NFTs Are a Pyramid Scheme and People Are Already Losing Money • Hacker News Board

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#121

Post by IshKebab » Sun, Mar 21, 2021, 2:18 PM UTC

draklor40 wrote: post #9

Ironic coming from a website like fstoppers. What exactly is the "value" of fine art photography ? Why do people pay exorbitant amounts for basically a few hours of photos during their wedding, given that a wedding might end up divorce ? People pay for whatever has "intrinsic" value to them. If Digitally generated/cryptographic art is it, so be it.

> Why do people pay exorbitant amounts for basically a few hours of photos during their wedding, given that a wedding might end up divorce?

That's about the worst example of people paying more for something than it is intrinsically worth that you could have come up with! People pay lots for wedding photographs because they want good photos, you're paying for an entire day of a skilled person's time - actually more because they usually edit the photos and produce some kind of photo book - and because there's high demand for wedding photographers.

People don't pay lots because of price speculation for their wedding photos!

A better example would be modern art, or maybe MTG cards.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#122

Post by mannykannot » Sun, Mar 21, 2021, 2:19 PM UTC

This is, very literally, the old scam of selling a bill of goods. The mark has bought just a bill (list) of goods, not the goods themselves.

The author appears to be comparing it to a pyramid scheme because artists are being encouraged to buy other artists' NFTs, so earlier entrants into the scheme are being paid by more recent ones.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#123

Post by brandonmenc » Sun, Mar 21, 2021, 2:20 PM UTC

draklor40 wrote: post #9

Ironic coming from a website like fstoppers. What exactly is the "value" of fine art photography ? Why do people pay exorbitant amounts for basically a few hours of photos during their wedding, given that a wedding might end up divorce ? People pay for whatever has "intrinsic" value to them. If Digitally generated/cryptographic art is it, so be it.

> Why do people pay exorbitant amounts for basically a few hours of photos during their wedding

So that they can, uh, have photos of their wedding?

> given that a wedding might end up divorce

Why do anything, then? Why have a child, they might die? etc.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#124

Post by PragmaticPulp » Sun, Mar 21, 2021, 2:21 PM UTC

skyzadev wrote: post #81

PragmaticPulp wrote: post #53

Earlier quoted context omitted.

So now we have no Banksy painting but someone has a crypto token that says “This represents a Banksy painting” in the code? Since there’s nothing to own or even point to, what’s stopping a second party from claiming they actually have the original Banksy NFT and selling their own? Just the time stamps on the blockchain? What a miserable destruction of real art to profit on a trading frenzy.

Private keys are what's stopping other people from selling unauthentic NFTs for the same thing.

Private keys don't verify that an NFT was authorized by the owners of the painting. You're still relying on real-world trust and claims that the NFT you're buying was the "real" NFT.

If the owners of the Banksy came out a few days later and claimed that someone else sold a fake Banksy NFT, but they're now going to sell the real NFT, the private keys won't help.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#125

Post by pabe » Sun, Mar 21, 2021, 2:21 PM UTC

The problem with NFTs is that they're not linked to any real legal contract. You basically buy a pointer to a file, not the file. Not even usage rights.

For NFTs to become more than a Ponzi, they have to be bound to legal contracts.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#126

Post by bradleyjg » Sun, Mar 21, 2021, 2:22 PM UTC

markkat wrote: post #116

bradleyjg wrote: post #68

Earlier quoted context omitted.

That proves too much. There’s nothing inherent in the paper that grants any rights and privileges. It’s the legal system that does that. A digital token is either meaningless (if the legal system doesn’t recognize it) or massive overkill (if the legal system treats it the same as a wet signature).

The legal system will recognize it, and attribution protocols are being built. Removing middlemen like title companies is an efficiency, not overkill.

Title companies are fading away with the advent of digital land registries (using plain old boring databases).

As usual for “like X but with a blockchain” this is a solution in search of a problem. Because despite all the protestations to the contrary the real motivation for crypto is not providing useful goods or services in exchange for reasonable compensation, it is getting rich by being an early adopter.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#127

Post by pessimizer » Sun, Mar 21, 2021, 2:22 PM UTC

NoOneNew wrote: post #83

twic wrote: post #58

Earlier quoted context omitted.

What capableweb said is correct. NFTs do not confer any ownership of, rights over, or special access to anything else, real-world out digital. When you buy an NFT of an artwork, you aren't buying the artwork, you are only buying the NFT. As far as I know, the inventors of NFTs do not claim that they do. But it seems like a lot of people talking about and perhaps buying NFTs don't understand that.

In your description, what's the difference between an NFT and a gag USD million bill with Bush, Obama, Trump or Biden's face on it? This makes it even harder to understand why anyone should care. Hell, it starts to make the people who thought Beanie Babies were a long term investment seem smart.

I think the point is that people believe NFTs are something other than that, so they buy them. Imagine there was a news story every morning about somebody different buying a gag bill for millions of dollars whose only important quality was that it would be very difficult to forge another. Literally the same situation. But also literally the art market, so there's that.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#128

Post by piva00 » Sun, Mar 21, 2021, 2:23 PM UTC

adnzzzzZ wrote: post #48

arcturus17 wrote: post #31

Earlier quoted context omitted.

Those are (a) very heavily regulated by definition and (b) means to an end, which is to create societal good, ie, foster innovation (I don’t want to argue whether that’s actually the case - I’m just taking the statu quo position) Could one say the same about tokens?

Yes. a) is very heavily regulated by the chain/protocol used to make the tokens work and b) would be to introduce scarcity to digital items, which possibly creates good and fosters innovation (I similarly don't want to argue whether that will actually be the case) in fields which benefit from scarcity.

What kinds of innovation are we talking about?

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#129

Post by PragmaticPulp » Sun, Mar 21, 2021, 2:24 PM UTC

ddeyar wrote: post #107

PragmaticPulp wrote: post #34

Earlier quoted context omitted.

NFTs don’t sell ownership. They sell NFTs. It’s like creating a contract that sells the contract itself. Then maybe you stamp a photo of Michael Jordan on the cover and call it a Michael Jordan contract, even though the contract doesn’t give the buyer any rights to anything Michael Jordan related, except the contract itself. Then you can go out and make more Michael Jordan contracts, because there’s nothing in the fi…

The contract would give the buyer rights to use the content. When I'm the owner of a physical Picasso then I have the right to sell t-shirts with the motive on it. If someone else would do that, I could sue him. The same idea is behind this NFT hype, you buy the right to use the content. As far as I understand it.

NFTs don't transfer real-world rights. They only transfer the NFT itself.

You could potentially create a real-world contract that ties ownership of the real-world asset to whoever holds the NFT, but that would introduce real-world legal issues like voiding the NFT in the event that it was transferred fraudulently and so on.

It seems a lot of people have been misled into believing that NFTs are something they're not. NFTs are like a special URL that points to some other content. You can trade that URL, but the content being pointed to still exists separately.

Re: NFTs Are a Pyramid Scheme and People Are Already Losing Money

#130

Post by SCHiM » Sun, Mar 21, 2021, 2:25 PM UTC

ses1984 wrote: post #88

Nextgrid wrote: post #74

Earlier quoted context omitted.

I still can't see how a blockchain here would do something that a database wouldn't. A DB of authentic serial numbers with a way to mark them as claimed is all you need. If your new widget's serial is already marked as claimed on the manufacturer's website then you most likely have a counterfeit, no blockchain necessary.

What if you want to sell your thing? Who is hosting this db?

You are, as a saas I think.

I mean, this gives you all the control, you can charge for all sorts of services and "value adds". There's no reason you, as the maker of this software, would want this available as a block chain.

Unless you also create a token and start having people speculate on your anti-counterfeiting blockchain?

That's what it looks like to me anyway.