Ask HN: What's so bad about NFTs?
Honestly not sure how I feel about them.
In need of some wisdom / perspective / reminders from the dev community.
18 comments
An NFT is equivalent to a concert ticket or a deed of ownership. It's not the object itself. A concert ticket has value because you can go to a concert. A deed of ownership has value because the police protect your property.
The real problem is that all these cryptocurrency enthusiasts think that you can just simulate everything digitally and live in some VR bubble where digital enforcement of contracts does not involve living beings.
As soon as you have some service being provided in meatspace people just use regular databases because they are more convenient even if they are less secure and less decentralized.
The real problem is that all these cryptocurrency enthusiasts think that you can just simulate everything digitally and live in some VR bubble where digital enforcement of contracts does not involve living beings.
As soon as you have some service being provided in meatspace people just use regular databases because they are more convenient even if they are less secure and less decentralized.
1. Artificial digital scarcity is usually not needed.
2. It costs an enormous amount of energy to create this artificial digital scarcity.
3. If you own an asset you can generate revenue from it. With NFTs you can't really. The only way to generate revenue is to sell the NFT, for increasingly higher sums.
4. Someone will be left holding the empty bag at the end.
> Someone will be left holding the empty bag at the end.
I fail to see how this is different than any speculative asset?
I fail to see how this is different than any speculative asset?
There have historically been attempts to restrict the sale of purely speculative assets to the general public (Howey test, binary options ban etc), because gambling is such a compelling addictive product that people ruin their lives by it.
> I fail to see how this is different than any speculative asset?
To drive home the point from pjc50's sibling post, NFTs are "empty" speculative assets.
If you speculate with company stock, housing, or whatever else — there's generally at least some material value that could be liquidated. Even during a bubble when it's overvalued, it's generally not zero. And the cases where it can become zero (companies going completely bankrupt), there's warning signs and possibly even fraud.
NFTs just have no backing. Even "fiat money" (frequently said to "only have value because people back it", after gold standards went away) is different since it's backed by some country. NFTs? Nope. Just nothing.
To drive home the point from pjc50's sibling post, NFTs are "empty" speculative assets.
If you speculate with company stock, housing, or whatever else — there's generally at least some material value that could be liquidated. Even during a bubble when it's overvalued, it's generally not zero. And the cases where it can become zero (companies going completely bankrupt), there's warning signs and possibly even fraud.
NFTs just have no backing. Even "fiat money" (frequently said to "only have value because people back it", after gold standards went away) is different since it's backed by some country. NFTs? Nope. Just nothing.
Countries are just successful memes that pulled up the ladder as well as they could.
>Countries
Populated with real, physical resources, and real, physical people, who will take real, physical action to secure themselves, their resources, and their ideas.
Who is defending my unique set of bits? How are they defended? What is gained from defending them? What is lost if they're not defended?
Populated with real, physical resources, and real, physical people, who will take real, physical action to secure themselves, their resources, and their ideas.
Who is defending my unique set of bits? How are they defended? What is gained from defending them? What is lost if they're not defended?
Possibly a separate question, but I was wondering just how serious the energy use problem is. I haven't actually seen what the stats are for carbon footprint etc.
https://kylemcdonald.github.io/ethereum-emissions/
Estimates that Etherum alone is responsible for a couple of coal power plants.
Proof-of-waste is the worst invention since leaded petrol and CFCs.
Estimates that Etherum alone is responsible for a couple of coal power plants.
Proof-of-waste is the worst invention since leaded petrol and CFCs.
Thank you so much for the link! And ditto on the thank you for introducing the term proof of waste. Extremely helpful.
Thanks for being the first to introduce the term ‘proof of waste’ to me!
It’s so obvious on seeing it that proof of work is just not an accurate term to describe what is going on.
It’s so obvious on seeing it that proof of work is just not an accurate term to describe what is going on.
> Someone will be left holding the empty bag at the end.
This. It's a modern variation on tulips.
This. It's a modern variation on tulips.
As an artist who has been able to survive the pandemic in part due to NFTs, honestly, nothing is that bad about them per se. That said there are a couple of points worth noting:
- as an artist when I sell an NFT it's the equivalent of selling conceptual art, the recipient basically buys the "certificate of authenticity" that states that this work, together with the certificate of ownership constitutes the original work. This isn't too different from a certificate of authenticity often issued with a print or painting, just suitably modified to the digital space. I mean, there are a million Van Gogh reproductions, some even eerily well forged, but only the painting with its certificate is the original work. Doesn't mean the rest of the world can't enjoy the reproductions.
- It helps me make ends meet as an artist and is a way for collectors to support that, especially important for digital artists whose works traditionally have suffered form being turned into static prints, for example.
- the POW issue re: sustainability is an ugly one, thankfully there alternatives with POS, but it's important to remember not everyone can afford to be too principled, sometimes you have to go where people are offering what you need to pay this months rent, not where you'd like to go.
- NFTs are massively hyped and have yet to be a better alternative to anything, that said they have helped a lot of artists survive the pandemic, they aren't a way of getting rich quick, or at least for 99% they aren't heh (but that's no different form the traditional art world).
- as an artist when I sell an NFT it's the equivalent of selling conceptual art, the recipient basically buys the "certificate of authenticity" that states that this work, together with the certificate of ownership constitutes the original work. This isn't too different from a certificate of authenticity often issued with a print or painting, just suitably modified to the digital space. I mean, there are a million Van Gogh reproductions, some even eerily well forged, but only the painting with its certificate is the original work. Doesn't mean the rest of the world can't enjoy the reproductions.
- It helps me make ends meet as an artist and is a way for collectors to support that, especially important for digital artists whose works traditionally have suffered form being turned into static prints, for example.
- the POW issue re: sustainability is an ugly one, thankfully there alternatives with POS, but it's important to remember not everyone can afford to be too principled, sometimes you have to go where people are offering what you need to pay this months rent, not where you'd like to go.
- NFTs are massively hyped and have yet to be a better alternative to anything, that said they have helped a lot of artists survive the pandemic, they aren't a way of getting rich quick, or at least for 99% they aren't heh (but that's no different form the traditional art world).
The intro reads like:
As a salesman who’s been able to survive the pandemic thanks to selling multilevel marketing schemes, honestly nothing is bad about them per say.
I don’t understand why it is that people have this inherent attitude that “it’s good when artists get money, no matter what”. I mean fair enough if you sell some art, but that’s not what NFTs are, they are risky investments bought because of the investment aspect. And while yes, as they say “in an up market there are no losers” it still might be the case that the losers will show if it collapses just like any Ponzi scheme or pyramid organization, and that will leave all the “suckers” at a loss. And I can’t agree that this is all ok simply because the snake oil salesmen where also artists this time around and not just selling certificates allowing others to sell water filters.
As a salesman who’s been able to survive the pandemic thanks to selling multilevel marketing schemes, honestly nothing is bad about them per say.
I don’t understand why it is that people have this inherent attitude that “it’s good when artists get money, no matter what”. I mean fair enough if you sell some art, but that’s not what NFTs are, they are risky investments bought because of the investment aspect. And while yes, as they say “in an up market there are no losers” it still might be the case that the losers will show if it collapses just like any Ponzi scheme or pyramid organization, and that will leave all the “suckers” at a loss. And I can’t agree that this is all ok simply because the snake oil salesmen where also artists this time around and not just selling certificates allowing others to sell water filters.
Yeah, I mean personally the only artists I know who have experimented with NFTs seem to have continued operating at a loss with no concrete hope of making back the money they've spent on minting fees etc.
I don't want this to be the narrative but I've been consistently reminded of the small number of people I've known / worked with in the past with who get into buying lottery tickets and / or scratchers. It's never people who are in a position to burn money and it seems like it turns into a long-term commitment / compulsion that is really hard to understand but also not something that seems like it should be judged too harshly either.
I don't want this to be the narrative but I've been consistently reminded of the small number of people I've known / worked with in the past with who get into buying lottery tickets and / or scratchers. It's never people who are in a position to burn money and it seems like it turns into a long-term commitment / compulsion that is really hard to understand but also not something that seems like it should be judged too harshly either.
Yeah, this is the sadder "it isn't a silver bullet" part, I've found it's a lot more productive to have the same mental expectations as selling a physical print: you need to have a community of people who like, want to support and/or collect your work. This has always been the case, even before NFTs, if you don't work on your visibility, community and reach, the chances of people randomly stumbling over your work and collecting it are ... slim. This is why I never recommend anyone to go all-in on NFTs, but rather choose a platform ala hicetnunc (or its now many variants and mirrors) with very low minting fees and double down on building community rather than burning a lot of money on sales.
What has made NFTs interesting to me, who as a digital artist has to "give away" their work daily just to stay visible in social media, is that it allows for also the non-physical manifestation of the work to have "value". That is to say I don't have to go through all the complexity and expense of producing a physical print in order for the jpeg to be considered "worth collecting".
But yeah, it's not a get-rich-quick deal, it's still just as tricky as the old-school art market..
What has made NFTs interesting to me, who as a digital artist has to "give away" their work daily just to stay visible in social media, is that it allows for also the non-physical manifestation of the work to have "value". That is to say I don't have to go through all the complexity and expense of producing a physical print in order for the jpeg to be considered "worth collecting".
But yeah, it's not a get-rich-quick deal, it's still just as tricky as the old-school art market..
This is definitely a refreshing / important perspective to hear. It's one I haven't actually heard yet from any other practicing artists and it makes me feel a little better / less hopeless about my friends who are dumping money into minting fees.
> they have helped a lot of artists survive the pandemic
Not an attempt to call-out or anything but just curious roughly how many artists you personally know that fall into this category.
> they have helped a lot of artists survive the pandemic
Not an attempt to call-out or anything but just curious roughly how many artists you personally know that fall into this category.
So, I know personally about 5-7 artists (closer circle), who have managed to pull through thanks to being able to sell works via NFTs (as all normal income sources like exhibitions and events got shuttered by the repeated lockdowns). I'm only counting artists who are full-time artists here, btw, and who don't have a day-job/other revenue streams, there are a lot more of them and and since it's a lot harder to gauge the impact NFTs there I'm not going to count them.
No-one's gotten rich, heh, but they've managed to keep paying rent and keep making art, which is what I think is the most important for them (and for those who love their work).
As I mentioned in another comment in this thread, there are platforms where minting fees are a lot lower, the crucial bit that rarely gets talked about is that minting into the void without a community and visibility will most likely not get you very far. Building a community around your art is the key bit, then naturally some people will want to collect or support you if you offer different ways to do so. NFTs are by themselves no solution to anything if the same bits you need to survive in the traditional art market aren't there at all either.
No-one's gotten rich, heh, but they've managed to keep paying rent and keep making art, which is what I think is the most important for them (and for those who love their work).
As I mentioned in another comment in this thread, there are platforms where minting fees are a lot lower, the crucial bit that rarely gets talked about is that minting into the void without a community and visibility will most likely not get you very far. Building a community around your art is the key bit, then naturally some people will want to collect or support you if you offer different ways to do so. NFTs are by themselves no solution to anything if the same bits you need to survive in the traditional art market aren't there at all either.
Thats pretty cool. A friend of mine is pretty artistic and I've mentioned NFT's to her before. Any tips on how one might get started as an artist making them?
I've heard a bit about Solana nft's having much lower transaction fee's. Have you see anything going on in the Solana NFT space? Seems like that might be better for making them if you were a creator.
Also any recommendations for crypto/nft aggregators or communities?
I've heard a bit about Solana nft's having much lower transaction fee's. Have you see anything going on in the Solana NFT space? Seems like that might be better for making them if you were a creator.
Also any recommendations for crypto/nft aggregators or communities?
I'd say, be an artist first and focus on building a community engaged in your art first, just becoming an "NFT artist" (shudder) probably won't do much for her, but if she can share and engage people in her art and then also offer ways for them to support her practice it may work.
It's important to have realistic expectations. When I first started out as an artist I made physical prints ... and nothing sold for, like, two years and I had to do commercial gigs I disliked to make ends meet. If then was now and instead I minted NFTs ... I expect the same would happen. Basically nobody apart from my family and a couple of friends even saw I had prints available because no-one knew I existed. As such NFTs are the same as the old art market, you need to be visible and have a proper community before they can be relied upon as a revenue source (a lot of "traditional" artists can rely on sales of paintings/prints as they produce them).
I'm not personally familiar with Solana, but I've good experiences with tezos (POS (way more eco friendly), very low minting fees) platforms like hicetnunc.
It's important to have realistic expectations. When I first started out as an artist I made physical prints ... and nothing sold for, like, two years and I had to do commercial gigs I disliked to make ends meet. If then was now and instead I minted NFTs ... I expect the same would happen. Basically nobody apart from my family and a couple of friends even saw I had prints available because no-one knew I existed. As such NFTs are the same as the old art market, you need to be visible and have a proper community before they can be relied upon as a revenue source (a lot of "traditional" artists can rely on sales of paintings/prints as they produce them).
I'm not personally familiar with Solana, but I've good experiences with tezos (POS (way more eco friendly), very low minting fees) platforms like hicetnunc.
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It isn't the NFTs that are bad per se but how they are promoted and sold that can be bad. Using an NFT for concert tickets makes sense. Using an NFT as a "certificate of authenticity" makes sense. Using NFTs in a video game or in a VR realm can make sense if it accurately describes what value the purchaser gets out of it.
The problem becomes when you imply the NFT has a value it doesn't have like ownership of a work of art. Buying an NFT of digital art doesn't give you any real ownership rights. It only gives you the right to say "you own that NFT", which is the thing on the block chain and not the art, and potentially to sell that NFT in the future. That is where the scam feeling comes in because no or very few "certificates of authenticity" are worth a lot of money. So the idea that NFTs are inflated assets that will quickly lose value is very real. That said, we have stuff like that happen all of the time such as tulips or more recently Beanie Babies.
The problem becomes when you imply the NFT has a value it doesn't have like ownership of a work of art. Buying an NFT of digital art doesn't give you any real ownership rights. It only gives you the right to say "you own that NFT", which is the thing on the block chain and not the art, and potentially to sell that NFT in the future. That is where the scam feeling comes in because no or very few "certificates of authenticity" are worth a lot of money. So the idea that NFTs are inflated assets that will quickly lose value is very real. That said, we have stuff like that happen all of the time such as tulips or more recently Beanie Babies.
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You don't own the NFT or picture, you just bought the right to the NFT and picture. Anyone can right click the picture and save it to their hard drive. If the picture is stored on a website and that website goes down or deletes the picture you are SOL.
As far as I can tell you don't own the right to the picture either. You just buy the right to have your name next to it. Is that right?
When you think about it, it's like copyright without enforcement...
I'm a musician (when not being a software architect) and I'm somewhat shocked by the number of artists getting excited about NFTs and thinking this is the ticket out of stream-poverty. It's ridiculous - the NFT gives the consumer nothing. The whole reason vinyl has resurged is because music consumers want to own a thing. Something they can hold, and feel like they had some kind of transactional relationship with the maker. The NFT is emperor's clothes: they get no musical value at all from it. It's just a way of donating money with a bunch of environmental destruction rolled in for no good reason. I fear that many of my colleagues spending time chasing this are just going to have wasted a ton of time and money they could have spent making art, because the novelty will wear off pretty damned quick.
If there’s anything I learned, is that any skepticism tied around crypto tech is generally met by the doubling of the value of whatever you doubted over time. I don’t have real answers for any of this, I just accept this stupid shit is going to be worth what they are saying in 5-10 years time.
It's a gamble. It's still better than going to the casino.
PoW is an awful use of energy with close-to-zero wealth created. Wealth in the original sense of the word.
I see them as transferrable autographs, and would be down to own even small shares of my favourite artists' work, but their energy usage is untenable.
I see them as transferrable autographs, and would be down to own even small shares of my favourite artists' work, but their energy usage is untenable.
> What's so bad about NFTs?
Nothing. But they are not for me thanks (in current form).
Why? None of the arguments really make them inherently bad. Bubble, yes, so if they were free / 0.0001c would NFTs be good? People make / lose money? Hype? Legal ownership / non ownership? By that metric everything is bad, especially in the tech space.
The internet economy is in a very interesting place at the moment. Donation / patronage / support things are everywhere, and for the most part, NFTs are in this space for me. The whole space is something I am yet to properly form a mental model of.
Donations to streamers, patreon, onlyfans, substack, most of kickstarter all in a similar bucket.
Nothing. But they are not for me thanks (in current form).
Why? None of the arguments really make them inherently bad. Bubble, yes, so if they were free / 0.0001c would NFTs be good? People make / lose money? Hype? Legal ownership / non ownership? By that metric everything is bad, especially in the tech space.
The internet economy is in a very interesting place at the moment. Donation / patronage / support things are everywhere, and for the most part, NFTs are in this space for me. The whole space is something I am yet to properly form a mental model of.
Donations to streamers, patreon, onlyfans, substack, most of kickstarter all in a similar bucket.
NBA Topshot was a flagship NFT.
NBA Topshot would be functionally as good or better if it were handled by a centralized DB owned and managed by the NBA.
The only reason it's an NFT is to pump prices due to crypto hype.
NBA Topshot would be functionally as good or better if it were handled by a centralized DB owned and managed by the NBA.
The only reason it's an NFT is to pump prices due to crypto hype.
https://www.psl.com/feed-posts/web3-engineer-take discussion: https://news.ycombinator.com/item?id=29321987
My problems with NFTs are (1) it's a bubble (or fraud) being pitched as a good investment and (2) NFTs are pitched as offering "ownership" but none of them do.
My problems with NFTs are (1) it's a bubble (or fraud) being pitched as a good investment and (2) NFTs are pitched as offering "ownership" but none of them do.
I dislike NFTs for the use in "art ownership" in which sense it may be a bubble/fraud, but the underlying tech has good foundation for practical uses. It is used as gaming items and as tokens for debt and probably some more, but I'd like to see it used for certifications, deeds (apartments, cars). the problem with art is NFTs can be minted infinite times, hence it's not an N-FT, it's a perfectly fungible token...
Yeah I've wondered about that since they first started gaining popularity. The series-oriented nature of minting 100 different colored bear gifs with the artist's promise that there will be only 100 doesn't strike me as terribly non-fungible. Obviously they can all become worth different amounts as they sell / resell but still something just seems fundamentally off there.
what I mean is worse than having colir vareity: there can be 1000s of NFTs without any vareity, except for the index in the series.
this can be useful if you buy 1000 spots ("tickets"), and I guess it makes sense for artist to make limited edition prints... but with digital art is pointless.
this can be useful if you buy 1000 spots ("tickets"), and I guess it makes sense for artist to make limited edition prints... but with digital art is pointless.
> deeds
This problem was solved by centralized databases in 1617. https://www.ros.gov.uk/our-registers/general-register-of-sas...
This problem was solved by centralized databases in 1617. https://www.ros.gov.uk/our-registers/general-register-of-sas...
Using NFTs for deeds sounds like the worst idea ever. So now if you get malware on your computer, you lose your house?
Pastel are building an alternative crypto for art : https://pastel.network/
you can read their arguments against NFT : https://pastel.wiki/en/home (ownership, data storage, centralization, ethereum, permissions, duplication of content, smart contracts, cost etc.)
you can read their arguments against NFT : https://pastel.wiki/en/home (ownership, data storage, centralization, ethereum, permissions, duplication of content, smart contracts, cost etc.)
The idea of "ownership" NFT brings is a make-believe. I can believe I own anything, I can believe I own mona lisa, the only difference NFT brings is if other people agree, which is pure vanity and I can't care less.
But I wouldn't call it bad, once in a lifetime cash grab opportunity where you can create "scarcity" from you home, with a story of why people should own, no need to really produce anything.
But I wouldn't call it bad, once in a lifetime cash grab opportunity where you can create "scarcity" from you home, with a story of why people should own, no need to really produce anything.
Perhaps, reverse the question what is good about them? Which problem do they solve? If they have no advantage they are useless.
Short answer: nothing by design, I believe, but as usual the devil is in the details. And there are a lot of details, it's a fairly complex ecosystem especially taken together with the larger crypto-sphere.
To my knowledge, a lot of the issues arise from reckless resource allocation from retail investors/traders.
To my knowledge, a lot of the issues arise from reckless resource allocation from retail investors/traders.
They're useless. You could use a digital signature to achieve all the benefits of an NFT without any of the blockchain waste. I don't think that makes them inherently "bad", but the industry hyping them up isn't good.
There’s a lot of wash trading going on, which is bad, since people get suckered.
But NFTs themselves are great. It’s like game skins etc but for lots of things.
But NFTs themselves are great. It’s like game skins etc but for lots of things.