The Crypto Backlash Is Booming
theatlantic.com
theatlantic.com
If you look at the "smart contracts", you find that the majority of NFTs are just links to urls hosted on a server somewhere else. So what you are actually buying is akin to a pamphlet advertising where the Louvre is, when what you thought you've bought was the Mona Lisa. The content behind the URL can change at a moment's notice. Want to put the full content on the blockchain or even a hash of the content? Look at the gas fees for ethereum and tell me it's worth it.
Everything in the NFT space is going to zero.
Anyone falling for a "legitimate" reason these things exist is a fool.
https://edition.cnn.com/2020/07/29/business/art-money-launde...
I'm saying that NFTs are the worst aspects of the art industry in a form that can be exploited by single individuals without producing a physical item. In short, they allow for ultrafast laundering because you don't have to go to art auctions, or generate paper trails, or whatever. Hell, you don't even need valid URLs (though it'd probably look a little fishy if all of your URLs pointed to the 404 collection).
The NFT space only makes sense as a money-laundering innovation. Why bother with finding art when you can just generate it from nothing?
The research in zk-STARKs is quite interesting and has application beyond blockchain.
https://eprint.iacr.org/2018/046.pdf
A push for technology that protects privacy by design does not just address money laundering.
The fact that zk-STARKs can bootstrap on blockchains, in part because of the funding, and in part because of the blockchain's capability to be a global source of truth (which we admittedly then use for URLs to GIFs, speculate about lolcoins, and buy drugs online with).
I don't agree on going to Zero though, in the medium term anyway, it's likely to stay up in the clouds and possibly for a very long time. Crypto generally has utterly failed as currency for actual economic use, outside tax evasion and money laundering, but in aggregate is still worth silly $billions.
I recommend following Kyle McDonald on twitter (@kcimc) if you want some deep dives on exactly why a lot of artists are skeptical about crypto/web3/NFT stuff.
Now?
https://www.goodreads.com/quotes/685739-if-the-management-co...
How do you differentiate a crypto rugpull or a company going bankrupt after all the funding has been drained out by its owner? Or fiat devalued by inflation? In principle it's all different sides of the same coin, pun intended.
So yeah, always has been.
2) the difference between a crypto rug pull and a company being drained of its resources is that the second one would result in a police investigation, and fraud charges. It would be illegal, because of the laws that protect investors from exactly that situation.
If "It's all the same" then why invest in crypto at all? It's way riskier, and had a lot more negative externalities.
2) Illegal's never stopped anyone from doing anything, and I don't see how the crypto version isn't fraud too. But in both these cases you can fly to a non extradition country with your newfound fuck-you-money, leaving the investors up shit creek without damages.
Crypto has some benefits over the stock market, it's open 24/7 so it doesn't discriminate against anyone, and it's more volatile so one can get higher returns (well, or losses) with less of an investment without having to resort to options or margin which are just as risky. It also has more defined and predictable bull/bear markets in relation to bitcoin halvings.
I don't really see the two markets as too different though. One has just had more time to become more rigged for wall street.
BTC on the other hand is not a productive asset. It’s value cannot change by the underlying thing changing. Instead it’s value can only change in regards to how much people want it.
It clearly is bubble with insane valuations for nothing on expectation of growth.
It is scam, due to wash trading and all other fun stuff. And fundamental way of trying to sell something worthless with implication that it will go up in value with rest of the bubble.
And yeah, point three is back to wash trading and laudering.
Why would anyone do this when the fees to trade are so high? Everyone thinks the end goal is to fake it until you make it, and sell the wash-traded pumped up tokens to an unsuspecting victim.
It's not.
The goal is to create fake wealth from nothing. There are banks now that will lend using NFTs as collateral.
You get millions of dollars in loans, then you spend millions, then you go bankrupt. Oopsie.
Step 2. Create a wallet.
Step 3. Put ill gotten gains in the wallet in step 2.
Step 4. Purchase your own asset with money from step 3.
Step 5. Cash out.
Because there appears to be no reason behind the valuation of NFTs, it's pretty hard for the tax man to determine that "Oh hey, this doesn't look above board!". Because wallets are pretty easy to create and fund from all over the place, it makes the perfect mode to turn anonymous money into real money.
Oh, and bonus points, you still have the NFT, so see if you can't unload it on a rube for less money.
Because no matter how many times misinformed critics call NFTs a "scam": there is something inherently honest about them: pay money, get a collectible. There are no financial instruments here that can be misunderstood.
What is "a collectible"? There's what all the grifters say they are/can be. That's where the dishonesty comes in.
All scams are technically fundamentally honest - pay money, get rock - once you remove all the parts that are dishonest.
It's like a Bitcoin, but we say instead of saying it is digital gold, it represents a picture of a monkey instead.
It can absolutely still be a scam. Wash trading is trivially employed to inflate the price of the "bid money" step, fraudulently suggesting the existence of demand when there is none.
It's much easier to pay off some influencers.
The ones who did are no longer in crypto.
NFTs are just an extension to what happened to bitcoin years ago, when it failed to scale but nobody in charge cared. The main interest in cryptocurrency is not in "A Peer-to-Peer Electronic Cash System", but in a global game of greater fool. Lack of scaling isn't important, because the people in control are perfectly happy with paying once to buy in, then selling once to cash out. If your expectation is that you'll make extremely infrequent transactions worth in the tens of thousands of USD, that you had to pay $50 to get it processed reasonably quickly is a rounding error.
Overall it'd been interesting to see how the supposed decentralized system didn't really last. Things got centralized anyway in that there's a very small team that develops the software and a small amount of groups that form an unelected governance systems, and the small contributors to the network effectively don't matter.
Back in the day, if you even hinted at "we might get a domain name and a website", you'd be getting funding. People were dumping millions in some pretty moronic and misguided notions. A lot of those companies failed for quite obvious reasons. But not without making several people very rich. Investors have a way with money where they manage to not lose when things go bad and win a lot when that fails to happen. That's one of the perks of playing with other people's money. Worst case you just take your cut and then you wash your hands of the whole thing. Best case it was all you and your genius insights. Sometimes stupid money is tempting for smart investors. When it's on offer, there will be people taking it.
And of course few companies actually had some good ideas and got a little more funding than they would have otherwise gotten and used that to become amazingly successful. Amazon, Google, Ebay, and a few others survived the bursting of the bubble and survived and thrived.
The same is happening with crypto and blockchain companies. Most of them are obviously empty shells run by charlatans operating out of dodgy jurisdictions. But those are actually pretty easy to spot. If it looks dodgy, it more than likely is super dodgy. If it looks to good to be true, it probably is. So, people losing their money are mostly just fools. The exact same kind of fools that lost their money 20 years ago. When some of those fools are institutional investors betting with your pension money, you'd be right to be a bit concerned about that though. That too happened 20 years ago.
More interesting is to look for the things that just aren't that dodgy at a first glance. Some of these companies are looking pretty serious actually. Solid investors, actual customers, working products, etc. It's not all scams and pyramid schemes and those might be the possible survivors of the crypto bubble bursting. Some of the tech is actually quite impressive and looks like it might be used to solve some real problems.
There are probably more than few very good tech companies just putting their heads down and getting some real work done right now. Those are the interesting ones to follow.
Why can't I be concerned about the thousands and thousands of fools that are losing money they can't afford? Yes, they are fools but are they deserving to suffer for being fools and getting carried away by con-men?
I know some poor, desperate people in Brazil who got caught in cryptocurrencies and NFTs out of desperation, they are fools but I believe they do deserve empathy when their families go hungry because of a predator with confidence was able to scam them. Not feeling concerned that thousands of individuals like that exist and are being tricked is a bit concerning for me...
I don't see the similarity. Yes, the stocks were overpriced, and people who didn't understand venture capital were effectively providing venture capital. But the dot com era produced some major corporations: Google, Amazon, eBay, Netflix, and many more. Those companies have real economic value because they create products that people want to pay for.
Web3 hasn't produced anything comparable. The space is now polluted enough that I doubt it will.
Yet; each of those companies burned through quite a bit of investment before they became profitable. You need to look at this space in ten years again. Web3 is just a marketing term that some people came up with in the last year or so. It takes longer than that for companies to become successful.
And BTW., that's your connection to the dot com bubble right there. That was web 1.0. This is web3. The tech is different. The investment behavior is the same level of idiocy.
That last part is my primary concern: there's a good argument that the real-estate bubble was in part caused by big investors seeking returns high enough to make up for their bad dotcom calls, and the cryptocurrency world seems to have a much higher risk of returns being at or close to zero — pets.com at least had some assets which could be sold to Petsmart but there's no value in random hashes.
> More interesting is to look for the things that just aren't that dodgy at a first glance. Some of these companies are looking pretty serious actually. Solid investors, actual customers, working products, etc. It's not all scams and pyramid schemes and those might be the possible survivors of the crypto bubble bursting. Some of the tech is actually quite impressive and looks like it might be used to solve some real problems.
Do you have any examples? In the dotcom era it was pretty obvious at the time which companies had a real chance: some were losing money on every transaction but others were actually doing something real (e.g. Amazon was a popular punching bag but if you looked at the financials it was clear that there was a solid business there). That last part has been missing so far in the cryptocurrency world — the only companies which seem to have a real business are the ones which seem to have pivoted away from the blockchain world where they got their early funding to do things like supply chain management using more conventional technology.
A lot of stuff in the Stellar ecosystem is pretty OK. Quite a few companies operating under out of e.g. Germany or other countries doing e.g. remittance networks using simple stable coins. Not that glamorous but looks real enough. In general, that ecosystem seems to be generally designed to be fintech friendly. Meaning people are working with financial authorities and generally are trying to do the right thing. E.g. Bitbond is a German company doing an investment products on top of Stellar. They've been working with the German financial authorities (Bafin) and are also partnering with a few big banks.
There are also plenty of traditional enterprise consultancy companies that have been working with various customers to implement e.g. blockchain based schemes for carbon trading, or solutions related to logistics or sourcing materials. Not all of that might succeed but it seems that trading/inventing some new crypto currency is not a goal with these projects.
During the dot com era, it all looked like a bunch of hippies going on about digital highways and crazy stuff like that.
That's interesting, not being German I hadn't heard about them.
> There are also plenty of traditional enterprise consultancy companies that have been working with various customers to implement e.g. blockchain based schemes for carbon trading, or solutions related to logistics or sourcing materials. Not all of that might succeed but it seems that trading/inventing some new crypto currency is not a goal with these projects.
That last part seems to fit with what I've seen in the companies I've looked at: they were pivoting away from what the cryptocurrency people call a blockchain to a ledger restricted to known parties since they're tracking existing business relationships anyway and things like efficiency or offline/low-connectivity support are important.
> During the dot com era, it all looked like a bunch of hippies going on about digital highways and crazy stuff like that.
That was definitely present, but it wasn't anywhere close to a majority position by at least the middle of the decade. You definitely had the hippies but also a ton of distilled capitalism: companies seeing new businesses which weren't previously viable, companies seeing advantages from moving their business online, selling services to the previous groups, etc. The Wired crowd got a certain amount of publicity but there were an awful lot of boring companies spending considerably more money.
This is the real reason there's such a backlash; it doesn't actually matter what the underlying merits or otherwise are, the ubiquitous sales tactics, cultishness, and arrogance of the advocates have enraged people.
I'm reminded of Russ Alberry's epic rant from 24 years ago about spam destroying one of the original internet decentralized communities, USENET: https://www.eyrie.org/~eagle/writing/rant.html
So ignore blockchain; take it out of the picture, and what do you have left with crypto?
People inventing/printing an endless supply of money for their own benefit. In what way is this *not* a scam?
But, but, but central banks do the same? Yes, they do --- but with a very different purpose and understanding. They try to maximize the positive effects on the entire, overall economy --- realizing this is the best way to maximize their own. If they fail in this, they can be replaced. Checks and balances.
"Digital" currency is a good idea that can and will eventually happen. But "crypto" currency is really just a system of misguided and misplaced trust --- you trust that unregulated "exchanges" are fair and honest and reasonable and acting in the public interest without any checks and balances.
And if they are not, you have no recourse.
It's a pump and dump. And once the marks get wise to one type of pump and dump, you change it around a bit and pump and dump something else. Real problems are not being solved by crypto.
If they don't feel bad, I wonder how they justify the cognitive dissonance.
The right thing for Vitalik would be to recognize that this is not going to turn into what he imagined it to be, and to publicly speak out against it. Instead, he's trying to justify everything and secretly hopes that he somehow can still turn it around.
"Now I am become Death, the destroyer of worlds."
https://www.forbes.com/sites/ninabambysheva/2021/11/03/ether...
> If they don't feel bad, I wonder how they justify the cognitive dissonance.
"Ethereum Co-Founder Vitalik Buterin’s Net Worth Hits $1.46 Billion As Ether Reaches New All-Time High" [0]
Trapped, not likely. Monster, maybe. Dissonance management not hard.
I think.
[0] https://www.forbes.com/sites/ninabambysheva/2021/11/03/ether...
So the creator of the coin is more likely to see continued upsides once the coin is off the ground and a bit of cognitive dissonance comes in and he donates some of the gains to good causes here and there and gets praised by people like pg so it creates a kinda shield against what would have been obvious to him if he were introduced to the scene as it exists now.
Tech initiatives are almost never led by someone that's simultaneously honest and a clear eye'd realist.
Anyone who believes that this degree of reliability and security is not required is naive and doesn't understand human nature and doesn't understand how capitalism shapes human nature.
This kind of accounting system is absolutely essential. History shows over and over that the means of power can be corrupted will be corrupted. If you haven't figured this out by now, you haven't been paying attention... You don't even need to look at history to see this. Just open your eyes to what's happening right now.
Suppose you sell something and the transaction is logged on a blockchain, that's immutable right? It's right there in the ledger, nothing anyone can do about it. It's immune from governmental interference right?
Say a court invalidates the transaction, maybe they think you lied to the counter-party, nothing they can do, right? The blockchain doesn't lie. Except they can prosecute you, fine you, imprison you, confiscate your property, pursue you to the ends of the earth and even kill you. If the transaction was an NFT, they can just directly modify the resource the NFT refers to. If it's bitcoin, they can fine you equivalent value in real world money and assets, or if they can be bothered to care about the bitcoin at all they can legally coerce you into transferring the bitcoin back.
It's like the scene in Game of Thrones where Little Finger tells Cersei that knowledge is power and only barely survives at her pleasure because presumably she was in a good mood. No. Power is power.
It's naive to not see how corrupted and hacked the majority of modern centralized systems have become... Big companies are constantly paying off hackers to avoid DDoS attacks. All this stuff is happening silently and constantly behind the scenes. Adding a layer of transparency to money transfers can go a long way.
I don’t get it. How does you using a black chain stop a government doing things in secret? I mean, all they have to do is not use the blockchain. And anyway, isn’t the point of the blockchain supposed to be that it’s anonymous? Confused.
You do understand that the crypto "exchanges" are effectively the gatekeepers to this "most secure and reliable accounting system"?
And appreciating how "capitalism shapes human nature", only a naive fool would ever expect them to do anything but promote their own interests above others.
In other words, "trust" is still inherent to crypto/blockchain. Ever hear of a "rug pull"?
Yeah, it's really just a globally accessible, append-only, Turing-complete accounting system controlled by no single authority.
Nothing to see here, move along.
Blockchain and crypto are interdependent and as such, are not really analogous to the technologies you mentioned. In other words, take away the crypto and blockchain is largely a solution looking for a problem.
Don't take my word for it, just ask Microsoft and IBM.
https://www.zdnet.com/article/microsoft-is-shutting-down-its...
https://www.coindesk.com/business/2021/02/01/ibm-blockchain-...
Otherwise, there are faster/cheaper/simpler alternatives.
Global financial systems?
> how much value there is in that
Value is subjective.
> there has to be a really compelling answer to that question to be worth the extra cost and risk.
Somehow I sense that you're not compelled. That's okay.
> Global financial systems?
Clearly not since those have functioned for centuries without one. You can argue it could be more efficient than the status quo but it can’t possibly be a requirement to use more compute capacity than the entire world had only a few years earlier.
> Somehow I sense that you're not compelled. That's okay.
Well, I do tend to require something in the way of evidence.
This is odd because Bitcoin, despite is ecological problem, was created to precisely not have an unlimited supply. There are only ever going to be 21 millions Bitcoin and the free market was supposed to decide was one Bitcoin was worth (offer and demand: nobody was coerced into buying any).
I don't like Bitcoin's carbon footprint but I can see how Bitcoin maximalists may be disgusted by all the shitcoins and by NFTs.
I don't think "Satoshi Nakamoto" (whatever that means), if he/they is/are still alive, planned on creating an unlimited supply of money just for the sake of getting rich.
To me Bitcoin seemed more like some kind of an anarchist cyberpunk statement than a ponzi/scam.
Bitcoin is not the only crypto. The supply of bitcoin clones and cryptocurrencies in general is unlimited.
... planned on creating an unlimited supply of money just for the sake of getting rich.
What was *planned* doesn't change the reality that exists in the crypto marketplace. And the creator is no longer in control.
Good description of 'Federal Reserve' which prints money to bail out the banks it allegedly regulates.
There are many open finance projects, DeFi, on Ethereum which allow me to opt out of the bankster's rigged system of debt-is-now-money.
Read the rest of my post.
The Federal Reserve Board does not get rich from this. Any benefit to them is indirect and follows the trajectory of the overall economy.
... opt out of the bankster's rigged system of debt-is-now-money
But only if you opt into the rigged system of electrons-are-now-money --- which also uses the idea of debt-is-now-money. For example, see Tether.
Crypto is a vibrant growing space and like any growing space there will be problems along the way. I have no interest in Tether, though some find it useful and they can use their free will to choose it as a place to park funds. I think people would be better served with DAI or USDP when parking funds, but that is just me.
Pitiful excuse. Tether should interest you in the same way (and for the same reason) the Federal Reserve does.
It is involved in more than half of all crypto trades and provides much of what passes for stability in the crypto marketplace. And Tether is based on debt-is-now-money --- only worse because the debit is unsecured IOUs at best and at worst may be totally non-existent.
The fact that no one really knows if Tether is backed at all, yet it easily maintains it's 1 USD peg points to possible/likely widespread collusion and fraud.
You can opt out of crypto just like you can opt out of liquor stores and MJ dispensaries. No opting out of taxes due in Fed debt notes.
Strange that you are obviously concerned about one and completely dismissive of the other. I guess it just doesn't fit the narrative you've bought into.
The government does not force people to use Tether. My only concern with Tether may be that it quickly collapses and that chapter can close. Hopefully your interest and attention on Tether will help kick it into history. And if you don't like Tether or brothels or MJ or tobacco then simply opt out of those.
[0] https://www.nytimes.com/2022/02/07/technology/cryptocurrency...
Nothing about underlying technology or why something might be new/good.
Not sure why this article presents this as a great surprise or a new discovery. Sure, the majority of NFTs (Especially the JPEGs) are a pump-n-dump ponzi scam selling images to each other. When the NFT craze runs out of steam, 90% of all the image/audio/video types of NFTs will collapse. 10% of the other NFTs will survive with a valid use case.
I don't see how the whole 'web3' narrative should apply to every single cryptocurrency and project in existence, like how this article has done. Just look at this sentence and the quote:
> A person investing in crypto or a shared future on the blockchain is said to hate Earth and support the “hyperfinancialization of all human existence.”
How does that apply to every single cryptocurrency as the author of this tweet has just generalized? [0]
[0] https://twitter.com/smdiehl/status/1465682611171467269?s=20
More likely - some legitimate use cases will emerge, as I am yet to see anything to date that would fit into that category, but there is still room for the solution that is crypto to find itself a problem to fix.
There is a strong selection bias for those that report on crypto for clicks or those that want to create a narrative that we can not live without some big central authority controlling our lives.
Tell me more? What problem does this solve that you can't do with centralized auth?
Centralized systems are amazing, until they aren't.
Decentralized systems are amazing, until they aren't
(Even if you wanted to have a decentralized account recovery like saying you can have 3 friends band together and help you recover your account if you lose access, what happens when those 3 friends decide that don't like you as much as they like the idea of banding together to take over your identity and all your money?...)
> Decentralized systems are amazing, until they aren't
No, they are not. They are expensive, they require responsibility. The UX is complicated. Most people shouldn't use it and will be better off delegating all this to someone else.
Thing is, it's not because something is good enough for most people that everyone should stick to it.
> what happens when those 3 friends decide that don't like you as much as they like the idea of banding together to take over your identity and all your money?
This argument is stupid. With decentralization, there is no reason for your identity to be something singular. There is even less reason for people to think that one wallet should hold "all your money".
If you don’t have any friends you trust (which is probably a pretty common thing), then you can choose any other people/entities you do trust. If you want to rely on the government or financial institutions, you can request that they be part of your social recovery wallet process.
This isn’t common yet, but you can also build your wallet so it’s very difficult to steal funds even if someone recovers your private key. Building challenge periods into your transactions is trivial and lets you know if an attacker has compromised your key. You can then transfer all of your assets out with your recovery key.
And so the issue you have is not with Paypal, Visa etc unless you think that those payment companies should tolerate illegal parties transacting money. Because that is a very slippery slope especially given how much wealth in the world comes from the despair of the very poor and helpless.
There are, and should be real-world limits on the ability of the US government to stop things from happening by deeming them illegal.
In the case of Wikileaks, one such limitation is the relatively decentralized nature of the internet. The US government was able to pressure Amazon to refuse to host it, but was unsuccessful in pressuring OVH, so Wikileaks remains online. There is no Great Firewall of America, so it remains accessible within the US.
Another limitation is that while the US government can and did pressure Paypal to refuse service to Wikileaks, there's no equivalent for preventing transfers of cryptocurrencies.
It already exists: the legal system.
> there's no equivalent for preventing transfers of cryptocurrencies
Money laundering, child trafficking, drug profiteering, terrorism etc. they all come with costs.
And doing nothing to stop them is not good for anyone.
What exactly are the valid use cases that are not already better served with centralized systems THAT DOES NOT involve illegal activity?
Of course you could say that Bitcoin is worthless and not proved as store of value, but that's not for me or you to decide, it's what's decided by the market.
So having your own blockchain domain and even using it as a method of login is illegal and centralised now? [0] ENS is a good existing example and concept 'so-far' of a valid use case, even when I disagree with it being implemented on Ethereum.
As for payments, cryptocurrencies that have blockchains like Bitcoin should be dismissed in the long term. Regulated stablecoins seem better for that purpose these days.
Everything else (and yes I’m even referring to ETH) is crap. It’s not truly decentralized, doesn’t have a REAL world use case (get real and be honest please), and don’t have anyone (or entity) “in charge” of it. Those are the major (among other) things that a real crypto is supposed to have by very definition.
Everything else is worthless (a “get rich scam”), and we all know it. And shame on those creating that crap, along with those gullible enough to buy them. Seriously, wake up. It’s just the hard cold truth, and we all know it.
Sorry to break it to most people, but apparently most don’t understand this “common sense” concept that is stupidly obvious in my opinion.
Even in the case of ETH (the undoubted #2 crypto), what would happen if Putin decided to go after Vitalik with all his might and the supper of the entire Russian government? You really think he’d stand a chance (and that’s assuming he’s a saint as well)? Again, wake up everyone. There’s a very good reason BTC has no “admins” or “chair board”, because nobody can corrupt it. Even the creator(s) of BTC were smart enough to not use their real names and lock themselves out of the system, and then disappear. They know what was coming. And now so should you. It’s really not complicated. There’s so many extremely powerful , rich, and ruthless people out there that stand to lose everything if this succeeds. You really Think they aren’t going to put up a fight?!? Get real. But that’s only if they know who to go after….
What happens if Putin decides to go after ASIC producers and some of the biggest mining operators?
https://twitter.com/dystopiabreaker/status/14701269278180679...
I think the scam goes all the way back to electricity and Edison!
Its a little bit disingenuous to blame etherium for NFT, its like blaming email for nigerian prince spam.
What is this? A game of 'it is', 'it isn't'?
NFT is not a crypto with total supply of 1, its not even a crypto, its at best a by-product of crypto transaction.
But you’re right about NFT’s not being ETH’s fault by the way, on that I agree with you. But it still happened. By the way, why (like in all reality if being brutally honest) did we need to have NFT’s to begin with? The answer is we didn’t. People saw a “get rich quick opportunity” (even though very wrong), and went after it. That does not make it right or give it a real world use case, sorry, it really doesn’t.
Yet, on the flip side, I pay my rent, most of my utility bills, and basically all purchases (Amazon, eBay, Uber/Uber Eats, Airbnb, American Airlines, and about ten others that compromise about 90% of all them) with Bitcoin (BTC). And that takes me about 5 minutes. Is that not real world? If not, please enlighten me, what is then?
Nuclear fission was the idea/tech, it was used to create A-bombs, and clean nuclear energy. Nuclear fission like smart contract is an idea, how its used it up to people.
Except that the law and regulations are always behind once the early technology has been introduced, with early adopters getting themselves burned, sued or encountering significant losses - Hence the DAO hack of 2016. That is the reason why ICOs are now regulated.
Did you really think that the SEC would do nothing and sit there and let the 2017 carnage continue? NFTs are no different and that technology (like tokens) will be subject to regulations. The same with email and electricity but by other regulatory standards.
How does this has anything to do with how technology was implemented?
I am not defending NFTs nor fighting regulation. I am saying that you cannot blame ether's smart contracts for creation of NFT.
Because even if the circles you move in are all very well aware that NFTs are a massive scam, very obviously many people haven't yet realized that—after all, it's still working.
Trust isn't an issue; a conventional database will be perfectly fine. Like, if you wanted to sell a product for tracking vaccines (assuming, for a moment, that health services and other large vaccine buyers don't have decades-old systems for this which everyone already knows how to use, which, if course, they do) why would you bring The Almighty Blockchain into it?
> If it had been logged to a DLT with an immutable ledger
.. while the power was off?
The vaccination rate is about a million an hour: https://ourworldindata.org/covid-vaccinations (!!), no blockchain is going to keep up with that.
More often than not they are a bad idea.
Because often you are required e.g. by the courts or legislation to truly delete something.
People don't think clearly about this any more.
It feels how many committed Democrats talk about Republicans and vice-versa -- all nuance is lost and the other side is evil and there is no middle ground or understanding at all.
If you slam crypto or NFTs on Twitter, you will get tons of likes.
If you mention that there is a lot of work towards more environmentally friendly NFTs via L2 and other environmentally friendly blockchains that by definition means that it also has low fees and this addresses one of the core criticisms, I find that people just shift towards a different anti-NFT argument, or call me a name.
I think that a lot of people are anti-NFT because they hate them and all these explanations for the exact reason why they suck shift once you start talking to these NFT haters and engaging them.
It is okay, you are allowed to hate NFTs, but the core technology is actually really powerful and I expect it to completely explode within the gaming community when these low and no-fee blockchains take over from the very inefficient Ethereum L1 NFTs. Although in the later versions of NFTs and cryptos they will more and more resemble the traditional banking institutions (often real-names, hosted key accounts, fully audited, and probably at least somewhat reversible transactions and various limits to prevent fraud), rather than the Wild West they currently are.
What use do block chains have for gaming that can't already be done more efficiently?
I think that offering interoperability will be a benefit for new entrants. Existing players tend to not change their ways very easily.
But I think the potential for game microtransaction revenue can be even larger with robust NFT marketplaces, secondary markets and the potential for interoperability of metaverse assets. There is more money here down this path and thus I think it will happen.
It’s a tough sell to pay more upfront in the hopes that it’ll yield results later, and that applies both to the consumers being asked to buy these NFTs and the companies being pitched on implementing them without clear demand.
Integrating third party blockchain microtransaction engines I think will be cheaper than implementing a custom solution for new games. I think it will in the future be viewed akin to adopting Auth0 for authentication rather than rolling your own - it seems cheaper to do it yourself until you want to get for ISO compliance or deal with JWT or SAML or OAuth or 2FA integration, and then you need your own people dealing with bugs, features, and UX designs distracting you from pushing your product's unique features forward.
The deeper question about this concept is about the idea of interoperability. Payments or authentication are comparatively simple problems which are well-understood. If I use Autho0, I'm cutting out the most expensive part of that problem and my app change are minimal — before I verified that you could receive email at you@example.org myself, now I get that as an attribute from the SSO service, but it's always been my unique identifier.
In contrast, integrating assets into games is a much harder problem without a turnkey solution. Putting an asset into a game requires the artwork, sound, etc. to be adjusted for the game engine (this is far more complicated than just resizing a JPEG since they need to adjust things like 3D meshes, lighting, etc.), custom behaviors implemented (does anything light up or respond to conditions?), if does anything which affects gameplay that has to be implemented and balanced against the rest of the game (you're going to regret paying extra if your favorite weapon is weak; nobody else will want to play if it's over-powered), and while those are substantial amounts of work they're not even the hardest part: the game developer needs to have a license to do any of that. You're not going to see Mario in Call of Duty because Nintendo doesn't want their billion-dollar franchise used that way. Gamers can't even resist advanced purchases for games of unknown quality, there's no chance that they're going to stop buying games until the publishers grant general access to assets or do so at less than usurious rates.
Now, look at it from the perspective of the implementer: if you want to take an asset from game A, you already spent the money buying it in that game. I can spend a lot of time and money licensing & developing support for that asset in my game in the hopes that it'll make you more likely to buy my game but that's a big upfront cost which limits my returns to the person or, hopefully, people who hold that particular NFT — or I can spend that time and money on things which I can sell to everyone, and don't require ongoing licensing fees to the developers of game A.
More generally, why would you use a blockchain for such an application at all? If some group of big gaming companies were interested in having in-game assets be transferable between their games, why not start a joint venture that manages the shared database instead of giving all the power away to some group of blockchain devs? That seems like it would have a lot of downsides (exposure to rugpulls, difficult onboarding for users that don't have a wallet yet, etc etc etc) for very little upside, and thus not a thing that company executives would be interested in.
Remember that NFT contracts can be written such that the original issuer can get a piece of secondary sales. That is a new revenue stream for the content owners.
I think that interoperability will not be universal, but maybe you can buy NFL gear on an NFL website and then it happens to also work in the licensed NFL games -- stuff like that. Or Nike negotiates with Fortnite and Roblox and Minecraft so that Nike NFTs that you buy from Nike.com work as avatar customizations in these games. I think this is how it starts -- limited and negotiated interoperability between non-competitors. Maybe it gets to where competitor games have interoperability, but that is definitely not where it starts.
You can't even use items from D&D 3.5e in D&D 5e.
There will not be universal interoperability of functional items across disparate games, and only limited interoperability of functional items within game families/series.
Can someone point me to a proposal for how this is even supposed to work, by someone who is familiar with game development? There is no standard for 3D asset development between game studios. Even games made within the same studio don't have interchangeable assets.
This seems like you’re arguing against the weakest form of the argument rather than engaging with the specific criticisms offered by people who understand the technology at least as well as most proponents. For example, most of the criticism I’ve seen of NFTs in gaming isn’t just about the high cost or environmental but rather more the fundamental business questions about what problems the companies who make games have which are best solved this way. If it’s something a company could trivially do now but has chosen not to, it’s unlikely to have a technological fix.
Does this meet your needs?
https://news.ycombinator.com/item?id=30243820
I also discuss interoperability and how I suspect it will be realized here:
All three problems are insurmountable. It's just a monumentally stupid idea.
When I refer to people who seem to not really understand nuance but rather view it in stark contrast I am specifically speaking of comments such as the above.
What happens if I want to bring in visual only avatar configuration? Does doesn't affect game balance. What happens if I wanted to tie my officially licensed sports game to assets that are being sold by sports teams in the leagues I have licensed? Or Nike or Adidas ensure that NFT shoes you buy online work in Fortnite or Roblox by giving these games some money to enable that?
Maybe the game is part of a series and some of the top in-game purchase are transferable to the next game in the series, even if it is created by a different company using different tech?
Maybe I want to be able to bring my WoW sword and carry it around in Decentraland where you don't really die and thus its stats don't matter because I like it?
Maybe I am a game publisher who has a few different genres of games and I make some special items which can go between the various games and result in really weird effects/bonuses? Cross promoting my properties.
I think there will be a lot of cool things happening if people start to see the potential here.
As one of the terrible nocoin haters, possibly I can explain what's going on here.
People dislike NFTs for _multiple reasons_:
- They're typically hideously wasteful of energy.
- They are typically scams
- Even if not explicitly scams, they represent a pointless and inefficient financialisation of bloody everything that no-one except crypto enthusiasts seems to be at all interested in
- The art is weirdly universally alarmingly bad
- As applied to games, they incentivise bad (pay to win) design dynamics
I could go on. It is not inconsistent to dislike something for multiple reasons.
What do you think of Immutable X, which has pledged to make all transactions on its blockchain carbon neutral? https://www.immutable.com
> They are typically scams
There is definitely a lot of scams. First most of the ICOs a few years back were scams, and then a lot/most? of DeFi schemes are scams. But I am not scared off of an area just because there are scammers in the vicinity. I think there is a lot of opportunity for what I would term gentrification of what are otherwise lawless areas.
> Even if not explicitly scams, they represent a pointless and inefficient financialisation of bloody everything that no-one except crypto enthusiasts seems to be at all interested in
I think that it will become less "inefficient" over time. I think that what can be sold will be sold if there is a market. There will be a series of fads, just like in real-life. I think this sorts itself out. If you want to believe Beanie Babies are a good thing to sell and speculate on, go for it. I won't stop you. But I probably won't speculate on those.
> The art is weirdly universally alarmingly bad
A lot of NFT art is derivative. But there are tens of thousands of artists who have made NFTs, and many are talented. I think you are cherry picking the copycats and the grifters work.
> As applied to games, they incentivise bad (pay to win) design dynamics
Games for me already went deep into the "pay to win" territory once they landed on mobile. That made a lot of companies quite rich. Thus you may disagree with the dynamics, but they are the main way that mobile games make money.
Instead of being fooled by feels good thinking, let's work on the real problem: decarbonizing the electrical grid.
All these things have a value returned to society in some shape or form, even if just as entertainment.
Being more mindful about our resources' usage is not a ploy, it's simply the mindset we need to have if we plan on having a comfortable future, it's pretty basic thinking: we need to be more efficient and mindful of where we spend our limited resources because the wake up call has come.
This complete reductionist take on the environmental effects of PoW is absurd... Much more absurd than the argument that energy is better spent somewhere else than mining coins. Yeah, we have plenty of energy, do something more useful with it then, not consume a whole medium-sized country of energy to support an immutable ledger.
> All these things have a value returned to society in some shape or form, even if just as entertainment.
If other people find crypto mining fun, valuable, or meaningful, then how are you able to claim they are wrong when you're relying on 'entertainment' to justify Netflix, etc?
> Being more mindful about our resources' usage is not a ploy, it's simply the mindset we need to have if we plan on having a comfortable future, it's pretty basic thinking: we need to be more efficient and mindful of where we spend our limited resources because the wake up call has come.
I agree with this sentiment in general. I think you could be more precise in your condemnation of cryptocurrency while justifying Netflix.
They’re using orders of magnitude more power for one thing, but also they clearly do not consider this as entertaining as watching Netflix because if they did they’d be talking about that. Nobody says they love random hashes, it’s always about how much money you can make selling them to someone else. NFTs theoretically could get closer to that but most of the salespeople never mention the artists’ names, much less give a reason why the aesthetic merits justify a high valuation: it always comes down to “buy high, sell higher”. Twitter’s NFT integration is a great example: they’re not linking to them because anyone cares about the artwork, it’s not new that you commission art, but it’s highlighted on profile pictures because people want to say “I spent a lot of money on this receipt. You can buy it from me!”
Contrast this with the early days of the web or smartphones: yes, lots of people talked about money but that was because a much larger group of people were having fun doing things that they couldn’t have done before. The point was to actually build something, not just put up a sign saying you spent a lot of money on something you didn’t have to.
It's not clear whether this statement is true. Do you have sources? I'm serious, do you know how much infrastructure is required to deliver Netflix streams globally? How much investment went into building that infrastructure on top of all of the supporting infrastructure and its energy costs?
> Nobody says they love [NFTs]... [it's not] as entertaining as watching Netflix.
These people like making money and they derive pleasure from it. How's that any different from 'watches TV and derives pleasure from it'? It's not. This isn't a logically consistent position to take. Your claim here reduces to "Making money != entertainment Therefore Crypto is Bad". It's nonsensical.
According to Netflix, an hour of streaming is 100g CO2e: https://about.netflix.com/en/news/net-zero-nature-our-climat...
Estimates vary about Bitcoin's exact cost but they generally come in on the order of kilograms per transaction, and because far, far more actual people use Netflix than use Bitcoin for real activity a fair fraction of those transactions are overhead rather than a single economic transaction.
> > Nobody says they love [NFTs]... [it's not] as entertaining as watching Netflix.
> These people like making money and they derive pleasure from it. How's that any different from 'watches TV and derives pleasure from it'? It's not.
This was explained in the parts you elided. If people were doing this out of some aesthetic appreciation for random hashes, we'd know because they would be talking about that. Instead the sales pitch is always about the things they can do after cashing out into hard currency. There are almost certainly some people who define themselves on making a number go up but they're not represented at all in the marketing material.
Of course it isn't. I don't like NFTs but it's dangerous to assume all NFTs fit in the above reasons. You can still have the following:
> - They're typically hideously wasteful of energy.
NFTs that are economically friendly: NFTs on Solana, Algorand, Avalanche, etc.
> - Even if not explicitly scams, they represent a pointless and inefficient financialisation of bloody everything that no-one except crypto enthusiasts seems to be at all interested in
NFTs that are useful: Blockchain Domain Names for identities. ENS [0], Solana Name Service, etc.
We still pay for blockchain domains in order to renew them, just like we do for domains on ICANN expect that for the latter, the registrar can seize your domain and hike the prices up [1], for any reason where as the former is owned by you on the blockchain and no one can take it away.
So which one is the true scam?
All the other reasons such as NFT jpegs, NFT games, etc are all valid criticisms and demonstrate limited or no usefulness. But not all NFTs are like that. ENS (which is a blockchain domains service) is a great example of utility in NFTs.
Doesn't this go both ways? People hear the loudest voices in the room, both for and against crypto. As a personal anecdote, I asked an acquaintance who is really into Internet Computer[1] how apps that implement the Matrix protocol[2] compare to something like OpenChat[3]. Their response was unconvincing, mainly because it was more like generalized marketing hype for Internet Computer and not actually addressing my question directly.
So I think while there are plenty of folks who blindly hate on the crypto/web3 ecosystem, there are also a lot of people trying to engage constructively and getting pro-crypto memes thrown back in their face. Where's the space for nuanced answers to these nuanced criticisms?
[1] https://smartcontracts.org/docs/introduction/welcome.html
[3] https://oc.app
Virtually all of the extreme vitriol is pure nonsense and entirely misplaced. People bashing NFTs because jpegs of apes are selling for millions are completely missing the point. It's equivalent to bashing the email protocol because of the existence of spammers, or hating tech in 2001 because of pets.com. A grammy-winning artist yesterday wrote a nice thread about how NFTs have changed his life by enabling him to better monetize his work [1]
Not to excuse scammers/spammers and charlatans because obviously that stuff is irritating. I personally despite the crappy NFT art collections selling for millions, NFT profile pictures, Ponzi-like play-to-earn crypto games as much as any hater. But I'm also aware that nobody is forcing me to buy a digital ape or play Axie Infinity, and that stuff is only a tiny fraction of what NFTs and crypto enable.
It's important to realize that we're still in very very early stages, not even the first inning of the web3 decentralized future, so at this point much of the talk is just prophecy. But there's no doubt in my mind that crypto, smart contracts, and decentralized technology (eg. IPFS) enable a ton of applications that were not possible before. Rather than fixating on bored apes, I'd rather focus on the real innovation (eg. with defi, zero knowledge proofs, DAOs, NFTs with real application, IPFS) and join in on building the future.
Bonus points if the examples are not "DRM with more steps", "P2E game", or "artificial scarcity in the metaverse is a good thing"
Bonus: say a new WoW private server spawns up (there are tons of these around). You can offer the option to a player to “migrate” from another server and keep all their items. All they have to do is provide a digital signature from the original server to show that they own the items.
Decentralized finance is huge. Borrowing/lending without having to rely on a central intermediary. Insurance without any central intermediary [2]. The ability to trade tokens without any central intermediary.
Tokenization itself enables decentralized governance in the form of DAOs (decentralized autonomous organizations), and to for example fundraise without having to give 5+% to private companies like Kickstarter, Patreon, or whoever. There's an attempt to create a universal basic income [3] Tokens themselves enable communities to have a vested financial interest in their own success, which sure could be a bunch of people holding apes and attending yacht parties, but could also be ENS [4] or MakerDAO managing a decentralized stablecoin with billions in value.
NFTs enable creators more opportunity to monetize their work such as via selling NFTs with exclusive privileges where the creator can even obtain royalties upon retrading, decentralized marketplaces for digital or even real life goods like ticketing or real estate, the ability to reuse digital assets across different applications/games. People here love to fixate on the stupid jpegs and the fact that the URL often points to a centralized server, but that's really not the point. NFT again is just digital scarcity (see the Twitter thread I linked in the parent comment [5])
Decentralization and users owning their own data is huge. Imagine owning your own content, and being able to utilize various frontends and/or build on top of the data. This means having a digital identity that can be reused across different platforms (eg. keeping your posts + followers). Don't like Youtube's algorithm? Use a different one. And of course there's censorship resistance. The modular nature of all this would enable enormous innovation, just like it already has in defi (for example look up dex aggregators like 1inch and matcha, or Curve and Convex finance)
Zero knowledge proofs in addition to enabling privacy and scaled computing also enable trustless anonymous voting. Meaning that an election can be run in a decentralized manner that's mathematically proven to be legitimate without revealing anyone's individual votes. This is massive.
I could go on all day but then I might as well write a damn article. This slide deck is a nice summary [6], as well as these threads from Chris Dixon [7] [8]. It seems most commenters here would rather just complain about bored apes and scammers, but there actually is a lot of cool stuff going on if one actually takes the time to do their research.
[1] https://www.zerohedge.com/technology/section-230-isnt-proble... [2] https://blog.etherisc.com/etherisc-teams-up-with-chainlink-t... [3] https://www.proofofhumanity.id/ [4] https://ens.domains/ [5] https://twitter.com/RAC/status/1490431018792226817 [6] https://www.linkedin.com/feed/update/urn:li:activity:6788792... [7] https://twitter.com/cdixon/status/1442201621266534402 [8] https://twitter.com/cdixon/status/1425645842552086532?lang=e...
No exploration of the underlying technology, just "he said, she said".
I'm not even angry. I'm just sad that I have to watch my friends lose a lot of money on obvious scams.
I don't think we've hit peak-crypto yet.
The other major class of banking regulation has to do with governments monitoring transfers of money. I'm not entirely convinced a weakening of their ability to do so would be a bad thing.
But cryptocurrency doesn't fix this, it just pretends to by throwing everything out of the window. I think what would ultimately work is a global 'bank' that implements all the safeguards the current system has without governments being able to touch them. That means it has to work within their legal frameworks, but also have high integrity and security to avoid the corruption... Which is probably fanciful, much like the idea crypto will fix it.
Since there has been tax introduced for crypto, why couldn't the government do it for crypto as well?
Most crypto I am aware of is as public as can be, if you were forced to verify your identity then they could directly track your transactions as well. And any somewhat anonymous crypto could just be made illegal, you could theoretically still use it, but you'd still have a log that says you got money from nowhere, which I think could warrant an audit if done a lot.
Actually, by many accounts, Tether (USDT) has been based on some kind of fractional reserve (nobody can prove that or disprove that), and USDT happens to be the top (?) stablecoin in use.
Much, much less so, really. Good luck pulling something like the big Ethereum shift that produced Ethereum Classic with the internet... We still aren't even on ipv6.
Do you have ANY idea how many there are in almost every country in the world (with backup links going to other areas)? What in the world are you talking about?? The internet is decentralized, plain and simple. Put it to you this way, let’s say you wanted to “take the internet down”, please (short of EMP attacking the entire planet - in which case we have way bigger problems than the internet obviously), how exactly would you do that. Seriously I’d love to know. See, I happen to have worked at major internet hubs throughout the world, and you would have to simultaneously take out hundred (again across the planets) in order to even slow down the internet.
Same principle goes for “truly” decentralized crypto (ie Bitcoin is the obvious example). Tell me, how exactly (even if you were the ruler of a major nation power) would you take either down? I’m dying to know…..
It’s impressive how ignorance spreads like wildfire. Do your homework people. Read. Do the actual math. Use your heads. What’s wrong with all you!?!?
You can disregard their bitterness and continue solving and building interesting things.
Crypto has been around for 12 years now.