passion that creators devote to chasing the NFT, the more time they’ll spend trying to create the appearance of scarcity and hustling people to believe that the tokens will go up in value. They’ll become promoters of digital tokens more than they are creators.<p>This has always been an issue with art. Artists can be promoters of their art to support their livelihood (“sell out”). I do not think that stops making people creators.<p>And a small nit: &gt; Unlike some stocks, it doesn’t pay dividends or come with any other rights.<p>Many NFTs pay a cut of future sales back to the creator. For that reason, I think of NFTs more like a stock than a claim of uniqueness.

I can see use cases for this in the future applying to real world items to prove authenticity such as unique cars, expensive shoes, pet ownership, antiques and plots of land.<p>Digital artwork seems to be an easy go to item at this infancy stage of NFTs.

All worth is in the eyes of the parties to a transaction. Sometimes you can take comfort that there is a cohort with similar thoughts. You probably got your starting thoughts from that cohort. But caveat emptor, that expensive house might go down in value as the crime rate rises in the neighborhood, and maybe your “investment” in fine china and antiques disappears because lifestyles and interests change. A NFT for ownership of Woody Allen’s Sleeper would probably be worth less now than its peak value.<p>Meanwhile, a big (or the main) point of the art was the environmental impact. That part seems really pertinent to keep in mind.

<i>&gt;NFTs are going to be more like Kindle books and YouTube videos. The vast majority are going to have ten views, not a billion. It’s an unregulated, non-transparent hustle with ‘bubble’ written all over it.</i><p>Some people will called Seth have no clue about technology or don&#x27;t know what&#x27;s he talking about, blah blah, but I think this is more about human psychology &amp; behavior(also, greed) than technology, like any speculation game. History will repeat itself regardless of technology.<p>My opinion about &#x27;current&#x27; use of NFTs: what a useless way to use our world&#x27;s power. But who am I to judge...

I&#x27;ve been reading a lot of pro-NFT opinions recently. This is a nice counter.

If non-fungibility is just a constraint of current technology protocols, and these protocols could be extended in time to allow exchange of larger swathes of tokens of different degrees of dissimilarity then the only things stopping this at the moment would seem to be demand - is that right? I.e. if Joe owned a uniquely verifiable, exchangeable and trackable piece of code, and so did Mary, then both of these codes could be pooled on the same market no matter how they differed within the constraints allowed by the protocols for verification, exchange and tracking?

The world is full of dangerous value traps: money, status, likes, power, attention, etc. where the trap seems like a good idea to encourage something important but has a dark side which destroys it instead.

An interesting (paraphrased) perspective from someone who bought one of Beeple’s $999 pieces and watched the value go up above $80k:<p>“I’m in an interesting bind. On one hand I can prove ownership to Beeple and claim my physical piece, but on the other hand, I could keep what is essentially the <i>ultimate unopened package</i>.”<p>I feel like Beeple might lose out on storage fees, but this is a stunning perspective. What if someone could buy a 20 year-old token that allows them to have the piece delivered <i>direct from the artist’s house where it’s been untouched the whole time</i>?

It is all about creating Veblin Goods [1] - where the price paid, and the obviousness of the price paid, is a key part of the asset, and have very different supply-demand-price curves.<p>Also, not far from Greater Fool theory of investing, which always ends well, ...ha...<p>[1] <a href="https:&#x2F;&#x2F;www.investopedia.com&#x2F;terms&#x2F;v&#x2F;veblen-good.asp" rel="nofollow">https:&#x2F;&#x2F;www.investopedia.com&#x2F;terms&#x2F;v&#x2F;veblen-good.asp</a>

I agree with the author’s premise but find the crypto argument at the end weak at best and misleading at worst. I don’t see how NFTs will ever be responsible for any remotely significant slice of the raw energy usage of the blockchain they might be implemented atop. Or, if you implemented a blockchain solely for an NFT, how it would ever get to a scale of energy consumption that is prohibitive or wasteful.

People looking at NFTs as beanie babies or mona lisas are severely missing the point.<p>The vast majority of high value art transactions are ALSO tax&#x2F;asset management activities. The prices are only loosely coupled with the art, and are primarily derived from the scarcity AND the fact that someone else paid $x in the past.<p>The fact that you purchase these with cryptocurrency should highlight the use case.

I founded a blockchain project dedicated entirely to NFTs. This is clearly a bubble. There may be some long term value in these NFTs long in the future simply because they will be some of the first NFTs ever made and NFTs will eventually possibly be extremely commonplace (offchain in-game items in MMOs, etc.), but IMO it would be prudent to just stay far, far, far away.

Don&#x27;t forget that this is just a social construct. Without anything tangeable (physical) we just have to agree that a NFT is unique &#x2F; original.<p>Compare it with paper notes, they are worthless but sociaty gives it value. If we all agree paper notes are worthless it is worthless.<p>I can see easily how this becomes worthless in a couple of years when the bubble bursts and the hype is over

When an article rants about the high electricity use of NFTs without acknowledging that some projects are on PoS and more are moving to it they are clearly just trying to present it in the worst light.<p>Even worse here as he mentions NBA Topshots which is on Flow, PoS and likely uses up less electricity than his blog.

NFTs applied to media just feels like a really rubbish version of CDs, tapes, vinyl, DVDs, and trading cards.

The whole thing has a large &quot;bragging&quot; part to it for now. Public auctions, showing how much you&#x27;ve paid (on the site I saw about NFT&#x27;s) This is also true in the physical art-world, you display it on your wall, show it off to your friends etc, hang it in a gallery.

I know there are some cryptocoins that actually do _useful_ calculations.<p>Maybe we should all strive for some kind of open standard with which every interested party can get their calculations calculated as the proof of work (e.g. cancer detection, seti, dna-analyses, ai-training, ..).

this severely underestimates their value. the baseball card analogy is good. there’s only a few that become valuable. the top shots nfts are good example, only some replays from the last 10 years are ones people care about. and those will retain value

So much FUD. If the author tokenizes their blog posts they may come to find out they cannot sell them for much whereas Jack&#x27;s first tweet tokenized is definitely worth something to people.<p>Digital collectibles can be transacted much more easily that trying to sell your old baseball cards (store, list, ship, etc).<p>ETH is moving to PoS and FLOW (which is used for NBA Top Shots) uses PoS. The energy complaint is short sighted.<p>Check out eulerbeats.com for a model that allows owners of originals to generate income and owners of prints to easy recoup 90% of their cost (all built into the smart contract).<p>If I could buy an NFT of my favorite YouTuber&#x27;s piano video, I would do it in a heartbeat. It would support them directly and allow me as a fan to &#x27;own&#x27; something valuable to me (proof of that support).<p>Yes, there will be many who lose money and like anything else, we build up a lot of hype for something new, but it is early days and there is so much potential.

Since many still use RSS and since this post on Seth&#x27;s Blog is so popular, thought I would point out that the blog has an RSS feed: <a href="https:&#x2F;&#x2F;seths.blog&#x2F;rss" rel="nofollow">https:&#x2F;&#x2F;seths.blog&#x2F;rss</a>

Are NFTs actually decentralized? I heard they run on the ethereum network, but not too sure if thats universal. Also, what happens if someone starts uploading illegal content? Is there a method for deletion once an NFT is &#x27;minted&#x27;?

&gt; <i>They use an astonishing amount of electricity to create and trade. Together, they are already using more than is consumed by some states in the US. Imagine building a giant new power plant just to make Christie’s or the Basel Art Fair function. And the amount of power wasted will go up commensurate with their popularity and value. And keep going up. The details are here. The short version is that for the foreseeable future, the method that’s used to verify the blockchain and to create new digital coins is deliberately energy-intensive and inefficient. That’s on purpose. And as they get more valuable, the energy used will go up, not down.</i><p>Binance Smart Chain has many NFTs and doesn&#x27;t use Proof of Work. Ethereum is migrating to Proof of Stake soon and will eliminate the power waste argument. If he wanted to attack NFTs he should have used a better argument.

It is odd, I&#x27;ve been involved in the cryptocurrency scene from the beginning, and I&#x27;ve seen the whole &quot;Bitcoin kills Mother Gaia&quot; talking point pop up every couple of years - but I&#x27;ve never seen such prolonged parroting as this last cycle. It is a silly complaint, because it never considers the wastefulness of the status quo. But it is an interesting method of attack, trying to conceal the fact that it is a call for others to act against their own interests, while also tickling their envy. It could be a dangerous gambit though, while most people can&#x27;t see far enough ahead to realize that global carbon caps effectively freeze the international market&#x27;s structure, they can see when somebody is ham-fistedly screwing with their money.

Somehow I feel like the message of this article is:<p>cryptocurrency is bad<p>and nfts are double bad because <i>artists</i> are the ones making a lot of money off of the absurdity of cryptocurrency instead of blockchain fanciers<p>maybe I&#x27;m just sleepy and cranky

&quot;A fool and his money are soon parted&quot;... This is a great way to part the early, non-sophisticated but luckily wealthy bitcoiner and ETH-holders from their rapid and &quot;easily&quot; won windfall.

Should be interesting as soon as Tikectmaster or something offers NFTs to boost sales but with the explicit written agreement that NFTs are non-transferable and any transfer history voids the ticket.

&quot;And unlike actual works of art, NFTs aren’t usually aesthetically beautiful on their own [...]&quot;<p>How blatantly gate-keeping can a single individual (that is not aesthetically beautiful on their own) be?

I remember growing up and seeing a very active “Warez” scene online, with cracks being distributed of all sorts of licensed software. Companies have since tried to make the programs “phone home” in order to check the licensec or turn them into SAAS to get revenue, but that is anathema to decentralized assets.<p>I haven’t looked too deeply into NFTs but it seems clear to me that:<p>1) NFTs are not for read access, but rather write access to a certain thing. Think Earth2 or MillionDollarHomePage or buying a domain name or some other namespace.<p>2) Ethereum and blockchains are entirely overkill for NFTs, because they are designed for arbitrary balances. If you want NFTs you can just have non divisible files that are collectively managed on MaidSAFE or something like that.

I hate to be a complainer, but where is the definition of NFT in this article? I was taught in university to expand acronyms the first time I used them. Is this not common practice?

Two misconceptions in this article:<p>1) proof of work is not the only way to do blockchains. You can do NFTs on e.g. Stellar or soon on Ethereum 2.0 and it would make sense to do that as it would be cheap to transact. That is in fact the main motivation to create ethereum 2.0: transacting needs to become cheaper. Some companies seem to have some success tokenizing e.g. supply chains, energy markets, art ownership changes, etc. The resulting tokens are typically not intended for speculative trading. Proof of stake solutions are optimal for this since making money of the transactions is not a goal here typically.<p>2) supply can actually be constrained quite easily. E.g. on Stellar you would issue a limited supply of whatever token from an issuing account (stellar tokens are identified by their issuing account) and then lock that account forever by increasing the account thresholds to be higher than the weight of the account signers (stellar supports multi sig accounts). That effectively is the last transaction that can ever happen on that account. No more tokens can be issued from then on. On ethereum, you&#x27;d be able to do something similar with smart contracts. I use stellar as an example, because I&#x27;ve used it to create a token. Creating tokens on Stellar is super easy and requires no programming. An NFT is basically a token with a supply of 1.<p>NFTs make sense in any kind of scenario where a group of stakeholders wants to agree on who owns what without relying on a trusted third party like a bank or government agency. If it&#x27;s cheap and easy to use them; why not use them?<p>You can get your own stellar account by putting in enough xlm to cover the base fees. About 5 XLM should be enough to create a handful of accounts + trustlines that you would neeed to create your own token. Stellar laboratory provides you all the tools to do this if you want to practice this on their testnet: <a href="https:&#x2F;&#x2F;laboratory.stellar.org&#x2F;#account-creator?network=test" rel="nofollow">https:&#x2F;&#x2F;laboratory.stellar.org&#x2F;#account-creator?network=test</a>. You click your own token together in a few minutes. Simply switch to the mainnet to do it for real. If you are serious about this, the legal work is going to be most of the effort.

Can the owner of the nft of a digital art start to sell printed copies in the real world and profit? Or other words, have the commercial rights to it?

What people don&#x27;t realize, is that we already have fantastic alternatives to Ethereum for low-energy, world-class decentralized networks with built in NFTs. My favorite is avalanche. This is all so new, but we CAN have a future that is feature-rich, fast, cheap, decentralized, and good for the environment.<p><a href="https:&#x2F;&#x2F;docs.avax.network&#x2F;build&#x2F;tutorials&#x2F;smart-digital-assets&#x2F;wallet-nft-studio" rel="nofollow">https:&#x2F;&#x2F;docs.avax.network&#x2F;build&#x2F;tutorials&#x2F;smart-digital-asse...</a>

I feel like in these conversations about crypto that people use the following terms somewhat interchangeably:<p>- Coin<p>- Token<p>- NFT<p>- Transaction<p>- Smart contract<p>Is there some place with a concise definition of each of these terms?

linked in the article: cryptoart.wtf<p>Just insane... what a completely indefensible ecological cost for such a trivial and absurd use.

NFTs are the perfect fraud for the moment, and will be controversial right to until they are worthless.

Has someone made a meta-NFT yet? I want to be able to buy an NFT representing another NFT transaction.

Aren&#x27;t the costs associated with creating NFTs included in their price? Who pays to create them?

The NBA is selling rare pepes now? Yeah that&#x27;s a pretty clear sign of a bubble about to burst.

So the gist is NFTs allow contracts to be traded on a secondary market?

So what’s an NFT? - 12 paragraphs down in the article... ¯\_(ツ)_&#x2F;¯

NFTs aren’t much different than merchandise artists and musicians sell. Tshirts, buttons, plastic figurines, stickers, etc.<p>The environmental critique rings hollow. Our economy revolves around this unnecessary consumerism. Why single out NFTs? Seems like sour grapes to me.

The author didn&#x27;t present the case for &quot;danger&quot;

What happens when the network supporting an NFT goes away?

The fact we’re so far into crypto and NFTs that this famous bloggers take is “it’s bad for the environment” should be the signal he’s past giving relevant takes.<p>This would have been the take to have in the first months of Bitcoin.<p>A boomer can’t comprehend the actions of the generation where house prices rocketed and their salaries stayed the same. They’re going to do whatever it takes to build wealth and gambles like crypto, gamestop, nft are now the norm, anyone over 30 today realizes building savings and living within your means is now a waste of time as they still struggle to afford houses.<p>When it comes down to it “but the environment...” isn’t going to put anyone off, the environmental impact of AirPods never put anyone off the convenience of no cable so why would this?

Only if you&#x27;re the last one holding! &#x2F;s

One major distinction between cards and other physical collectibles is that they come bundled with the implicit protection of the legal system on others making more physical copies (i.e., counterfeiting). So if one owns a rare card, others can see pictures of it, but they cannot make their own physical copy (backed by the legal system and threat of being arrested). This is unlike the NRT &#x2F; digital side where making identical copies (sans blockchain) is perfectly legal.

So how is it any different Bitcoin?

NFTs are 21st century Dadaism.

What is a &quot;NFT&quot;?

Read the first few paragraphs. Still don&#x27;t know what an NFT is.

Tldr: proof of stake is a climate disaster because it rewards those who already have money, which means those without money will get hurt more by climate change.<p>Yes, this is the actual argument made in the underlying post that this is blogspam for.<p>&gt;I’m sure you’re seeing the problem here- there is not a schema that doesn’t reward those who already are already wealthy, who are already bought in, who already have excess capital or access to outsized computational power. Almost universally they grant power to the already powerful. This is also a climate issue. Climate justice is social justice. This is true in that the worst impacts of climate collapse are felt by those with no means to avoid them, while those with resources easily fuck on off to somewhere where they don’t have to see it.

Crypto == destroy planet is an important meme.

So will this help everyone realise how stupid Bitcoin is? Is this dorseys goal? To counteract the insane libertarian propaganda through reductio ad absurdim?

&gt; People can look at images of the Mona Lisa all day long without compensating you, because you simply own the original trophy, not the idea…<p>Your ownership isn&#x27;t stamped or an inhenrant part of the Mona Lisa, your ownership comes from the certificate and trust in the certificate, history of sales and its legacy. NFTs are simply digifying this.<p>&gt; [Creators will] become promoters of digital tokens more than they are creators. Because that’s the only reason that someone is likely to buy one–like a stock, they hope it will go up in value<p>Since this is such a new idea and market speculation is rampant but the comparison and suggestion is still unfair. Money may be one driving factor in buying stocks, but it often isn&#x27;t the only factor. NFTs don&#x27;t change much for physical artists but non fungiblility did not exist for digital art until now.<p>&gt; NFTs aren’t usually aesthetically beautiful on their own, they simply represent something that is.<p>In both cases the certificate is a representation of the art. The certificate or idea that you own the Mona Lisa isn&#x27;t what&#x27;s beautiful, the piece of art your ownership represents is.<p>&gt; BUYERS of NFTs may be blind to the fact that there’s no limit on the supply. In the case of baseball cards, there are only so many rookies a year.<p>Creating a new token is easy, just as doing a scribble and calling it art. There&#x27;s still implicit trust that the creator won&#x27;t make a duplicate token with the same representation just as there&#x27;s implicit trust an artist won&#x27;t certify identical paintings as originals.<p>The benifit for collectables is that the minting and supply is public. You can verify that your NFT is 1 out of X, and only X.<p>&gt; THE REST OF US are going to pay for NFTs for a very long time. They use an astonishing amount of electricity to create and trade. Together, they are already using more than is consumed by some states in the US. Imagine building a giant new power plant just to make Christie’s or the Basel Art Fair function. And the amount of power wasted will go up commensurate with their popularity and value. And keep going up. The details are here. The short version is that for the foreseeable future, the method that’s used to verify the blockchain and to create new digital coins is deliberately energy-intensive and inefficient. That’s on purpose. And as they get more valuable, the energy used will go up, not down.<p>The energy costs of the NFTs are currently pretty high, but to claim it&#x27;ll only go up is disingenuous. In the foreseeable future Bitcoin will be the only energy intensive blockchain as others move to proof of stake. Ethereum has begun to make this transition and most other large platforms have already made this transition.<p>Since blockchain is digital and public the ease to produce a concrete estimate of energy paints an easy target. Measuring energy from other recreational activities is much harder and fuzzy. Gaming is a similar target but is much harder to discredit.

One of the issues I see around NFTs is simply a misunderstanding of what they are at a fundamental level and the constraints which exist. The lack of understanding is causing hyperbole and flat out mistakes in online discussion around the topic.<p>Some truths:<p>* NFT is simply an idea; non-fungible token. The idea is that of a certificate of authenticity.<p>* The most prominent implementation of the NFT idea is the ERC-721 standard on the Ethereum blockchain.<p>* The ERC-721 standard simply defines a common interface for verification of ownership (validity of the certificate of authenticity) and transfer of ownership - <a href="https:&#x2F;&#x2F;eips.ethereum.org&#x2F;EIPS&#x2F;eip-721" rel="nofollow">https:&#x2F;&#x2F;eips.ethereum.org&#x2F;EIPS&#x2F;eip-721</a><p>* The ERC-721 standard allows for a token to be purchased in one market place and sold in another. The same way an email can be sent from a gmail server and received on a proton mail server.<p>* The ERC-721 standard allows any party to verify that a given Ethereum address (wallet) owns a particular token. It allows anyone with the private key of that wallet to verify their ownership of the wallet and therefore the token.<p>* The private key can be shared with anyone in the same way a physical certificate of ownership could be replicated and shared with others given sufficient resources to perform the replication.<p>* The underlying implementation of an ERC-721 compliant smart contract (think token owner registry) is up to the developer. The simplest implementation would be an array of Ethereum wallet addresses where each index of the array represents an individual token and its corresponding value represents the owner. Just a lookup.<p>* If the ERC-721 standard is being followed then there is only a single &quot;owner&quot; of the token. Multiple owners are not supported by the standardised interface.<p>* Other standards exist and will likely be created in the future. Their success will be determined by network effects.<p>* A different NFT standard to ERC-721 COULD assign value of a single token to multiple owners. I would argue that this token is no longer an NFT :shrug:<p>* NFTs are not JPGs, GIFs, tickets, or pointers to an owned item. They are simply some kind of ownership entry in a smart contract stored on a trusted ledger (the blockchain). They&#x27;re collectibles in the sense that a wallet can collect them.<p>* The value of an NFT lies solely in the external value assigned to an individuals ability to verify ownership of the token through a private key. For an art piece this might provide access to an exclusive real world event, the ability to hang the art piece in a virtual world, bragging rights etc.<p>* The external value can change over time. Right now you may &quot;own&quot; a GIF but in ten years time the artist may host an exclusive event and invite token holders.<p>* The standardised interface means that anyone can assign value to a given token. A cryptokitty is minted by dapper labs but can be used in any environment which recognises the token as a &quot;thing&quot;. For example this could be a virtual world or any number of games.<p>* A new platform can sort of bootstrap liquidity by supporting an existing type of NFT (e.g. cryptokitties, punks etc.). One of a new MMORPG&#x27;s value proposition may be that they have integrated hundreds or thousands of popular types of virtual items to be used within their world.<p>* As such, Dapper Labs could go bust and disappear but a cryptokitty could have value in other environments beyond this event. The standardised interface means that a cryptokitty can continue to be bought and sold beyond the lifetime of Dapper Labs.<p>* NFTs cannot be copied, replicated, cloned. Private keys can be shared and therefore access to the NFTs value COULD be shared.<p>* Based on the above points, hopefully it&#x27;s clear that a given NFT cannot be minted multiple times. If the artist mints three NFTs then each one is unique. Each could have different external value assigned to it (or the same).

&quot;An NFT&quot;?

This represents a reasonable-sounding surface view but is mostly off the mark. There are valid <i>concerns</i> but insufficient logic to justify a <i>dangerous trap</i>.<p>O&#x2F;P TLDR:<p>1. Art is silly too but it&#x27;s ok for Real Art because we&#x27;ve done it that way for a long time<p>2. It&#x27;ll become a soulless money-grab<p>3. Buyers don&#x27;t understand scarcity<p>4. It&#x27;s killing the environment<p>re #1 (Art):<p>&gt; You either own this thing or you don’t.<p>This logic just doesn&#x27;t make sense and seems backwardly purist. Status conveyed by owning original editions of physical art doesn&#x27;t just come from having it sitting on your wall where you can show it to 3 people a week, it&#x27;s from making sure people know you own an original edition (art as flex, art as humble brag). In the digital world there is tons of status to claim using mediums beyond that narrow view and that&#x27;s fine.<p>And the point:<p>&gt; Owning a Honus Wagner card doesn’t mean you own Honus Wagner. Or a royalty stream or anything else but the card itself.<p>Why should you limit your thinking on what art can be and why it&#x27;s valuable to people based on an old model? The &quot;other stuff&quot; which can be layered in increases its value substantially to some segments of buyers and there&#x27;s no reason the artist shouldn&#x27;t benefit from this.<p>re #2 (Paying creators):<p>&gt; CREATORS may rush to start minting NFTs as a way to get paid for what they’ve created.<p>Why shouldn&#x27;t creators get paid!? This is a very top-down, privileged argument. The biggest impediment for most creatives to creating their creations is usually worrying about monetization! Why shouldn&#x27;t we try to get them paid as much as possible with as little work as possible so they can go back to making the things we love?<p>Chris Dixon had a good post [<a href="https:&#x2F;&#x2F;a16z.com&#x2F;2021&#x2F;02&#x2F;27&#x2F;nfts-and-a-thousand-true-fans&#x2F;" rel="nofollow">https:&#x2F;&#x2F;a16z.com&#x2F;2021&#x2F;02&#x2F;27&#x2F;nfts-and-a-thousand-true-fans&#x2F;</a>] about how NFTs allow more fine-tuned segmentation among different fan groups, allowing artists to gain more from their work while simultaneously satisfying the market. Seth is a marketer who understands segmentation intimately, so I have to imagine this is an oversight.<p>The embedded fear here is that we&#x27;ll corrupt the purity of art by finally allowing creators to have a business model, and to be fair it&#x27;s one that will probably see some crazy bubble dynamics and abuses. But that&#x27;s well worth it if the world becomes a more creative place by introducing better tools to monetize creation and community.<p>re #3 (buyers don&#x27;t get scarcity):<p>&gt; BUYERS of NFTs may be blind to the fact that there’s no limit on the supply.<p>And buyers of stock may be blind to the fully diluted EPS of the shares they&#x27;re buying... what&#x27;s the point? Again, there&#x27;s a reasonable embedded fear that we&#x27;ll get over our skiis and convince people or imply things that aren&#x27;t true, resulting in consternation, but this isn&#x27;t sufficient to call NFTs a &quot;Dangerous Trap&quot;<p>re #4 (Environment):<p>&gt; They use an astonishing amount of electricity to create and trade.<p>This is a fully Ethereum-centric view of the world but today Ethereum isn&#x27;t the only chain. Ethereum is only used for NFT minting right now because it had years to build up tooling but it is unsuitable for creators because transaction fees run in the $50 range just to transfer tokens and &gt;$100 to mint, so obviously creators are desperately looking for alternatives. And they&#x27;re out there -- I work on the NEAR project (near.org) which is Proof of Stake, has purchased offsets to become fully carbon neutral, and is cheap enough to test in prod. Look where the ball is going, not where it is today!<p>Sorry for the rant. We need the biggest voices to present a more nuanced case for this technology.

I think the immediate value of NFTs lies in industries where you need to keep the producer honest to protect against artificial scarcity.<p>For example, what stops baseball card printers from re-printing &quot;rare&quot; cards? And how do we know they&#x27;re not hoarding some of the best cards for a few years, then selling them individually? I could see NFTs being demanded in situations like this to force producers to create digital proof of initial production and distribution.<p>I haven&#x27;t thought about it much, but hashing old tweets or a picture of something and claiming it&#x27;s valuable sounds like snake-oil sales to me.

I think the author needs to look into NFTs more closely before making a judgment like this. With the sole notable exception of NBA TopShots, which is on Flow, all prominent NFTs are currently issued on Ethereum. Ethereum&#x27;s energy consumption will massively decrease in the near future as the long-planned switch of its consensus algorithm to one based on Proof of Stake is implemented.<p>Ethereum&#x27;s Proof of Stake Beacon Chain launched in December 2020 and has worked smoothly since then. The launch was the first of the three phases of ETH2, by the end of which Ethereum will be fully reliant on Proof of Stake - with no dependence on energy mass-consuming Proof of Work - and be massively more scalable.<p>The author&#x27;s criticism aside and on the subject of the nascent NFT market, I hope in the future multiple MMORGs recognize NFT sets and allow players to unlock certain digital items, traits or characters by proving ownership over an NFT within that set.<p>Being able to migrate digital assets across virtual worlds could lead to the emergence of a global cyber culture with universally recognized digital cultural items.

&quot;Buyers of NFTs may be blind to the fact that there&#x27;s no limit on the supply&quot;. Sure anyone can make an NFT, but not all of them will be viewed as realistic stores of value. Like baseball cards, you will not print an unlimited copy of rare cards cause they would lose their value, and no creator would sabotage their brand like that. Besides, it costs money to mint a token, so there is a limit related to the artist&#x27;s economic situation.

&gt; I could, for example, turn each of the 8,500 posts on this blog into a token and sell them on the open market.<p>So it&#x27;s like a DOI?<p>DOI&#x27;s can apply internally, so a book can have one, a chapter can have one, paragraph, sentence.<p>I guess someone will blog the difference at some point

NFTs real value is &quot;BS identifier&quot; and &quot;crypto market cleanup&quot;.

How much electricity is used refrigerating frozen desserts in the US? It&#x27;s probably a lot. Probably more than a small country. Is ice cream an unnecessary and &quot;dangerous&quot; trap that we will all pay dearly for in the end? Probably.

great write up thanks Seth.<p>we&#x27;re going to have to suffer hearing about these terrible ways to extract money from people &amp; waste energy for so long.<p>this is a demented game of make believe, and it&#x27;s just going to keep getting worse all around us.

Youtube has been successful even though most videos are watched a dozen times or so.<p>NFTs are a parallel copyright system. The market price of an NFT that violates meatspace copyright law would be a function of the relevance and enforceability of the law&#x2F;jurisdiction in question.<p>The shortcomings cited by the author are critiques of the distriution of market prices, but there is no alternative proposed. Of course most Youtube videos get a handful of views, and of course most NFTs will be nearly worthless. That concern is orthogonal to the question of whether NFTs offer some benefits over traditional copyright mechanisms.

This repeats the same mistaken belief that &quot;energy is precious&quot;. In reality, there&#x27;s lots of energy that is either worthless or has negative value. There currently is no economical solution for storing this energy and it&#x27;s the biggest impediment for renewable energy.<p>Many bubbles have left lasting improvements to infrastructure. The railroad bubble brought railroads. The telegraph bubble wired up the country. The internet bubble made internet connectivity mainstream.<p>I believe that proof-of-work can bring lasting improvements to both energy infrastructure and semiconductor processes that are unaccounted for in all the naive calculations that make for a good headline.

The author is confused about what an NFT is. It&#x27;s simply a verifiable digital claim about &#x27;anything&#x27;. It also happens to be a token that is easy to transact with, i.e., buy and sell.<p>I think the author is just complaining what someone is willing to pay (and is paying) for NFTs. This argument comes up all the time, especially regarding items that have mostly status value.<p>The answer to that is simple, anyone can pay whatever it&#x27;s worth to them. It&#x27;s none of the authors business. Stop complaining.<p>There are artists and creators who have worked for years and never made a dime from their art. NFTs have changed their lives. NFTs create instant markets for any digital item, giving them value. And there are no middlemen.<p>The author is missing the beauty of this creative explosion and opportunity. Look into it for yourself and you&#x27;ll see. Either that or stay poor.

I disagree with the arguments there.<p>- Creators... become promoters of digital tokens more than they are creators&quot;: Is this a purist approach that artists needs to do only art for 24&#x2F;7? Anything else is a violation of their artist oath or something?<p>- &quot;BUYERS of NFTs may be blind to the fact that there’s no limit on the supply&quot;: there&#x27;s the same limit on supply you got on regular art. Attaching a token to an art piece does not change its supply.<p>- &quot;THE REST OF US are going to pay for NFTs for a very long time. They use an astonishing amount of electricity to create and trade&quot;: No they don&#x27;t. NFTs are not a separate blockchain. They add nothing to the electricity already being spent.<p>The post has so many more inaccuracies, making it difficult to take its conclusion seriously. Here&#x27;s another example:<p>- &quot;Unlike alternative digital currencies which are relatively complicated to invent and sell&quot;: what? no. There are ERC20 tokens generators exactly like there are NFT generators.

The article references a fishy source for its claims of the „astonishingly“ high carbon foot print. That web site „cryptoart.wtf“ does not site any source on how it derives its carbon foot print numbers.<p>Probably, they are derived from the claim Bitcoin consumed as much energy as Argentina. First of all, NFTs are minted on the Ethereum blockchain where mining is still much cheaper. Second, energy usage does not simply equate carbon foot print which is a function of geolocation and hardware efficiency.<p>However, I found a nice peer reviewed article on the estimate of Bitcoin‘s carbon foot print: <a href="https:&#x2F;&#x2F;www.sciencedirect.com&#x2F;science&#x2F;article&#x2F;pii&#x2F;S2542435119302557" rel="nofollow">https:&#x2F;&#x2F;www.sciencedirect.com&#x2F;science&#x2F;article&#x2F;pii&#x2F;S254243511...</a><p>It’s from 2019 and states that the whole Bitcoin blockchain emits the carbon dioxide equivalent of Kansas City.<p>I am not aware of similar analysis on Ethereum but I guess one could use the Bitcoin number and scale it down quite a bit.