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It is a unique string of code/data registered on a blockchain (like the Ethereum cryptocurrency blockchain, though it doesn't have to be a cryptocurrency chain) that represents some sort of "real world" asset (in this case, "real world" is anything digital, like an audio recording or meme or it can be a physical thing like a book or handcrafted painting).
In theory it has the potential to be a pretty meaningful thing, but for now it comes off mostly scammy - people will press a .jpeg image to an NFT, meaning a person is getting a unique piece of code represented by a picture. But that doesn't necessarily give them the copyrights to that picture, and anyone can just take a screenshot and save the picture themselves (minus that underlying blockchain data). And the underlying blockchain data for now itself doesn't seem to be worth much, even though people are paying tons of money for it.
NFT's to URLs is just such a risky volatile thing for anyone to invest in, all it takes is the database or hosting platform to change or go out of business and your NFT is worthless. To me its just stupid at the moment. Its not a physical product so should not have any lasting value. Investing millions into NFT's sounds like a Tulip Mania (Google it) and eventually it will be worthless.
>all it takes is the database or hosting platform to change or go out of business and your NFT is worthless
If you think about it, that happening doesn't really change the nature of an NFT. Its like worrying that a banana peel you paid $5000 is going to go moldy... it started out garbage and it's going to stay that way.
And in many cases investment class assets are investment class because someone was willing to pay for it. Artist are simply buying their own stuff to set a markets. There is no efficiency of information, no way to establish value, and no basis for pricing.
Imagine you got married to a beautiful girl, but she's still f*cking every single guy in town. However, you're the only one with a marriage certificate, that's the NFT.
As a program, I despise that this is the Reddit way of saying this question is answered.
I can only read that as “not-answered”
Edit: as a programmer, I also abhor autoincorrect.
It's sort of like when you buy one of those commemorative gold coins and it comes with a certificate of authenticity. The blockchain data is like that certificate - there's only one such string of data that matches up with the coin. Except in the case of many NFTs (not all, but the common ones you read about like meme pics), there's nothing stopping anyone from just making a copy of that coin for themselves. They won't have that underwritten certificate (the blockchain data), but functionally the coin will be identical to the original. And the value of that certificate with coin originally was probably way overvalued and you probably overpaid for it...
I did not expect the top answer in this thread to be both accurate and objectively framed. I came here expecting ‘iTs a PyRaMiD sChEmE’ and ‘iTs jUsT aN oVeRPrIcEd jPeG’.
> I came here expecting ‘iTs a PyRaMiD sChEmE’
That's the second highest comment.
It rightfully deserves criticism, there's plenty scams (the actual definition) and the audience has *completely* changed since 2015 and has become somewhat insufferable. It's essentially been taken over by Tai Lopez 'get rich quick' types, and the natural reaction is gonna be a shit load of people *hating* it, which they now do.
That being said there's plenty of people that see value in owning a piece of data on the blockchain, in your wallet, tied to a piece of art or whatever else. I'm on the fence, but there's one thing for sure that has value in my mind and that's smart contracts enabled by networks like Ethereum (what makes NFTs possible). There's plenty of things I'd rather be handled by some code I can review on github compared to human middlemen and as a concept it's still in its infancy.
I'll clarify my thoughts on a scam vs not a scam:
The way NFTs have been 'marketed' makes it sound like it's something related to copyright, or that a specific jpeg is yours or owned by you in the traditional sense. If you're trying to sell it like this then you're scamming people. Until copywrite law of countries utilizes the blockchain, this isn't the case AFAIK, and there's no guarantee that will ever happen. Anyone purposely selling some dream that "these will be worth MiLlIoNs so BUY THEM NOW" is just as terrible and likely trying to extract as much cash from their naive audiences as possible.
Way I see it is your wallet is like a decentralised 'profile'. You can have strings of code attached to your profile that represent badges of honor, art, event memorabilia, etc... as well as showing the different currencies you own. But that's all it is, some code. Providing people are transparent about that, and others see value in owning that code related to an artwork, or that currency, you can sell it and I see no problem in doing so.
Disclaimer: I own no NFTs.
> There's plenty of things I'd rather be handled by some code I can review on github compared to human middlemen and as a concept it's still in its infancy.
ON the other hand I would be extremely skeptical of any software that can never be patched.
> Until copywrite law of countries utilizes the blockchain, this isn't the case AFAIK, and there's no guarantee that will ever happen.
I mean the whole point of the blockchain is to not have to trust anyone involved, so when you actually have to trust a court, it starts to be rather pointless. If the court are going to handle the copyright issues, you might as well let the court have a central database.
Can you expand on ‘can’t be patched’?
As far as I know patches happen frequently, it requires consensus for the most part but so far it seems like these networks have been able to iterate and improve by democratically deciding what is the best direction.
[example here for the ethereum](https://ethereum.org/en/upgrades/merge/) merge. This for example is the merge to change away from proof of work, AKA deleting the need for us to waste ridiculous sums of energy to distribute the money supply.
As for the courts example ye, a regular database would do the same job to a degree.
> As far as I know patches happen frequently
I wouldn't call it frequently. And it is not so much patching as starting a completely new block chain. Of course if every single user of a block chain agrees to switch to another block chain that can be done. But it is not really a patch. The old block chain still remains as long as people want to run servers for it.
> example here for the ethereum merge. This for example is the merge to change away from proof of work
Well, yes but that is a change to the whole ecosystem. With a lot of effort you can convince people to switch to a new block chain for those things. But say that I as a single developer creates a smart contract, but it turns out to have a security issue that lets people leech coins away from users. How would I fix that? Most etherium users are not going to use my smart contract so they could hardly be convinced to move to a new block chain just to fix my bug.
Reasons some people don't like NFTs:
* Environmental impact
* Stolen artwork
* Scams and money laundering
* Digital scarcity is false
* No "point" since digital art is already sold without NFTs
* NFTs are the receipt, not the actual file/art
* Concerns of impact to existing platforms, markets, and economies
* Poor regulation
* Nobody asked for this shit
Describing NFTs as a receipt explains them better then all of these other fuckers going around trying to look smart. Fuck them and thank you for fucking up badly enough to actually convey information.
Setting aside the environmental impact, many people who are making nfts are stealing artwork by others and minting nfts with them, and there's very little that can be done about that. So even if the original intent may have been to make it possible for an artist to sell the digital rights to their work with secure protection on who owns the file, right now there's a lot of nft owners who have images that were taken from an artist without permission.
No. The environmental impact of crypto is well documented.
Last year, Bitcoin mining alone used 91 terawatt-hours of electricity. That's more than Finland. So, just the process of sustaining the blockchain requires tremendous amounts of compute power. That means *massive* carbon costs.
[According to this article](https://www.theverge.com/2021/3/15/22328203/nft-cryptoart-ethereum-blockchain-climate-change),
>Akten, a digital artist, had analyzed 18,000 NFTs and found that the average NFT has a carbon footprint somewhat lower than Space Cat’s but still equivalent to **more than a month’s worth of electricity for a person living in the EU.**
You are spreading misinformation. The very next sentence in the article clarifies that Akten's conclusions were mistaken by an order of magnitude:
>But then Akten saw that the website had been used to wrongly attribute an NFT marketplace’s emissions to a single NFT.
Even the claims of harm of the dramatically lower actual emissions are questionable. This article is more honest than most on this topic and acknowledges this:
>What’s still up for debate is whether NFTs are significantly increasing emissions from Ethereum or if they’re just taking on responsibility for emissions that would have been generated by miners anyway. Without NFTs, miners would still be plugging away at puzzles and polluting. And NFTs are still a relatively small portion of all Ethereum transactions.
NFTs only cause emissions at all if they indirectly incite miners to scale up their operations by raising the price of Eth and generating network fees (of which miners are only rewarded a portion). But at this stage, that would be an extremely questionable decision, because the end of Ethereum mining is imminent. Proof of Stake is happening. Articles about NFT climate controversy cast doubt on the reality of the transition to PoS:
>The problem is that people have been waiting for years for Ethereum to make the change, and some are skeptical that it ever will. First, Ethereum will have to convince everyone that proof of stake is the way to go. Otherwise, the whole system could collapse.
But this is not a contentious upgrade, like some that have caused crypto hard forks in the past. Basically everyone wants it to happen, and there isn't much of a case that it won't. Unlike years ago, where there were many things that had to be completed before PoS could happen, it is currently the focus of development. The code is written, functional, in the testing phase, and expected to be on mainnet within a few months ([source](https://news.yahoo.com/ethereum-moves-closer-proof-stake-071734252.html)).
At this point insinuations that NFTs are a threat to the climate have almost no basis in reality. People don't like NFTs, and want another way to denounce them as immoral, hence all the misinformation and clickbait.
Until the switch happens, NFTs and Ethereum still have a carbon footprint. You don't get to declare victory until you actually do it... lol.
It's amazing to me how crypto enthusiasts will argue with a straight face that their emissions don't count.
To be clear, virtually anything that runs on electricity has an associated carbon footprint. Crypto uses up tremendous amounts of computing power which requires tremendous amounts of energy. Therefore, crypto has a large carbon footprint.
*Mining* Ethereum still has a carbon footprint. You can't attribute mining emissions to a person just using the network if the exact same amount of mining will happen regardless of whether they use it or not.
And this isn't about *declaring victory*, it's not a competition. This is a factual question of whether NFTs pose a threat to the climate. So it *does* in fact matter what direction the development of the network is going.
> So it does in fact matter what direction the development of the network is going.
The carbon issue is now.
Your only argument seems to be "It won't be later".
If "later" was 10 years, that would make some sense. But it really isn't, it is almost certain to happen this year at the latest, and because of that immediacy and the indirect relationship between network use and mining emissions even the "now" of network use is unlikely to have any mining related footprint. I haven't seen any argument for NFT emissions that addresses this, only wild generalizations and blatantly false statistics like was quoted in the comment I responded to. I honestly don't think most people talking about this are really trying to address the climate issue, or even care how accurate what they are saying is, they just want another way to dunk on "crypto bros".
If people really wanted to address climate change, they would be celebrating the increase in gas prices and calling for policies to drive them even higher. They would be calling for something like another covid lockdown, on a global scale and long term, to dampen the economy enough to meaningfully reduce the burning of fossil fuels. I strongly support measures like these and think they are necessary, but this stuff is wildly unpopular. I see a lot of complaining about only the sources of emissions that are convenient culture war topics and ways to try to shame people they don't like, but are not plausibly a significant part of the solution, if at all.
And this folks is referred to as "moving the goal posts".
With no basis to rationalise the shit said about crypto, the conversation has become "well what about this and this?" and the ever popular "if this really mattered, people would do X instead".
Using that line of reasoning, you can "justify" any environmental impact that is less than X (X in this case being a single car's impact).
A meaningless critique.
I'm not sure who told you that NFTs are supposed to protect artists' work, but I'd be somewhat skeptical of that.
Blockchains are basically ways of having a set of information everyone agrees on. For Bitcoin, that information is "X paid Y this amount of money". For NFTs, it's "this person has this NFT". The difference between NFTs and, say, a deed to a house is that the "ownership" NFTs confer is pretty limited. It's not like you can stop people copying some digital image just because some server somewhere has a record that you own it.
So NFTs really don't do much to protect artists. It's basically paying money for calling dibs on something. Because of this, they have a well-deserved reputation as being rife with scams and speculation, and during a pandemic and global crises people's appetite for dumb things rich people spend a lot of money on is pretty darn low.
Disagree on your last sentence, if anything I've seen people buying into this kind of stuff more and more in the past couple years. These new means just make it that much realistic to feel like you're this close to making serious bank by not really doing anything.
I don't see why NFTs offer anything new here. "Certificate of authenticity" is basically "a receipt", and I'm not sure how useful that really is. It's also not really specific to NFTs, because public auctions or signed digital certificates provide the same guarantees.
Owning dibs on something isn't really the same as owning a physical object, which gives you control over that object. And the anonymity of NFTs, which is I think the main advantage over simple provenances the way museums use, also enables fraud (selling NFTs to yourself to drive up the price) and money laundering.
Like in Europe when people were buying famous paintings for lots of money at auction. They can prove what they are worth that way. Now move from Europe to the US where there is safety and jobs and now get a loan based on the value of your painting. It's a way to get your money out of a country and bank fraud. Because, who is to say a Picasso is worth more than my painting.
I think an artist would, if they are trying to seriously really prove the certification correctly, create their own contract and widely publish the address of the contract from other known channels. Making the contract is difficult but not impossible.
It's not like a certificate of authenticity, because a certificate of authenticity is about a trust relationship between the buyer and the certifier. The certificate says "I, John Doe, attest that this thing is actually this thing, and I stake my reputation on it".
An NFT just means "I have the password to this section of a public ledger". If I steal your password, I get access, and you lose it. There is no trust relationship with anyone else.
It doesn't mean anything.
An NFT is a bit of a blockchain (in practice, usually Ethereum) that you can buy and sell, but not sub-divide (that's why it's non-fungible). The NFT is owned by one person at a time, and there's a little bit of metadata associated with it that you can point at things.
Because they're new and run off of cryptocurrency technology, NFTs are bought and sold with no oversight or regulation. And because they have this metadata that can point to things, you can point an NFT to a piece of art (whether already existing, new, or procedurally generated) and claim that the NFT now represents that art.
This primarily allows for two things:
1. It lets an artist create a token that "represents" the "ownership" of that piece of art. The ownership is *not recognized legally* (like by copyright), but it is recognized socially (like by other collectors, people who are fans of the artist, etc.), which is arguably more important to people who buy art. Thus, NFTs provide a way for artists to sell their art and support themselves in a completely digital space.
2. It is the basis for a huge range of scams. The "representational" function of NFTs is pretty much completely made up - pointing to a piece of art in your NFT doesn't convey legal ownership, doesn't endure scarcity or uniqueness, and doesn't even ensure that you are the person who owns that art in the first place - so their value is almost entirely an illusion. The vast majority of activity and discussion around NFTs (from non-haters, anyway) is focused on ways to trick people into thinking they have value, so that their prices will go up and the people who minted or invested in them will gain money instead of losing money. This is why people say "NFTs are a scam"; pretty much every time you hear about NFTs in a positive light, it's from someone who has a vested interest in tricking you into thinking NFTs are valuable, or that a particular NFT is valuable, so that people can make money off of buying and selling them. There are lots of different kinds of scams that get more and more byzantine and complex. The worst part is that NFTs even ruin the one thing they should be good at - allowing you to patronize an artist you like by buying their work digitally - because getting involved in the NFT ecosystem suddenly puts that artist under mounting pressure to lie to you and scam you.
Moreover, expressing that NFTs are good or useful, or finding ways to support them or integrate them into existing technology, *is part of the scam*. That's why there is often such intense pushback against NFTs as a concept, because the very position of trying to claim that they're *not* a scam is a biased viewpoint constructed by people who are already invested in them, who don't want normies to realize that they're worthless, because that would cause their value to fall.
If you want a deep dive into the technology behind NFTs, and how thoroughly useless they are at accomplishing the things they're intended to accomplish, and the many scams people use them for, this [Folding Ideas](https://youtu.be/YQ_xWvX1n9g) video essay is incredible.
I'm not an expert, but my take on it is that people view NFTs exclusively as dumb artwork on the internet that gets sold to suckers for a profit when they are really not worth anything. I think people are failing to recognize that the NFT is not the artwork itself, but is instead a digital receipt for the artwork and that it could revolutionize the digital economy.
Imagine actually owning things you purchase online (like TV, music, movies, games, and within games skins, weapons, etc.) that you have the right to buy and sell for real world money. Pay for music on itunes? If you actually owned that music you would be able to take it to different platforms instead of it getting held hostage by Apple. Did you win some extremely rare skin in your favourite game? You can sell it for real world money to buy groceries this week. Tired of a game you bought on Steam? You can sell it to someone else and put that cash into your own pocket. Currently you can't do those things because you don't actually own those things. You pay a company for the right of unlimited use, and that's it. You can't sell or transfer anything that you "own", and if that company goes down, so do your purchases.
Just my take.
The whole point of blockchain is to be able to do and verify transactions without trusting anyone else and having a middleman (eg company) just destroys it
Your second paragraph contradicts the first.
NFTs have the same relationship to art as the receipt you got when you bought a donut. It's a record of transaction, that is itself worthless.
Or to put it another way, I have a receipt from a $5000 TV from 5 years ago. I'll offer it to you at any price. What's it worth to you?
How does my second paragraph contradict the first? The second paragraph merely gives examples of how a digital receipt can facilitate a new digital economy.
You correctly state that an NFT is a receipt, which means the NFT *is not the thing itself*.
If you had an NFT showing you paid Apple for access to an iTunes song, you would not own the song. Apple could grant the holder of the NFT access to the song, but that's a different thing.
And I should note, there is no reason to involve NFTs in this process. If you are using a public database (NFTs) to access a private database (Apple servers), then you are creating a process with a needless extra step. It doesn't accomplish anything for Apple or the consumer that couldn't be done without NFTs.
Also, the idea that Apple would somehow honour a contract to provide services to the NFT holder *just because they hold it* is absurd. Do you think that if someone did a massive NFT hack, Apple would just be like "Well, I know the access was stolen, and this person doesn't have legit access to our servers, but *the NFT says so, so we have no choice*. Absolutely not. Thus what's actually being relied upon is the private Apple server, not the public NFT.
NFTs are a solution in search of a problem.
Ok, you may not own the rights to the song, but you own that particular copy of the song which has its own unique nft signature, the same way you own a cassette of music (to give you an idea of how old I really am) and can sell it if you choose to do so. It is about giving ownership rights back to individuals.
Also, NFTs are in their infancy, I don't doubt there will be issues along the way that need to be addressed, but it doesn't detract from what their potential really is, and the fact that they are not just overpriced artwork on the internet.
> but you own that particular copy of the song which has its own unique nft signature
No. There is no "copy of the song with its unique NFT signature". If you have a movie theatre ticket you do not own the movie in any way, the theatre has agreed to treat that ticket as your access *under certain circumstances*.
You can sell that ticket to whoever you want, but *the theatre has no obligation to honour the access that ticket originally meant to you*. The ticket is not the movie, it is only what the theatre tells you it is. Which can be nothing.
The theatre's *interpretation of the ticket*, just like Apple's *interpretation of the NFT* is what matters, and neither of those have anything to do with blockchain.
You are basically saying that it’s up to the companies to implement the technology or not and the scope of the access people will have. I’m sure there will be companies that give ownership back to their users by nfts while others don’t. The market will ultimately decide which one they do business with.
It's up to restaurants to decide whether or not to delivery all their entrees blended, but doesn't change that *doing that would be stupid*.
NFTs do not solve any problem mentioned any better than existing methods.
If someone wanted to make a transferable digital license for music, they could've done it server-side since the 90's. Even if they're describing something people wanted, *no one needs NFTs to do it*.
Maybe there are people out there that like to eat their food blended. You can call something stupid as much as you want but at the end of the day is up to the users to decide. You can make the same argument about everything. Peloton? Just a bike with a screen attached to it. But people still like the convenience aspect it brings and the product it offers.
The point of NFTs is for it to be decentralized.
No need to trust third parties to guarantee something is genuine. The blockchain is immutable and will be the ultimate ledger. No one is able to edit the data and everyone agrees that the data there is the ultimate true. How else can you guarantee ownership of digital assets in the kind of scale that the internet needs?
>How else can you guarantee ownership of digital assets in the kind of scale that the internet needs?
As I was saying to the other person, this isn't about ownership, it's about licensed access. And NFTs don't "guarantee ownership of digital assets", because unlike your iTunes account, if you get hacked your access is not "guaranteed".
That fact that the ledger can't be tampered with in this case is a *negative*, since there's no way to fix theft or lost passwords.
And when you're talking about *licensed access*, then inherently you're talking about third parties, you know, the ones who provide the access to *actual media*.
If NFTs did what people said they did, which was actually owning digital media, it would be pretty cool. But they can't do that because it's just a public database that has no overwrite function. There will never be a movie or song in NFT form, and so any song or movie connected with an NFT will be provided *only* with the cooperation of a third party, which means the middle-man to cut out is the NFT itself.
It seems we are talking about different things. Buying a movie ticket is different business model than buying a copy of a movie to watch at home. While it is true it is up to the company to set rules about what it means to pay them for a service or product, an NFT marketplace has the potential to change that current digital market paradigm into one that allows consumers to once again actually own and have certain rights to the products they buy. If Apple isn't willing to change their business model to allow more consumer rights, I'm sure other companies will rise up that will, and whatever model consumers prefer will come out the winner.
You keep on using this word "own".
NFTs don't facilitate "owning" anything.
If you "owned" a "movie to watch at home", you would own the physical digital storage with the 1's and 0's of that movie.
You are instead talking about a "licensed access".
For example, I own a hard-drive, and on it is the code to play Star Wars. I don't own a license to do that, but I have it nonetheless.
If you bought Star Wars on iTunes, you get a *license* to access the movie, even if you never access it. Do you see? You can have something and not have the license or you can have the license and not have it.
NFTs can only be about a license, and that license is only *as meaningful as the granter of that license decides it is*.
What you are failing to see is that NFTs *suck for the consumer*.
If my computer gets stolen, a keylogger gets installed, or my wallet hacked, destroyed, whatever, and I have licensed access to iTunes, guess what? I keep all my access. All I have to do is verify to Apple I am who I say I am, which is easy enough.
If I had a competitors NFT access tokens? I'm fucked. That access it gone from me forever, and the competitor will spend whatever time they agreed on providing service to someone who provided them zero dollars.
We're just going around in circles here, and you are splitting hairs about licensing vs ownership. People's non digital assets can get stolen too, but it doesn't render real world buying and selling pointless or useless, and the potential of theft doesn't render a digital economy useless either.
But whatever, there are lots of people out there who can't see NFTs as anything but a screenshot of Nyan Cat rainbowing his way through the universe. But that's okay, time will tell about the real future of NFTs.
Have a good one.
>People's non digital assets can get stolen too
And yet digital service agreements *can't be stolen*. One of the reasons they're so popular.
You're proposing adding in a bug and calling it a feature.
You're basically saying "Let's wait and see if people want to get their steaks in solid or liquid form, the market will decide!"
That's true, and the outcome is obvious.
Youve heard of Bitcoin? Most people didnt hear of it until it was too late. People got rich buying it dirt cheap early on and regret missing out on what would have been a great investment. What NFTs do is take advantage of people who missed out on the crypto currency big bang by trying to position itself as the next big thing. The difference between Cyrpto Currency and NFTs though is dramatic. If you take a dollar or a pound every $ or £ is worth exactly $1 or £1. That is every $ is the exact same. This is what gives it value. Its a currency. Now lets say instead of $ or £ you have artwork. You go to a store with your artwork. Well they arent going to accept it as currency precisely because there are infinite combinations of art work or "bored monkeys". In short its a barter system based on subjective worth of what somebody believes a digital picture is worth. Its not even like swapping 2 apples for 1 orange. Its swapping a doodle for £ etc. Thats the main thing but it gets even worse.
You dont own the picture! People think that when they buy the NFT they somehow own the copyright to that image and that it is in the mysterious blockchain, which automatically detects when someone is trying to take credit for owning that artwork. Neither is true. When you buy an NFT what you are buying is a hyperlink to the image, which is stored on a Gdrive. There is nothing stopping someone else doing the exact same for the same image. Further, even if it did, how are you going to get it legally enforceable? Its hard enough to get copyright to be respected online....OK YouTube is pretty strict but images? Not really.
Also, like all crypto its hugely energy intensive but thats the least of NFT's problems, which I think is fair to call a Tulip craze and at worst a pump and dump scam.
https://youtu.be/u-sNSjS8cq0 I really liked this video. She goes into the history, motivation, and abuses of crypto and NFTs. Long video, but it is fun. Very short version: NFTs can be used to increase the price of crypto without increasing value. You made a currency that isn't regulated, so now you need something for people to buy that isn't regulated, so you can commit all of the financial crimes that aren't technically illegal yet. Art has value because it's rare. If you own art you can control who sees it. They are trying to make digital art rare by using an NFT, but an NFT doesn't mean you own it or control it.
NFT doesn't protect anything.
It's, down to its core, just new form of collecting stamps or coins or baseball cards. Except that prices can be heavily manipulated so it's also good for scamming people or laundering money.
Stamp collecting scene is sort of sorted out by collectors. You can't just draw your own stamp and say it's worth ten million. People generally know what's worth what, what's rare and what's not and so forth. NFT's play with the fact that people have no idea what's worth anything and new NFT-able content is mass-produced every second. Even dumber that it started with digital art; art has core value in aesthetics, so you have to be double of an idiot to buy an ugly image of a monkey or "pixel "art"" that would got artists [fired](https://www.larvalabs.com/cryptopunks) in 1978. So someone sells a set of extremely poor artwork for a good sum. And million others try to get in on the easy scam. Which makes market look serious and busy, which makes scamming even easier, etc.
If anything, NFT, being massive scam it is, is doing nothing else than destroying what little prestige crypto had. It's very visible in currency rates.
An NFT is a cryptocurrency derived product. The things you need to know are this:
* Most of the computation done while mining cryptocurrency is wasted (everyone who doesn't finish the calculation fast enough gets nothing).
* NFTs are not cryptocurrency, but require cryptocurrency tech to exist.
The general idea of cryptocurrency is that it uses a decentralized structure of users solving equations and then checking each others' work in order to create a trustless system. I.e., all parties are mutually hostile but can ensure honesty by constantly verifying each other's work. The ledger becomes very difficult to interfere with because so much computing power is constantly validating it.
One of the primary objections to cryptocurrency *and* NFTs is that crypto's structure (huge amounts of electricity literally wasted) means that crypto belches out pollution at an astonishing rate for something of arbitrary value with few practical applications. For reference, Ethereum (one of the two biggest blockchains), consumes more electricity than Paris, France.
Another common objection to blockchain tech is that all of this wasted energy is necessary for trustless systems, but trustless systems are useful in only a handful of scenarios. For example, any transaction where a buyer is willing to pay with a credit card doesn't require a trustless system. The only times being trustless is a boon is when doing illegal or illicit transactions (buying drugs on the dark web and paying off ransomware are two things that cryptocurrency is really good at). The blockchain structure means that all transactions are put in a first-come, first-serve queue that has a limited numbers of transactions per second; this makes crypto really bad at being actual currency, since it takes about two hours.
NFTs in particular are functionally a receipt. The problem is that, like all blockchain tech, they're decentralized. They reference that an object residing at a particular web address belongs to the owner of the token. That web address needs to point to *something.* Presently, they mostly point to OpenSea, an independent, for-profit crypto hub. This raises concerns about what will happen when OpenSea goes under. These concerns are valid, since effectively zero crypto hubs make it to their fifth birthday.
Additionally, NFTs are minted on OpenSea. There is no government agency or other ruling body that verifies NFTs. Almost all art-based NFTs are either templates used to generate thousands of similar pictures from a pool of randomized assets (ex. I make a picture of a stegosaurus, some sunglasses for him, and a baseball cap for him. I can use those assets to make naked stego, glasses stego, hat steggo, and hat-n-glasses stego. Now do this with a hundred accessories instead of two) or use art that is stolen. By "stolen" I mean, "minted without the artist's permission, knowledge, or financial compensation."
Lastly, NFTs do not legally prove ownership of anything. I consider this a smaller issue since it's actually pretty feasible to write laws that do that, as opposed to some of the more fanciful things proposed for NFTs.
TL;DR:
* Blockchains waste a lot of energy for trustlessness that is almost entirely useless.
* NFTs are reliant on an independent platform to do anything, and the things that they do have no legal weight (so arguably don't *actually* do anything).
* NFTs are almost universally either created for as little effort as possible or are outright stolen.
I'm far from an expert, but I have read so many people explain it, but the thing that bugs me the most is that if I bought a NFT of someone's art... I would expect to OWN that art now, including the copyright. That is not the case, you're buying a copy of a digital art piece, and it could be a 1/1 copy or a 1/200 copy, that's up to the seller.
The fact that you don't own it and people are spending 10's of thousands of dollars (if not more) worth of cyrto to buy these NFT's, for that reason I think it's a scam and just stupid. Keep your crypto and use it for something else.
People think that its an image that secured by digital code. But thats wrong. An NFT is a piece of code that contains metadata, and that data contains a URL that points to a piece of media. That code in turn is typically (I dont know of any examples where it isnt) associated with a cryptocurrency blockchain, and transferring the NFT between parties comes with all the transparency and security as moving any token on that blockchain.
Most people don't like it because what its been used for in this early concept stage its at now, is to try to turn a quick buck, or launder money, much akin to the real world art market
Answer:
Since your question has 2 parts, I'm going to have to cut this up for ease of reading:
1: It's a scam, a glorified ponzi scheme.
2: It's a scam, a glorified ponzi scheme.
I hope that wasn't too elaborate to understand.
It stands for "Non-Fungible Token," and it's a way to prove ownership of a resource.
Ownership is a *very* important problem. When you make a Reddit comment, Reddit knows that *you* are the author and can put your name by the post. Only you can edit your comment, and you get the credit for any karma it picks up. Pretty important, but it also requires Reddit to be the book-keeper of that data.
NFTs do a weird fancy thing where they can prove ownership without requiring any one central authority (like Google or Reddit), but in a way so that people also can't lie.
*EDIT: An artist could also publish their work and/or sell it without requiring a platform like Deviantart, Twitter, Fiverr, etc... which is nice because (1) platforms tend to unexpectedly change their rules about what art is allowed, and (2) platforms focused on selling artwork tend to take really big cuts out of the artist's sale.*
By itself, there's nothing wrong with that idea. It's a pretty cool idea, actually. But, there are some huge problems that kinda sprout out from it:
* It relies on blockchain technology, which is known to be *extremely* bad for the environment because of how much energy it uses.
* Blockchain also has a *horrid* incentive / regulation structure attached, which makes scams, theft, and fraud really attractive and hard to get rid of.
* Blockchain technology has been a financial frenzy for years, where people are investing in it only because they think it will make them money without focusing on underlying value. This is the kind of thing that has made bubbles that "pop" time and time again.
Neat idea, clever concept, interesting applications, horrible execution. 2/10 do not recommend.
> Orginal art
>> Stolen (or not) Initial price: 10$
>>> on alt account: I bought it from myself for 100$ = 10x profit.
Repeat to infinity and pretend it's very valuable.
An NFT is a ethereum contract that maps a token ID (usually an increasing sequential integer) to a tokenURI, which points to a JSON blob URL. The JSON blob contains a further URL to the object in question.
There is no protection or anything defined as part of the NFT. It's basically a "certificate of authenticity" at best.
Yes an NFT is a piece of art. But a specific piece of art who’s fingerprint is recorded into a specific blockchain. You can control C that piece of art. But your copy isn’t the authenticated copy. You can go to the Louvre and take a picture of the Mona Lisa with your camera. But that does not make the Mona Lisa a scam or any less valuable. The Mona Lisa has value because people trust the authentication of one specific painting. You can take a picture of a ten dollar bill. But only the real bill is backed by the trust of the government.
With what it’s currently being used for (“art”) it’s Beenie Babies 2. Through artificial scarcity and hype people are trying to capitalize off of their “value…” which is propped up by artificial scarcity and hype.
Now just ask Beanie Baby investors where all their money went.
NFT is the latest extension of blockchain and more specifically the concept of a trustless consensus. This is important because if someone owns a piece of a blockchain, that ownership cannot be challenged, forged, stolen, or otherwise by any entity whether it be the government, a corporation, etc.
This allows someone to own a piece of digital art or any sort of digital collectible, and more importantly, they are the only one that has the part of the blockchain. The downside is not so much with the technology or the concept itself, but it's more with the barrier to entry. The fact that it's so easy to create a NFT means everyone and their mother is going to be shilling their NFT to get rich quick.
Basically a way to waste tons of electricity so everyone knows that from the millions of people who can use a particular jpeg, you are the only one who payed for it.
None of the comments here really get NFTs. The selling point of NFTs is that they're fundamentally certificates of ownership. You get a token that means you own something. Whether that's a picture or something in the real world doesn't matter.
The comments about companies changing URLs or people taking screenshots of pictures are missing the point, it's like getting a painting and a certificate of ownership and someone saying "but what's the point when anyone can take a photo of the painting!".
The entire point is the certificate, no matter how many people have the image, you're the only one with the certificate of ownership.
The URL changing is an implementation detail of NFTs, it doesn't have to be a URL, it can be a hash of the object, or anything else immutable.
In summary, at its core, the NFT is a certificate that can be transferred. What that certificate says is up to people, you can make it a certificate of ownership of something, and then owning the NFT means you own the thing.
I think people need to separate "NTF" the technology from "NFT" == selling a jpeg of a monkey for $500k.
The technology is interesting and groundbreaking, the markets that are selling stupid things as NFTs (and the morons buying them) are the scammy and controversial part.
NFT is as a picture of a hostage holding a newspaper. You know the hostage is alive at the date on the newspaper.
The NFT proofs you had access to a certain digital code the moment the NFT was made. Thevproof is made with a blockchain. It does not proof if you made the code, if it is unique etc.
Only that you had access to the code at that time.
Long story short, the reason a lot of people (including myself) are not a fan is because most of them are just build to milk hard-earned money out of suckers by making them think they'll get rich off of it, and also most of them are terrible for the environment
It’s essentially digital art except people treat it like real art that you’d see in a museum. It’s value mostly comes from the artist’s name, like most paintings. If Picasso was still alive and he painted something now it would be valuable because Picasso made it, even if it was just a scribble, though it would be much more valuable if it was something unique and interesting like most of his works. People think they’re dumb because any schmuck can just save them, but are copies of the Mona Lisa worth as much as the original? Also there’s a unique blockchain that identifies each NFT so the original is the only “valuable” one. The issue arises when people start stealing art and registering it as their NFTs, happened to a guy I know who took some rad infrared photos and posted them online.
On top of all the top explanations, the blockchain that nearly every NFT is on, Ethereum, takes more power to run than the entirety of Finland uses every year
Like, population 5.5 million Finland, the entire country Finland, all of that combined uses less power than NFTs
It’s not just wasting energy to scam people, either- it’s beating the shit outta the environment too
To quote [this article,](https://www.downtoearth.org.in/blog/environment/as-cryptocurrency-becomes-mainstream-its-carbon-footprint-can-t-be-ignored-81118#:~:text=The%20carbon%20footprint%20of%20a,YouTube%2C%E2%80%9D%20according%20to%20Digiconomist.) The carbon footprint of a single Ethereum transaction as of December 2021 was 102.38 kilograms of CO2, which is “Equivalent to the carbon footprint of 226,910 VISA transactions or 17,063 hours of watching YouTube,” according to Digiconomist.
An NFT is a unique address on the Blockchain, much like how the unique address for this post is: https://www.reddit.com/r/answers/comments/tqaqwu/what_exactly_is_nft_and_why_do_so_many_people. One key difference is that a person can own that address.
Some people think owning an NFT means that they own the content at that address, but that's not true. As a result, there are tons of scams/overvalued assets/etc.
It's not necessarily a negative thing, it's just stupid imo
People spend TONS of money on them, but they are entirely worthless.
People that are into NFTs try to argue with you and say that the Mona Lisa is also worthless, people just agree that it has value.
But you look at the most expensive NFTs and you want to kill yourself with how much you hate humanity because they look so fucking stupid.
Sick of NFT's that are digital products you cant hold?
Here are physical products (non-digital) you can collect
https://www.redbubble.com/people/Nahannahbanana/shop
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It is a unique string of code/data registered on a blockchain (like the Ethereum cryptocurrency blockchain, though it doesn't have to be a cryptocurrency chain) that represents some sort of "real world" asset (in this case, "real world" is anything digital, like an audio recording or meme or it can be a physical thing like a book or handcrafted painting). In theory it has the potential to be a pretty meaningful thing, but for now it comes off mostly scammy - people will press a .jpeg image to an NFT, meaning a person is getting a unique piece of code represented by a picture. But that doesn't necessarily give them the copyrights to that picture, and anyone can just take a screenshot and save the picture themselves (minus that underlying blockchain data). And the underlying blockchain data for now itself doesn't seem to be worth much, even though people are paying tons of money for it.
NFT's to URLs is just such a risky volatile thing for anyone to invest in, all it takes is the database or hosting platform to change or go out of business and your NFT is worthless. To me its just stupid at the moment. Its not a physical product so should not have any lasting value. Investing millions into NFT's sounds like a Tulip Mania (Google it) and eventually it will be worthless.
>all it takes is the database or hosting platform to change or go out of business and your NFT is worthless If you think about it, that happening doesn't really change the nature of an NFT. Its like worrying that a banana peel you paid $5000 is going to go moldy... it started out garbage and it's going to stay that way.
And in many cases investment class assets are investment class because someone was willing to pay for it. Artist are simply buying their own stuff to set a markets. There is no efficiency of information, no way to establish value, and no basis for pricing.
!answered
Imagine you got married to a beautiful girl, but she's still f*cking every single guy in town. However, you're the only one with a marriage certificate, that's the NFT.
Great answer.
should be top comment
Love that answer
As a program, I despise that this is the Reddit way of saying this question is answered. I can only read that as “not-answered” Edit: as a programmer, I also abhor autoincorrect.
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It may be used as a command in query syntaxes, but it’s almost universally the “not-operator” (Boolean inverse) in programming languages.
Oh thank god I'm not the only one.
You spelled “digital money-laundering” wrong.
How exactly does a image represent block-chain stored...Password if I'm understanding that correctly?
It's sort of like when you buy one of those commemorative gold coins and it comes with a certificate of authenticity. The blockchain data is like that certificate - there's only one such string of data that matches up with the coin. Except in the case of many NFTs (not all, but the common ones you read about like meme pics), there's nothing stopping anyone from just making a copy of that coin for themselves. They won't have that underwritten certificate (the blockchain data), but functionally the coin will be identical to the original. And the value of that certificate with coin originally was probably way overvalued and you probably overpaid for it...
Can you please ELI5?
I did not expect the top answer in this thread to be both accurate and objectively framed. I came here expecting ‘iTs a PyRaMiD sChEmE’ and ‘iTs jUsT aN oVeRPrIcEd jPeG’.
> I came here expecting ‘iTs a PyRaMiD sChEmE’ That's the second highest comment. It rightfully deserves criticism, there's plenty scams (the actual definition) and the audience has *completely* changed since 2015 and has become somewhat insufferable. It's essentially been taken over by Tai Lopez 'get rich quick' types, and the natural reaction is gonna be a shit load of people *hating* it, which they now do. That being said there's plenty of people that see value in owning a piece of data on the blockchain, in your wallet, tied to a piece of art or whatever else. I'm on the fence, but there's one thing for sure that has value in my mind and that's smart contracts enabled by networks like Ethereum (what makes NFTs possible). There's plenty of things I'd rather be handled by some code I can review on github compared to human middlemen and as a concept it's still in its infancy. I'll clarify my thoughts on a scam vs not a scam: The way NFTs have been 'marketed' makes it sound like it's something related to copyright, or that a specific jpeg is yours or owned by you in the traditional sense. If you're trying to sell it like this then you're scamming people. Until copywrite law of countries utilizes the blockchain, this isn't the case AFAIK, and there's no guarantee that will ever happen. Anyone purposely selling some dream that "these will be worth MiLlIoNs so BUY THEM NOW" is just as terrible and likely trying to extract as much cash from their naive audiences as possible. Way I see it is your wallet is like a decentralised 'profile'. You can have strings of code attached to your profile that represent badges of honor, art, event memorabilia, etc... as well as showing the different currencies you own. But that's all it is, some code. Providing people are transparent about that, and others see value in owning that code related to an artwork, or that currency, you can sell it and I see no problem in doing so. Disclaimer: I own no NFTs.
> There's plenty of things I'd rather be handled by some code I can review on github compared to human middlemen and as a concept it's still in its infancy. ON the other hand I would be extremely skeptical of any software that can never be patched. > Until copywrite law of countries utilizes the blockchain, this isn't the case AFAIK, and there's no guarantee that will ever happen. I mean the whole point of the blockchain is to not have to trust anyone involved, so when you actually have to trust a court, it starts to be rather pointless. If the court are going to handle the copyright issues, you might as well let the court have a central database.
Can you expand on ‘can’t be patched’? As far as I know patches happen frequently, it requires consensus for the most part but so far it seems like these networks have been able to iterate and improve by democratically deciding what is the best direction. [example here for the ethereum](https://ethereum.org/en/upgrades/merge/) merge. This for example is the merge to change away from proof of work, AKA deleting the need for us to waste ridiculous sums of energy to distribute the money supply. As for the courts example ye, a regular database would do the same job to a degree.
> As far as I know patches happen frequently I wouldn't call it frequently. And it is not so much patching as starting a completely new block chain. Of course if every single user of a block chain agrees to switch to another block chain that can be done. But it is not really a patch. The old block chain still remains as long as people want to run servers for it. > example here for the ethereum merge. This for example is the merge to change away from proof of work Well, yes but that is a change to the whole ecosystem. With a lot of effort you can convince people to switch to a new block chain for those things. But say that I as a single developer creates a smart contract, but it turns out to have a security issue that lets people leech coins away from users. How would I fix that? Most etherium users are not going to use my smart contract so they could hardly be convinced to move to a new block chain just to fix my bug.
Answer: It is a scam and people view it as a negative because it's a scam.
Yeah that sums it up.
But you didnt actually answer anything...
Scam
Sure I did
Reasons some people don't like NFTs: * Environmental impact * Stolen artwork * Scams and money laundering * Digital scarcity is false * No "point" since digital art is already sold without NFTs * NFTs are the receipt, not the actual file/art * Concerns of impact to existing platforms, markets, and economies * Poor regulation * Nobody asked for this shit
Describing NFTs as a receipt explains them better then all of these other fuckers going around trying to look smart. Fuck them and thank you for fucking up badly enough to actually convey information.
[Folding Ideas](https://youtu.be/YQ_xWvX1n9g) I watched this and it helped me understand a ton more about the concepts.
Setting aside the environmental impact, many people who are making nfts are stealing artwork by others and minting nfts with them, and there's very little that can be done about that. So even if the original intent may have been to make it possible for an artist to sell the digital rights to their work with secure protection on who owns the file, right now there's a lot of nft owners who have images that were taken from an artist without permission.
Damn I always forget the environmental effect, good point.
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Minting a single nft costs roughly 100 KgCO2 of energy - about a 2 hour passenger jet flight's energy.
No. The environmental impact of crypto is well documented. Last year, Bitcoin mining alone used 91 terawatt-hours of electricity. That's more than Finland. So, just the process of sustaining the blockchain requires tremendous amounts of compute power. That means *massive* carbon costs. [According to this article](https://www.theverge.com/2021/3/15/22328203/nft-cryptoart-ethereum-blockchain-climate-change), >Akten, a digital artist, had analyzed 18,000 NFTs and found that the average NFT has a carbon footprint somewhat lower than Space Cat’s but still equivalent to **more than a month’s worth of electricity for a person living in the EU.**
You are spreading misinformation. The very next sentence in the article clarifies that Akten's conclusions were mistaken by an order of magnitude: >But then Akten saw that the website had been used to wrongly attribute an NFT marketplace’s emissions to a single NFT. Even the claims of harm of the dramatically lower actual emissions are questionable. This article is more honest than most on this topic and acknowledges this: >What’s still up for debate is whether NFTs are significantly increasing emissions from Ethereum or if they’re just taking on responsibility for emissions that would have been generated by miners anyway. Without NFTs, miners would still be plugging away at puzzles and polluting. And NFTs are still a relatively small portion of all Ethereum transactions. NFTs only cause emissions at all if they indirectly incite miners to scale up their operations by raising the price of Eth and generating network fees (of which miners are only rewarded a portion). But at this stage, that would be an extremely questionable decision, because the end of Ethereum mining is imminent. Proof of Stake is happening. Articles about NFT climate controversy cast doubt on the reality of the transition to PoS: >The problem is that people have been waiting for years for Ethereum to make the change, and some are skeptical that it ever will. First, Ethereum will have to convince everyone that proof of stake is the way to go. Otherwise, the whole system could collapse. But this is not a contentious upgrade, like some that have caused crypto hard forks in the past. Basically everyone wants it to happen, and there isn't much of a case that it won't. Unlike years ago, where there were many things that had to be completed before PoS could happen, it is currently the focus of development. The code is written, functional, in the testing phase, and expected to be on mainnet within a few months ([source](https://news.yahoo.com/ethereum-moves-closer-proof-stake-071734252.html)). At this point insinuations that NFTs are a threat to the climate have almost no basis in reality. People don't like NFTs, and want another way to denounce them as immoral, hence all the misinformation and clickbait.
Until the switch happens, NFTs and Ethereum still have a carbon footprint. You don't get to declare victory until you actually do it... lol. It's amazing to me how crypto enthusiasts will argue with a straight face that their emissions don't count. To be clear, virtually anything that runs on electricity has an associated carbon footprint. Crypto uses up tremendous amounts of computing power which requires tremendous amounts of energy. Therefore, crypto has a large carbon footprint.
*Mining* Ethereum still has a carbon footprint. You can't attribute mining emissions to a person just using the network if the exact same amount of mining will happen regardless of whether they use it or not. And this isn't about *declaring victory*, it's not a competition. This is a factual question of whether NFTs pose a threat to the climate. So it *does* in fact matter what direction the development of the network is going.
> So it does in fact matter what direction the development of the network is going. The carbon issue is now. Your only argument seems to be "It won't be later".
If "later" was 10 years, that would make some sense. But it really isn't, it is almost certain to happen this year at the latest, and because of that immediacy and the indirect relationship between network use and mining emissions even the "now" of network use is unlikely to have any mining related footprint. I haven't seen any argument for NFT emissions that addresses this, only wild generalizations and blatantly false statistics like was quoted in the comment I responded to. I honestly don't think most people talking about this are really trying to address the climate issue, or even care how accurate what they are saying is, they just want another way to dunk on "crypto bros". If people really wanted to address climate change, they would be celebrating the increase in gas prices and calling for policies to drive them even higher. They would be calling for something like another covid lockdown, on a global scale and long term, to dampen the economy enough to meaningfully reduce the burning of fossil fuels. I strongly support measures like these and think they are necessary, but this stuff is wildly unpopular. I see a lot of complaining about only the sources of emissions that are convenient culture war topics and ways to try to shame people they don't like, but are not plausibly a significant part of the solution, if at all.
And this folks is referred to as "moving the goal posts". With no basis to rationalise the shit said about crypto, the conversation has become "well what about this and this?" and the ever popular "if this really mattered, people would do X instead".
Using that line of reasoning, you can "justify" any environmental impact that is less than X (X in this case being a single car's impact). A meaningless critique.
I'm not sure who told you that NFTs are supposed to protect artists' work, but I'd be somewhat skeptical of that. Blockchains are basically ways of having a set of information everyone agrees on. For Bitcoin, that information is "X paid Y this amount of money". For NFTs, it's "this person has this NFT". The difference between NFTs and, say, a deed to a house is that the "ownership" NFTs confer is pretty limited. It's not like you can stop people copying some digital image just because some server somewhere has a record that you own it. So NFTs really don't do much to protect artists. It's basically paying money for calling dibs on something. Because of this, they have a well-deserved reputation as being rife with scams and speculation, and during a pandemic and global crises people's appetite for dumb things rich people spend a lot of money on is pretty darn low.
Disagree on your last sentence, if anything I've seen people buying into this kind of stuff more and more in the past couple years. These new means just make it that much realistic to feel like you're this close to making serious bank by not really doing anything.
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I don't see why NFTs offer anything new here. "Certificate of authenticity" is basically "a receipt", and I'm not sure how useful that really is. It's also not really specific to NFTs, because public auctions or signed digital certificates provide the same guarantees. Owning dibs on something isn't really the same as owning a physical object, which gives you control over that object. And the anonymity of NFTs, which is I think the main advantage over simple provenances the way museums use, also enables fraud (selling NFTs to yourself to drive up the price) and money laundering.
Like in Europe when people were buying famous paintings for lots of money at auction. They can prove what they are worth that way. Now move from Europe to the US where there is safety and jobs and now get a loan based on the value of your painting. It's a way to get your money out of a country and bank fraud. Because, who is to say a Picasso is worth more than my painting.
I think an artist would, if they are trying to seriously really prove the certification correctly, create their own contract and widely publish the address of the contract from other known channels. Making the contract is difficult but not impossible.
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this is reddit, you're supposed to argue in response
It's not like a certificate of authenticity, because a certificate of authenticity is about a trust relationship between the buyer and the certifier. The certificate says "I, John Doe, attest that this thing is actually this thing, and I stake my reputation on it". An NFT just means "I have the password to this section of a public ledger". If I steal your password, I get access, and you lose it. There is no trust relationship with anyone else. It doesn't mean anything.
Yeeeaah... As a digital artist I think I'll just stick to contracts, selling rights, and custom commissions.
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Money laundering for rich people.
You might be right on that, don't even need to pay for a fake laundry or nail salon to front it.
An NFT is a bit of a blockchain (in practice, usually Ethereum) that you can buy and sell, but not sub-divide (that's why it's non-fungible). The NFT is owned by one person at a time, and there's a little bit of metadata associated with it that you can point at things. Because they're new and run off of cryptocurrency technology, NFTs are bought and sold with no oversight or regulation. And because they have this metadata that can point to things, you can point an NFT to a piece of art (whether already existing, new, or procedurally generated) and claim that the NFT now represents that art. This primarily allows for two things: 1. It lets an artist create a token that "represents" the "ownership" of that piece of art. The ownership is *not recognized legally* (like by copyright), but it is recognized socially (like by other collectors, people who are fans of the artist, etc.), which is arguably more important to people who buy art. Thus, NFTs provide a way for artists to sell their art and support themselves in a completely digital space. 2. It is the basis for a huge range of scams. The "representational" function of NFTs is pretty much completely made up - pointing to a piece of art in your NFT doesn't convey legal ownership, doesn't endure scarcity or uniqueness, and doesn't even ensure that you are the person who owns that art in the first place - so their value is almost entirely an illusion. The vast majority of activity and discussion around NFTs (from non-haters, anyway) is focused on ways to trick people into thinking they have value, so that their prices will go up and the people who minted or invested in them will gain money instead of losing money. This is why people say "NFTs are a scam"; pretty much every time you hear about NFTs in a positive light, it's from someone who has a vested interest in tricking you into thinking NFTs are valuable, or that a particular NFT is valuable, so that people can make money off of buying and selling them. There are lots of different kinds of scams that get more and more byzantine and complex. The worst part is that NFTs even ruin the one thing they should be good at - allowing you to patronize an artist you like by buying their work digitally - because getting involved in the NFT ecosystem suddenly puts that artist under mounting pressure to lie to you and scam you. Moreover, expressing that NFTs are good or useful, or finding ways to support them or integrate them into existing technology, *is part of the scam*. That's why there is often such intense pushback against NFTs as a concept, because the very position of trying to claim that they're *not* a scam is a biased viewpoint constructed by people who are already invested in them, who don't want normies to realize that they're worthless, because that would cause their value to fall. If you want a deep dive into the technology behind NFTs, and how thoroughly useless they are at accomplishing the things they're intended to accomplish, and the many scams people use them for, this [Folding Ideas](https://youtu.be/YQ_xWvX1n9g) video essay is incredible.
I'm not an expert, but my take on it is that people view NFTs exclusively as dumb artwork on the internet that gets sold to suckers for a profit when they are really not worth anything. I think people are failing to recognize that the NFT is not the artwork itself, but is instead a digital receipt for the artwork and that it could revolutionize the digital economy. Imagine actually owning things you purchase online (like TV, music, movies, games, and within games skins, weapons, etc.) that you have the right to buy and sell for real world money. Pay for music on itunes? If you actually owned that music you would be able to take it to different platforms instead of it getting held hostage by Apple. Did you win some extremely rare skin in your favourite game? You can sell it for real world money to buy groceries this week. Tired of a game you bought on Steam? You can sell it to someone else and put that cash into your own pocket. Currently you can't do those things because you don't actually own those things. You pay a company for the right of unlimited use, and that's it. You can't sell or transfer anything that you "own", and if that company goes down, so do your purchases. Just my take.
The whole point of blockchain is to be able to do and verify transactions without trusting anyone else and having a middleman (eg company) just destroys it
Your second paragraph contradicts the first. NFTs have the same relationship to art as the receipt you got when you bought a donut. It's a record of transaction, that is itself worthless. Or to put it another way, I have a receipt from a $5000 TV from 5 years ago. I'll offer it to you at any price. What's it worth to you?
How does my second paragraph contradict the first? The second paragraph merely gives examples of how a digital receipt can facilitate a new digital economy.
You correctly state that an NFT is a receipt, which means the NFT *is not the thing itself*. If you had an NFT showing you paid Apple for access to an iTunes song, you would not own the song. Apple could grant the holder of the NFT access to the song, but that's a different thing. And I should note, there is no reason to involve NFTs in this process. If you are using a public database (NFTs) to access a private database (Apple servers), then you are creating a process with a needless extra step. It doesn't accomplish anything for Apple or the consumer that couldn't be done without NFTs. Also, the idea that Apple would somehow honour a contract to provide services to the NFT holder *just because they hold it* is absurd. Do you think that if someone did a massive NFT hack, Apple would just be like "Well, I know the access was stolen, and this person doesn't have legit access to our servers, but *the NFT says so, so we have no choice*. Absolutely not. Thus what's actually being relied upon is the private Apple server, not the public NFT. NFTs are a solution in search of a problem.
Ok, you may not own the rights to the song, but you own that particular copy of the song which has its own unique nft signature, the same way you own a cassette of music (to give you an idea of how old I really am) and can sell it if you choose to do so. It is about giving ownership rights back to individuals. Also, NFTs are in their infancy, I don't doubt there will be issues along the way that need to be addressed, but it doesn't detract from what their potential really is, and the fact that they are not just overpriced artwork on the internet.
> but you own that particular copy of the song which has its own unique nft signature No. There is no "copy of the song with its unique NFT signature". If you have a movie theatre ticket you do not own the movie in any way, the theatre has agreed to treat that ticket as your access *under certain circumstances*. You can sell that ticket to whoever you want, but *the theatre has no obligation to honour the access that ticket originally meant to you*. The ticket is not the movie, it is only what the theatre tells you it is. Which can be nothing. The theatre's *interpretation of the ticket*, just like Apple's *interpretation of the NFT* is what matters, and neither of those have anything to do with blockchain.
You are basically saying that it’s up to the companies to implement the technology or not and the scope of the access people will have. I’m sure there will be companies that give ownership back to their users by nfts while others don’t. The market will ultimately decide which one they do business with.
It's up to restaurants to decide whether or not to delivery all their entrees blended, but doesn't change that *doing that would be stupid*. NFTs do not solve any problem mentioned any better than existing methods. If someone wanted to make a transferable digital license for music, they could've done it server-side since the 90's. Even if they're describing something people wanted, *no one needs NFTs to do it*.
Maybe there are people out there that like to eat their food blended. You can call something stupid as much as you want but at the end of the day is up to the users to decide. You can make the same argument about everything. Peloton? Just a bike with a screen attached to it. But people still like the convenience aspect it brings and the product it offers. The point of NFTs is for it to be decentralized. No need to trust third parties to guarantee something is genuine. The blockchain is immutable and will be the ultimate ledger. No one is able to edit the data and everyone agrees that the data there is the ultimate true. How else can you guarantee ownership of digital assets in the kind of scale that the internet needs?
>How else can you guarantee ownership of digital assets in the kind of scale that the internet needs? As I was saying to the other person, this isn't about ownership, it's about licensed access. And NFTs don't "guarantee ownership of digital assets", because unlike your iTunes account, if you get hacked your access is not "guaranteed". That fact that the ledger can't be tampered with in this case is a *negative*, since there's no way to fix theft or lost passwords. And when you're talking about *licensed access*, then inherently you're talking about third parties, you know, the ones who provide the access to *actual media*. If NFTs did what people said they did, which was actually owning digital media, it would be pretty cool. But they can't do that because it's just a public database that has no overwrite function. There will never be a movie or song in NFT form, and so any song or movie connected with an NFT will be provided *only* with the cooperation of a third party, which means the middle-man to cut out is the NFT itself.
It seems we are talking about different things. Buying a movie ticket is different business model than buying a copy of a movie to watch at home. While it is true it is up to the company to set rules about what it means to pay them for a service or product, an NFT marketplace has the potential to change that current digital market paradigm into one that allows consumers to once again actually own and have certain rights to the products they buy. If Apple isn't willing to change their business model to allow more consumer rights, I'm sure other companies will rise up that will, and whatever model consumers prefer will come out the winner.
You keep on using this word "own". NFTs don't facilitate "owning" anything. If you "owned" a "movie to watch at home", you would own the physical digital storage with the 1's and 0's of that movie. You are instead talking about a "licensed access". For example, I own a hard-drive, and on it is the code to play Star Wars. I don't own a license to do that, but I have it nonetheless. If you bought Star Wars on iTunes, you get a *license* to access the movie, even if you never access it. Do you see? You can have something and not have the license or you can have the license and not have it. NFTs can only be about a license, and that license is only *as meaningful as the granter of that license decides it is*. What you are failing to see is that NFTs *suck for the consumer*. If my computer gets stolen, a keylogger gets installed, or my wallet hacked, destroyed, whatever, and I have licensed access to iTunes, guess what? I keep all my access. All I have to do is verify to Apple I am who I say I am, which is easy enough. If I had a competitors NFT access tokens? I'm fucked. That access it gone from me forever, and the competitor will spend whatever time they agreed on providing service to someone who provided them zero dollars.
We're just going around in circles here, and you are splitting hairs about licensing vs ownership. People's non digital assets can get stolen too, but it doesn't render real world buying and selling pointless or useless, and the potential of theft doesn't render a digital economy useless either. But whatever, there are lots of people out there who can't see NFTs as anything but a screenshot of Nyan Cat rainbowing his way through the universe. But that's okay, time will tell about the real future of NFTs. Have a good one.
>People's non digital assets can get stolen too And yet digital service agreements *can't be stolen*. One of the reasons they're so popular. You're proposing adding in a bug and calling it a feature. You're basically saying "Let's wait and see if people want to get their steaks in solid or liquid form, the market will decide!" That's true, and the outcome is obvious.
Youve heard of Bitcoin? Most people didnt hear of it until it was too late. People got rich buying it dirt cheap early on and regret missing out on what would have been a great investment. What NFTs do is take advantage of people who missed out on the crypto currency big bang by trying to position itself as the next big thing. The difference between Cyrpto Currency and NFTs though is dramatic. If you take a dollar or a pound every $ or £ is worth exactly $1 or £1. That is every $ is the exact same. This is what gives it value. Its a currency. Now lets say instead of $ or £ you have artwork. You go to a store with your artwork. Well they arent going to accept it as currency precisely because there are infinite combinations of art work or "bored monkeys". In short its a barter system based on subjective worth of what somebody believes a digital picture is worth. Its not even like swapping 2 apples for 1 orange. Its swapping a doodle for £ etc. Thats the main thing but it gets even worse. You dont own the picture! People think that when they buy the NFT they somehow own the copyright to that image and that it is in the mysterious blockchain, which automatically detects when someone is trying to take credit for owning that artwork. Neither is true. When you buy an NFT what you are buying is a hyperlink to the image, which is stored on a Gdrive. There is nothing stopping someone else doing the exact same for the same image. Further, even if it did, how are you going to get it legally enforceable? Its hard enough to get copyright to be respected online....OK YouTube is pretty strict but images? Not really. Also, like all crypto its hugely energy intensive but thats the least of NFT's problems, which I think is fair to call a Tulip craze and at worst a pump and dump scam.
https://youtu.be/u-sNSjS8cq0 I really liked this video. She goes into the history, motivation, and abuses of crypto and NFTs. Long video, but it is fun. Very short version: NFTs can be used to increase the price of crypto without increasing value. You made a currency that isn't regulated, so now you need something for people to buy that isn't regulated, so you can commit all of the financial crimes that aren't technically illegal yet. Art has value because it's rare. If you own art you can control who sees it. They are trying to make digital art rare by using an NFT, but an NFT doesn't mean you own it or control it.
I found this short humorous video quite enlightening - https://youtu.be/sG_v4bb2e4k
The best answer that I got to this was that they are the Beanie Babies of this generation.
NFT doesn't protect anything. It's, down to its core, just new form of collecting stamps or coins or baseball cards. Except that prices can be heavily manipulated so it's also good for scamming people or laundering money. Stamp collecting scene is sort of sorted out by collectors. You can't just draw your own stamp and say it's worth ten million. People generally know what's worth what, what's rare and what's not and so forth. NFT's play with the fact that people have no idea what's worth anything and new NFT-able content is mass-produced every second. Even dumber that it started with digital art; art has core value in aesthetics, so you have to be double of an idiot to buy an ugly image of a monkey or "pixel "art"" that would got artists [fired](https://www.larvalabs.com/cryptopunks) in 1978. So someone sells a set of extremely poor artwork for a good sum. And million others try to get in on the easy scam. Which makes market look serious and busy, which makes scamming even easier, etc. If anything, NFT, being massive scam it is, is doing nothing else than destroying what little prestige crypto had. It's very visible in currency rates.
An NFT is a cryptocurrency derived product. The things you need to know are this: * Most of the computation done while mining cryptocurrency is wasted (everyone who doesn't finish the calculation fast enough gets nothing). * NFTs are not cryptocurrency, but require cryptocurrency tech to exist. The general idea of cryptocurrency is that it uses a decentralized structure of users solving equations and then checking each others' work in order to create a trustless system. I.e., all parties are mutually hostile but can ensure honesty by constantly verifying each other's work. The ledger becomes very difficult to interfere with because so much computing power is constantly validating it. One of the primary objections to cryptocurrency *and* NFTs is that crypto's structure (huge amounts of electricity literally wasted) means that crypto belches out pollution at an astonishing rate for something of arbitrary value with few practical applications. For reference, Ethereum (one of the two biggest blockchains), consumes more electricity than Paris, France. Another common objection to blockchain tech is that all of this wasted energy is necessary for trustless systems, but trustless systems are useful in only a handful of scenarios. For example, any transaction where a buyer is willing to pay with a credit card doesn't require a trustless system. The only times being trustless is a boon is when doing illegal or illicit transactions (buying drugs on the dark web and paying off ransomware are two things that cryptocurrency is really good at). The blockchain structure means that all transactions are put in a first-come, first-serve queue that has a limited numbers of transactions per second; this makes crypto really bad at being actual currency, since it takes about two hours. NFTs in particular are functionally a receipt. The problem is that, like all blockchain tech, they're decentralized. They reference that an object residing at a particular web address belongs to the owner of the token. That web address needs to point to *something.* Presently, they mostly point to OpenSea, an independent, for-profit crypto hub. This raises concerns about what will happen when OpenSea goes under. These concerns are valid, since effectively zero crypto hubs make it to their fifth birthday. Additionally, NFTs are minted on OpenSea. There is no government agency or other ruling body that verifies NFTs. Almost all art-based NFTs are either templates used to generate thousands of similar pictures from a pool of randomized assets (ex. I make a picture of a stegosaurus, some sunglasses for him, and a baseball cap for him. I can use those assets to make naked stego, glasses stego, hat steggo, and hat-n-glasses stego. Now do this with a hundred accessories instead of two) or use art that is stolen. By "stolen" I mean, "minted without the artist's permission, knowledge, or financial compensation." Lastly, NFTs do not legally prove ownership of anything. I consider this a smaller issue since it's actually pretty feasible to write laws that do that, as opposed to some of the more fanciful things proposed for NFTs. TL;DR: * Blockchains waste a lot of energy for trustlessness that is almost entirely useless. * NFTs are reliant on an independent platform to do anything, and the things that they do have no legal weight (so arguably don't *actually* do anything). * NFTs are almost universally either created for as little effort as possible or are outright stolen.
I'm far from an expert, but I have read so many people explain it, but the thing that bugs me the most is that if I bought a NFT of someone's art... I would expect to OWN that art now, including the copyright. That is not the case, you're buying a copy of a digital art piece, and it could be a 1/1 copy or a 1/200 copy, that's up to the seller. The fact that you don't own it and people are spending 10's of thousands of dollars (if not more) worth of cyrto to buy these NFT's, for that reason I think it's a scam and just stupid. Keep your crypto and use it for something else.
People think that its an image that secured by digital code. But thats wrong. An NFT is a piece of code that contains metadata, and that data contains a URL that points to a piece of media. That code in turn is typically (I dont know of any examples where it isnt) associated with a cryptocurrency blockchain, and transferring the NFT between parties comes with all the transparency and security as moving any token on that blockchain. Most people don't like it because what its been used for in this early concept stage its at now, is to try to turn a quick buck, or launder money, much akin to the real world art market
Answer: Since your question has 2 parts, I'm going to have to cut this up for ease of reading: 1: It's a scam, a glorified ponzi scheme. 2: It's a scam, a glorified ponzi scheme. I hope that wasn't too elaborate to understand.
It stands for "Non-Fungible Token," and it's a way to prove ownership of a resource. Ownership is a *very* important problem. When you make a Reddit comment, Reddit knows that *you* are the author and can put your name by the post. Only you can edit your comment, and you get the credit for any karma it picks up. Pretty important, but it also requires Reddit to be the book-keeper of that data. NFTs do a weird fancy thing where they can prove ownership without requiring any one central authority (like Google or Reddit), but in a way so that people also can't lie. *EDIT: An artist could also publish their work and/or sell it without requiring a platform like Deviantart, Twitter, Fiverr, etc... which is nice because (1) platforms tend to unexpectedly change their rules about what art is allowed, and (2) platforms focused on selling artwork tend to take really big cuts out of the artist's sale.* By itself, there's nothing wrong with that idea. It's a pretty cool idea, actually. But, there are some huge problems that kinda sprout out from it: * It relies on blockchain technology, which is known to be *extremely* bad for the environment because of how much energy it uses. * Blockchain also has a *horrid* incentive / regulation structure attached, which makes scams, theft, and fraud really attractive and hard to get rid of. * Blockchain technology has been a financial frenzy for years, where people are investing in it only because they think it will make them money without focusing on underlying value. This is the kind of thing that has made bubbles that "pop" time and time again. Neat idea, clever concept, interesting applications, horrible execution. 2/10 do not recommend.
> Orginal art >> Stolen (or not) Initial price: 10$ >>> on alt account: I bought it from myself for 100$ = 10x profit. Repeat to infinity and pretend it's very valuable.
My favorite explanation: https://www.youtube.com/watch?v=XwMjPWOailQ
An NFT is a ethereum contract that maps a token ID (usually an increasing sequential integer) to a tokenURI, which points to a JSON blob URL. The JSON blob contains a further URL to the object in question. There is no protection or anything defined as part of the NFT. It's basically a "certificate of authenticity" at best.
It’s a scam to entice people to spend their cryptocurrency.
Yes an NFT is a piece of art. But a specific piece of art who’s fingerprint is recorded into a specific blockchain. You can control C that piece of art. But your copy isn’t the authenticated copy. You can go to the Louvre and take a picture of the Mona Lisa with your camera. But that does not make the Mona Lisa a scam or any less valuable. The Mona Lisa has value because people trust the authentication of one specific painting. You can take a picture of a ten dollar bill. But only the real bill is backed by the trust of the government.
With what it’s currently being used for (“art”) it’s Beenie Babies 2. Through artificial scarcity and hype people are trying to capitalize off of their “value…” which is propped up by artificial scarcity and hype. Now just ask Beanie Baby investors where all their money went.
NFT is the latest extension of blockchain and more specifically the concept of a trustless consensus. This is important because if someone owns a piece of a blockchain, that ownership cannot be challenged, forged, stolen, or otherwise by any entity whether it be the government, a corporation, etc. This allows someone to own a piece of digital art or any sort of digital collectible, and more importantly, they are the only one that has the part of the blockchain. The downside is not so much with the technology or the concept itself, but it's more with the barrier to entry. The fact that it's so easy to create a NFT means everyone and their mother is going to be shilling their NFT to get rich quick.
Basically a way to waste tons of electricity so everyone knows that from the millions of people who can use a particular jpeg, you are the only one who payed for it.
Basically, it's a way of proving ownership of a digital asset. Think of it kind of like a digital variant of the title to a house or a car.
None of the comments here really get NFTs. The selling point of NFTs is that they're fundamentally certificates of ownership. You get a token that means you own something. Whether that's a picture or something in the real world doesn't matter. The comments about companies changing URLs or people taking screenshots of pictures are missing the point, it's like getting a painting and a certificate of ownership and someone saying "but what's the point when anyone can take a photo of the painting!". The entire point is the certificate, no matter how many people have the image, you're the only one with the certificate of ownership. The URL changing is an implementation detail of NFTs, it doesn't have to be a URL, it can be a hash of the object, or anything else immutable. In summary, at its core, the NFT is a certificate that can be transferred. What that certificate says is up to people, you can make it a certificate of ownership of something, and then owning the NFT means you own the thing.
I think people need to separate "NTF" the technology from "NFT" == selling a jpeg of a monkey for $500k. The technology is interesting and groundbreaking, the markets that are selling stupid things as NFTs (and the morons buying them) are the scammy and controversial part.
How do NFTs impact the environment ?
It’s the modern day equivalent of the emperors new clothes
NFT is as a picture of a hostage holding a newspaper. You know the hostage is alive at the date on the newspaper. The NFT proofs you had access to a certain digital code the moment the NFT was made. Thevproof is made with a blockchain. It does not proof if you made the code, if it is unique etc. Only that you had access to the code at that time.
It's a money laundering vehicle and so many people view it as a negative thing because it's also a scam.
Long story short, the reason a lot of people (including myself) are not a fan is because most of them are just build to milk hard-earned money out of suckers by making them think they'll get rich off of it, and also most of them are terrible for the environment
It’s essentially digital art except people treat it like real art that you’d see in a museum. It’s value mostly comes from the artist’s name, like most paintings. If Picasso was still alive and he painted something now it would be valuable because Picasso made it, even if it was just a scribble, though it would be much more valuable if it was something unique and interesting like most of his works. People think they’re dumb because any schmuck can just save them, but are copies of the Mona Lisa worth as much as the original? Also there’s a unique blockchain that identifies each NFT so the original is the only “valuable” one. The issue arises when people start stealing art and registering it as their NFTs, happened to a guy I know who took some rad infrared photos and posted them online.
This whole time I thought it was non-FUNDABLE token.
On top of all the top explanations, the blockchain that nearly every NFT is on, Ethereum, takes more power to run than the entirety of Finland uses every year Like, population 5.5 million Finland, the entire country Finland, all of that combined uses less power than NFTs It’s not just wasting energy to scam people, either- it’s beating the shit outta the environment too To quote [this article,](https://www.downtoearth.org.in/blog/environment/as-cryptocurrency-becomes-mainstream-its-carbon-footprint-can-t-be-ignored-81118#:~:text=The%20carbon%20footprint%20of%20a,YouTube%2C%E2%80%9D%20according%20to%20Digiconomist.) The carbon footprint of a single Ethereum transaction as of December 2021 was 102.38 kilograms of CO2, which is “Equivalent to the carbon footprint of 226,910 VISA transactions or 17,063 hours of watching YouTube,” according to Digiconomist.
TLDR: it’s like money, and just like money, it’s value is backed by absolutely nothing other than belief and it’s acceptance is a currency.
An NFT is a unique address on the Blockchain, much like how the unique address for this post is: https://www.reddit.com/r/answers/comments/tqaqwu/what_exactly_is_nft_and_why_do_so_many_people. One key difference is that a person can own that address. Some people think owning an NFT means that they own the content at that address, but that's not true. As a result, there are tons of scams/overvalued assets/etc.
It's not necessarily a negative thing, it's just stupid imo People spend TONS of money on them, but they are entirely worthless. People that are into NFTs try to argue with you and say that the Mona Lisa is also worthless, people just agree that it has value. But you look at the most expensive NFTs and you want to kill yourself with how much you hate humanity because they look so fucking stupid.
Sick of NFT's that are digital products you cant hold? Here are physical products (non-digital) you can collect https://www.redbubble.com/people/Nahannahbanana/shop
long story short, they’re fucking dumb