Are NFTs a scam?
2021 October 06 21:53 kaxline 210¤ 2383¤
What are the best arguments you've heard for/against NFTs being a scam. I don't think they're inherently a scam, but I'm sure there are scams running around it. What's the most sensible, non-religious position?
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2021 October 07 19:30 stuartscott 2030¤ 1494¤
The blockchain/cryptocurrency space has been plagued with a lot of scams. That's not to say all projects are scams, but the ones that are can be hard to distinguish from the ones that aren't.
I'm still not convinced that I need an NFT of some generated pixelated image because its entire value is visible and copyable. Artwork NFTs were a path to market and a way to prove the tech, but their value is artificially inflated and I believe there will be a huge correction.
I am convinced that an immutable public record would be useful for assets whose value is not entirely visible or copyable. The main use case I can see is "official records" (property deeds; resource rights; identification; birth, marriage, and death certificates; legal contracts) where you want the world to agree on a single truth, and it doesn't matter if someone has a copy of the document.
The biggest issue with blockchain is that we don't have a sustainable consensus mechanism. The most common one is Proof-of-Work which underpins Bitcoin where all computers in the network directly compete to mine the next block. Considering ~90% of the energy that goes into a computer leaves as heat, the environmental impact cannot be ignored. We simply cannot build our future on the requirement to run our systems at maximum all the time - the energy consumption is too high, and vast majority of it is directly warming our environment.
The second most common consensus mechanism is Proof-of-Stake which Ethereum recently switched over to. Essentially those with the most stake have the most control of the network, which is a violation of the decentralized, power-to-the-people promise of blockchain tech as the wealthiest can easily take control of the network. To be fair Proof-of-Work also has this defect where the wealthiest can purchase more mining equipment and therefore have a higher probability of mining the next block.
What we need is a consensus mechanism that is fair to everyone and doesn't destroy our environment in the process.
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2021 October 08 19:08 kaxline 1272¤ 1719¤
Ah good points here. I find myself wanting a voting mechanism on this platform, perhaps even on certain sentences.
I mostly agree with this, but on the environmental front, I would want to see the energy consumption of our Web 2 usage and the energy consumption of regular financial transactions and infrastructure before condemning the PoW/PoS (although I resonate with how both are not truly egalitarian). And if we're going to start policing what people do with computers/electricity and saying it needs to be worthwhile, are we going to start saying playing some resource demanding video games is immoral? It seems like you have to assume that crypto mining inherently and objectively has no value to start down that road.
Plus, the value produced from crypto mining is allowing more green energy to be developed. For example, a solar array in a remote village would not be able to get investing, but if you hook up miners to the array to monetize the excess energy, suddenly it's a good investment, it gets funded/built, and people using dirty energy like kerosene or coal will have clean, reliable electricity. There may be problems with that example as well, but the point being I think there's too many variables to focus simply on the energy used by mining.
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2021 October 09 15:46 stuartscott 2464¤ 464¤
It would certainly be an interesting comparison if we had all the energy data for the construction, maintenance, and operation of all the headquarters, branches, exchanges, call centers, and ATMs of all the financial institutions; their workforce's business travel and daily commute; their call and data networks; the paper, printing, and mailing they love; etc. and I'm sure it would be a closer comparison than many people think.
Though there are a couple of caveats here; as you said a lot of the energy going into PoW is renewable - here in the US a lot of gas extracted by the oil industry is flared because the cost to capture and transport is too high, but some people are looking to use it for PoW instead (which can easily be deployed to remote locations) so while the greenhouse gases still end up in the atmosphere at least some work is done in the process. Regardless of the source of energy, the destination is still the same and it isn't good.
The other aspect to consider is that Bitcoin scales the effort required to ensure a block is only mined roughly every 10 minutes so the more computational power available, the harder the puzzle. Meaning the more popular Bitcoin gets, the bigger its environmental impact. Now maybe this will balance out once all the blocks are mined (estimated to be around 2140, as about 89% have already been mined), and the miners are only rewarded with transaction fees, so many of them drop out and thus the difficulty decreases.
I digress, the topic was NFTs, not Bitcoin.
Most of the NTFs I've seen so far are artwork, which I feel are less about advancing society, and more about individuals speculatively investing to advance themselves. Eventually there will be a correction and someone will be left holding the bag.
I hope the tech gets be used for the public good, and that a government starts using NFTs/public ledgers for public records. I see value in a digital truth that cannot be changed or destroyed, and that anyone can verify, but I hope that humanity comes up with something better than needing to run our entire infrastructure at maximum indefinitely to do it.
I wouldn't go as far as to say video games are immoral, but I do think that a society that is able to measure the environmental impacts of its actions and disincentivize harmful behaviour (perhaps a kind of tax on exhausts and pollution that funds green projects?) would be better able to avoid an environmental disaster.
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2021 October 25 06:05 stuartscott 372¤ 556¤
@kaxline what do you think will be the long term impact and legacy of NFTs?
Do you think digital artwork will remain the dominant use case, or are there any other applications you are excited about and believe will become the primary use case? Perhaps in the gaming world, ie. achievements and leaderboards, upgrades and unlockables, customizations and personalization?
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2021 October 25 13:49 kaxline 1088¤ 25¤
Good question. I think it will end up being a low level protocol for uniqueness that many different types of experiences are built on. NFT will probably move into the background like HTTP, TCP ...
Gaming is the most salient use case, since we can envision carrying items and avatars from one gaming environment to the next, but really I think that's just a small microcosm of what it will enable.
Ultimately I think the concept/technology is the wonderful overlap of digital infinity and meatspace uniqueness. We can create an infinite amount of digital assets/items, but once created, we can imbue them with uniqueness so that they can interact with each other and have their own histories.
Imagine an NFT that represents a tree in the digital space. Then an experience I'm in allows me to carve my name in that tree. Then, 20 years later, someone can discover that tree in a completely different experience/game (the original one is long gone), and see my name there and see when it was carved. Now imagine that happening with everything. This is what enables the metaverse ...
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2021 October 09 18:05 stuartscott 330¤ 179¤
> I find myself wanting a voting mechanism on this platform, perhaps even on certain sentences.
👍
The voting/ranking mechanism is based on responses, so by replying to a post you're upvoting it, however it is rather broad and I see your point that it might be nice to be able to single out certain parts of a larger post.
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2021 October 11 21:09 kaxline 180¤ 180¤
Yes, and also sometimes I might not have anything to say necessarily, but want to give some juice to a post. I like the Slack/Discord reaction emojis as a voting mechanism as well.
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2021 October 12 12:40 stuartscott 358¤ 2¤
Reacting to a post with an emoji will "upvote" it with a coin (an emoji is typically 2 bytes, so 1 goes to post, and the other goes up the conversation).
@winksaville and I have been discussing the idea of "gifts" where you could give an amount of coins to a post and support the author's future content without needing to say anything. What do you think?
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2021 October 09 19:13 mbenbenek 864¤ 233¤
As an owner of (cheap) NFTs I don't think they are a scam any more than traditional paintings or other forms of physical art. Like other art, the work has no inherent value, only what you (or the market) thinks it is worth. You pay money to the creator because you value what they do and want to support their career (although most NFTs are AI generated, someone still has to develop the AI right?). Most importantly, just like traditional art, the high priced items aren't usually being bought solely because the buyer really likes the art. It's more typical that they're bought for status, collecting, tax purposes, or as a risky investment to try and profit from later. I do think that most NFTs are ridiculously priced for what little artistic value they have, but they certainly aren't misleading people about what they're buying so I don't think it's a scam.
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2021 October 12 13:02 stuartscott 446¤
Good point. NFTs may also be more accessible than physical art for 'everyday' people.
The risks and rewards might be higher due to the lack of regulations for protecting consumers, though this may soon change. The US Department of Justice recently announced the National Cryptocurrency Enforcement Team to focus on cryptocurrency trading platforms, so I wouldn't be surprised if a similar body was established for NFTs, possibly under the SEC?
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2021 October 06 21:54 kaxline 115¤ 33¤
Haha, whoops, I started out writing something else about DeFi and forgot to change my Topic. Any way to edit posts?
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2021 October 07 19:32 stuartscott 66¤
Not yet: https://github.com/AletheiaWareLLC/conveyearthgo/issues/3
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