Here's Devin's video from LegalEagle: ua-cam.com/video/C6aeL83z_9Y/v-deo.html Here's 3Blue1Brown's video explaining cryptocurrency: ua-cam.com/video/bBC-nXj3Ng4/v-deo.html Here's Line Goes Up by Folding Ideas: ua-cam.com/video/YQ_xWvX1n9g/v-deo.html Here's Benji The Bear: www.benjithebear.com You can also discuss this video on REDDIT: stvmld.com/5un7d-vh The sponsor is Brilliant: Get started for free here: brilliant.org/stevemould. The first 200 people get 20% off Brilliant's annual premium subscription.
Thank you. This is probably the only video that properly explains what NFTs are without shilling anything or without nonsensical arguments. The only thing that you ignored is the energy-wasting issue of the blockchain.
25:06 Just one thing to note, there are other ways to support artists you like buying full resolution files of their work, becoming a patron, buying prints or merchandise and paying for commissions (which is when the artist creates an original piece at your request).
That brought me to a question that was never answered by anyone that i asked : where is the value for the artist or the customer if there's a third party involved in the transaction ? Not at all comparing with an authentication expert or a Reseller type of thing no, literally someone taking money from both part just to print the recipe, where is the added value compared to a comission (wich will always be my way to go, if possible in cash) ?
Overhyped might be a kinder way of putting it. They might possibly have niche uses, but at the moment they are just being used in pyramid schemes because they are the current trendy buzzword.
This is correct. Fundamentally it makes no sense outside of very specific cases and definitely not always a good thing in the consumer space. To be exact the argument is that NFT collectibles are stupid, and just speculative things. NFTs by themselves when actually given a real purpose (a core replacement for database identity entries due to the immutable nature), have specific legitimate uses that help protect the integrity of an information system. NFTs should never have been used to overhype collectibles at all.
Looks like a lot of people still didn't get the point... Go back to 07:11 where Steve gives an example of NFTs as tickets for an event, you could even use NFTs to substitute real estate registration offices
@@israelRaizer why would you though when there are cheaper / easier / more environmentally friendly alternatives that already exist? What extra benefit does it really give you?
I would have liked to see the apparent paradox regarding centralisation be discussed in the video. What I'm talking about is the fact that blockchain is inherently supposed to be a decentralised/trustless technology, but the way blockchain is actually used (at least for NFT’s), it has become centralised and does rely on trust. What if the images are taken down? The NFT doesn't mean as much now. What if OpenSea goes down? That's going to make a lot of apps stop working. Most people won't be interacting with the blockchain directly, just as people don't host their own websites on their own servers - they rely on companies to do the hard work for them. This might be more of a problem with “Web3” than NFT’s specifically, but I still think the argument stands.
I think, there is always so much hype around new technologies, that people forget KISS (Keep It Simple Stupid), you shouldn't use more complicated technologies, if you don't need to.
another big issue in this area is forks in the transaction history. already with ethereum and bitcoin there are major forks based on disputed transactions, and of course the forks with the higher value crypto are the forks that the rich people agreed with. so there is already a central authority with the ability to control the foundational aspect of a cryptocurrency, and they are accountable to no one essentially.
Websites are just good looking front ends interacting with smart contracts, everything you can do on OpenSea you can do directly through their smart contracts as displayed when Steve used etherscan. You're always interacting directly with the blockchain, opensea just makes the user experience better. (which means that even if openseas servers crashed for good no apps would ever break because of it)
I would only ever publish NFTs like this on a permanent and immutable storage system like arDrive. Using standard URLs or even IPFS is liable to just vanish at some point when people stop paying for storage or pinning
The best description for NFT is buying a voided copy of someone else's grocery receipt. Your receipt says "milk", but you can't exchange it for milk or use it to get milk or claim that it IS milk, you just have a piece of paper that says "milk".
But carrying that example a bit further suppose there exists a matter duplicator that can create an exact duplicate of the milk just by using the transaction number on the receipt. The only thing you don't get from the duplicate is bragging rights for having the original. Without the matter duplicator (i.e., NFT), only the original purchaser can drink the milk. With digital art NFTs the matter duplicator is a simple file copy command. Was bragging rights worth $69 million? Apparently not as last I heard it has already lost 90% of its cost.
It isn't a voided receipt, it's the same receipt. If the grocery shop were to accept that receipt and give you a carton of milk every time you presented it, then it would have some value. Obviously no sane person is going to do that with real cartons of milk... but in the digital world, creating a copy has no cost, so someone could accept that receipt everytime, to, for example, show a photo of a carton of milk next to your name. Or some avatar image, or a hat in a game, or anything else that they have control over, and you can only access by showing that receipt. Then it's not just a voided receipt for a photo, but an actual ticket for the use of that photo on someone's service, and that can have actual value. It all depends on who is going to accept that ticket for what.
The explanation of NFTs I came up with is: Person is standing at a table, on the table are a few polaroid photos. Each photo is set inside a shoebox with no lid. "Hi, would you like to buy an NFT of this polaroid photo of Picasso's The Charnel House?" "Oh, okay. So I now own The Charnel House?" "No." "Okay, so I own the polaroid photo?" "No." "What will I own?" "You'll own a post-it note that says that _this_ shoebox is your shoebox. The shoebox will stay on this table forever. Inside this shoebox is a polaroid photo of The Charnel House." "Uh, okay. So I can take the shoebox with me?" "No, it stays here, but you can come look at it any time." "Hrm, well, I can put a lid on the shoebox, and you'll only take the lid off when I show you this post-it note, then, right?" "No, the shoebox lid is always open." "So anyone could come by and take a photo of the polaroid in the shoebox with their cameraphone?" "Yes, but they aren't supposed to do that." "Now, wait a minute, I just realized, you said only that the _shoebox_ is my shoebox. What about the polaroid photo of The Charnel House inside?" "Oh, the photo is managed by Sam over there. Sam says the polaroid won't be moved, but you just have to take Sam's word for it." "So Sam could remove the Mona Lisa polaroid and just leave nothing in the shoebox? Or replace it with a polaroid of a pile of dog poop?" "I mean, technically, yeah. But Sam said they'll leave The Charnel House polaroid there. And your post it note says that the shoebox is yours!" "But I can choose to publicly display this polaroid of The Charnel House. should I choose, right? Or sell T-shirts with a photo of the polaroid on it?" "No, The Charnel House is still under copyright, you'd need to get permission from the Picasso estate to display or sell merchandise with it on it." "But this is the only shoebox with this polaroid in it, right?" "No, I'm pretty sure Bob over there has another shoebox with a polaroid of The Charnel House in it."
Well, you got some of the most important points wrong: the polaroid of The Charnel House can't be in two shoeboxes if the NFT is ERC721 (that means the token has only 1 copy). There is an another standard called ERC1155 - Multi Token standard, but that's not an NFT by definition. The second thing you got wrong is that someone can change the contents of the shoebox. The IPFS network generates a *uniqe* hash for each file it has. When you upload something to the IPFS network, it gives you a hash. If you put something else on the network, the hash would be different. So, the NFT refers to specific hash on the IPFS, contents of which can't be deleted or modified. If there's a polaroid of The Charnel House in the shoebox, that polaroid will stay there until the end of times (okay, not the end of times, rather the end of Internet)
For a system built around not needing trust, an awful lot of trust seems to be involved. Trusting marketplaces, trusting that content related to an NFT will be ported to future platforms, trust that the one minting the NFT is the one deserving credit for whatever their NFT links to... They might as well use centralized systems instead of trust; way less inefficient.
folding ideas actually talked about that in his video, too. there's nothing guaranteeing that the link that is associated with the NFT will still point to a copy of the artwork originally associated with it. someone nefarious, or a webhosting company going bankrupt or even just a bug, or whatever else may happen, could all render that nft useless in regards to authentification of art pieces. As steve said, the art piece itself isnt directly hosted on the blockchain, only linked by proxy, and there are tons of ways that link could be broken.
@@philcorrigan5641 What these people are against is central authorities having a lot of power. Cops are not a central authority but a human. The question is how independent they think. If they just follow orders and a central authority can order whatever they want bad things happen.
@@rfldss89 Actually, with IPFS there _is_ such a guarantee -- the numbers and letters in the URL are a hash of the file, so you can load that with IPFS and verify that the hash matches the file content, and you'll know you still have the original file, without needing to trust anyone. Additionally, it's hard to delete items from IPFS, and it's not hosted centrally so there's no one to go bankrupt. Everyone collectively hosting an IPFS node would need to go bankrupt, and that's just exceedingly unlikely.
You can tell that a lot of research went into this video. This is one of the best explanations of what NFTs are, what is a blockchain, and how smart contracts work. Great job.
This may be an impressively stupid question, but here it goes: if the blockchain ledger keeps a record of every transaction, doesn't it eventually get too big and unwieldy?
From some quick googling, the Bitcoin Blockchain was 253gb total in April of 2020 and was created in 2009. There are ways to keep the full set of info of where everything is that were 5gbs in April of 2020. The Ethereum blockchain appears to have been designed to avoid size problems by having something called "sharding"
Yes. That's one of the technical problems that makes popular chains slow and expensive to use. Enthusiasts insist that the problem could theoretically be (partially) fixed, but the people with the power to actually fix it don't want to because they make more money this way.
One aspect you didn't cover, which I find particularly concerning, is that you are given no control/access to where that URL points. You may buy an NFT that points to an image on geocities, but if the owner of that server deletes the image/gets hacked/or stops paying their bills, your link will point to a 404 page, or worse. It feels more like buying a receipt to me. That receipt will have the address of the shop on it, but the shop can up and move. If the jpeg was actually on the blockchain, that would be different. Sure that would be more expensive, but at least there's something to it then other than a hope and a promise. Your initial idea of selling tickets with escrow contracts is the best actual use for blockchain tech that I've ever heard of, so I doubt we'll ever see it in action :/ I'm still firmly in the "NFTs aren't just stupid, but also irresponsible, and more often than not, a scam." camp.
I own nfts, and an NFT literally has an image attached through the blockchain. You don't have to worry about it pointing to a website. the entire image is on the blockchain. it is near impossible to screw with an nft as well, you will need to change the update authority, which only the creator of the nft has access to. As long as the update authority is intact it can't be changed, so the image will be forever the same even if the creator were to leave or abandon, you still have the nft. My projects I buy are well developed and doxed (give out their real identification), you don't have to worry about the owner changing the nft or the owner leaving the project, because they're gonna be caught with fraud if they give out their identity then go and steal money from people who buy your nft. Now I'm gonna say this also, that if someone doesn't tell you who they are, why would you even interact in their script even if it looks good and give them money in exchange for the nft. I see nfts could become big as a ticket system, authentication system, and reservation system. I also see it good for sports events, gambling, and lifestyle/merch. I'm sorry if my comment is long and confusing, that's usually how mine are, I buy nfts because they may go somewhere they may not but it's definitely a technology thats overlooked and laughed at that definitely can do some good if it gets more development and research.
In the case when the URL is an IPFS address then it can't be forged, since IPFS addresses are cryptographic hashes. The file can still be lost to time of course, but inauthentic files can't take its place without being obvious forgeries.
Expanding on the existing answer about IPFS links not being forgable, you can also host that IPFS file yourself, so you don't rely on others and others can always access it via you
The issue with the trading card analogy is that the link on the NFT can be broken at any time for any number of reasons. Yes, your line in the ledger still exists, but the content it was pointing to isn't guaranteed to last. If I buy a trading card, there isn't any risk of me pulling it out some day and having the artwork on it suddenly change to "404 not found".
It's worth recognising that storing on-chain is a technology which is emerging, and is compatible with a variety of blockchains. The situation with links now only really exists because people are really impatient and wanted to start working with the technology before it was even ready.
And as a side note, NFTs usedfor non-art like access passes and such, will 'work forever' already, as they store their information on chain inside the token metadata, regardless of the functionality of a link. But in this case it's besides the point really as that token will probably outlast it's usecase and everything else
I don’t understand why they don’t put a digital signature of the jpg on the blockchain (to be fair, for all I know maybe they do now). Then you can put the jpg anywhere, and the signature can be used to verify it’s the jpg referenced on the nft. It makes me wonder if crypto people understand crypto.
@@joeshmoe4207 It may be obvious, but I feel it's worth pointing out that the image itself cannot be reconstructed from the hash. It really is just a signature, the image is way too big to store on the blockchain. If the image URL goes away, the hash won't help.
The comparison to trading cards is a interesting. Its true that some products do have long lasting collectible value and NFTs are in theory no different. But those collectibles first began as products people simply wanted to own, not in the hope of selling to someone else. Trading cards in the 90s had a boom driven entirely by speculation, comic books had a similar phenomenon at the same time. In both cases the market came to be dominated by people buying in the expectation of profiting by selling it later to another buyer. Both markets collapsed after a few years and settled back down to markets of consumers buying the product because they actually want it, with a smaller secondary market of trading. That's the issue with NFTs, how many people actually want an AI clipart image of a monkey, and if they do is it actually worth $500,000 to them? Or is it bought just for speculation? I mean, we all know its the latter, and then how can anyone expect that speculation to carry on forever, with the price always going up?
The comparsions to trading cards is bullshit. Its the description of a training card, but the real card is stored in a safe thats not under your control
@@starflow90210u can print the card urself but experts would be able to tell it's not original or issued from the company source same why u can do it nft.
NFTs are a solution looking for a problem. Every NFT implementation I've seen so far has been either stupid or a scam. Can they potentially be used for something good? maybe, but usually there's a non NFT alternative already working there where the NFT is completely superfluous. Can NFTs replace microtransactions? Sure, but its just moving the database to a blockchain instead of the developer's database. Can they become tickets? sure but you still have to trust the issuer that the event exists and you will be let in. Can NFTs be used in smartcontracts? sure, but if you have an issue you can't appeal to anyone except a court and that's essentially the same as regular contracts. It's all crypto bros looking for the next big crypto bucks, so they invent solutions to problems that dont' exist.
It's also worth noting that it's a 12 year old solution looking for a problem. The technology is clunky and slow, and gets slower the more you use it. Almost all block chain activity actually ends up being done by seperate brokers that don't use block chain because it's THAT BAD for actually using.
> Sure, but it's just moving the database to a blockchain instead of the developers database. Exactly, thank you, let's all agree to stop there and move on and let people decide where they want to store their own stuff and what they think is more reliable 🤷
I think the issue is that the systems that already 'work' don't work everywhere, they just work in the West so we've decided that crypto tech is unnecessary - we're able to have greater trust in institutions/government than much of the rest of the world, but being able to change who you have to trust, or to eliminate the need for trust in certain parts of a transaction is beneficial in those parts of the world where the idea of trusting the government is a joke. The only project I've seen so far that uses NFTs, that can't be done using traditional finance routes, is called Empowa. They're building affordable green housing in Mozambique. I can't speak for them as I don't work for them, but they claim that NFTs have basically greased the wheels of their business and allowed it to function in a way that traditional Mozambican finance couldn't have allowed.
I think that the eventual use of NFTs will be boring and trivial. The practical part of NFTs are not in investments or getting rich but more in their core use of verifying the uniqueness of a record. One solution that comes to mind is in replacing Notaries. There are many important documents that I have to take to a special person so that they can stamp it, in order for the person that receives it to be assured that this document is authentic. It could be something like a deed, or contract, or birth certificate, but before I can use this or send it in. I need to drive to a person and pay them so that they can authenticate this document. If this document was issued on a government blockchain as a non fungible token, it would completely remove the need for each copy of this document to be stamped. The blockchain would verify that this document is unique, authentic, issued by the correct authority and assigned to me and only me. Imagine a situation where we as a society don't have to worry about forged documents any more. Changing a single character on a document would not work since the block chain would prevent such a situation from being verified. Of course there are other possible issues with how practical something like this might be at scale, and the logistics of a country or government having a blockchain and the issues between local and state government having different blockchains, etc. My overall point is that there are some valid use cases and they might not be exciting or even tied in with monetary value like they are currently. Last time I used a notary, me and another person had to sign a document. I needed to coordinate with this other person that lives across the city to meet at a specific location so that a third person with a stamp could be present to verify the we were who we claimed to be and witness us sign the document in front of them. With a digital and secure version of this, like and NFT, me and this other person could use our mobile phones to do the same and only pay a few cents. I could have saved a whole morning and the notary fee and done the same while sitting on the toilet.
As a programmer, when I saw smart contracts for the first time, I said "Oh... God. What have we done?" Do you know how easy it would be for someone to maliciously OR unintentionally create a smart contract that doesn't do what it looks like it does? A simple overlooked bug could wipe away millions, billions, or trillions of dollars in under a second. Whether you think NFTs are stupid or not, they ARE NOT a safe place to hold your money.
This is my exact problem with NFTs. Its like you put a one of a kind painting from a famous artist on your front porch. Its gonna get stolen. Whats more is they make it so that NFTs are impossible to edit. So if someone hacks into it once, nobody can fix it. So its like that painting gets stolen, you contact the police and they say the person definitely owned that painting before selling it, and there's nothing they can do.
According to Folding ideas / Dan Olsen (and the news) this does, in fact, happen. Quite often. He said something like: each smart contract bug effectively comes with a built-in bug bounty that goes to the first person who finds and figures out how to exploit the bug.
I find it funny that the popularity of Nfts and the dunning kruger effect are basically the same line. Those who think they know everything love nfts since they can't see anything going wrong. Those who actually know that "they don't know everything" dispise nfts since they know enough to see how everything will go wrong.
There are people researching this using formal methods and dependently types languages to embed proofs in smart contracts. This means you can prove that if your code type checks then it does what you want it to do. It unfortunately has the problem of making the smart contracts much more complicated and thus harder for non-super technical people to read.
So the fact that the NFT's we hear about are some sort of artwork means nothing. The NFT can point to anything, even nothing at all. This 'pointer-to-nothing' can then be sold and bought, for whichever amount of money (real or imaginary). So all those schemes for laundering money by pretending to sell something for some money and pretending to buy it back for a different amount have suddenly got legit?
It's finance economy going hyperbolic. We already have houses, products, the future existence of a product, the right to buying the future existence of a product... etc. being bought and sold simply to be resold again and again for profit, so going from there to the ultimate level of abstraction, buying and selling literal nothingness, while still another step, doesn't sound too removed from the rest of the financial sysyem and just worrks to show, in my opinion, how ludicrous this has all become
This was well presented. It's funny that everyone uses tickets sales for an event as the one example of NFTs being useful. Indeed, they don't HAVE to be stupid. They could be the unforgeable third-party verification mechanism we need for some things. For digital art, however it's flatly ridiculous. You're buying nothing, you own nothing, except for the ability to pass the hot potato off to someone more stupid than yourself.
Unfortunately, NFTS can't be useful for anything but scamming. If you wanted to use NFTs for normal everyday commerce this would fail for two unavoidable reasons. First, In order to buy them, you need to buy into the wildly volatile ethereum market, which is by design far too volatile for normal everyday commerce. Second, the physical resources required for the transactions to enter onto the register are both far too slow and far too expensive for normal commerce items. This means they cannot be used for normal things like "buying a coffee" or "buying a ticket" because the transaction can take minutes or poentially hours under strong contention, which is too long for most commerce tasks. It also means that the act of buying itself costs more than any small value item. It also means that the resources of the market are potentially exhaustable by normal market forces or bad actors, so buying and selling becomes an unreliable act.
@@jsrodman Excellent points - with all that, I don't see it mainstreaming. Unless you had a "stablecoin" but the attempts at that I'm aware of have failed, too. It's seeming more and more like a "solution" in search of a problem Or a technology in search of a useful application
@@jdraven0890 the point isn't to work for any practical use, but just to provide a vector for crypto bros to cash out. It was always a scam, as is the larger crypto scam it supports
@@jsrodman it's certainly seeming like that. A few earnest ppl are struggling to figure out a legitimate use, while the vast majority are promoting it on the basis of FOMO.
@@jdraven0890 ask yourself. What is the purpose of a decentralized market? The obvious properrty is no oversight. If its not obvious that this means scams, then i don't know what to tell you. No amount of technology fetishism can wish away bad actors. This was built by bad actors.
If you want to support an artist, you can just give them the money, whether by making a commission, supporting them on Patreon/Fanbox/etc., or simply by donating to PayPal or wherever they accept donations. NFTs provide no additional benefits here.
the biggest problem with copycat nfts is that the decentralized nature of crypto chains, means you can mint these things with no personal data on the line, making it very hard for anything to be served or to be legally prosecuted. the best you can do is a takedown notice to where the image itself is hosted but if thats your own website its very hard
well see the thing is, for something to be sold, someone has to buy it - just like how we learned how to ignore spam mail, I think it makes sense if we collectively learned to ignore and not to fall for copycat scams :|
@@telotawa that's true for data, but not processes. Think of patents. Those are an intellectual property that describes how an invention is constructed. The very nature of patents is that they are publicly shared, but you have the legal right to prevent anyone else from effecting that process for commercial means.
When you brought up "You can't refuse someone sending cryptocurrency to you", I thought you'd eventually bring up the malicious smart contract NFTs that can get sent to you with no control, and if you delete them, they steal all the stuff in your wallet.
Nothing is being "sent" to you. Its like saying that Chuck E Cheese is "sending" you tokens when they put a number next to your name in their database. Its their own ledger and nothing prevents them from doing that on excel or even a napkin. What you are saying is you should be able to show up and demand they change your balance on their database. Although I agree with you that this is not explained anywhere. This ledger could have malicious code that might mislead you into believing you are "deleting" what has been "sent" to you. To finish the analogy, that Chuck E Cheese is instead a mob hangout and they rob what you brought with you
Oh that's clever. And also, who the hell allowed a system of implementation where positive confirmation of transfer out is required before taking action. Idiotic.
Actually, this has already happened. There are many people that got sent an NFT that hack their NFT artwork browser to delete or move their stuff away. Much of the time they are aware of it, but now they need to live with the known virus in their wallet and they cannot send it away because the contract that they received says so.
so 2 things 1) always check what you're interacting with before you interact with it. 2) malicious crap existing in your wallet doesn't hurt you or your wallet. It's like email; don't interact with random spam crapmail & it being sent to you (which you also can't refuse unless you know the email first & then block it which doesn't prevent them from creating more spam accounts) doesn't hurt you or your email.
They aren’t “stored” in your wallet, your wallet address is stored in those contracts as an owner. It’s the wallet frontend (M****ask , etc) fault for showing you those sus contracts have your wallet in it it. Op***ea already does this and won’t show you sus contracts that day you’re an owner
I wish you had been a professor at my uni! You have a beautifully concise, easily understood explanation for the topics you discuss. Thank you for the education sir!
Given how big the current market is for autographs and collectibles, I'm pretty sure this is mostly a bubble. Some will survive, but people will want physical objects and stuff that actually feels nice to "own" rather than something they think someone else will buy thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else
on the contrary, for the very reason you gave, the shear size of the collectables market, NFT collectables will retain a market among people who find fulfillment in collecting NFTs. just as they do staps, coins, or unusually shaped chips. ther eis no accounting for taste, and soemone somewhere will find value in owning nearly anything. the really interesting application is in things like digital assets, game components and stuff. i deal with a lot of on choin games that use NFTs as a stand in for cards for variosonline card like playing games. things like fortnight skins could be NFTs as easily as anything else. but even more useful is to start using NFTs as steve envisioned, as access tokens for any number of things, concert tickets, gym memberships, security passes. the list is litteraly endless. NFT artwork is just the first wisespread usecase. as people get past the novelty of the idea and it gains traction i expect the market to crash (its certainally a bubble) but it will always retain some value, likley a lot, but NFT use cases will explode.
Solid idea.. its just i only see people selling stupid images they call "art".. which lack the value of the art itself (just like how stupid modern art is)
@@jondepinet The problem is, using NFTs as access tokens is about equally dumb because we could do that that way easier and way more secure by just storing a list of who has access to something on some sort of central server. As we've seen these last few days, the blockchain is very easy to exploit if you can find a way to give yourself a supermajority. I guess that's not so much a problem as a feature. The same thing as why we're all shipping food grown next to us abroad even though we're eating some other country's version of it. someone makes money off of the convolution.
I'm still convinced NFT art is a scam that buyers are hoping the majority of people agree that their NFT art has the outrageous value they bought the NFT for lol Like normal insanely expensive artwork...it is reserved for the ultra rich and wealthy to help transfer wealth, store large sums of money, diversify, or tax reasons. Physical art is much harder to copy though.
That's not that different as stock market. The point is that exchanging NFTs is not to be confused as exchanging ownership of the art (you only buy or sell something related to a piece of art, and though the art is not original, the NFT is). Where NFTs are stupid is exactly the same reasons why stock market is stupid and may collapse, with the main difference being that stock market directly relates to production and follows outside rules, where NFTs are self-dependant and only work if people think it does.
Tax reasons, mostly. Just like "NFT art" is entierly for tax reasons and money laundering. NFTs are the scam everyone was worried cryptocoins were going to be.
Right now it's completely stupid. Rampant speculation, people hopping on "NFT mints" as soon as they come out just to flip them like hot potatoes. Just go on Twitter or some NFT site and look at the "art", it's all cookie cutter stuff... Countless Monkeys, countless animal caricatures, countless pixel art, and combinations of all 3. None of this stuff will be wanted in a few years time, and they're all being bought up like they will be. $2000 or more equivalent for an 8 bit penguin with sunglasses or a cat with a hoodie? Really? Yes... but it's not going to last....
A big difference is that stocks are a digital token in a way, BACKED by a PHYSICAL asset...the company. NFT art, on the other hand, I can copy/paste/save for my personal use and viewing, or even making additional copies to distribute/sell illegally.
I can't believe that that expensive NFT points to some fricking ipfs gateway (that might shut down at any point) instead of the actual ipfs path. FFS how rotten can this nonsense even get!?
I agree somewhat, but it looked the ipfs URL was mentioned within the HTTPS URL - so if the HTTPS server is down you could re-interpret it as pointer to the IPFS url that uses some idosyncratic syntax that might require custom parsing.
@@MegaNardman I guess his argument was that the gateway URL still contains the real Hash that is used on the IPFS network, so one could just interpret that dead URL in a different way and it would still work.
I'm a musician and NFTs were made of my music without my permission by somebody I don't know, for sale on the internet. It was a very stressful experience to get them taken down. If you're gonna buy an NFT - which I do not and will never support - make sure it was minted by the person whose art it is. Also though, f*** NFTs and what they do to the environment
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You experienced one of the main, most criticized problems with the very idea of NFTs: near impossible to tell if it's legit. All the cryptography can't do it.
On your last point, yes, absolutely. We already waste of a lot of energy on Visa, Chase, Mastercard, and all the other credit card providers. Building a system that requires the waste of a lot of energy on computing power is not inherently better (although, now I really want to know what the comparison would be). On the first part, that really sucks and until marketplaces build in protections against that sort of theft they are going to generate a lot of well-deserved hate.
@@x--. The problem with coming up a way to verify the legitimacy of people minting NFTs is that it is *literally impossible* to do without trusting a source outside of the blockchain, which completely defeats the whole point of using a blockchain (which is specifically to be self contained and to not trust *anything* outside of it). Effectively the best that could be done is to make an outside server with a database and link to it from the blockchain, which is essentially pointless
@@x--. Before credit cards, how exactly do you think money was moved around? The cost of printing physical money, along with transportation and guarding it, greatly exceeds the cost of moving it digitally.
Nice intro to NFTs. It left me with the question - what happens if the artist forgets to pay the hosting fee to the site with the picture and the page with the art quits displaying?
Pretty much, yes. However, most NFTs are hosted on the IPFS, which works as a P2P hosting, so as long as "someone" is hosting a copy, it's still available for everyone. Right now, there are some large interests behind offering free "backup" space for NFTs on IPFS, but it would be wisest for anyone buying an NFT to also keep a copy of it, and of the target image or whatever asset, on their own IPFS client, or to pay for some redundant IPFS hosting. Something that anyone can do, but it would be mostly in the NFT's owner's interest to also do themselves.
I was arguing with my friends for a long time that NFTs is the dumbest idea I've known that people believe in. Now that I know this video exists, I'll just point them here.
the technology itself is not dumb, its interesting, and may have some potential uses in the future. the problem is that PEOPLE are dumb, and they like to turn everything cool into a way to make easy money. right now NFTs don't really fix any problem that makes it worth the trouble, at most it give marginal advantages in niche cases. but as long as it has such a huge carbon footprint, is EXTREMELY unsafe, and is just a tool for people to play with a unregulated speculative market, it won't be any good.
@@danilooliveira6580 Not sure about the carbon footprint remark, but otherwise completely spot on. Any new technology goes through a period of novelty, or even hyper-novelty, where we really aren't sure what the thing is or how it should be used. Electricity, automobiles, computers, nuclear fission. NFTs and block chain are no different in that it'll just take time to work out what the actual utility of it all is.
Actually the wedding ring example is very useful. You value your wedding ring more than any other ring. But to anyone else who has no emotional attachment to that ring, this is just yet another piece of metal that could eventually be melted to make a new one. What is non fungible to you is completely fungible to me. Non fungibility is highly subjective.
@@LabGecko I've watched his video. But I'm talking here about the signification of the term non fungible itself, which doesn't have any legal definition. And I agree with Legal Eagle that all the discourse about NFTs replacing legal contract is a huge bullshit. NFTs don't have any binding effect if they are not backed by an official contract that clearly defines what the NFT represents and what rights and duties are associated with the "possession" of the NFT. All the talk about blockchain technologies revolves around removing the need to trust other people. This is completely delusional. Our entire society is built on trusting millions of other people with behaving mainly in a normal way. When you're a kid you trust your parents to feed and shelter you. You trust your professors with teaching you things. You trust any food seller with not poisoning the food they sell to you. You trust the architect and builders with making a solid home. Etc. Without trust society simply doesn't exist at all.
@@christianbarnay2499 If you're saying the term "non-fungible" _in the context of blockchain NFTs_ doesn't have any legal definition, then I agree. My comment was pointing out that if you try to take any of this to court, you must necessarily use the *court's* definition of non-fungible, and that has a specific definition that Legal Eagle showed in his vid. (edited to fix malformed italics)
no, fungibility is not subjective at all. fungibility means that one item is equally tradable with any other items of the same kind and owning one is not more or less valuable that the others. example: physical currency is fungible, one dollar bill is equally tradable to another. or one quarter is equally tradable with another. and one euro coin is equally tradable with another. that is fungibility. non-fungibility means that items are not fungible. the definition is quite objective, unless i'm missing something.
I’ve been half-heartedly trying to understand NFTs for a while now, thanks Steve for making this video! Feel like I finally know enough to know I don’t need to know about it!
Don't worry mate. It'll come for you in a few years. Once the marketplaces get cleaned-up and more protections are put in place. Reputable businesses like having strong transaction ledgers, protects them and their businesses.
@@x--. Why should anyone put so much effort in protecting that stuff, if they could just digitally sign the art and sell that signatures? It would be much easier and technically give the same or even better proof. The only thing you could not do with that so easily is speculating. And that's actually what NFTs are today. Objects for speculation, because the byers don't have an interest in the artist. They speculate that some time later someone will pay them more. That's the reason they bought it in the first place. But why should someone do that? There isn't really a point in it besides supporting the artist. But the NFT doesn't really have a value. Just the hope that someone is stupid enough to pay more later.
@@Duconi First, I think you're absolutely right about the ongoing speculation. Second, did you watch the video? I think he made a pretty good argument for what the value of NFTs could be, even if it's pure speculation at the moment. Third, digital signatures grant you what I would call providence but not publicly provable ownership of the token. The "thing" preventing someone from selling the same token over and over again is that eventually they get exposed on the blockchain. Nothing like that would apply to digital signatures on an image file. I could copy that image, strip out the digital signature and there's no public record. The blockchain establishes a public provable record of the ledger, what happened. And just to be clear, I don't use any blockchains or crypto. I'm not in favor of it and even less in favor of it with the huge power consumption being expended to amass the currency these speculators want when it becomes more mainstream but I think I have a pretty good grip on the tech.
I think you should get a bit more information. This was a relatively neutral, but overall positive take on NFTs. He only mentions a lot of the negatives in passing, and misses mentioning a few negatives altogether. Id recommend looking into it a little further before you can really say you dont need to know more. Look at some extremely negative takes, look at crypto bro takes, and come to a conclusion thats somewhere in the middle.
@@Yipper64 As I'm not planning on "investing" in any of this stuff in the near future I'm busy just trying to stay afloat but I see your point. I think crypto bros are hype queens I wouldn't trust more than I could throw them. I will say most of the negative takes I've seen pretty clearly don't understand the technology, that makes it hard to listen to any of their opinion beyond some obvious criticism (environmental costs of mining). If you have links to any sophisticated critiques where the author actually understands the technology I'd be curious.
The better analogy with Patrick Stewards picture would be that he'd put a stamp on a separate piece of paper that says "I approve that Steve Mould has printed a picture of me". That's much less unique than a signature on the picture itself.
I think one key component of the, "Are NFTs stupid?" question is not just, "Is the concept of digital ownership stupid?" but, "Is the NFT implementation stupid?" Imagine if a private tech company started up specifically to manage token->owner mappings. Their mapping is publicly available, so anyone can verify that they indeed own the listed token, but it's privately managed. Wouldn't all of the benefits of NFTs still apply? How does a public, decentralized ledger truly help anyone in the long run? If DeviantArt started supporting a purchasable, publicly-posted artwork->owner mapping ledger, wouldn't that be way better than the Etherium blockchain? Like Dan Olsen said, NFTs are a problem created to justify cryptocurrencies. The concept of digital ownership isn't stupid, but, while NFTs have provided us with insight that there is a need / desire for this form of digital ownership (and I believe that insight will outlast NFTs), the implementation is so convoluted that NFTs are far from an ideal solution to the problem.
Public availability means ownership that persists. For example, a videogame publisher could grant licenses as NFTs which could then be transferrable AND could grant access to multiple platforms (e.g PC vs console) AND that license would be provably yours even if the publisher or all the original platforms went out of business. And it could be done without expensive legal agreements between different platform holders. A new platform could simply reference the Blockchain and know that a given user could be freely distributed that title due to their provable ownership.
@@joshieecs Not for something as simple as digital ownership. What benefit does decentralization offer over a centralized “ownership” authority, much less all the inefficiencies and risks created by having to work on a cryptographic blockchain? As well, I didn’t say people aren’t mocking digital ownership. I just said that the concept of digital ownership isn’t stupid, at least no more than collectables in general, like Steve said. There’s a market for anything, and that NFTs have uncovered a new market is actually impressive… even if that market could be much better serviced by something else.
@@DanKaschel The blockchain isn’t any more permanent than any other publicly-distributed read-only ledger. As opposed to requiring every ownership management authority to agree on the ownership providence, I would agree there’s value in there only being THE Etherium blockchain as THE single authority to manage ownership… except Etherium isn’t the only blockchain… it isn’t even the only Etherium blockchain. From a technical standpoint, the examples you show are still things that could better (more quickly, cheaply, easily, and safely) be managed by a central authority. The only reason they aren’t (to a certain extent, they actually are, though) is because there hasn’t been a desire for them. The examples you show are examples of NFTs being a solution looking for a problem.
Capitalism: We need scarcity to enforce class division and unequal distribution of resources Digital goods: *lack the concept of scarcity* Capitalism: Well that just won't do. I have something for this
@@saeedrazavi4428 It's not capitalism, it's consumerism. Also there is plenty of other things that can be used to enforce class division why would they need to rely on scarcity alone? Hell you only need to look at the continual class difference between the nouveau riche (who are overwhelmingly inarguably wealthier) and old money. In other words: You can't buy class.
I've seen a few explanations of NFTs that make the analogy to naming a star. You use to be able to send money to a company that would give you the right to name a star some place in the galaxy. The company would record the name, and the person that named the star in a ledger, and then send you a certificate stating that this star was named by you. Do you own the star itself? NO! You could never own a star. BUT according to this company you PAID to name that star. But some other company could have had someone else to pay for that star. But the bigger issue is this: What happens when that company shuts down? Do you still have a star you named? Not really that ledger is gone... You really haven't gained anything but a piece of paper.
This is *so* close but misses a really big point: MILLIONS of people are supporting your Star Company. They have an ongoing and strong interest in making sure the Star Company continues into the future indefinitely and that it keeps perfect records of every star ever named. That's very different than the actual star-naming companies that have no incentive to keep perfect records, to never give duplicate names and can go out of business relatively easily. If longevity matters, blockchains have an edge.
@@x--. there's one more thing he's missing with the analogy: star-naming companies never spent millions of tons of CO2 to do their shit, while we are on the edge of a Climatic Abyss
I've just watched the legal eagle video and yours, and I have to say, excellent collab. I feel like you sat down with some creators and split up the subjects, which is awesome. So much better than all those "there's another creator in my vid here". thank you and props!
A simpler way to think of an NFT is that it's a receipt. It's a fully traceable receipt, but all the receipt actually says is "I own this receipt". It might also have a picture of a cat or a link to a tweet on it, but that is basically irrelevant. BTW, I am currently selling an NFT of Steve Mould's wedding ring if anyone is interested. And an NFT of the abstract concept of stupid.
Owning an NFT is like having a receipt which says: "In you enter the Louvre, go down the stair under the pyramid, take the stairs to the second floor, take the corridor on the left, walk until the room 17B, enter the room, the fifth painting on the right wall is yours". But you cannot take your painting home, everybody can go to the Louvre to see it and take pictures of it an reproduce these pictures indefinitely
@@francescoghizzo In addition, the Louvre could decide to sell that painting, or simply put it in storage, and it would no longer be where the token says it is. Even if the Louvre sold you the NFT. In the same way, the digital artist could remove the JPG from the IPFS. This may be unethical, but I don’t think it would be illegal. (I am not a lawyer!) You still have the NFT token, but now it points to nothing. What is its value then????
instead of buying the NFT of your friend's artwork, why not just commission them or pay them directly for the art? buy a print? you can support your friend and buy art that is meaningful to you without having to "wait for nfts to become carbon neutral"
Just imagine paying your favorite comics author for the original drawing of a strip and receiving an actual piece of paper with the original drawing of that strip. What a bizarre concept! Naah, let's buy a line in a database stating that you've blown fake money to reach a public URL on the internet •_•
I have two, very similar questions/concerns: 9:27 - So a concert ticket can be lost or stolen, and an NFT cannot. But the private key can be (although it can't reasonably be counterfeited). This just seems like moving the problem one layer up. 11:05 - So you can buy an NFT with a cryptocurrency without trust, but how can you buy a cryptocurrency without trust? Again, this seems like the problem has just been moved one layer up.
actually an nft also can be stolen due to their implementation being programmable - so its possible to build malware into one that when interacted with (for example to get rid of it) will transfer things out of that wallet
I finally have a basic understanding of the whole cryptocurrency and NFT brouhaha now. Thank you so much for breaking it down so anyone can understand. Especially important for consultants such as myself when questions from clients such as this topic arise :)
Wow the whole thing is so much clearer now. Thanks Steve. As far as whether NFTs are smart or dumb, they are what they are. Something is worth what someone will pay for it. If you drop $69 million on an NFT then you had better hope that someone else is willing to pay at least that much for it if you try to sell it. If the best offer you ever get is $5 then you payed $69 million for something that's only worth 5 bucks. I'm guessing some people are buying these for tax evasion or money laundering purposes, just like they do famous art works
In fact, they function identically to "high art". Which is to say they're for money laundering. Put a bunch of money into an object, claim it has that value, then have someone else buy it. Boom. Money laundered.
And this is my personal objection to NFTs as they're currently traded; you're buying what is essentially a digital certificate of authority that ties to but grants no rights over a digital file somewhere on the Net, with the expectation that you will be able to sell it in the future to someone who will pay more to buy it from you than you spent to buy it. And _they_ would be purchasing it with the expectation that, like you, they will be able to sell it in the future at a higher price to someone else, and so on, until someone who has paid some (hopefully not exorbitant) price for that NFT discovers that there's no one willing to buy it more than a tiny fraction of what the last buyer spent, so all this achieves is a chain of shuffling money to an optimist from a bigger optimist, until it collapses under its own weight.
Once an NFT of a piece of art is sold... What's to stop the artist making another NFT that has a different location on the internet, but represents the same artwork? Surely that would devalue the first NFT?
Yes, but such is the nature of artificially attributed value. If something does not have intrinsic value due to what it is (i.e. it can be consumed in some way), that value is always subject to flux and can be easily manipulated under the right circumstances. It's not as easy, but an artist can paint a second copy of an original work as well. Will that devalue the original or increase its value because it's considered the original? It could go either way and is basically a matter of convincing more people one way or the other. The value is arbitrary to begin with, so increasing and decreasing that value is also arbitrary and is depending on public perception. Crypto and NFTs are no different and fiat currency is not far off either. Hell, when gold was used as the standard it was still basically an arbitrary value, but now we actually USE gold so it has an actual use and therefore intrinsic value beyond status symbol.
Nothing physically stops them. I suppose the first NFT will probably have higher value if people like the idea of it being the first one. It's a bit like artists that sell limited edition prints - nothing physically stops them selling more copies later.
@@MonkeyJedi99 They don't even have to buy it, just download the image and make an NFT of it, but then it won't be THE nft made by the artist, it's just another NFT of the same image.
To sum up in a couple of words, the main purpose of NFTs is to "build scarcity", since mankind has always (over)appreciated and fallen for anything rare, even if practically useless.
@@gb2983as in US dollar? But dollar isn’t scarce. It does have 5000 nuclear bombs and 12 aircraft carrier task forces supporting it. Much more work and maintenance in lives and stories.
@@Dave-rd6sp Yes, I forgot about that bit, fair enough. However, if someone pays any amount for a picture or a piece of music that anyone can see/listen to then it's pointless. Who the hell wastes millions on that ? (they deserve to loose all their money.)
@@frankowalker4662 I can go to the internet and download games without paying for them. Does that mean games are pointless? Of course not. I agree NFTs are so far bad and have no use in the real world yet, but your comparison is not that great. And don't pirate games, a lot have heart and love put into them and are real works of art, paying a bit to enjoy is the minimum!
One thing that you didn't really touch on are the implications of what owning just a particular URL to a file on a server actually means Unlike a trading card in your possession which puts the onus on you to keep it safe, if that server goes down or someone with access alters the data on it, you can be left with nothing, or worse (here's a nice virus to hack your etherium wallet) And the question remains, what is the thing that is actually valuable; a line in a ledger that says you have a link to some work of art, or the very art itself? What's more valuable, a trading card, or a line in a ledger saying you know the address as to where the card currently is?
so research the nft before buying & ensure they are storing it either on-chain directly (SVG are just text, this is easy, for example) or on permanent, immutable storage so it can't just go down viruses can't do anything unless you run them. so here's an obligatory reminder for anyone reading this: DO NOT interact with anything you aren't sure about. better safe than sorry. value is subjective, most of the time.
See, the main problem boils down to this. Everything you can do with an NFT, you can do some other way, often a better way, and on top of that there is the problem that blockchain mining has become a *massive* environmental disaster. The blockchain is a neat idea in theory... but ultimately it has proven to be a solution in search of a problem, and in that search has become a problem itself.
Don't get me wrong, I liken NFTs to Dutch tulips but I don't think its really an environmental problem. If you google energy usage charts comparing crypto to traditional banking it is still below traditional's usage..
That's a false equivalence. Let's imagine for a second that all fiat currency disappeared tomorrow and crypto took over all financial functions... it would still eat up tons of energy (more in fact with the explosion in demand) with mining, AND it would wind up using about the same energy as traditional banking for everything else it had to take over. As long as you have any kind of financial system, the infrastructure that traditional banks support would have to keep getting done. No matter which way you slice it, blockchain mining is an unneeded extra drain on energy, hardware, and resources ON TOP of whatever other monetary system is in place.
@@chrisjokinen217 just because it is not even a fraction of the transactions. The maximum possible amount of transactions per second in e.g. bitcoin is only 7 - while in comparison Visa processes on average 1,700 transactions per second (without shredding GPUs in the process)
@@townsends-ip Okay, so are you saying that the amount of energy needed to increase the transaction rate _limit_ of Bitcoin to match that of Visa's _average_ is trivial? Blockchain is already a disaster as it is, and it's only a toy for geeks and grifters. How is throwing more energy at it (no matter how cleanly it's generated) a good thing? Are there not better things that energy could be put towards? To put it another way, what problems are blockchain uniquely suited to solve? What problems can blockchain solve more quickly or efficiently than conventional means? And does solving those problems benefit more people than just the ones who created them in the first place?
Ofc the energy demand and the way it's currently used is pretty stupid / scammy. But I do not think its a solution in search of a problem. Again, disclaimer: I have held some cryptos in the past but atm am not invested in them whatsoever. Having said that... besides the current issues of stability, adoption and energy consumption, theres is one element to it which does solve a problem. That is the fact that crypto is an attempt of creating an artificial currency that is not bound to any single authority / state / institution. So compared to for example the USD, there is no government that can just print (create) new money on demand, which had not existed before. The same goes with other regulatory power over the currency and the stability based on how a paticular country / region is doing politically or economically for example. In a way it is a more democratic approach to how a currency could be managed. I am not saying the current cryptos are perfect, nor do I see them as replacements for classic currencies yet. But I think you can acknowledge the value of the idea behind it. While atm the trust and simply the amount of users are lacking, there is still potential. The problem with democracy is, it only works if people participate in the process, otherwise the system gets corrupt and controlled by a small group of individuals. This is something you can see atm with how the majority of some cryptos are held in the hands of a few individuals and the same goes for "mining power". Therefore trust is obviously hard to establish with the current cryptos. But I think somewhere down the line, after multiple improvements and iterations, we might find a new way of managing our currencies (/ one global currency, naively speaking). Obviously talking here on the scale of multiple decades / maybe a century. Closing again, that I am not advertising / incentivising to anyone to invest into crypto, I merely want to state there is an idea that we should not simply ignore (besides the obvious amount of flaws still present in the current processes).
Even after listening to the "Maybe NFTs aren't stupid" segment, I still think that NFTs are stupid. (Specifically, I'm talking about NFTs in the artwork context as discussed in the video. They might not be stupid for some other use cases.)
I agree in the sence that there should be more then just a peice of digital artwork with an nft, there needs to be something that you can get access to any other way then getting the nft
@@michaelmcdoesntexist1459 that’s cause it is stupid, it holds 0 tangible real world value. If you got money like that. Buy houses and rent them out to create cash flow and real world assets
@@chrislacascia4547 I'm not denying it XD. But, ya know, even enforced bragging right have a value. Our current society is build on that. That's why autographs, expensive cloth, etc have some value. Yes, is stupid. But we already spend a lot of money on stupid things. My problem with crypto is that some jerks try to convice everyone that is the new big thing instead of another "stupid thing". But the people who get robbed by believe that shit kind of deserve it.
At least clothing and autographs have some physical value as an item. NFTs are actually nothing. Their only value is in scamming someone else out of their money with it.
@@TheGeekRex game skins, gachas, and pornography have the same physical value. And people still spend on them. If you know what you're buying (digital bragging rights) you can spend your money on whatever the fuck you want. And if you buy NFT arts without the proper understanding of what you are actually buying, then you're a moron who deserves to be scammed
20:10 that right there. if an artist wants to make an NFT of their art, fine, but if someone else makes an NFT of art that isn't theirs, which is overwhelmingly the case, then NFTs become a problem. cool tech, misused horribly
@@Derokorian The big problem though is that NFT's are being sold as a solution to this problem while it's happening in plain sight for everyone to see. If all of the "bad" things NFT's are supposed to fix still happen, then what's the point of it when there are arguably better, more mature solutions already in use and available?
@@DarthBiomech Out of literally every single technology ever made by humans that you could use as an example, you went with *leaded gasoline* ? Like, I _guess_ , but... All you can do is burn it....and it releases so much lead...
I watched like 15 videos about what are NFTs, and couldn't get it the way I did from your video. Everyone has those weird explanations from which you can't really tell what exactly NFTs are... but your video gets it 100% explained! Thank you!
24:45 It's almost a valid point, but Trading cards have value for actual reasons. As far as I'm aware, all trading cards except those representing pro athletes are part of a card game. i.e. a game that can be played using those cards. What determines the value of these cards is two general factors, -their rarity (artificially introduced) -their power (how good is the card) Even many 'rare' cards aren't valuable because they're simply not good in the game so aren't sought after. One of the most valuable playable trading card is the Black Lotus from MTG, which is an old card from a finite set of limited cards. It's also an extremely powerful card, being powerful enough to just be outright banned in all formats (although, most of what enforces its extreme value is the meme and the high cost of the boxes that contain them). Football/baseball etc. cards are valuable because of rarity and the fact the cards represent a player in an isolated moment of history. The most valuable ones are famous players from past or extremely limited cards, (a player who didn't want to be on a cigarette card, but had already been printed a few times). NFT "Collectables" are simply permutations from a set of random attributes, they're not 'rare', they're not historic and can't be used to improve your play. So their "value" is entirely speculative, not reinforced.
I actually was under the impression that the entire jpeg file was on the ledger. The fact that it's not seems even more stupid to me. It doesn't solve the problem of the file being publicly accessible; the pointer tells you exactly where to go to find it. And it introduces the new problem that you're relying on an external server to keep existing and hosting the file.
@@browolf the ipfs adress gives a file that points to a http ipfs gateway instead. If the gateway goes down you can't access it directly, you need to copy the ipfs URI from the http URL
On-chain storage is a developing technology, only reason we have the whole links situation is because people were too impatient to get started with it, that they didn't let it mature
IPFS is like bit torrent, it requires people to seed the file. You can do this yourself, or someone could have an old copy and randomly decide to re-host it later, and it would have the same address/hash. But if there's nobody hosting the file at the time you want to download it, you're not getting it.
As an artist myself, I really dislike them. I follow so many artists and love the art community, but since NFTs became 'a thing', it's gotten to be such a horrible rat race.
what I've noticed, unfortunately, is that much of the horrible stuff is just people being mean to each other for things that they don't understand, and most of the toxicity around NFTs is coming from... people who don't like them.
@@FelineJAM I follow hundreds of artists who have had their art made into NFT's and sold without their consent. All by crypto bros looking to make a buck. And if you find discussion about NFT's almost anywhere public enough, it's filled with bots promoting some project that, if you do a little research, is obviously some kind of scam. THAT'S toxic. People mouthing off about not liking or not understanding NFT's might annoy you, but compared to that, is not measurably toxic.
I don't know if it's only just become a horrible rat race with the influx of NFTs, if you've ever dealt with galleries you might be aware of how cutthroat the business can be.
Pukicho on tumblr said that artists that sell their work as NFTs really only care about the value the work can have, rather than the work itself. They even go as far as to claim these people are really just businessmen that are masquerading as artists. I think theres some truth to that and I'm glad to see that other artists also don't like NFTs.
Just like "high art", the price of NFTs doesn't have anything to do with skill, beauty, or effort, only on artist influence with a bit of luck Art has always been like that to an extent, but NFTs just kinda... Shove it in your face more... Don't know how else to explain it
I will say that the "signed photo" thing does not quite work, since to most people, the value in a signed photo is that the signature itself is unique. Even if it's very _similar_ to thousands of other signatures that person has signed over the years, but it is a unique expression of that signature. If you then just photocopied that image with the signature attached, that would have a lot less value to most than an original signature. Also, a lot of people place value on the act of _getting_ a signature in person, the act of meeting this person for even a moment, and the object itself mainly has commemorative value, like your wedding ring. By these measures, I don't think that an NFT ever achieves any of these positive connections. For the types of NFTs we're discussing her, at least, I believe they have NO value except to those few people who just have a lot of money and like to just show off that they spent a lot of money on something, OR to chancers who believe that they can buy things low and sell them high, which is not a wise investment here.
You seem to have missed something. This does uniquely bind the artist to the buyer, as long as the underlying blockchain remains. It's "impossible" to copy the NFT stuff.
@@matteyas If a person genuinely feels that way about their purchase, then that is their business, but I don't believe that most people would feel the same level of personal connection to a hash in a blockchain that they would to a hand written signature, particularly to one made in their presence.
@@timogul That's probably true and might be for another 5 to 10 years, maybe more. What's probably also true is that a majority of the people in the upcoming generations are more likely to feel a personal connection based solely on digital happenings. Either way, that's none of my concern. :)
@@matteyas Except in 5 to 10 years, most of these will be subject to link rot and the URLs/URIs will point to absolutely nothing. Though you last line makes me question _a lot_ about your perspective on these.
So it's a signed version of their digital artwork (or the token is the signature of that artwork, I guess )... that's the best explanation I've heard of NFT!
Yes, but the signature is an arbitrary number and it's not in the picture. When you hold your precious 'signed' picture, is exactly the same as before.
27:20. “You are buying an NFT that points to the location of the artwork on the open internet”. No. You are buying an NFT that points to a location on the open internet - a location that is owned and can be altered freely by someone else and not by you. There is nothing to stop them from changing what is at that location. Or shutting it down. There is no record on the block chain of what that location contains. And there are better ways to give artists your money if you want to support them.
Imagine the shitshow that would happen if someone replaced rich mans funny monkey jpg with literally illegal content. or a picture of poop, which would have less shock value but would at least be funny instead of horrifying.
Thanks for the information. And I guess congratulations on convincing me that buying NFTs (at least as they are currently used) is dumber than I initially thought.
21:38 I was genuinely distracted by how fantastic the quality of LegalEagle's footage is. Like, wow. That's one crisp image and beautiful lighting. I thought we were jumping to a clever sponsor or something, my goodness.
You entirely skipped a HUGE elephant in the room : The whole system is designed to financially benefit people who invested early in cryptocurrencies. Especially etherium. That's why it's such a "problem in search of a solution". If people use this thing, it will make them rich, so they have to hype it.
It's good to talk about the misconceptions about what NFTs are, and the ways in which NFTs can mimic existing trading concepts, such as trading cards or contracts. But I feel like you glossed over the huge negatives, such as the amount of computational power (and therefore electrical energy and technological resources) required to work this "ledger", and the entities who have particular interests in pushing NFT technology (including scammers). In short, the theoretical concepts are all fine and dandy, but they aren't really necessary and they do more harm than good, in my opinion. If I want to give money to an artist, I'll sign up for their Patreon.
So, best case scenario, what you'd "own" in the beeple example is a pointer to a location on a file server? However, file servers are rotated and replaced as physical objects. Also, URLs are not real objects and change often. If the server suddenly had a glitch and the file had to be replaced, you would then own a pointer to a counterfeit file. Also, if the server farm went bankrupt, you only really own the pointer to that file at one point in time and some finite-but-unknown period thereafter. The original file may no longer exist, and your pointer would be as useful as a deed to land on the island of Atlantis.
No, it's the ability to buy and transfer digital media and ownership. You can even own part of something. In the case of digital art, you can buy the usage rights to a piece, and then if you find someone online selling copies of it you could prove ownership and have that website remove the copies being sold, and can even take the person to court proving your ownship of the digital art and have them hand over all the proceeds of them selling the forgeries. It also means more than one person can own something by each having a smaller part. In future if the value of that artwork increases and everyone who owns it agrees to sell it, the proceeds of the sale get split between the owners. Equally if everyone EXCEPT you wants to sell their part, they can do so. It doesn't have to be digital art either. An actual painting's ownership rights can be put on the blockchain, so if someone or many people want to buy or sell their rights to a piece, they don't have to go to a 3rd party like an auction house and pay commission on the sale, they just sell their part on the blockchain and it's done. In the auction house all you're doing is buying a certificate of ownership and it doesn't actually do anything to the piece, just confirms who owns it. NFTs do this without the need for an auction house. Think of things as well like property rights. Currently if you want to sell your home you have to go to a centralised land registry and have to pay to update the records, have to pay a legal rep to draw up all the paperwork for everyone to sign, and then have to put the property in escrow while everyone waits for the payments to be transferred and confirmed. NFT's allow this to happen without the land registry, and without a lawyer. You just set up a smart contract which automatically transfers the ownership of the house to you the second the crypto hits that wallet at the agreed price - It's thrustless and doesn't need a land registry or a lawyer or even a bank. It's all done in seconds, is final, and can't be reversed. Think of any instance where you need a 3rd party to confirm ownership. NFT's remove the need for 3rd parties. A good example is what BTC did for money. You don't need a bank or 3rd party to give you a bank statement and prove you have a bank balance, and you don't need banks and card providers to transfer BTC from you to a 3rd party.
@@NeonVisualThat's just the beautiful theory. As @LegalEagle showed, NFCs have no legal power per se. They could have if accompanied with the relevant legal framework, signed by everyone downstream taking over the NFC. But that's absolutely not the case for most NFC, which really do not confer any rights than the right of owning the NFC itself.
You still seem to have a bit of confusion around ownership, particularly in your ticketing example. You don't own the ticket (or the NFT), *your private key does*. Whoever has your private key owns the ticket. If you lose access to that (say, you get hacked), it's just as gone as a physical ticket or normal emailed ticket would be. The transaction on the blockchain doesn't record who you are, only which private key you happened to use for the transaction! Of course you could make the smart contract require some sort of identity information. Say, a name and state ID number (driver's license, passport, etc). Then you'd have a trustless link to a trusted central identity validation system, so you could say you own it... but you've lost the benefits of trustlessness since you're depending on the central database to link the NFT to the identity.
"How do you prove that you were the purchaser of that particular ticket?" Umm, Steve, it's called "will call" ticketing. We've had this figured out for decades, if not longer, and they don't require computers at all, let alone a blockchain. I've yet to see a single use case for NFTs that is both more secure than earlier processes and also easier to use.
Boy you're will call experiences are better than mine ;) Of course, they always seem to lose my comp tickets. They haven't yet built "easier to use" part but it's getting there. Email started off as a command-line experience where you needed to no the esoteric parts of the system to get it reliably right. Eventually, developers came along who did figure out how to make it easy to use and about a decade after that it had all but taken over. So to here. Just going to take a few years to figure out how to make it easier *but* it will get there. There are too many advantages to having a cryptographic wallet where a transaction can be 'proven' without having to rely on paying Mastercard, Visa, Discover, Amex, etc, a but of your sales. That's where the real competition is going to be. Can blockchain be cheaper than credit card companies? If yes, then eventually they win.
@@x--. That doesn’t make any sense at all. Credit card companies do more than just process transactions. So Blockchain garbage isn’t even in competition. At best you hope they adopt the tech on their own, to vindicate all of the blowhard talk about how great the shit is. But the idea that Blockchain is actually going to replace anything, is absurd. Just a problem looking for a solution. Not a solution looking for a problem, but a problem itself.
@@JM-zg2jg Let's talk, my friend. You are right, they do "more than transactions" but the absolute heart of their business (to the tune of tens of billions a year) is taking money from you and giving it to the business. They do this by taking a cut of the transaction and charging network access fees. Do businesses like paying 3% of their transactions (less if you're bigger) to some other business? Don't think so. In California they dislike it so much they have cash vs. credit gas prices. So that's the fundamental question. Can blockchain currency beat 2 to 5% and provide the necessary ancillary services to get consumers to shift? I would bet, yeah, probably. Banks and card processors have to make a profit. Crypto blockchains don't. So it is likely to permeate through society and become more common and accessible. As it does, I don't see what stops it from taking over.
@@x--. Until the problems with mining are solved I don't see blockchains being able to supplant anything long term. Proof of work mining gets more energy intensive over time, and proof of stake is exploitable as all hell.
What about the environmental issues though? A trading card costs resources to print, then that is it. An NFT is continually costing resources as long as it exists.
Is it though? So long as you aren't trading your digital trading card, your token is not being processed by the ledger. People even store their private keys offline on paper, so you can't even say that someone's computer is running to keep validating it. The biggest impact your NFT will have is when someone downloads the whole blockchain from scratch, most places just append new data. And on top of that, with the world moving towards green electricity production, what does a carbon footprint mean in a few years time? Let's assume the worst case that the NFT is constantly using energy. Cool, solar powered crypto monkey. The way the technology is used right now is a meme - literally, some of the first NFTs were rare mint Pepe's - but the whole crypto market is based around efficiency, how many hashes can I crunch per watt used? Miners pay for electricity, and in a world where green energy is cheap because our governments want us to use it, it is disingenuous to claim that a market build on efficiency is not aware of its own inefficiencies and isn't constantly trying to solve them.
There is something like NFTs developing in an online game that I play, EVE Online. I won't go deep into the details but the game is a scifi space based MMO in which players own ships and can change the surface appearance of their ships with what are SKINs, basically colorful patterns (applied to the surface of the ship. It's actually a license to display the pattern on your ship in perpetuity. So even if you lose a ship of a given type you can display the same licensed SKIN on another ship of the same type forever. Recently the ability to make these SKINs by the players themselves was added to the game. They are sold on the digital market in both in game currency (ISK) and a digital currency equivalents (PLEX) that can either be purchased directly from the game developer or bought on the in game market from other players. Both of these currencies are in effect worth real-world currency. And the SKINs themselves can be sold for what amounts to anywhere from $5 to $20 of real-world currency. This is a similar phenomenon to digital artwork NFTs.
I think you seriously understated the environmental impact, since that seems to be the best argument against them across the board, as opposed to entirely subjective argument that they are stupid.
Other arguements are: They cause far more harm than good (9.3 billion dollars lost to fraud and counting). They are horribly inefficient(A Raspberry Pi can outperform the entire Etherium blockchain). Proof-of-stake has yet to show concrete numbers on improved environmental impact and Etherium has been claiming its shift is months away for 5 years (Also proof of stake centralizes decision power and wealth generation to the wealthy).
The issue with that rebuttal here is that enviromental impact of NFT is only a short term issue, once Ethereum (responsible for 70% of NFTs) transition NFTs pratically dont contribute to the enviromental destruction anymore. And i doubt you'd suddendly start liking NFTs once the ethereum transitions.
No, the best argument is that they are horrible for artists and are riff with scams and illegal activity. The environmental impact is just the cherry on top.
I really like the information that was presented in this video. The interesting part is that he answers the question about NFTs being stupid (27:00) by saying that they don't have to be, which is another way of saying they currently are. When people that don't know a lot about NFTs talk about them, I say that they (the NFTs) are stupid. When people that know about NFTs talk about them, I say that they (the NFTs) are very stupid.
Shows how narrow minded you are to have this viewpoint. NFTs in the abstract are simply a technology that will 100% be integrated into everyday society within the next 10 years. You’re thinking of it as some type of marketplace of value when that is just the current outcome of the marketplace. You could make the statement that the current iteration of most used aspects of NFTs is dumb, but calling NFTs, the technology dumb is ignorant. Do you know how many people had the same viewpoint towards crypto? The money making (and losing) aspect will be gone most likely, but the technology will be here way after you’re dead.
i still don't get it but i still think its stupid, after he said that he later came up with an analogy that confused me more i don't really know how to explain it so ill come up with my own analogy: if you want a house, you don't buy the house, nor an NFT of the house, you'd buy an NFT of the road leading to the house... and an NFT of the road is different from the actual road itself... you know when you wen't in a circle to end up where you started, but then you keep going around that you don't even know its a circle anymore or a different shape you just know you ended up where you started, i feel like that right now the guy in the video probably might be a chill dude in person but i have no idea what the heck is goin on in this vid, i just feel even more confused about nft's, and it feels like a scam when i try to understand it
@@lenny_1369 A better analogy is this: If you buy a house, you buy an NFT of the title/deed to the house. No, this doesn't mean you DIRECTLY own the electronic image/scan of the title/deed. What it DOES mean is that your NFT of the deed is PUBLICLY and directly traceable back to the original seller of the house (Real estate agency/bank/government/etc...). So yes, other people could mint NFTs of the same title/deed, but none of them would be directly traceable to the original seller like yours. IE, you own the title/deed, ie you own the house. Is it a bit roundabout? Yes. Is it being used as intended? Not on a wide scale. Is the idea of having a system to reliably track down electronic purchases stupid? In my opinion, no
@@ryanhughes1101 I'm sure one day NFTs will have their place. Problem is today NFTs are more well known for questionable artwork then any actual usefulness.
I like that you mentioned smart contracts. These are incredibly hard to write well, and pretty much impossible to change once on the blockchain. There is a recent case of millions of dollars worth of crypto essentially being lost forever because of a bug in a smart contract.
What happens if an angry ex-boyfriend or girlfriend created revenge porn as an NFT then gives it to your wallet As far as I can see that is there for eternity, or your national security number, your bank account details, lies about you, truths about you - anything. It can never be deleted.
@@yt_user892 - I work with victims of narcissistic abuse - narcissists' speciality is massively vindictive revenge campaigns. They will simply LOVE this - it will destroy millions of lives will this...
Steve, I am surprised you did not talk about about regular currency and electronic payments. If I want to support a digital artist, I will pay for their artwork with regular cash. I will not go through this indirect route with middlemen taking a big cut of the payment.
Or the amount of profiteering, rugpulls and straight forward scams ....that...to the regular, average person, are essential identical and indecipherable from the next Bored ape Yacht Club. The odds of finding the next big thing. Getting in at the ground level. It's not a investment regular people should make. Steve is doing some intellectual dishonesty and it sucks
I understand the mechanics of NFTs much better now. Thank you! I can't see the future and I can't say whether NFTs are "objectively good" or "objectively bad" because I don't know if there is such a thing as "objectivity" when it comes to such concepts. For some reason though, I'm reminded of that story about the king and the fabric salesmen who said they had the finest fabric. So fine, in fact that only exceptionally smart people could even *see* it. So the king commissioned an entire set of fine clothes made of.... a lie. I feel like... without a thorough understanding of what exactly it is that you are paying for, NFTs can easily be used to scam people. All I can say is that I won't be spending money on them for the foreseeable future. But who knows, I could still change my mind
It still is stupid but a respectable stupid, looks like they threw the ball to grant NFT's a placement to involve "objectivity" it fell off when we come into terms with logic.
Blender Guru made a video making similar points to yours, also as a response to Dan Olson's video. The idea that things can have sentimental value completely detached from their objective material value, and is a viable way to support artists. Which is interesting, because Olson didn't really argue against that. His main thrust against NFTs is that the are the outgrowth of crypto movement, which he sees as a "socially destructive force" because of crypto's deflationary nature (giving power to already wealthy, trapping poors in a cycle of debt), and drive to turn everything into a speculative market. He said he skipped over the art and patronage aspect of NFTs because he sees this as a trojan horse by which those crypto magnates (who are mostly already powerful institutional investors) get their foot in the door of mainstream, and any benefit that artists get from this is coincidental.
Not to mention, if something has sentimental value you can just store the actual digital object in your own computer or personal server. There's no need for a receipt stating you own the link to a piece of art.
@@riley8385 And if you want to support artists there are less wasteful, more direct and non-hackable ways to do so, like, say, give them money. You may even exchange that money for a real-life, physical object :D
The biggest issue is with NFTs as a way to support artists is not this conceptual issue, it's that there is no guarantee that who is getting the money is actually the artist. NFTs don't do anything for that. Anyone can mint NFTs for any artwork they just found somewhere on a google search. There's no check whatsoever on whether the person who minted it produced it or owns it in any way. That's all "off-chain". So if you want to be sure of that you'd have to trust another party to verify that(say a website where the NFT is advertised that verifies the identity of the seller) and then you're trusting a third party off-chain and the whole point is lost. I guess if you don't care about the whole "trustless system" thing then sure, but then the issue is still that practically speaking this whole thing makes it much easier for scammers to make money off artists who get nothing and does not make it easier for artists themselves to make money through this system.
A flaw in the argument that smart contracts are "transparent" and "trustworthy", is that it's only as transparent and trustworthy as the ability for someone to understand what it does, including potential flaws and vulnerabilities. Since smart contracts are written and verified by human beings, there are a lot of room for error. Things such as bugs both non-intentional and intentional can be hidden in plain sight, simply by obscurity or lack of knowledge in the area. This is the same flawed argument that open source code can be trusted, because you can read and potentially modify the source code. An example of why this argument is flawed can be seen by vulnerabilities like Heartbleed bug in OpenSSL.
@@superfluidity That's true. The fact that blockchains are set in stone also prevents code patches or refunds. Blockchains are all too easy to scam someone with. Like Mr. Olsen mentioned, blockchains themselves might be unbreakable, but that doesn't prevent a hostile force from putting in fraudulent (but otherwise legitimate) data into the blockchain in the first place.
@@superfluidity While that's indeed true, patching source code in an open source project does not necessarily automatically apply those patches to copies of the software and the bug will still be present in unpatched copies.
Still smart contracts and open source code are way more "transparent" and "trustworthy" than proprietary software and shady robinhood/cashap-ish services.
@@pasikavecpruhovany7777 Trust is relative and subjective. What you consider trustworthy is likely to be different from what I consider trustworthy. The level of trust you have in something is based on different factors such as on experience, knowledge and personal beliefs that you have in something. Of course, You are able to more easily verify something that is openly accessible, compared to something that is closed. But the quality of verification is limited by your knowledge of the domain.
What an excellent video. The signed Patrick Stewart picture analogy was hilarious, but flawed I think. The problem is that when Patrick Stewart signs his likeness, he creates something real and of value, which you now own and can keep or sell. The NFT equivalent would be as if he gave you a ticket with the location of the box where he stores the signed picture. And everyone else knows where it is too. And they can all see it. And it still belongs to Patrick Stewart. I humbly submit that such a ticket has no intrinsic value because there's no difference between the state of having it and not having it. But the bit of you hugging the picture was comic genius. :-)
The difference is, banks are legally required to turn their 1s and 0s in their databases to actual money (that the government promises it's legal tender and has some value. It isn't gold standard money but still)
@@Razzer666 most UK houses are worth more than that, it's not that unusual for people to have more than £80k in savings, I'm aware that might seem nuts if you're under 30.
@@AlLiberali yes, but only for a part of someone's wealth, not necessarily for all of it. If it's held as crypto then the buck stops with the owner - which has pros and cons as well, obviously, but it's a personal choice. I choose not to trust the bank with any of my wealth.
In a nutshell: NFTs are stupid because of how people use them. They can be used in a smarter way, but people just chose to use them to get rich quickly.
To be more precise, most people use nfts (and crypto currencies, in general) for speculation, not much different than regular stock market. In essence, they are technologies, who were developed to meet a need that regular currencies can't (being sometimes decrentralized, traceable, etc). And this makes it valuable, but HOW valuable? And that's where the speculation enters. The market is far too new, thus, it's highly volatile, full of scams, etc. I think it will take at least a couple more years to mature until regular people can use it regularly, like people now can use pix, for example. It's still too difficult for the average guy to use and understand why it is valuable.
@@JoshuaLTDS The difference of course is that the stock market has actual value attached to it. People are trading companies that actually do something. When you buy that bit of company you are speculating that the company will say create better products in the future, make more money and therefore be more valuable. NFT's are a bigger fool scam. What you are trying to do is purchase something with a sole purpose to sell it to someone who will buy that thing off you for more money. Currently there is no use case for them that can not be achieved via Web 2.0 protocols. They are a solution in search of a problem. At least when the dutch were selling tulips to each other they created a more beautiful countryside, the byproduct of this bullshit is CO2 emissions of the same said country several hundred years in the future. All for a URL of a fucking monkey that will 404 or be replaced by a picture of a Persian Rug
8:40 This is my preferred explanation for asymmetric cryptology that seems to clear it up for most people. Hopefully this helps at least someone. If i go to the store and buy a pack of 4 locks for luggage, they all use the same key to open. Now I keep the key, but i mail these 4 locks out to a friend. The friend has 4 boxes and puts a secret note into each box and secures those boxes using the locks I sent them. They mail the locked boxes to me. No matter who touches one of my boxes or intercepts a box during transit, or steals a box from my front porch, only I have the key to all of those locked boxes and thus only I can read the secret notes. The public key is the locks, the private key is the physical key, and the secret note is whatever data you're encrypting in this analogy.
Well...they'd have to be a little better quality than luggage locks if you really expect them to be secure, but I get you. I guess I watch too much Lock Picking Lawyer, lol.
Kinda... It's more like there's an infinite number of your locks for anyone to take for free. Theres an opposite (essential) function of PKI: the 'locks' work in the reverse way too. You can lock a message inside a special compartment in the luggage(with your key, not your friend's lock) that anyone can open and read with free public keys, but only the secret key owner (you) could have put it there so it proves it was not tampered with en route (authenticity), and you can't later claim that you didn't put it there (non repudiation).
In relation to the Patrick Stewart picture signing analogy: I don't think it is analogous to Patrick Stewart signing the picture. Him signing the picture would change your original valueless printout and make it unique. In the world of NFT's the string on the ledger does not modify the hosted image. A much better analogy I feel is a letter of authenticity for a picture of Patrick Stewart that he used to own. Because he owned that image it would have value, but only if you could prove he had owned it. Anyone else can print that same image but it does not have the same value. And in real terms, if you gave the letter of authenticity to any other person with an identical image, it would increase the value of their image and reduce the value of yours even though the actual image didn't change hands.
If you want to program a smart contract, you'd better be a damn good programmer, because every bug is permanent and fixing bugs means spending a lot of ETH to replace all NFTs.
I've seen videos of people explaining how to create an NFT, and they explain everything well, and when it comes to the smart contract it's always "just copy this code and paste it in, don't worry about it, it's too complicated". And it's thousands of lines of code. Nobody is going to sit down and read it to see what it actually does, _if_ they even understand exactly what it is.
@@echelonrank3927 I don't know if that's possible. Once it's stored in the blockchain, the code is permanent. But maybe I'm wrong and code can get added later like amendments to the constitution.
@@NaudVanDalen no, im saying its like creating a file that 'changes' its content depending on time of day. of course the actual file stays the same permanently, but when its viewed it appears in different ways.
Love this one, really nice to see a normal analysis of what it actually is. The problem with them is not the technical aspect, it's exactly the way people are using them... for quick money, trying to sell collectors-cards that are not signed by the author or by giving out cards that, also in the real world, would have little to no value. But they do try to ask a lot, because it's a hype. They always use the argument that it helps artists, which is almost never the case.
There are a few technical aspects that _are_ bad though, such as the insane amount of energy and hardware and time needed to satisfy proof of work, or the fact that since blockchains are set in stone, it's impossible to undo a fraudulent transaction or fix a buggy smart contract. I'm not sure how to solve these problems, and I'm not sure the good things blockchains bring to the table are better than systems that already exist.
I think that there are useful and interisting uses for NFTs As he pointed to tickets, that could be used as a very secure way to own a ticket to either an event, or service. Maybe it could be used as a second way for you to have some less information heavy documents without needing to be scared of losing them, etc... Still, digital artwork as an NFT is probably the worst thing that you could have really. Art only has value if it has history, if it was part of a movement or if it looks good to the buyer in the first place. Because of that, there's no way an NFT will make a replacement for a physical artwork. But if we used NFTs as this ticket thing, maybe you could have a ticket to get the artwork afterwards, so having the ownership of the artwork both digitally and physically It is my belief that if we had a market for it, we may have real uses for this technology in the future, but I don't think it'll be in the near future.
@@Peasham How are you so sure about that The blockchain is one of the best places to be sure of transactions and other things as such that is also very difficult to hack How can you be so sure you cannot use a token that can have a different value from another in the blockcahin in a better way than any other technology
@@Lonrok The person who originally minted any NFT can at any time change the link the receipt of the NFT points to. The amount of rugpulls and scams pulled inside the community has been LEGENDARY. Also, I have no idea what this sentence is supposed to mean "How can you be so sure you cannot use a token that can have a different value from another in the blockcahin in a better way than any other technology"
@@Peasham I see I meant basically: "How can you be so sure an NFT cannot be used in any way better than any other technology". I mean, not necessarily an NFT the way it is, but a Non fungible token itself.
@@Lonrok Well, that's because all an NFT is is a receipt that costs a lot of energy to make for no discernable reason. Like, it doesn't posess any unique properties, the only thing unique about it is how it's made, and that has no bearing on how useful it is.
Most people think... investing in crypto is all about buying coin and leaving it to rise,😂common it takes much analysis to be a successful crypto trader
If I owned an NFT, I would like to think that I had access to the most perfect version of the original. But surely, just a pointer to a stored JPEG picture cannot guarantee that. The original image would almost certainly have been created in a non-compressed form, so would be superior to a JPEG, which inevitably introduces imperfections. So in practice, the original artist will probably still hold a copy superior to the NFT that I'd purchased. Crazy!
The only thing NFTs provide is less trust. For most use cases, the price is overkill and the carbon emissions are not justifiable. I have no problem trusting a video game developer with my digital toy items. If you're dealing with someone you can't trust why deal with them at all? I think we need more trust not less.
New tools to do things securely don't decrease trust in other people. Being less secure makes us _need_ more trust, not _have_ more trust. With more secure tools, you can offer wilder permissions or kinds of transactions, and trust that the transaction will happen exactly as you understand it when you pay. That's really what you need in a transaction - not to trust the other party at a personal level, but to trust that nothing bad will come of trying to complete a transaction with them. When it's possible to trust transactions with people you don't trust, it just frees you to do way more kinds of transactions with way more people. It doesn't help or hurt your ability to trust anyone. also, the Ethereum blockchain powers most NFTs, and it's switching to a proof-of-stake model soon, which doesn't involve mining.
ok so imagine you buy a piece of art, except you dont own the art, you dont get to take it home with you, you dont get to make any decisions about it, in fact you dont actually own it you own a receipt to it that has no legal standing, but actually the receipt is to a specific place on the wall its hanging and nothing stops them from swapping it out for a different piece of art or completely removing it, ok now imagine that receipt cost you 3 million dollars, and also the art was shit and made by hitting random on one of those picrew avatar making sites
In as few words as possible.... it's a way to purchase bragging rights, without receiving anything to brag about (other than being stupid enough to pay money).
It's like a read only file that's stored on a blockchain instead of your computer. The file can contain anything, but you can't change it. NFTs got popular because people are putting art into the file then selling the file for exorbitant prices. This doesn't make sense if you are trying to be the only one who has that art, because the art can just be copied. NFTs won't stop that from happening. However, that's not really the best use case for NFTs, IMO. Once people start using NFTs for public legal documents it will make more sense to people. For example, a registered trademark.
I loved hearing all of the information from the lawyer. Very informative. Thanks for all of this. Wait, how was I not subscribed?? I've been watching and referencing your videos for years!! Well, I am now.
The strongest positive I can think of for the blockchain tech is to be used to disseminate information in a way that is basically unstoppable. Things like the old AACS encryption key come to mind. You could also fit in large blocks of text using tools like the library of Babel website- still somewhat limited by the length of data allowed in the data. This is also a potentially *very bad* thing since people could potentially store illegal content- images or something similar through the same type of tools: it could be used as an irrevocable distribution system for them. It is probably only a matter of time until some bad person figures out a way to embed something heinous in one of these blockchains and that’ll raise an interesting questions about what to do. Ban the tools? What if the code of the tool is also embedded in the blockchain?
There is a relatively easy fix that already exists. Reputable marketplaces and software developers will develop blacklists of NFTs that they won't display or exchange. Much like the Tor web, it'll still exist and be available to those who are motivated to find it but most people, most of the time aren't willing to put in that level of effort. This is probably how we'll have to handle instances of fraud or IP theft as well. Sure, you have the token but it's been blacklisted now and 'reputable' marketplaces won't display or exchange it.
@@x--. Fraudulent cash and fraudulent NFT’s are a completely different ball game. NFT’s takes seconds to make and take days or months to remove for copyright or other types of infringement. Fraudulent physical cash requires expensive or stolen equipment to manufacture. It’s much easier to track and more difficult to replicate. Then you have time problem of having a centralized body to monitor these NFT’s for malicious behavior, which defeats the purpose of a decentralized economy. Which also introduces the fact that the anonymity of the blockchain can attract criminal activity. Why would people invest in a platform that with risks that involve stolen content that can be revoked at any time that is almost completely anonymous, aka without consequences? That’s just asking for trouble. And then you still have to buy things with the NFT with REAL money. So you’re going to have to file taxes with the IRS too. It’s so confusing when people say they are cutting out the middle man when in practice that doesn’t happen. Like at all.
@@nathandam6415 Excellent points. I think the difference with NFTs vs a centralized government authority is NFTs and the theoretical centralized body to identify fraud would be transnational and democratic. If enough people stop supporting the blockchain it would collapse. If people don't support changes, it will collapse. Is this better than the present situation with government fiat currency? Ehhhhhh, I don't know. Look at Russia, because of the choices of their despot leader their currency is now subject to crazy rules and restrictions. This could sort of be done by governments with blockchain by restricting internet access but they can't decouple the value of your holdings from the rest of the world. If you escape your land, you still have access to your blockchain holdings. Do these small but tangible differences get enough people to, quite literally, buy-in? I'm not soothsayer but if I had any money, I'd have some of it in blockchain. In the same way I'd keep some cash on hand if I weren't broke-AF.
The biggest issue with this video is that it only addresses whether NFTs have some value to the purchasers of them. While this is not even a certainty, the bigger question is "Does the value derived from NFT transactions offset the costs, both to the purchaser and the cost to process the transaction." You might think you're doing good by providing an artist beer money, but the actual currency you're paying with is fossil fuels and computer hardware (and this won't change with proof of stake).
I feel like a lot of blockchain is trying to enforce things using cryptology and maths which society tries to enforce using overly complicated legal systems that often boil down to "even if everything burns to the ground, at least we should theoretically know who to blame for it". Though these often end up going against each other as each one doesn't know how to deal with the other and all hell breaks loose regardless.
TLDR: blockchain and NFTs HAVE utility that needs some work, but the current marketplace is instead built around confidence scams. Blockchain is hardly immune to that, though. It has checks for a few processes, but the rest of it is wide open to human error and malicious conduct. Squid coin was intentionally coded so that buyers could never cash out. The DAO, one of the first big smart-contract-based organizations, had a code vulnerability that was exploited to transfer out a third of the ethereum that had been stored in it; most users would have to just swallow that kind of loss, but the DAO was a project of the ethereum creators and other big names, so they forked the entire "indestructible" blockchain to make that mistake vanish. It's a matter of time before contacts are created that contradict each other or that get stuck in perpetual loops with no human interaction to hit the breaks or that commit some crime like money laundering. NFTs with code that transfers out coins or other NFTs have already been made and used, and with no way to refuse incoming transfers, the best the targets can do is remember which of their assets are legit and set mysterious newcomers to "hidden". There's no barriers against mundane confidence scams, and the lack of human oversight means there is no recourse for the victims of these scams. Well...no recourse unless they have so much influence that if they created a modified version of the blockchain, their version would have more value that the undoctored version. They got rid of the legal jumble by just saying "buyer beware", but every NFT collection and crypto fanzine is shouting "BUY IN NOW TO GET RICH" and exercising some cultish levels of social isolation by enforcing the removal of any voice of fear, uncertainty, or doubt. It's a trustless environment, but the speculative projects demand blind faith because blind faith makes the speculative value look better. The rational choice is not to get involved, but the mechanics of the thing have been plastered over in promises, cherry-picked success stories, and outright lies. It's just another money sink for the desperate.
Here's Devin's video from LegalEagle: ua-cam.com/video/C6aeL83z_9Y/v-deo.html
Here's 3Blue1Brown's video explaining cryptocurrency: ua-cam.com/video/bBC-nXj3Ng4/v-deo.html
Here's Line Goes Up by Folding Ideas: ua-cam.com/video/YQ_xWvX1n9g/v-deo.html
Here's Benji The Bear: www.benjithebear.com
You can also discuss this video on REDDIT: stvmld.com/5un7d-vh
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Hi
Mint the first comment as an NFT
@@sasdagreat8052 i was first
Thank you. This is probably the only video that properly explains what NFTs are without shilling anything or without nonsensical arguments. The only thing that you ignored is the energy-wasting issue of the blockchain.
I use Arch btw...
25:06 Just one thing to note, there are other ways to support artists you like buying full resolution files of their work, becoming a patron, buying prints or merchandise and paying for commissions (which is when the artist creates an original piece at your request).
1000% this. If you want a collectable of something, there's less egregious ways to do it then to buy a spot on a scam registry.
exactly - giving them straightup business is way more valuable to them than engaging in speculative cryptocrap
These are all so much better for the artist as they won't be burdened with minting costs
All without supporting an inherently wasteful transaction service.
That brought me to a question that was never answered by anyone that i asked : where is the value for the artist or the customer if there's a third party involved in the transaction ? Not at all comparing with an authentication expert or a Reseller type of thing no, literally someone taking money from both part just to print the recipe, where is the added value compared to a comission (wich will always be my way to go, if possible in cash) ?
Thank you for telling us NFTs are stupid without telling us NFTs are stupid.
Yeah this video is really good at showing the absolute best case of NFTs, and making the viewer realize that that's still useless and stupid.
Overhyped might be a kinder way of putting it. They might possibly have niche uses, but at the moment they are just being used in pyramid schemes because they are the current trendy buzzword.
This is correct. Fundamentally it makes no sense outside of very specific cases and definitely not always a good thing in the consumer space.
To be exact the argument is that NFT collectibles are stupid, and just speculative things. NFTs by themselves when actually given a real purpose (a core replacement for database identity entries due to the immutable nature), have specific legitimate uses that help protect the integrity of an information system. NFTs should never have been used to overhype collectibles at all.
Looks like a lot of people still didn't get the point...
Go back to 07:11 where Steve gives an example of NFTs as tickets for an event, you could even use NFTs to substitute real estate registration offices
@@israelRaizer why would you though when there are cheaper / easier / more environmentally friendly alternatives that already exist? What extra benefit does it really give you?
I would have liked to see the apparent paradox regarding centralisation be discussed in the video. What I'm talking about is the fact that blockchain is inherently supposed to be a decentralised/trustless technology, but the way blockchain is actually used (at least for NFT’s), it has become centralised and does rely on trust. What if the images are taken down? The NFT doesn't mean as much now. What if OpenSea goes down? That's going to make a lot of apps stop working. Most people won't be interacting with the blockchain directly, just as people don't host their own websites on their own servers - they rely on companies to do the hard work for them. This might be more of a problem with “Web3” than NFT’s specifically, but I still think the argument stands.
I think, there is always so much hype around new technologies, that people forget KISS (Keep It Simple Stupid), you shouldn't use more complicated technologies, if you don't need to.
another big issue in this area is forks in the transaction history. already with ethereum and bitcoin there are major forks based on disputed transactions, and of course the forks with the higher value crypto are the forks that the rich people agreed with. so there is already a central authority with the ability to control the foundational aspect of a cryptocurrency, and they are accountable to no one essentially.
@@Aras14 I completely agree with you. And especially if those newer technologies hurt the planet when there's absolutely no need to use them.
Websites are just good looking front ends interacting with smart contracts, everything you can do on OpenSea you can do directly through their smart contracts as displayed when Steve used etherscan.
You're always interacting directly with the blockchain, opensea just makes the user experience better. (which means that even if openseas servers crashed for good no apps would ever break because of it)
I would only ever publish NFTs like this on a permanent and immutable storage system like arDrive. Using standard URLs or even IPFS is liable to just vanish at some point when people stop paying for storage or pinning
The best description for NFT is buying a voided copy of someone else's grocery receipt. Your receipt says "milk", but you can't exchange it for milk or use it to get milk or claim that it IS milk, you just have a piece of paper that says "milk".
...
Milk
That's a very helpful and funny description -- thank you!
But carrying that example a bit further suppose there exists a matter duplicator that can create an exact duplicate of the milk just by using the transaction number on the receipt. The only thing you don't get from the duplicate is bragging rights for having the original. Without the matter duplicator (i.e., NFT), only the original purchaser can drink the milk. With digital art NFTs the matter duplicator is a simple file copy command. Was bragging rights worth $69 million? Apparently not as last I heard it has already lost 90% of its cost.
Sooner or later someone is going to scoop some poop off a sidewalk with a piece of cardboard and sell it as an NFT. (Newly Found Turd) 🤣
It isn't a voided receipt, it's the same receipt. If the grocery shop were to accept that receipt and give you a carton of milk every time you presented it, then it would have some value. Obviously no sane person is going to do that with real cartons of milk... but in the digital world, creating a copy has no cost, so someone could accept that receipt everytime, to, for example, show a photo of a carton of milk next to your name. Or some avatar image, or a hat in a game, or anything else that they have control over, and you can only access by showing that receipt. Then it's not just a voided receipt for a photo, but an actual ticket for the use of that photo on someone's service, and that can have actual value. It all depends on who is going to accept that ticket for what.
The explanation of NFTs I came up with is:
Person is standing at a table, on the table are a few polaroid photos. Each photo is set inside a shoebox with no lid.
"Hi, would you like to buy an NFT of this polaroid photo of Picasso's The Charnel House?"
"Oh, okay. So I now own The Charnel House?"
"No."
"Okay, so I own the polaroid photo?"
"No."
"What will I own?"
"You'll own a post-it note that says that _this_ shoebox is your shoebox. The shoebox will stay on this table forever. Inside this shoebox is a polaroid photo of The Charnel House."
"Uh, okay. So I can take the shoebox with me?"
"No, it stays here, but you can come look at it any time."
"Hrm, well, I can put a lid on the shoebox, and you'll only take the lid off when I show you this post-it note, then, right?"
"No, the shoebox lid is always open."
"So anyone could come by and take a photo of the polaroid in the shoebox with their cameraphone?"
"Yes, but they aren't supposed to do that."
"Now, wait a minute, I just realized, you said only that the _shoebox_ is my shoebox. What about the polaroid photo of The Charnel House inside?"
"Oh, the photo is managed by Sam over there. Sam says the polaroid won't be moved, but you just have to take Sam's word for it."
"So Sam could remove the Mona Lisa polaroid and just leave nothing in the shoebox? Or replace it with a polaroid of a pile of dog poop?"
"I mean, technically, yeah. But Sam said they'll leave The Charnel House polaroid there. And your post it note says that the shoebox is yours!"
"But I can choose to publicly display this polaroid of The Charnel House. should I choose, right? Or sell T-shirts with a photo of the polaroid on it?"
"No, The Charnel House is still under copyright, you'd need to get permission from the Picasso estate to display or sell merchandise with it on it."
"But this is the only shoebox with this polaroid in it, right?"
"No, I'm pretty sure Bob over there has another shoebox with a polaroid of The Charnel House in it."
Interesting explanation regardless of who thought of it.
this is true
@@AG-zv9jo well said
Well, you got some of the most important points wrong: the polaroid of The Charnel House can't be in two shoeboxes if the NFT is ERC721 (that means the token has only 1 copy). There is an another standard called ERC1155 - Multi Token standard, but that's not an NFT by definition.
The second thing you got wrong is that someone can change the contents of the shoebox. The IPFS network generates a *uniqe* hash for each file it has. When you upload something to the IPFS network, it gives you a hash. If you put something else on the network, the hash would be different.
So, the NFT refers to specific hash on the IPFS, contents of which can't be deleted or modified. If there's a polaroid of The Charnel House in the shoebox, that polaroid will stay there until the end of times (okay, not the end of times, rather the end of Internet)
This is 100% correct.
I didn't actually think I would come out of this being convinced that NFTs are even more stupid than I thought they were...
Never thought I would be even more convinced NFT is stupid and a scam.
Kind of makes you wonder how much Steve got paid to shill this shit.
@@mattm226 I...what? This Steve? The one who just tore open NFTs and explained why they are stupid?
@@mattm226 i also wonder how are you so dense
@@mattm226 found the gullible crypto bro.
For a system built around not needing trust, an awful lot of trust seems to be involved. Trusting marketplaces, trusting that content related to an NFT will be ported to future platforms, trust that the one minting the NFT is the one deserving credit for whatever their NFT links to...
They might as well use centralized systems instead of trust; way less inefficient.
Trust and centralization are orthogonal.
These people tend to be opposed to central authorities until they need a cop (ie when someone else steals their monkeys…)
folding ideas actually talked about that in his video, too. there's nothing guaranteeing that the link that is associated with the NFT will still point to a copy of the artwork originally associated with it. someone nefarious, or a webhosting company going bankrupt or even just a bug, or whatever else may happen, could all render that nft useless in regards to authentification of art pieces. As steve said, the art piece itself isnt directly hosted on the blockchain, only linked by proxy, and there are tons of ways that link could be broken.
@@philcorrigan5641
What these people are against is central authorities having a lot of power.
Cops are not a central authority but a human.
The question is how independent they think.
If they just follow orders and a central authority can order whatever they want bad things happen.
@@rfldss89 Actually, with IPFS there _is_ such a guarantee -- the numbers and letters in the URL are a hash of the file, so you can load that with IPFS and verify that the hash matches the file content, and you'll know you still have the original file, without needing to trust anyone. Additionally, it's hard to delete items from IPFS, and it's not hosted centrally so there's no one to go bankrupt. Everyone collectively hosting an IPFS node would need to go bankrupt, and that's just exceedingly unlikely.
You can tell that a lot of research went into this video. This is one of the best explanations of what NFTs are, what is a blockchain, and how smart contracts work. Great job.
I tottaly agree, I haven't seen a video that has explained it as well as this one
This may be an impressively stupid question, but here it goes: if the blockchain ledger keeps a record of every transaction, doesn't it eventually get too big and unwieldy?
yeah, it slows down over time
From some quick googling, the Bitcoin Blockchain was 253gb total in April of 2020 and was created in 2009. There are ways to keep the full set of info of where everything is that were 5gbs in April of 2020. The Ethereum blockchain appears to have been designed to avoid size problems by having something called "sharding"
Yes. That's one of the technical problems that makes popular chains slow and expensive to use.
Enthusiasts insist that the problem could theoretically be (partially) fixed, but the people with the power to actually fix it don't want to because they make more money this way.
A simple question, but not a stupid one. And impressively enough, one that Etherium doesn't have an answer for, for the time being.
@@kcrtxbw.4349 just wait until ethereum 2.0
One aspect you didn't cover, which I find particularly concerning, is that you are given no control/access to where that URL points. You may buy an NFT that points to an image on geocities, but if the owner of that server deletes the image/gets hacked/or stops paying their bills, your link will point to a 404 page, or worse. It feels more like buying a receipt to me. That receipt will have the address of the shop on it, but the shop can up and move. If the jpeg was actually on the blockchain, that would be different. Sure that would be more expensive, but at least there's something to it then other than a hope and a promise. Your initial idea of selling tickets with escrow contracts is the best actual use for blockchain tech that I've ever heard of, so I doubt we'll ever see it in action :/
I'm still firmly in the "NFTs aren't just stupid, but also irresponsible, and more often than not, a scam." camp.
I own nfts, and an NFT literally has an image attached through the blockchain. You don't have to worry about it pointing to a website. the entire image is on the blockchain. it is near impossible to screw with an nft as well, you will need to change the update authority, which only the creator of the nft has access to. As long as the update authority is intact it can't be changed, so the image will be forever the same even if the creator were to leave or abandon, you still have the nft. My projects I buy are well developed and doxed (give out their real identification), you don't have to worry about the owner changing the nft or the owner leaving the project, because they're gonna be caught with fraud if they give out their identity then go and steal money from people who buy your nft. Now I'm gonna say this also, that if someone doesn't tell you who they are, why would you even interact in their script even if it looks good and give them money in exchange for the nft. I see nfts could become big as a ticket system, authentication system, and reservation system. I also see it good for sports events, gambling, and lifestyle/merch. I'm sorry if my comment is long and confusing, that's usually how mine are, I buy nfts because they may go somewhere they may not but it's definitely a technology thats overlooked and laughed at that definitely can do some good if it gets more development and research.
NFTs are indeed neat. Not for me, UA-cam advertising, but still neat.
@@slowdrifters5149 lul so you didn't watch the video. Good luck with your ummm 'investment'
In the case when the URL is an IPFS address then it can't be forged, since IPFS addresses are cryptographic hashes. The file can still be lost to time of course, but inauthentic files can't take its place without being obvious forgeries.
Expanding on the existing answer about IPFS links not being forgable, you can also host that IPFS file yourself, so you don't rely on others and others can always access it via you
The issue with the trading card analogy is that the link on the NFT can be broken at any time for any number of reasons. Yes, your line in the ledger still exists, but the content it was pointing to isn't guaranteed to last. If I buy a trading card, there isn't any risk of me pulling it out some day and having the artwork on it suddenly change to "404 not found".
It's worth recognising that storing on-chain is a technology which is emerging, and is compatible with a variety of blockchains. The situation with links now only really exists because people are really impatient and wanted to start working with the technology before it was even ready.
And as a side note, NFTs usedfor non-art like access passes and such, will 'work forever' already, as they store their information on chain inside the token metadata, regardless of the functionality of a link. But in this case it's besides the point really as that token will probably outlast it's usecase and everything else
I don’t understand why they don’t put a digital signature of the jpg on the blockchain (to be fair, for all I know maybe they do now). Then you can put the jpg anywhere, and the signature can be used to verify it’s the jpg referenced on the nft.
It makes me wonder if crypto people understand crypto.
@@scaredyfish they actually do that with ipfs, it is a hash of the image and that is stored on the blockchain.
@@joeshmoe4207 It may be obvious, but I feel it's worth pointing out that the image itself cannot be reconstructed from the hash. It really is just a signature, the image is way too big to store on the blockchain. If the image URL goes away, the hash won't help.
The comparison to trading cards is a interesting. Its true that some products do have long lasting collectible value and NFTs are in theory no different. But those collectibles first began as products people simply wanted to own, not in the hope of selling to someone else. Trading cards in the 90s had a boom driven entirely by speculation, comic books had a similar phenomenon at the same time. In both cases the market came to be dominated by people buying in the expectation of profiting by selling it later to another buyer. Both markets collapsed after a few years and settled back down to markets of consumers buying the product because they actually want it, with a smaller secondary market of trading.
That's the issue with NFTs, how many people actually want an AI clipart image of a monkey, and if they do is it actually worth $500,000 to them? Or is it bought just for speculation? I mean, we all know its the latter, and then how can anyone expect that speculation to carry on forever, with the price always going up?
The comparsions to trading cards is bullshit. Its the description of a training card, but the real card is stored in a safe thats not under your control
@@starflow90210u can print the card urself but experts would be able to tell it's not original or issued from the company source same why u can do it nft.
Watch the video again, they aren't even buying the image
NFTs are a solution looking for a problem. Every NFT implementation I've seen so far has been either stupid or a scam. Can they potentially be used for something good? maybe, but usually there's a non NFT alternative already working there where the NFT is completely superfluous.
Can NFTs replace microtransactions? Sure, but its just moving the database to a blockchain instead of the developer's database. Can they become tickets? sure but you still have to trust the issuer that the event exists and you will be let in. Can NFTs be used in smartcontracts? sure, but if you have an issue you can't appeal to anyone except a court and that's essentially the same as regular contracts.
It's all crypto bros looking for the next big crypto bucks, so they invent solutions to problems that dont' exist.
It's also worth noting that it's a 12 year old solution looking for a problem. The technology is clunky and slow, and gets slower the more you use it. Almost all block chain activity actually ends up being done by seperate brokers that don't use block chain because it's THAT BAD for actually using.
The "problem" NFTs solve is an insufficient amount of fraud and money laundering. And they are a MARVELOUS solution to that problem.
> Sure, but it's just moving the database to a blockchain instead of the developers database.
Exactly, thank you, let's all agree to stop there and move on and let people decide where they want to store their own stuff and what they think is more reliable 🤷
I think the issue is that the systems that already 'work' don't work everywhere, they just work in the West so we've decided that crypto tech is unnecessary - we're able to have greater trust in institutions/government than much of the rest of the world, but being able to change who you have to trust, or to eliminate the need for trust in certain parts of a transaction is beneficial in those parts of the world where the idea of trusting the government is a joke.
The only project I've seen so far that uses NFTs, that can't be done using traditional finance routes, is called Empowa. They're building affordable green housing in Mozambique. I can't speak for them as I don't work for them, but they claim that NFTs have basically greased the wheels of their business and allowed it to function in a way that traditional Mozambican finance couldn't have allowed.
I think that the eventual use of NFTs will be boring and trivial. The practical part of NFTs are not in investments or getting rich but more in their core use of verifying the uniqueness of a record. One solution that comes to mind is in replacing Notaries. There are many important documents that I have to take to a special person so that they can stamp it, in order for the person that receives it to be assured that this document is authentic. It could be something like a deed, or contract, or birth certificate, but before I can use this or send it in. I need to drive to a person and pay them so that they can authenticate this document. If this document was issued on a government blockchain as a non fungible token, it would completely remove the need for each copy of this document to be stamped. The blockchain would verify that this document is unique, authentic, issued by the correct authority and assigned to me and only me. Imagine a situation where we as a society don't have to worry about forged documents any more. Changing a single character on a document would not work since the block chain would prevent such a situation from being verified. Of course there are other possible issues with how practical something like this might be at scale, and the logistics of a country or government having a blockchain and the issues between local and state government having different blockchains, etc. My overall point is that there are some valid use cases and they might not be exciting or even tied in with monetary value like they are currently.
Last time I used a notary, me and another person had to sign a document. I needed to coordinate with this other person that lives across the city to meet at a specific location so that a third person with a stamp could be present to verify the we were who we claimed to be and witness us sign the document in front of them. With a digital and secure version of this, like and NFT, me and this other person could use our mobile phones to do the same and only pay a few cents. I could have saved a whole morning and the notary fee and done the same while sitting on the toilet.
As a programmer, when I saw smart contracts for the first time, I said "Oh... God. What have we done?" Do you know how easy it would be for someone to maliciously OR unintentionally create a smart contract that doesn't do what it looks like it does? A simple overlooked bug could wipe away millions, billions, or trillions of dollars in under a second. Whether you think NFTs are stupid or not, they ARE NOT a safe place to hold your money.
This is my exact problem with NFTs. Its like you put a one of a kind painting from a famous artist on your front porch. Its gonna get stolen. Whats more is they make it so that NFTs are impossible to edit. So if someone hacks into it once, nobody can fix it. So its like that painting gets stolen, you contact the police and they say the person definitely owned that painting before selling it, and there's nothing they can do.
According to Folding ideas / Dan Olsen (and the news) this does, in fact, happen. Quite often.
He said something like: each smart contract bug effectively comes with a built-in bug bounty that goes to the first person who finds and figures out how to exploit the bug.
I find it funny that the popularity of Nfts and the dunning kruger effect are basically the same line.
Those who think they know everything love nfts since they can't see anything going wrong.
Those who actually know that "they don't know everything" dispise nfts since they know enough to see how everything will go wrong.
thats your POV, let people take risks and maybe one day it'll be safe to use and we all benefit from it
There are people researching this using formal methods and dependently types languages to embed proofs in smart contracts.
This means you can prove that if your code type checks then it does what you want it to do.
It unfortunately has the problem of making the smart contracts much more complicated and thus harder for non-super technical people to read.
So the fact that the NFT's we hear about are some sort of artwork means nothing. The NFT can point to anything, even nothing at all. This 'pointer-to-nothing' can then be sold and bought, for whichever amount of money (real or imaginary). So all those schemes for laundering money by pretending to sell something for some money and pretending to buy it back for a different amount have suddenly got legit?
As legit as you can get in the crypto space.
Watch the Folding Ideas video, its long, but its an eye opener !
It's finance economy going hyperbolic. We already have houses, products, the future existence of a product, the right to buying the future existence of a product... etc. being bought and sold simply to be resold again and again for profit, so going from there to the ultimate level of abstraction, buying and selling literal nothingness, while still another step, doesn't sound too removed from the rest of the financial sysyem and just worrks to show, in my opinion, how ludicrous this has all become
You could. Although laundering money on a PUBLIC ledger is a very bad idea. It's way easier to get caught, since anyone can follow your tracks.
All money is imaginary
@@ArnavBarbaad And?
This was well presented. It's funny that everyone uses tickets sales for an event as the one example of NFTs being useful. Indeed, they don't HAVE to be stupid. They could be the unforgeable third-party verification mechanism we need for some things.
For digital art, however it's flatly ridiculous. You're buying nothing, you own nothing, except for the ability to pass the hot potato off to someone more stupid than yourself.
Unfortunately, NFTS can't be useful for anything but scamming.
If you wanted to use NFTs for normal everyday commerce this would fail for two unavoidable reasons. First, In order to buy them, you need to buy into the wildly volatile ethereum market, which is by design far too volatile for normal everyday commerce. Second, the physical resources required for the transactions to enter onto the register are both far too slow and far too expensive for normal commerce items. This means they cannot be used for normal things like "buying a coffee" or "buying a ticket" because the transaction can take minutes or poentially hours under strong contention, which is too long for most commerce tasks. It also means that the act of buying itself costs more than any small value item. It also means that the resources of the market are potentially exhaustable by normal market forces or bad actors, so buying and selling becomes an unreliable act.
@@jsrodman Excellent points - with all that, I don't see it mainstreaming. Unless you had a "stablecoin" but the attempts at that I'm aware of have failed, too.
It's seeming more and more like a "solution" in search of a problem
Or a technology in search of a useful application
@@jdraven0890 the point isn't to work for any practical use, but just to provide a vector for crypto bros to cash out. It was always a scam, as is the larger crypto scam it supports
@@jsrodman it's certainly seeming like that. A few earnest ppl are struggling to figure out a legitimate use, while the vast majority are promoting it on the basis of FOMO.
@@jdraven0890 ask yourself. What is the purpose of a decentralized market? The obvious properrty is no oversight. If its not obvious that this means scams, then i don't know what to tell you. No amount of technology fetishism can wish away bad actors. This was built by bad actors.
If you want to support an artist, you can just give them the money, whether by making a commission, supporting them on Patreon/Fanbox/etc., or simply by donating to PayPal or wherever they accept donations. NFTs provide no additional benefits here.
Yep. The furries have had this problem solved for years
even got drawback in unnecessary energy consumption
@@borkborkfoxxo279 commissioned art has been a phenomena for centuries
p.s. don't car for your childish joke or furries
I don't think you understand. Wouldn't you want a signature from your favorite artist? That's the value of an NFT
@@sphereron no not really
the biggest problem with copycat nfts is that the decentralized nature of crypto chains, means you can mint these things with no personal data on the line, making it very hard for anything to be served or to be legally prosecuted. the best you can do is a takedown notice to where the image itself is hosted but if thats your own website its very hard
well see the thing is, for something to be sold, someone has to buy it - just like how we learned how to ignore spam mail, I think it makes sense if we collectively learned to ignore and not to fall for copycat scams :|
funny thing is chain *can* be altered by people who hold power over the chain and people with lots of money
open internet makes intellectual property unenforceable, you either have to censor the entire internet or abandon intellectual property
If it's your own website just break the URL
@@telotawa that's true for data, but not processes.
Think of patents. Those are an intellectual property that describes how an invention is constructed. The very nature of patents is that they are publicly shared, but you have the legal right to prevent anyone else from effecting that process for commercial means.
When you brought up "You can't refuse someone sending cryptocurrency to you", I thought you'd eventually bring up the malicious smart contract NFTs that can get sent to you with no control, and if you delete them, they steal all the stuff in your wallet.
Nothing is being "sent" to you. Its like saying that Chuck E Cheese is "sending" you tokens when they put a number next to your name in their database. Its their own ledger and nothing prevents them from doing that on excel or even a napkin. What you are saying is you should be able to show up and demand they change your balance on their database. Although I agree with you that this is not explained anywhere. This ledger could have malicious code that might mislead you into believing you are "deleting" what has been "sent" to you. To finish the analogy, that Chuck E Cheese is instead a mob hangout and they rob what you brought with you
Oh that's clever. And also, who the hell allowed a system of implementation where positive confirmation of transfer out is required before taking action. Idiotic.
Actually, this has already happened. There are many people that got sent an NFT that hack their NFT artwork browser to delete or move their stuff away. Much of the time they are aware of it, but now they need to live with the known virus in their wallet and they cannot send it away because the contract that they received says so.
so 2 things
1) always check what you're interacting with before you interact with it.
2) malicious crap existing in your wallet doesn't hurt you or your wallet.
It's like email; don't interact with random spam crapmail & it being sent to you (which you also can't refuse unless you know the email first & then block it which doesn't prevent them from creating more spam accounts) doesn't hurt you or your email.
They aren’t “stored” in your wallet, your wallet address is stored in those contracts as an owner. It’s the wallet frontend (M****ask , etc) fault for showing you those sus contracts have your wallet in it it. Op***ea already does this and won’t show you sus contracts that day you’re an owner
I wish you had been a professor at my uni! You have a beautifully concise, easily understood explanation for the topics you discuss. Thank you for the education sir!
Are pyramid schemes stupid?
Only for the people who aren’t at the top.
@@pmsteamrailroadingso only for most of the people involved xD
They aren't
It's a clever scam scheme
Bitcoin, the largest Ponzi Scheme in the world.
I’m so glad this is the first comment I see
Given how big the current market is for autographs and collectibles, I'm pretty sure this is mostly a bubble. Some will survive, but people will want physical objects and stuff that actually feels nice to "own" rather than something they think someone else will buy thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else thinking they can sell it to someone else
on the contrary, for the very reason you gave, the shear size of the collectables market, NFT collectables will retain a market among people who find fulfillment in collecting NFTs. just as they do staps, coins, or unusually shaped chips. ther eis no accounting for taste, and soemone somewhere will find value in owning nearly anything.
the really interesting application is in things like digital assets, game components and stuff. i deal with a lot of on choin games that use NFTs as a stand in for cards for variosonline card like playing games. things like fortnight skins could be NFTs as easily as anything else.
but even more useful is to start using NFTs as steve envisioned, as access tokens for any number of things, concert tickets, gym memberships, security passes. the list is litteraly endless. NFT artwork is just the first wisespread usecase. as people get past the novelty of the idea and it gains traction i expect the market to crash (its certainally a bubble) but it will always retain some value, likley a lot, but NFT use cases will explode.
It's Bored Apes all the way down
@@jondepinet Beanie Babies. I think it will still exist, but I doubt they will retain anywhere close to the current prices.
Solid idea.. its just i only see people selling stupid images they call "art".. which lack the value of the art itself (just like how stupid modern art is)
@@jondepinet The problem is, using NFTs as access tokens is about equally dumb because we could do that that way easier and way more secure by just storing a list of who has access to something on some sort of central server. As we've seen these last few days, the blockchain is very easy to exploit if you can find a way to give yourself a supermajority.
I guess that's not so much a problem as a feature. The same thing as why we're all shipping food grown next to us abroad even though we're eating some other country's version of it. someone makes money off of the convolution.
I'm still convinced NFT art is a scam that buyers are hoping the majority of people agree that their NFT art has the outrageous value they bought the NFT for lol
Like normal insanely expensive artwork...it is reserved for the ultra rich and wealthy to help transfer wealth, store large sums of money, diversify, or tax reasons.
Physical art is much harder to copy though.
*While* buring far more energy than should be necessary for something like that
That's not that different as stock market. The point is that exchanging NFTs is not to be confused as exchanging ownership of the art (you only buy or sell something related to a piece of art, and though the art is not original, the NFT is). Where NFTs are stupid is exactly the same reasons why stock market is stupid and may collapse, with the main difference being that stock market directly relates to production and follows outside rules, where NFTs are self-dependant and only work if people think it does.
Tax reasons, mostly. Just like "NFT art" is entierly for tax reasons and money laundering. NFTs are the scam everyone was worried cryptocoins were going to be.
Right now it's completely stupid. Rampant speculation, people hopping on "NFT mints" as soon as they come out just to flip them like hot potatoes.
Just go on Twitter or some NFT site and look at the "art", it's all cookie cutter stuff... Countless Monkeys, countless animal caricatures, countless pixel art, and combinations of all 3. None of this stuff will be wanted in a few years time, and they're all being bought up like they will be. $2000 or more equivalent for an 8 bit penguin with sunglasses or a cat with a hoodie? Really? Yes... but it's not going to last....
A big difference is that stocks are a digital token in a way, BACKED by a PHYSICAL asset...the company. NFT art, on the other hand, I can copy/paste/save for my personal use and viewing, or even making additional copies to distribute/sell illegally.
9:00 and if you lose your personal key for whatever reason - you're back where you would be if you had lost your physical ticket to the event.
NFTs are an excellent way to manufacture capital losses to offset actual capital gains and avoid taxes.
Yeah, like the wife of a former president has EVER done that!
I can't believe that that expensive NFT points to some fricking ipfs gateway (that might shut down at any point) instead of the actual ipfs path. FFS how rotten can this nonsense even get!?
Its probably a tax evasion scam so it doesnt have to point to anything.
Noticed that too. This link will be invalid in few years probably.
I agree somewhat, but it looked the ipfs URL was mentioned within the HTTPS URL - so if the HTTPS server is down you could re-interpret it as pointer to the IPFS url that uses some idosyncratic syntax that might require custom parsing.
@@superfluidity Too bad the NFT holder doesn't own control of the domain the URL points to...
@@MegaNardman I guess his argument was that the gateway URL still contains the real Hash that is used on the IPFS network, so one could just interpret that dead URL in a different way and it would still work.
I'm a musician and NFTs were made of my music without my permission by somebody I don't know, for sale on the internet. It was a very stressful experience to get them taken down. If you're gonna buy an NFT - which I do not and will never support - make sure it was minted by the person whose art it is.
Also though, f*** NFTs and what they do to the environment
You experienced one of the main, most criticized problems with the very idea of NFTs: near impossible to tell if it's legit. All the cryptography can't do it.
Better yet, never buy one. Also, don't answer that Nigerian prince emailing you.
On your last point, yes, absolutely. We already waste of a lot of energy on Visa, Chase, Mastercard, and all the other credit card providers. Building a system that requires the waste of a lot of energy on computing power is not inherently better (although, now I really want to know what the comparison would be).
On the first part, that really sucks and until marketplaces build in protections against that sort of theft they are going to generate a lot of well-deserved hate.
@@x--. The problem with coming up a way to verify the legitimacy of people minting NFTs is that it is *literally impossible* to do without trusting a source outside of the blockchain, which completely defeats the whole point of using a blockchain (which is specifically to be self contained and to not trust *anything* outside of it).
Effectively the best that could be done is to make an outside server with a database and link to it from the blockchain, which is essentially pointless
@@x--. Before credit cards, how exactly do you think money was moved around? The cost of printing physical money, along with transportation and guarding it, greatly exceeds the cost of moving it digitally.
Nice intro to NFTs. It left me with the question - what happens if the artist forgets to pay the hosting fee to the site with the picture and the page with the art quits displaying?
Pretty much, yes. However, most NFTs are hosted on the IPFS, which works as a P2P hosting, so as long as "someone" is hosting a copy, it's still available for everyone.
Right now, there are some large interests behind offering free "backup" space for NFTs on IPFS, but it would be wisest for anyone buying an NFT to also keep a copy of it, and of the target image or whatever asset, on their own IPFS client, or to pay for some redundant IPFS hosting. Something that anyone can do, but it would be mostly in the NFT's owner's interest to also do themselves.
I was arguing with my friends for a long time that NFTs is the dumbest idea I've known that people believe in. Now that I know this video exists, I'll just point them here.
Show them the folding ideas video as well, for a deeper look!
the technology itself is not dumb, its interesting, and may have some potential uses in the future. the problem is that PEOPLE are dumb, and they like to turn everything cool into a way to make easy money. right now NFTs don't really fix any problem that makes it worth the trouble, at most it give marginal advantages in niche cases. but as long as it has such a huge carbon footprint, is EXTREMELY unsafe, and is just a tool for people to play with a unregulated speculative market, it won't be any good.
Mint an NFT pointing to this video and sell it to them
Forget NFTs, I wanna sell people my farts for 100k each. They are all unique and one of a kind.
@@danilooliveira6580 Not sure about the carbon footprint remark, but otherwise completely spot on. Any new technology goes through a period of novelty, or even hyper-novelty, where we really aren't sure what the thing is or how it should be used. Electricity, automobiles, computers, nuclear fission. NFTs and block chain are no different in that it'll just take time to work out what the actual utility of it all is.
Actually the wedding ring example is very useful. You value your wedding ring more than any other ring. But to anyone else who has no emotional attachment to that ring, this is just yet another piece of metal that could eventually be melted to make a new one. What is non fungible to you is completely fungible to me. Non fungibility is highly subjective.
Not to a court. Watch Legal Eagle's coop video on this. There's a link in the description of this vid.
@@LabGecko I've watched his video. But I'm talking here about the signification of the term non fungible itself, which doesn't have any legal definition. And I agree with Legal Eagle that all the discourse about NFTs replacing legal contract is a huge bullshit. NFTs don't have any binding effect if they are not backed by an official contract that clearly defines what the NFT represents and what rights and duties are associated with the "possession" of the NFT.
All the talk about blockchain technologies revolves around removing the need to trust other people. This is completely delusional. Our entire society is built on trusting millions of other people with behaving mainly in a normal way. When you're a kid you trust your parents to feed and shelter you. You trust your professors with teaching you things. You trust any food seller with not poisoning the food they sell to you. You trust the architect and builders with making a solid home. Etc. Without trust society simply doesn't exist at all.
@@christianbarnay2499 If you're saying the term "non-fungible" _in the context of blockchain NFTs_ doesn't have any legal definition, then I agree. My comment was pointing out that if you try to take any of this to court, you must necessarily use the *court's* definition of non-fungible, and that has a specific definition that Legal Eagle showed in his vid.
(edited to fix malformed italics)
ua-cam.com/video/sZZksPJHfac/v-deo.html any of y’all like mustard? LMAO
no, fungibility is not subjective at all. fungibility means that one item is equally tradable with any other items of the same kind and owning one is not more or less valuable that the others. example: physical currency is fungible, one dollar bill is equally tradable to another. or one quarter is equally tradable with another. and one euro coin is equally tradable with another. that is fungibility. non-fungibility means that items are not fungible. the definition is quite objective, unless i'm missing something.
I’ve been half-heartedly trying to understand NFTs for a while now, thanks Steve for making this video! Feel like I finally know enough to know I don’t need to know about it!
Don't worry mate. It'll come for you in a few years. Once the marketplaces get cleaned-up and more protections are put in place. Reputable businesses like having strong transaction ledgers, protects them and their businesses.
@@x--. Why should anyone put so much effort in protecting that stuff, if they could just digitally sign the art and sell that signatures? It would be much easier and technically give the same or even better proof. The only thing you could not do with that so easily is speculating. And that's actually what NFTs are today. Objects for speculation, because the byers don't have an interest in the artist. They speculate that some time later someone will pay them more. That's the reason they bought it in the first place. But why should someone do that? There isn't really a point in it besides supporting the artist. But the NFT doesn't really have a value. Just the hope that someone is stupid enough to pay more later.
@@Duconi First, I think you're absolutely right about the ongoing speculation.
Second, did you watch the video? I think he made a pretty good argument for what the value of NFTs could be, even if it's pure speculation at the moment.
Third, digital signatures grant you what I would call providence but not publicly provable ownership of the token. The "thing" preventing someone from selling the same token over and over again is that eventually they get exposed on the blockchain. Nothing like that would apply to digital signatures on an image file.
I could copy that image, strip out the digital signature and there's no public record.
The blockchain establishes a public provable record of the ledger, what happened.
And just to be clear, I don't use any blockchains or crypto. I'm not in favor of it and even less in favor of it with the huge power consumption being expended to amass the currency these speculators want when it becomes more mainstream but I think I have a pretty good grip on the tech.
I think you should get a bit more information. This was a relatively neutral, but overall positive take on NFTs. He only mentions a lot of the negatives in passing, and misses mentioning a few negatives altogether. Id recommend looking into it a little further before you can really say you dont need to know more. Look at some extremely negative takes, look at crypto bro takes, and come to a conclusion thats somewhere in the middle.
@@Yipper64 As I'm not planning on "investing" in any of this stuff in the near future I'm busy just trying to stay afloat but I see your point.
I think crypto bros are hype queens I wouldn't trust more than I could throw them.
I will say most of the negative takes I've seen pretty clearly don't understand the technology, that makes it hard to listen to any of their opinion beyond some obvious criticism (environmental costs of mining).
If you have links to any sophisticated critiques where the author actually understands the technology I'd be curious.
The better analogy with Patrick Stewards picture would be that he'd put a stamp on a separate piece of paper that says "I approve that Steve Mould has printed a picture of me". That's much less unique than a signature on the picture itself.
I think one key component of the, "Are NFTs stupid?" question is not just, "Is the concept of digital ownership stupid?" but, "Is the NFT implementation stupid?" Imagine if a private tech company started up specifically to manage token->owner mappings. Their mapping is publicly available, so anyone can verify that they indeed own the listed token, but it's privately managed. Wouldn't all of the benefits of NFTs still apply? How does a public, decentralized ledger truly help anyone in the long run? If DeviantArt started supporting a purchasable, publicly-posted artwork->owner mapping ledger, wouldn't that be way better than the Etherium blockchain?
Like Dan Olsen said, NFTs are a problem created to justify cryptocurrencies. The concept of digital ownership isn't stupid, but, while NFTs have provided us with insight that there is a need / desire for this form of digital ownership (and I believe that insight will outlast NFTs), the implementation is so convoluted that NFTs are far from an ideal solution to the problem.
you have it backwards. digital ownership is what people think is stupid. nft is a reasonable enough technical implementation.
@@joshieecs yet not perfect, so let's just look forward for what will be created next
Public availability means ownership that persists. For example, a videogame publisher could grant licenses as NFTs which could then be transferrable AND could grant access to multiple platforms (e.g PC vs console) AND that license would be provably yours even if the publisher or all the original platforms went out of business.
And it could be done without expensive legal agreements between different platform holders. A new platform could simply reference the Blockchain and know that a given user could be freely distributed that title due to their provable ownership.
@@joshieecs Not for something as simple as digital ownership. What benefit does decentralization offer over a centralized “ownership” authority, much less all the inefficiencies and risks created by having to work on a cryptographic blockchain?
As well, I didn’t say people aren’t mocking digital ownership. I just said that the concept of digital ownership isn’t stupid, at least no more than collectables in general, like Steve said. There’s a market for anything, and that NFTs have uncovered a new market is actually impressive… even if that market could be much better serviced by something else.
@@DanKaschel The blockchain isn’t any more permanent than any other publicly-distributed read-only ledger. As opposed to requiring every ownership management authority to agree on the ownership providence, I would agree there’s value in there only being THE Etherium blockchain as THE single authority to manage ownership… except Etherium isn’t the only blockchain… it isn’t even the only Etherium blockchain.
From a technical standpoint, the examples you show are still things that could better (more quickly, cheaply, easily, and safely) be managed by a central authority. The only reason they aren’t (to a certain extent, they actually are, though) is because there hasn’t been a desire for them. The examples you show are examples of NFTs being a solution looking for a problem.
The notion of digital scarcity is asinine. NFTs feel like a backend to help inforce that notion.
Capitalism: We need scarcity to enforce class division and unequal distribution of resources
Digital goods: *lack the concept of scarcity*
Capitalism: Well that just won't do. I have something for this
@@saeedrazavi4428 Well put.
Thank you! Some day we have to realise that digital good creation cannot be adequately and sensibly supported by capitalism.
I guess digital scarcity is not really happening because every day there is anew type of token released, diluting the scarcity of all previous tokens.
@@saeedrazavi4428 It's not capitalism, it's consumerism. Also there is plenty of other things that can be used to enforce class division why would they need to rely on scarcity alone?
Hell you only need to look at the continual class difference between the nouveau riche (who are overwhelmingly inarguably wealthier) and old money.
In other words: You can't buy class.
I've seen a few explanations of NFTs that make the analogy to naming a star. You use to be able to send money to a company that would give you the right to name a star some place in the galaxy. The company would record the name, and the person that named the star in a ledger, and then send you a certificate stating that this star was named by you. Do you own the star itself? NO! You could never own a star. BUT according to this company you PAID to name that star. But some other company could have had someone else to pay for that star. But the bigger issue is this: What happens when that company shuts down? Do you still have a star you named? Not really that ledger is gone... You really haven't gained anything but a piece of paper.
So the secret is to name a star in a Blockchain, got it /s
This is *so* close but misses a really big point: MILLIONS of people are supporting your Star Company. They have an ongoing and strong interest in making sure the Star Company continues into the future indefinitely and that it keeps perfect records of every star ever named.
That's very different than the actual star-naming companies that have no incentive to keep perfect records, to never give duplicate names and can go out of business relatively easily.
If longevity matters, blockchains have an edge.
@@x--. Since most humans don't live more than 70years on average, NFTS are literally useless.
@@x--. there's one more thing he's missing with the analogy: star-naming companies never spent millions of tons of CO2 to do their shit, while we are on the edge of a Climatic Abyss
@@samus88 Respectfully, this argument goes over my head. What's 70 years got to do with anything?
I've just watched the legal eagle video and yours, and I have to say, excellent collab. I feel like you sat down with some creators and split up the subjects, which is awesome. So much better than all those "there's another creator in my vid here". thank you and props!
A simpler way to think of an NFT is that it's a receipt. It's a fully traceable receipt, but all the receipt actually says is "I own this receipt". It might also have a picture of a cat or a link to a tweet on it, but that is basically irrelevant.
BTW, I am currently selling an NFT of Steve Mould's wedding ring if anyone is interested. And an NFT of the abstract concept of stupid.
I'll take ten of those please.
Owning an NFT is like having a receipt which says: "In you enter the Louvre, go down the stair under the pyramid, take the stairs to the second floor, take the corridor on the left, walk until the room 17B, enter the room, the fifth painting on the right wall is yours".
But you cannot take your painting home, everybody can go to the Louvre to see it and take pictures of it an reproduce these pictures indefinitely
@@francescoghizzo That's exactly it. You get the equivalent of a ticket that says "some artwork, somewhere".
@@francescoghizzo In addition, the Louvre could decide to sell that painting, or simply put it in storage, and it would no longer be where the token says it is. Even if the Louvre sold you the NFT. In the same way, the digital artist could remove the JPG from the IPFS. This may be unethical, but I don’t think it would be illegal. (I am not a lawyer!) You still have the NFT token, but now it points to nothing. What is its value then????
@@Eric14492 Exactly!
instead of buying the NFT of your friend's artwork, why not just commission them or pay them directly for the art? buy a print? you can support your friend and buy art that is meaningful to you without having to "wait for nfts to become carbon neutral"
Just imagine paying your favorite comics author for the original drawing of a strip and receiving an actual piece of paper with the original drawing of that strip. What a bizarre concept!
Naah, let's buy a line in a database stating that you've blown fake money to reach a public URL on the internet •_•
I have two, very similar questions/concerns:
9:27 - So a concert ticket can be lost or stolen, and an NFT cannot. But the private key can be (although it can't reasonably be counterfeited). This just seems like moving the problem one layer up.
11:05 - So you can buy an NFT with a cryptocurrency without trust, but how can you buy a cryptocurrency without trust? Again, this seems like the problem has just been moved one layer up.
actually an nft also can be stolen due to their implementation being programmable - so its possible to build malware into one that when interacted with (for example to get rid of it) will transfer things out of that wallet
I finally have a basic understanding of the whole cryptocurrency and NFT brouhaha now. Thank you so much for breaking it down so anyone can understand. Especially important for consultants such as myself when questions from clients such as this topic arise :)
Wow the whole thing is so much clearer now. Thanks Steve. As far as whether NFTs are smart or dumb, they are what they are. Something is worth what someone will pay for it. If you drop $69 million on an NFT then you had better hope that someone else is willing to pay at least that much for it if you try to sell it. If the best offer you ever get is $5 then you payed $69 million for something that's only worth 5 bucks. I'm guessing some people are buying these for tax evasion or money laundering purposes, just like they do famous art works
In fact, they function identically to "high art". Which is to say they're for money laundering. Put a bunch of money into an object, claim it has that value, then have someone else buy it. Boom. Money laundered.
And this is my personal objection to NFTs as they're currently traded; you're buying what is essentially a digital certificate of authority that ties to but grants no rights over a digital file somewhere on the Net, with the expectation that you will be able to sell it in the future to someone who will pay more to buy it from you than you spent to buy it. And _they_ would be purchasing it with the expectation that, like you, they will be able to sell it in the future at a higher price to someone else, and so on, until someone who has paid some (hopefully not exorbitant) price for that NFT discovers that there's no one willing to buy it more than a tiny fraction of what the last buyer spent, so all this achieves is a chain of shuffling money to an optimist from a bigger optimist, until it collapses under its own weight.
Once an NFT of a piece of art is sold... What's to stop the artist making another NFT that has a different location on the internet, but represents the same artwork? Surely that would devalue the first NFT?
Or the buyer making a copy, then selling either the original or one of their copies.
Yes, but such is the nature of artificially attributed value. If something does not have intrinsic value due to what it is (i.e. it can be consumed in some way), that value is always subject to flux and can be easily manipulated under the right circumstances.
It's not as easy, but an artist can paint a second copy of an original work as well. Will that devalue the original or increase its value because it's considered the original? It could go either way and is basically a matter of convincing more people one way or the other. The value is arbitrary to begin with, so increasing and decreasing that value is also arbitrary and is depending on public perception. Crypto and NFTs are no different and fiat currency is not far off either.
Hell, when gold was used as the standard it was still basically an arbitrary value, but now we actually USE gold so it has an actual use and therefore intrinsic value beyond status symbol.
Nothing physically stops them. I suppose the first NFT will probably have higher value if people like the idea of it being the first one. It's a bit like artists that sell limited edition prints - nothing physically stops them selling more copies later.
It’s like saying making prints devalues the original artwork
@@MonkeyJedi99 They don't even have to buy it, just download the image and make an NFT of it, but then it won't be THE nft made by the artist, it's just another NFT of the same image.
Hilarious that "Escrow" sounds exactly like the french word "escroc" which stands for "scammer"
Heh, there's a trust issue on the other side: you trust that you'll be given the seat. Computers can't guarantee it.
To sum up in a couple of words, the main purpose of NFTs is to "build scarcity", since mankind has always (over)appreciated and fallen for anything rare, even if practically useless.
especially money
@@gb2983as in US dollar? But dollar isn’t scarce.
It does have 5000 nuclear bombs and 12 aircraft carrier task forces supporting it.
Much more work and maintenance in lives and stories.
So when you buy an NFT, you are buying nothing. Got it.
Not true, you're buying bragging rights to a receipt that no one will care to ask you for!
@@Waffle4569 Of course, I did'nt think of the obvious.
@@Dave-rd6sp Yes, I forgot about that bit, fair enough. However, if someone pays any amount for a picture or a piece of music that anyone can see/listen to then it's pointless. Who the hell wastes millions on that ? (they deserve to loose all their money.)
And when you put your money in a bank, it is now nothing
@@frankowalker4662 I can go to the internet and download games without paying for them. Does that mean games are pointless? Of course not. I agree NFTs are so far bad and have no use in the real world yet, but your comparison is not that great.
And don't pirate games, a lot have heart and love put into them and are real works of art, paying a bit to enjoy is the minimum!
One thing that you didn't really touch on are the implications of what owning just a particular URL to a file on a server actually means
Unlike a trading card in your possession which puts the onus on you to keep it safe, if that server goes down or someone with access alters the data on it, you can be left with nothing, or worse (here's a nice virus to hack your etherium wallet)
And the question remains, what is the thing that is actually valuable; a line in a ledger that says you have a link to some work of art, or the very art itself?
What's more valuable, a trading card, or a line in a ledger saying you know the address as to where the card currently is?
so research the nft before buying & ensure they are storing it either on-chain directly (SVG are just text, this is easy, for example) or on permanent, immutable storage so it can't just go down
viruses can't do anything unless you run them. so here's an obligatory reminder for anyone reading this: DO NOT interact with anything you aren't sure about. better safe than sorry.
value is subjective, most of the time.
Most urls associated with nfts are permanent and immutable
See, the main problem boils down to this. Everything you can do with an NFT, you can do some other way, often a better way, and on top of that there is the problem that blockchain mining has become a *massive* environmental disaster. The blockchain is a neat idea in theory... but ultimately it has proven to be a solution in search of a problem, and in that search has become a problem itself.
Don't get me wrong, I liken NFTs to Dutch tulips but I don't think its really an environmental problem. If you google energy usage charts comparing crypto to traditional banking it is still below traditional's usage..
That's a false equivalence. Let's imagine for a second that all fiat currency disappeared tomorrow and crypto took over all financial functions... it would still eat up tons of energy (more in fact with the explosion in demand) with mining, AND it would wind up using about the same energy as traditional banking for everything else it had to take over. As long as you have any kind of financial system, the infrastructure that traditional banks support would have to keep getting done. No matter which way you slice it, blockchain mining is an unneeded extra drain on energy, hardware, and resources ON TOP of whatever other monetary system is in place.
@@chrisjokinen217 just because it is not even a fraction of the transactions.
The maximum possible amount of transactions per second in e.g. bitcoin is only 7 - while in comparison Visa processes on average 1,700 transactions per second (without shredding GPUs in the process)
@@townsends-ip Okay, so are you saying that the amount of energy needed to increase the transaction rate _limit_ of Bitcoin to match that of Visa's _average_ is trivial?
Blockchain is already a disaster as it is, and it's only a toy for geeks and grifters. How is throwing more energy at it (no matter how cleanly it's generated) a good thing? Are there not better things that energy could be put towards?
To put it another way, what problems are blockchain uniquely suited to solve? What problems can blockchain solve more quickly or efficiently than conventional means? And does solving those problems benefit more people than just the ones who created them in the first place?
Ofc the energy demand and the way it's currently used is pretty stupid / scammy. But I do not think its a solution in search of a problem. Again, disclaimer: I have held some cryptos in the past but atm am not invested in them whatsoever.
Having said that... besides the current issues of stability, adoption and energy consumption, theres is one element to it which does solve a problem. That is the fact that crypto is an attempt of creating an artificial currency that is not bound to any single authority / state / institution. So compared to for example the USD, there is no government that can just print (create) new money on demand, which had not existed before. The same goes with other regulatory power over the currency and the stability based on how a paticular country / region is doing politically or economically for example. In a way it is a more democratic approach to how a currency could be managed.
I am not saying the current cryptos are perfect, nor do I see them as replacements for classic currencies yet. But I think you can acknowledge the value of the idea behind it. While atm the trust and simply the amount of users are lacking, there is still potential.
The problem with democracy is, it only works if people participate in the process, otherwise the system gets corrupt and controlled by a small group of individuals. This is something you can see atm with how the majority of some cryptos are held in the hands of a few individuals and the same goes for "mining power". Therefore trust is obviously hard to establish with the current cryptos.
But I think somewhere down the line, after multiple improvements and iterations, we might find a new way of managing our currencies (/ one global currency, naively speaking). Obviously talking here on the scale of multiple decades / maybe a century.
Closing again, that I am not advertising / incentivising to anyone to invest into crypto, I merely want to state there is an idea that we should not simply ignore (besides the obvious amount of flaws still present in the current processes).
Even after listening to the "Maybe NFTs aren't stupid" segment, I still think that NFTs are stupid. (Specifically, I'm talking about NFTs in the artwork context as discussed in the video. They might not be stupid for some other use cases.)
"They might be" LMAO
I agree in the sence that there should be more then just a peice of digital artwork with an nft, there needs to be something that you can get access to any other way then getting the nft
So digital art NFTs are cryptographically enforced bragging rights ... great.
Man, if you say that like that of course ir would sound stupid.
@@michaelmcdoesntexist1459 that’s cause it is stupid, it holds 0 tangible real world value. If you got money like that. Buy houses and rent them out to create cash flow and real world assets
@@chrislacascia4547 I'm not denying it XD. But, ya know, even enforced bragging right have a value. Our current society is build on that. That's why autographs, expensive cloth, etc have some value. Yes, is stupid. But we already spend a lot of money on stupid things. My problem with crypto is that some jerks try to convice everyone that is the new big thing instead of another "stupid thing". But the people who get robbed by believe that shit kind of deserve it.
At least clothing and autographs have some physical value as an item. NFTs are actually nothing. Their only value is in scamming someone else out of their money with it.
@@TheGeekRex game skins, gachas, and pornography have the same physical value. And people still spend on them. If you know what you're buying (digital bragging rights) you can spend your money on whatever the fuck you want. And if you buy NFT arts without the proper understanding of what you are actually buying, then you're a moron who deserves to be scammed
20:10 that right there. if an artist wants to make an NFT of their art, fine, but if someone else makes an NFT of art that isn't theirs, which is overwhelmingly the case, then NFTs become a problem. cool tech, misused horribly
as with all technology, it has the ability to be used in a good or a bad way, and that doesn't make it inherently bad.
@@Derokorian Sure, like leaded gasoline.
@@Derokorian The big problem though is that NFT's are being sold as a solution to this problem while it's happening in plain sight for everyone to see. If all of the "bad" things NFT's are supposed to fix still happen, then what's the point of it when there are arguably better, more mature solutions already in use and available?
@@DarthBiomech Out of literally every single technology ever made by humans that you could use as an example, you went with *leaded gasoline* ? Like, I _guess_ , but... All you can do is burn it....and it releases so much lead...
I watched like 15 videos about what are NFTs, and couldn't get it the way I did from your video.
Everyone has those weird explanations from which you can't really tell what exactly NFTs are... but your video gets it 100% explained!
Thank you!
24:45 It's almost a valid point, but Trading cards have value for actual reasons.
As far as I'm aware, all trading cards except those representing pro athletes are part of a card game. i.e. a game that can be played using those cards.
What determines the value of these cards is two general factors,
-their rarity (artificially introduced)
-their power (how good is the card)
Even many 'rare' cards aren't valuable because they're simply not good in the game so aren't sought after.
One of the most valuable playable trading card is the Black Lotus from MTG, which is an old card from a finite set of limited cards. It's also an extremely powerful card, being powerful enough to just be outright banned in all formats (although, most of what enforces its extreme value is the meme and the high cost of the boxes that contain them).
Football/baseball etc. cards are valuable because of rarity and the fact the cards represent a player in an isolated moment of history. The most valuable ones are famous players from past or extremely limited cards, (a player who didn't want to be on a cigarette card, but had already been printed a few times).
NFT "Collectables" are simply permutations from a set of random attributes, they're not 'rare', they're not historic and can't be used to improve your play. So their "value" is entirely speculative, not reinforced.
He was showing baseball cards tho
@@mattmmilli8287 Did you read the whole comment or just the first 3 lines?
I actually was under the impression that the entire jpeg file was on the ledger. The fact that it's not seems even more stupid to me. It doesn't solve the problem of the file being publicly accessible; the pointer tells you exactly where to go to find it. And it introduces the new problem that you're relying on an external server to keep existing and hosting the file.
IPFS is a decentralized storage network
@@browolf the ipfs adress gives a file that points to a http ipfs gateway instead. If the gateway goes down you can't access it directly, you need to copy the ipfs URI from the http URL
They can be but usually aren't because it is too expensive to do so in most cases
On-chain storage is a developing technology, only reason we have the whole links situation is because people were too impatient to get started with it, that they didn't let it mature
IPFS is like bit torrent, it requires people to seed the file. You can do this yourself, or someone could have an old copy and randomly decide to re-host it later, and it would have the same address/hash. But if there's nobody hosting the file at the time you want to download it, you're not getting it.
As an artist myself, I really dislike them. I follow so many artists and love the art community, but since NFTs became 'a thing', it's gotten to be such a horrible rat race.
what I've noticed, unfortunately, is that much of the horrible stuff is just people being mean to each other for things that they don't understand, and most of the toxicity around NFTs is coming from... people who don't like them.
@@FelineJAM I follow hundreds of artists who have had their art made into NFT's and sold without their consent. All by crypto bros looking to make a buck. And if you find discussion about NFT's almost anywhere public enough, it's filled with bots promoting some project that, if you do a little research, is obviously some kind of scam. THAT'S toxic. People mouthing off about not liking or not understanding NFT's might annoy you, but compared to that, is not measurably toxic.
I don't know if it's only just become a horrible rat race with the influx of NFTs, if you've ever dealt with galleries you might be aware of how cutthroat the business can be.
Pukicho on tumblr said that artists that sell their work as NFTs really only care about the value the work can have, rather than the work itself.
They even go as far as to claim these people are really just businessmen that are masquerading as artists.
I think theres some truth to that and I'm glad to see that other artists also don't like NFTs.
Just like "high art", the price of NFTs doesn't have anything to do with skill, beauty, or effort, only on artist influence with a bit of luck
Art has always been like that to an extent, but NFTs just kinda... Shove it in your face more... Don't know how else to explain it
I will say that the "signed photo" thing does not quite work, since to most people, the value in a signed photo is that the signature itself is unique. Even if it's very _similar_ to thousands of other signatures that person has signed over the years, but it is a unique expression of that signature. If you then just photocopied that image with the signature attached, that would have a lot less value to most than an original signature. Also, a lot of people place value on the act of _getting_ a signature in person, the act of meeting this person for even a moment, and the object itself mainly has commemorative value, like your wedding ring. By these measures, I don't think that an NFT ever achieves any of these positive connections. For the types of NFTs we're discussing her, at least, I believe they have NO value except to those few people who just have a lot of money and like to just show off that they spent a lot of money on something, OR to chancers who believe that they can buy things low and sell them high, which is not a wise investment here.
You seem to have missed something. This does uniquely bind the artist to the buyer, as long as the underlying blockchain remains. It's "impossible" to copy the NFT stuff.
@@matteyas If a person genuinely feels that way about their purchase, then that is their business, but I don't believe that most people would feel the same level of personal connection to a hash in a blockchain that they would to a hand written signature, particularly to one made in their presence.
@@timogul That's probably true and might be for another 5 to 10 years, maybe more. What's probably also true is that a majority of the people in the upcoming generations are more likely to feel a personal connection based solely on digital happenings. Either way, that's none of my concern. :)
@@matteyas Except in 5 to 10 years, most of these will be subject to link rot and the URLs/URIs will point to absolutely nothing.
Though you last line makes me question _a lot_ about your perspective on these.
@@scaper8 Skepticism is a virtue.
So it's a signed version of their digital artwork (or the token is the signature of that artwork, I guess )... that's the best explanation I've heard of NFT!
Yes, but the signature is an arbitrary number and it's not in the picture. When you hold your precious 'signed' picture, is exactly the same as before.
27:20. “You are buying an NFT that points to the location of the artwork on the open internet”. No. You are buying an NFT that points to a location on the open internet - a location that is owned and can be altered freely by someone else and not by you. There is nothing to stop them from changing what is at that location. Or shutting it down. There is no record on the block chain of what that location contains. And there are better ways to give artists your money if you want to support them.
If the location use ipfs, then you cannot change it. At best you can delete it, but at least the owner itself should keep a copy.
Imagine the shitshow that would happen if someone replaced rich mans funny monkey jpg with literally illegal content. or a picture of poop, which would have less shock value but would at least be funny instead of horrifying.
Thanks for the information. And I guess congratulations on convincing me that buying NFTs (at least as they are currently used) is dumber than I initially thought.
21:38 I was genuinely distracted by how fantastic the quality of LegalEagle's footage is. Like, wow. That's one crisp image and beautiful lighting. I thought we were jumping to a clever sponsor or something, my goodness.
You entirely skipped a HUGE elephant in the room : The whole system is designed to financially benefit people who invested early in cryptocurrencies. Especially etherium.
That's why it's such a "problem in search of a solution". If people use this thing, it will make them rich, so they have to hype it.
Somewhere in between a pyramid scheme and a Ponzi.
That's the same thing as the whole stock market.
_That's why it's such a "problem in search of a solution"._
just call it a *scam*
He plugged Folding Ideas video on NFTs - Line Goes Up.
Check that video out. It goes into that ELEPHANT.
It's good to talk about the misconceptions about what NFTs are, and the ways in which NFTs can mimic existing trading concepts, such as trading cards or contracts. But I feel like you glossed over the huge negatives, such as the amount of computational power (and therefore electrical energy and technological resources) required to work this "ledger", and the entities who have particular interests in pushing NFT technology (including scammers). In short, the theoretical concepts are all fine and dandy, but they aren't really necessary and they do more harm than good, in my opinion. If I want to give money to an artist, I'll sign up for their Patreon.
@@Dave-rd6sp "only a few months away" how many years have we been hearing that for now lol
@@voidling 5 I think?
NFTs are good for 2 things - scamming and money laundering.
So, best case scenario, what you'd "own" in the beeple example is a pointer to a location on a file server? However, file servers are rotated and replaced as physical objects. Also, URLs are not real objects and change often. If the server suddenly had a glitch and the file had to be replaced, you would then own a pointer to a counterfeit file. Also, if the server farm went bankrupt, you only really own the pointer to that file at one point in time and some finite-but-unknown period thereafter. The original file may no longer exist, and your pointer would be as useful as a deed to land on the island of Atlantis.
No, it's the ability to buy and transfer digital media and ownership. You can even own part of something. In the case of digital art, you can buy the usage rights to a piece, and then if you find someone online selling copies of it you could prove ownership and have that website remove the copies being sold, and can even take the person to court proving your ownship of the digital art and have them hand over all the proceeds of them selling the forgeries.
It also means more than one person can own something by each having a smaller part. In future if the value of that artwork increases and everyone who owns it agrees to sell it, the proceeds of the sale get split between the owners. Equally if everyone EXCEPT you wants to sell their part, they can do so.
It doesn't have to be digital art either. An actual painting's ownership rights can be put on the blockchain, so if someone or many people want to buy or sell their rights to a piece, they don't have to go to a 3rd party like an auction house and pay commission on the sale, they just sell their part on the blockchain and it's done. In the auction house all you're doing is buying a certificate of ownership and it doesn't actually do anything to the piece, just confirms who owns it. NFTs do this without the need for an auction house.
Think of things as well like property rights. Currently if you want to sell your home you have to go to a centralised land registry and have to pay to update the records, have to pay a legal rep to draw up all the paperwork for everyone to sign, and then have to put the property in escrow while everyone waits for the payments to be transferred and confirmed. NFT's allow this to happen without the land registry, and without a lawyer. You just set up a smart contract which automatically transfers the ownership of the house to you the second the crypto hits that wallet at the agreed price - It's thrustless and doesn't need a land registry or a lawyer or even a bank. It's all done in seconds, is final, and can't be reversed.
Think of any instance where you need a 3rd party to confirm ownership. NFT's remove the need for 3rd parties. A good example is what BTC did for money. You don't need a bank or 3rd party to give you a bank statement and prove you have a bank balance, and you don't need banks and card providers to transfer BTC from you to a 3rd party.
@@NeonVisualThat's just the beautiful theory. As @LegalEagle showed, NFCs have no legal power per se. They could have if accompanied with the relevant legal framework, signed by everyone downstream taking over the NFC. But that's absolutely not the case for most NFC, which really do not confer any rights than the right of owning the NFC itself.
You still seem to have a bit of confusion around ownership, particularly in your ticketing example. You don't own the ticket (or the NFT), *your private key does*. Whoever has your private key owns the ticket. If you lose access to that (say, you get hacked), it's just as gone as a physical ticket or normal emailed ticket would be. The transaction on the blockchain doesn't record who you are, only which private key you happened to use for the transaction!
Of course you could make the smart contract require some sort of identity information. Say, a name and state ID number (driver's license, passport, etc). Then you'd have a trustless link to a trusted central identity validation system, so you could say you own it... but you've lost the benefits of trustlessness since you're depending on the central database to link the NFT to the identity.
"How do you prove that you were the purchaser of that particular ticket?" Umm, Steve, it's called "will call" ticketing. We've had this figured out for decades, if not longer, and they don't require computers at all, let alone a blockchain.
I've yet to see a single use case for NFTs that is both more secure than earlier processes and also easier to use.
Boy you're will call experiences are better than mine ;) Of course, they always seem to lose my comp tickets.
They haven't yet built "easier to use" part but it's getting there. Email started off as a command-line experience where you needed to no the esoteric parts of the system to get it reliably right. Eventually, developers came along who did figure out how to make it easy to use and about a decade after that it had all but taken over.
So to here. Just going to take a few years to figure out how to make it easier *but* it will get there. There are too many advantages to having a cryptographic wallet where a transaction can be 'proven' without having to rely on paying Mastercard, Visa, Discover, Amex, etc, a but of your sales.
That's where the real competition is going to be. Can blockchain be cheaper than credit card companies? If yes, then eventually they win.
@@x--. That doesn’t make any sense at all. Credit card companies do more than just process transactions. So Blockchain garbage isn’t even in competition.
At best you hope they adopt the tech on their own, to vindicate all of the blowhard talk about how great the shit is. But the idea that Blockchain is actually going to replace anything, is absurd.
Just a problem looking for a solution. Not a solution looking for a problem, but a problem itself.
@@JM-zg2jg Let's talk, my friend. You are right, they do "more than transactions" but the absolute heart of their business (to the tune of tens of billions a year) is taking money from you and giving it to the business.
They do this by taking a cut of the transaction and charging network access fees. Do businesses like paying 3% of their transactions (less if you're bigger) to some other business? Don't think so. In California they dislike it so much they have cash vs. credit gas prices.
So that's the fundamental question. Can blockchain currency beat 2 to 5% and provide the necessary ancillary services to get consumers to shift?
I would bet, yeah, probably. Banks and card processors have to make a profit. Crypto blockchains don't.
So it is likely to permeate through society and become more common and accessible. As it does, I don't see what stops it from taking over.
@@x--. Until the problems with mining are solved I don't see blockchains being able to supplant anything long term. Proof of work mining gets more energy intensive over time, and proof of stake is exploitable as all hell.
What about the environmental issues though?
A trading card costs resources to print, then that is it. An NFT is continually costing resources as long as it exists.
Is it though? So long as you aren't trading your digital trading card, your token is not being processed by the ledger. People even store their private keys offline on paper, so you can't even say that someone's computer is running to keep validating it. The biggest impact your NFT will have is when someone downloads the whole blockchain from scratch, most places just append new data.
And on top of that, with the world moving towards green electricity production, what does a carbon footprint mean in a few years time? Let's assume the worst case that the NFT is constantly using energy. Cool, solar powered crypto monkey.
The way the technology is used right now is a meme - literally, some of the first NFTs were rare mint Pepe's - but the whole crypto market is based around efficiency, how many hashes can I crunch per watt used? Miners pay for electricity, and in a world where green energy is cheap because our governments want us to use it, it is disingenuous to claim that a market build on efficiency is not aware of its own inefficiencies and isn't constantly trying to solve them.
There is something like NFTs developing in an online game that I play, EVE Online. I won't go deep into the details but the game is a scifi space based MMO in which players own ships and can change the surface appearance of their ships with what are SKINs, basically colorful patterns (applied to the surface of the ship. It's actually a license to display the pattern on your ship in perpetuity. So even if you lose a ship of a given type you can display the same licensed SKIN on another ship of the same type forever. Recently the ability to make these SKINs by the players themselves was added to the game. They are sold on the digital market in both in game currency (ISK) and a digital currency equivalents (PLEX) that can either be purchased directly from the game developer or bought on the in game market from other players. Both of these currencies are in effect worth real-world currency. And the SKINs themselves can be sold for what amounts to anywhere from $5 to $20 of real-world currency. This is a similar phenomenon to digital artwork NFTs.
I think you seriously understated the environmental impact, since that seems to be the best argument against them across the board, as opposed to entirely subjective argument that they are stupid.
Other arguements are:
They cause far more harm than good (9.3 billion dollars lost to fraud and counting).
They are horribly inefficient(A Raspberry Pi can outperform the entire Etherium blockchain).
Proof-of-stake has yet to show concrete numbers on improved environmental impact and Etherium has been claiming its shift is months away for 5 years (Also proof of stake centralizes decision power and wealth generation to the wealthy).
The issue with that rebuttal here is that enviromental impact of NFT is only a short term issue, once Ethereum (responsible for 70% of NFTs) transition NFTs pratically dont contribute to the enviromental destruction anymore. And i doubt you'd suddendly start liking NFTs once the ethereum transitions.
@@jslavertu Everything points to it happening this year. It's been successfully shadow merged multiple times already.
No, the best argument is that they are horrible for artists and are riff with scams and illegal activity. The environmental impact is just the cherry on top.
I really like the information that was presented in this video. The interesting part is that he answers the question about NFTs being stupid (27:00) by saying that they don't have to be, which is another way of saying they currently are. When people that don't know a lot about NFTs talk about them, I say that they (the NFTs) are stupid. When people that know about NFTs talk about them, I say that they (the NFTs) are very stupid.
Shows how narrow minded you are to have this viewpoint. NFTs in the abstract are simply a technology that will 100% be integrated into everyday society within the next 10 years. You’re thinking of it as some type of marketplace of value when that is just the current outcome of the marketplace. You could make the statement that the current iteration of most used aspects of NFTs is dumb, but calling NFTs, the technology dumb is ignorant. Do you know how many people had the same viewpoint towards crypto? The money making (and losing) aspect will be gone most likely, but the technology will be here way after you’re dead.
@@ryanhughes1101 Found the NFT user. He fears my screenshot abilities.
i still don't get it but i still think its stupid, after he said that he later came up with an analogy that confused me more
i don't really know how to explain it so ill come up with my own analogy:
if you want a house, you don't buy the house, nor an NFT of the house, you'd buy an NFT of the road leading to the house... and an NFT of the road is different from the actual road itself...
you know when you wen't in a circle to end up where you started, but then you keep going around that you don't even know its a circle anymore or a different shape you just know you ended up where you started, i feel like that right now
the guy in the video probably might be a chill dude in person but i have no idea what the heck is goin on in this vid, i just feel even more confused about nft's, and it feels like a scam when i try to understand it
@@lenny_1369 A better analogy is this:
If you buy a house, you buy an NFT of the title/deed to the house. No, this doesn't mean you DIRECTLY own the electronic image/scan of the title/deed. What it DOES mean is that your NFT of the deed is PUBLICLY and directly traceable back to the original seller of the house (Real estate agency/bank/government/etc...). So yes, other people could mint NFTs of the same title/deed, but none of them would be directly traceable to the original seller like yours. IE, you own the title/deed, ie you own the house.
Is it a bit roundabout? Yes.
Is it being used as intended? Not on a wide scale.
Is the idea of having a system to reliably track down electronic purchases stupid? In my opinion, no
@@ryanhughes1101 I'm sure one day NFTs will have their place. Problem is today NFTs are more well known for questionable artwork then any actual usefulness.
I like that you mentioned smart contracts. These are incredibly hard to write well, and pretty much impossible to change once on the blockchain. There is a recent case of millions of dollars worth of crypto essentially being lost forever because of a bug in a smart contract.
What happens if an angry ex-boyfriend or girlfriend created revenge porn as an NFT then gives it to your wallet
As far as I can see that is there for eternity, or your national security number, your bank account details, lies about you, truths about you - anything. It can never be deleted.
@@piccalillipit9211 dude, that's like, the whole Internet. You don't need crypto for someone to tell lies about you.
@@Andrew-jh2bn - NO - but you can get a court order to have it removed. That is not possible with the blcok chain.
@@yt_user892 - I work with victims of narcissistic abuse - narcissists' speciality is massively vindictive revenge campaigns. They will simply LOVE this - it will destroy millions of lives will this...
0:02 Short answer - Yes. Longer answer - Undoubtedly, yes.
Steve, I am surprised you did not talk about about regular currency and electronic payments. If I want to support a digital artist, I will pay for their artwork with regular cash. I will not go through this indirect route with middlemen taking a big cut of the payment.
Or the amount of profiteering, rugpulls and straight forward scams ....that...to the regular, average person, are essential identical and indecipherable from the next Bored ape Yacht Club. The odds of finding the next big thing. Getting in at the ground level. It's not a investment regular people should make. Steve is doing some intellectual dishonesty and it sucks
I wasn't ready for the Arch Linux comparison
"Are NFTs stupid?"
Yes, yes they are
And now that the bubble collapsed, we know that the true value was in finding out who had too much money along the way.
I understand the mechanics of NFTs much better now. Thank you!
I can't see the future and I can't say whether NFTs are "objectively good" or "objectively bad" because I don't know if there is such a thing as "objectivity" when it comes to such concepts.
For some reason though, I'm reminded of that story about the king and the fabric salesmen who said they had the finest fabric. So fine, in fact that only exceptionally smart people could even *see* it. So the king commissioned an entire set of fine clothes made of.... a lie. I feel like... without a thorough understanding of what exactly it is that you are paying for, NFTs can easily be used to scam people.
All I can say is that I won't be spending money on them for the foreseeable future. But who knows, I could still change my mind
"The Emperors New Clothes"
It still is stupid but a respectable stupid, looks like they threw the ball to grant NFT's a placement to involve "objectivity" it fell off when we come into terms with logic.
Blender Guru made a video making similar points to yours, also as a response to Dan Olson's video. The idea that things can have sentimental value completely detached from their objective material value, and is a viable way to support artists. Which is interesting, because Olson didn't really argue against that. His main thrust against NFTs is that the are the outgrowth of crypto movement, which he sees as a "socially destructive force" because of crypto's deflationary nature (giving power to already wealthy, trapping poors in a cycle of debt), and drive to turn everything into a speculative market.
He said he skipped over the art and patronage aspect of NFTs because he sees this as a trojan horse by which those crypto magnates (who are mostly already powerful institutional investors) get their foot in the door of mainstream, and any benefit that artists get from this is coincidental.
Not to mention, if something has sentimental value you can just store the actual digital object in your own computer or personal server. There's no need for a receipt stating you own the link to a piece of art.
@@riley8385 And if you want to support artists there are less wasteful, more direct and non-hackable ways to do so, like, say, give them money. You may even exchange that money for a real-life, physical object :D
The biggest issue is with NFTs as a way to support artists is not this conceptual issue, it's that there is no guarantee that who is getting the money is actually the artist. NFTs don't do anything for that. Anyone can mint NFTs for any artwork they just found somewhere on a google search. There's no check whatsoever on whether the person who minted it produced it or owns it in any way. That's all "off-chain". So if you want to be sure of that you'd have to trust another party to verify that(say a website where the NFT is advertised that verifies the identity of the seller) and then you're trusting a third party off-chain and the whole point is lost.
I guess if you don't care about the whole "trustless system" thing then sure, but then the issue is still that practically speaking this whole thing makes it much easier for scammers to make money off artists who get nothing and does not make it easier for artists themselves to make money through this system.
A flaw in the argument that smart contracts are "transparent" and "trustworthy", is that it's only as transparent and trustworthy as the ability for someone to understand what it does, including potential flaws and vulnerabilities. Since smart contracts are written and verified by human beings, there are a lot of room for error. Things such as bugs both non-intentional and intentional can be hidden in plain sight, simply by obscurity or lack of knowledge in the area.
This is the same flawed argument that open source code can be trusted, because you can read and potentially modify the source code. An example of why this argument is flawed can be seen by vulnerabilities like Heartbleed bug in OpenSSL.
And at least open source code can be patched when the bugs are found. No patches on the blockchain.
@@superfluidity That's true. The fact that blockchains are set in stone also prevents code patches or refunds. Blockchains are all too easy to scam someone with.
Like Mr. Olsen mentioned, blockchains themselves might be unbreakable, but that doesn't prevent a hostile force from putting in fraudulent (but otherwise legitimate) data into the blockchain in the first place.
@@superfluidity While that's indeed true, patching source code in an open source project does not necessarily automatically apply those patches to copies of the software and the bug will still be present in unpatched copies.
Still smart contracts and open source code are way more "transparent" and "trustworthy" than proprietary software and shady robinhood/cashap-ish services.
@@pasikavecpruhovany7777 Trust is relative and subjective. What you consider trustworthy is likely to be different from what I consider trustworthy. The level of trust you have in something is based on different factors such as on experience, knowledge and personal beliefs that you have in something.
Of course, You are able to more easily verify something that is openly accessible, compared to something that is closed. But the quality of verification is limited by your knowledge of the domain.
Yes, they are!
What an excellent video. The signed Patrick Stewart picture analogy was hilarious, but flawed I think.
The problem is that when Patrick Stewart signs his likeness, he creates something real and of value, which you now own and can keep or sell. The NFT equivalent would be as if he gave you a ticket with the location of the box where he stores the signed picture. And everyone else knows where it is too. And they can all see it. And it still belongs to Patrick Stewart.
I humbly submit that such a ticket has no intrinsic value because there's no difference between the state of having it and not having it.
But the bit of you hugging the picture was comic genius. :-)
The difference is, banks are legally required to turn their 1s and 0s in their databases to actual money (that the government promises it's legal tender and has some value. It isn't gold standard money but still)
Depending on where you live, they're only required to turn a *portion* of them to 'actual money'. In the UK, that's £80,000 per person.
@@banksarenotyourfriends Still. Someone can be held responsible
Yeah, but if you have that kind of money, you’re pretty likely to have it invested in some kind of property or equities?
@@Razzer666 most UK houses are worth more than that, it's not that unusual for people to have more than £80k in savings, I'm aware that might seem nuts if you're under 30.
@@AlLiberali yes, but only for a part of someone's wealth, not necessarily for all of it. If it's held as crypto then the buck stops with the owner - which has pros and cons as well, obviously, but it's a personal choice. I choose not to trust the bank with any of my wealth.
In a nutshell: NFTs are stupid because of how people use them. They can be used in a smarter way, but people just chose to use them to get rich quickly.
Nice summary
To be more precise, most people use nfts (and crypto currencies, in general) for speculation, not much different than regular stock market. In essence, they are technologies, who were developed to meet a need that regular currencies can't (being sometimes decrentralized, traceable, etc). And this makes it valuable, but HOW valuable? And that's where the speculation enters. The market is far too new, thus, it's highly volatile, full of scams, etc.
I think it will take at least a couple more years to mature until regular people can use it regularly, like people now can use pix, for example. It's still too difficult for the average guy to use and understand why it is valuable.
@@JoshuaLTDS The difference of course is that the stock market has actual value attached to it. People are trading companies that actually do something. When you buy that bit of company you are speculating that the company will say create better products in the future, make more money and therefore be more valuable. NFT's are a bigger fool scam. What you are trying to do is purchase something with a sole purpose to sell it to someone who will buy that thing off you for more money. Currently there is no use case for them that can not be achieved via Web 2.0 protocols. They are a solution in search of a problem. At least when the dutch were selling tulips to each other they created a more beautiful countryside, the byproduct of this bullshit is CO2 emissions of the same said country several hundred years in the future. All for a URL of a fucking monkey that will 404 or be replaced by a picture of a Persian Rug
Some people use them to get broke quickly
If you got rich by selling it its not stupid. But the stupid ones are those who buy it without knowing much about it.
8:40
This is my preferred explanation for asymmetric cryptology that seems to clear it up for most people. Hopefully this helps at least someone.
If i go to the store and buy a pack of 4 locks for luggage, they all use the same key to open. Now I keep the key, but i mail these 4 locks out to a friend. The friend has 4 boxes and puts a secret note into each box and secures those boxes using the locks I sent them. They mail the locked boxes to me. No matter who touches one of my boxes or intercepts a box during transit, or steals a box from my front porch, only I have the key to all of those locked boxes and thus only I can read the secret notes.
The public key is the locks, the private key is the physical key, and the secret note is whatever data you're encrypting in this analogy.
Well...they'd have to be a little better quality than luggage locks if you really expect them to be secure, but I get you. I guess I watch too much Lock Picking Lawyer, lol.
Kinda... It's more like there's an infinite number of your locks for anyone to take for free.
Theres an opposite (essential) function of PKI: the 'locks' work in the reverse way too. You can lock a message inside a special compartment in the luggage(with your key, not your friend's lock) that anyone can open and read with free public keys, but only the secret key owner (you) could have put it there so it proves it was not tampered with en route (authenticity), and you can't later claim that you didn't put it there (non repudiation).
In relation to the Patrick Stewart picture signing analogy:
I don't think it is analogous to Patrick Stewart signing the picture. Him signing the picture would change your original valueless printout and make it unique. In the world of NFT's the string on the ledger does not modify the hosted image. A much better analogy I feel is a letter of authenticity for a picture of Patrick Stewart that he used to own. Because he owned that image it would have value, but only if you could prove he had owned it. Anyone else can print that same image but it does not have the same value. And in real terms, if you gave the letter of authenticity to any other person with an identical image, it would increase the value of their image and reduce the value of yours even though the actual image didn't change hands.
If you want to program a smart contract, you'd better be a damn good programmer, because every bug is permanent and fixing bugs means spending a lot of ETH to replace all NFTs.
I've seen videos of people explaining how to create an NFT, and they explain everything well, and when it comes to the smart contract it's always "just copy this code and paste it in, don't worry about it, it's too complicated". And it's thousands of lines of code. Nobody is going to sit down and read it to see what it actually does, _if_ they even understand exactly what it is.
someone with too much spare time will surely program a contract that keeps modifying itself in all kinds of funny ways just to piss people off.
@@echelonrank3927 I don't know if that's possible. Once it's stored in the blockchain, the code is permanent. But maybe I'm wrong and code can get added later like amendments to the constitution.
@@NaudVanDalen no, im saying
its like creating a file that 'changes' its content depending on time of day.
of course the actual file stays the same permanently, but when its viewed it appears in different ways.
Well just hope Microsoft doesn't NFT Windows then.
Love this one, really nice to see a normal analysis of what it actually is. The problem with them is not the technical aspect, it's exactly the way people are using them... for quick money, trying to sell collectors-cards that are not signed by the author or by giving out cards that, also in the real world, would have little to no value. But they do try to ask a lot, because it's a hype. They always use the argument that it helps artists, which is almost never the case.
There are a few technical aspects that _are_ bad though, such as the insane amount of energy and hardware and time needed to satisfy proof of work, or the fact that since blockchains are set in stone, it's impossible to undo a fraudulent transaction or fix a buggy smart contract. I'm not sure how to solve these problems, and I'm not sure the good things blockchains bring to the table are better than systems that already exist.
Essential for them to work is the 'Greater Fool Theory' which might not be much of a theory but reality.
I think that there are useful and interisting uses for NFTs
As he pointed to tickets, that could be used as a very secure way to own a ticket to either an event, or service. Maybe it could be used as a second way for you to have some less information heavy documents without needing to be scared of losing them, etc...
Still, digital artwork as an NFT is probably the worst thing that you could have really.
Art only has value if it has history, if it was part of a movement or if it looks good to the buyer in the first place. Because of that, there's no way an NFT will make a replacement for a physical artwork. But if we used NFTs as this ticket thing, maybe you could have a ticket to get the artwork afterwards, so having the ownership of the artwork both digitally and physically
It is my belief that if we had a market for it, we may have real uses for this technology in the future, but I don't think it'll be in the near future.
There is nothing useful about NFTs that cannot be achieved better with alternate technologies.
@@Peasham How are you so sure about that
The blockchain is one of the best places to be sure of transactions and other things as such that is also very difficult to hack
How can you be so sure you cannot use a token that can have a different value from another in the blockcahin in a better way than any other technology
@@Lonrok The person who originally minted any NFT can at any time change the link the receipt of the NFT points to. The amount of rugpulls and scams pulled inside the community has been LEGENDARY.
Also, I have no idea what this sentence is supposed to mean "How can you be so sure you cannot use a token that can have a different value from another in the blockcahin in a better way than any other technology"
@@Peasham I see
I meant basically: "How can you be so sure an NFT cannot be used in any way better than any other technology". I mean, not necessarily an NFT the way it is, but a Non fungible token itself.
@@Lonrok Well, that's because all an NFT is is a receipt that costs a lot of energy to make for no discernable reason. Like, it doesn't posess any unique properties, the only thing unique about it is how it's made, and that has no bearing on how useful it is.
Most people think... investing in crypto is all about buying coin and leaving it to rise,😂common it takes much analysis to be a successful crypto trader
How? This is deep.
Beautiful said.
Accurately spoken bitcoin investment especially is really profitable nowadays
To me I will say making money is easier by investing, instead of saving while not buy assets and investment for the future
Access than can make you rich is
Bitcoin
Stock
Real estate
If I owned an NFT, I would like to think that I had access to the most perfect version of the original. But surely, just a pointer to a stored JPEG picture cannot guarantee that. The original image would almost certainly have been created in a non-compressed form, so would be superior to a JPEG, which inevitably introduces imperfections. So in practice, the original artist will probably still hold a copy superior to the NFT that I'd purchased. Crazy!
I used to think that NFTs were stupid, but after watching your video, I now think they are INCREDIBLY stupid...
The only thing NFTs provide is less trust. For most use cases, the price is overkill and the carbon emissions are not justifiable. I have no problem trusting a video game developer with my digital toy items. If you're dealing with someone you can't trust why deal with them at all? I think we need more trust not less.
Its not about any of this. It's about all of this and everything. NFT are a minimalist use of Ethereum. Ethereum is what people should be looking at.
New tools to do things securely don't decrease trust in other people. Being less secure makes us _need_ more trust, not _have_ more trust.
With more secure tools, you can offer wilder permissions or kinds of transactions, and trust that the transaction will happen exactly as you understand it when you pay. That's really what you need in a transaction - not to trust the other party at a personal level, but to trust that nothing bad will come of trying to complete a transaction with them.
When it's possible to trust transactions with people you don't trust, it just frees you to do way more kinds of transactions with way more people. It doesn't help or hurt your ability to trust anyone.
also, the Ethereum blockchain powers most NFTs, and it's switching to a proof-of-stake model soon, which doesn't involve mining.
I've watched several videos about how bitcoin, blockchain and such works. Your explanation really makes me fully understand it
I’ve watched so many videos and STILL don’t know what the heck they are 😭
They are non fungible tokens, just like any portion of a blockchain.
ok so imagine you buy a piece of art, except you dont own the art, you dont get to take it home with you, you dont get to make any decisions about it, in fact you dont actually own it you own a receipt to it that has no legal standing, but actually the receipt is to a specific place on the wall its hanging and nothing stops them from swapping it out for a different piece of art or completely removing it, ok now imagine that receipt cost you 3 million dollars, and also the art was shit and made by hitting random on one of those picrew avatar making sites
In as few words as possible.... it's a way to purchase bragging rights, without receiving anything to brag about (other than being stupid enough to pay money).
you don't understand what they are because they aren't anything, except a scam
It's like a read only file that's stored on a blockchain instead of your computer. The file can contain anything, but you can't change it.
NFTs got popular because people are putting art into the file then selling the file for exorbitant prices. This doesn't make sense if you are trying to be the only one who has that art, because the art can just be copied. NFTs won't stop that from happening.
However, that's not really the best use case for NFTs, IMO. Once people start using NFTs for public legal documents it will make more sense to people. For example, a registered trademark.
I loved hearing all of the information from the lawyer. Very informative.
Thanks for all of this.
Wait, how was I not subscribed?? I've been watching and referencing your videos for years!! Well, I am now.
"you could lose your ticket" --- just like you could lose your private key when your device is lost or stolen.
The strongest positive I can think of for the blockchain tech is to be used to disseminate information in a way that is basically unstoppable. Things like the old AACS encryption key come to mind. You could also fit in large blocks of text using tools like the library of Babel website- still somewhat limited by the length of data allowed in the data.
This is also a potentially *very bad* thing since people could potentially store illegal content- images or something similar through the same type of tools: it could be used as an irrevocable distribution system for them.
It is probably only a matter of time until some bad person figures out a way to embed something heinous in one of these blockchains and that’ll raise an interesting questions about what to do. Ban the tools? What if the code of the tool is also embedded in the blockchain?
There is a relatively easy fix that already exists. Reputable marketplaces and software developers will develop blacklists of NFTs that they won't display or exchange.
Much like the Tor web, it'll still exist and be available to those who are motivated to find it but most people, most of the time aren't willing to put in that level of effort.
This is probably how we'll have to handle instances of fraud or IP theft as well. Sure, you have the token but it's been blacklisted now and 'reputable' marketplaces won't display or exchange it.
@@x--. Fraudulent cash and fraudulent NFT’s are a completely different ball game. NFT’s takes seconds to make and take days or months to remove for copyright or other types of infringement. Fraudulent physical cash requires expensive or stolen equipment to manufacture. It’s much easier to track and more difficult to replicate. Then you have time problem of having a centralized body to monitor these NFT’s for malicious behavior, which defeats the purpose of a decentralized economy. Which also introduces the fact that the anonymity of the blockchain can attract criminal activity. Why would people invest in a platform that with risks that involve stolen content that can be revoked at any time that is almost completely anonymous, aka without consequences? That’s just asking for trouble. And then you still have to buy things with the NFT with REAL money. So you’re going to have to file taxes with the IRS too. It’s so confusing when people say they are cutting out the middle man when in practice that doesn’t happen. Like at all.
@@nathandam6415 Excellent points. I think the difference with NFTs vs a centralized government authority is NFTs and the theoretical centralized body to identify fraud would be transnational and democratic. If enough people stop supporting the blockchain it would collapse. If people don't support changes, it will collapse.
Is this better than the present situation with government fiat currency? Ehhhhhh, I don't know. Look at Russia, because of the choices of their despot leader their currency is now subject to crazy rules and restrictions. This could sort of be done by governments with blockchain by restricting internet access but they can't decouple the value of your holdings from the rest of the world. If you escape your land, you still have access to your blockchain holdings.
Do these small but tangible differences get enough people to, quite literally, buy-in? I'm not soothsayer but if I had any money, I'd have some of it in blockchain. In the same way I'd keep some cash on hand if I weren't broke-AF.
It would have taken me less than 30 minutes to conclude that yes, NFTs ARE, indeed, stupid, but I appreciate the video and the education nonetheless!
The biggest issue with this video is that it only addresses whether NFTs have some value to the purchasers of them. While this is not even a certainty, the bigger question is "Does the value derived from NFT transactions offset the costs, both to the purchaser and the cost to process the transaction."
You might think you're doing good by providing an artist beer money, but the actual currency you're paying with is fossil fuels and computer hardware (and this won't change with proof of stake).
I feel like a lot of blockchain is trying to enforce things using cryptology and maths which society tries to enforce using overly complicated legal systems that often boil down to "even if everything burns to the ground, at least we should theoretically know who to blame for it". Though these often end up going against each other as each one doesn't know how to deal with the other and all hell breaks loose regardless.
TLDR: blockchain and NFTs HAVE utility that needs some work, but the current marketplace is instead built around confidence scams.
Blockchain is hardly immune to that, though. It has checks for a few processes, but the rest of it is wide open to human error and malicious conduct. Squid coin was intentionally coded so that buyers could never cash out. The DAO, one of the first big smart-contract-based organizations, had a code vulnerability that was exploited to transfer out a third of the ethereum that had been stored in it; most users would have to just swallow that kind of loss, but the DAO was a project of the ethereum creators and other big names, so they forked the entire "indestructible" blockchain to make that mistake vanish. It's a matter of time before contacts are created that contradict each other or that get stuck in perpetual loops with no human interaction to hit the breaks or that commit some crime like money laundering. NFTs with code that transfers out coins or other NFTs have already been made and used, and with no way to refuse incoming transfers, the best the targets can do is remember which of their assets are legit and set mysterious newcomers to "hidden".
There's no barriers against mundane confidence scams, and the lack of human oversight means there is no recourse for the victims of these scams. Well...no recourse unless they have so much influence that if they created a modified version of the blockchain, their version would have more value that the undoctored version. They got rid of the legal jumble by just saying "buyer beware", but every NFT collection and crypto fanzine is shouting "BUY IN NOW TO GET RICH" and exercising some cultish levels of social isolation by enforcing the removal of any voice of fear, uncertainty, or doubt. It's a trustless environment, but the speculative projects demand blind faith because blind faith makes the speculative value look better. The rational choice is not to get involved, but the mechanics of the thing have been plastered over in promises, cherry-picked success stories, and outright lies. It's just another money sink for the desperate.