What's so bad about NFTs?

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.

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.

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).

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.

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.

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.

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.

> 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.

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.

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.

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.)

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.

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.

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.

The only real purpose served is to enable money laundering at tremendous cost to society and the environment.