TheNFTbay.org – The Billion Dollar Torrent (All NFT's from Ethereum and Solana)

So far most comments here fail to understand that the economic value of an NFT, unlike traditional art through most of recent history, is not tied to scarcity of access to its media. If you want to learn more about this (very polarizing) paradigm and how it can benefit artists, I suggest the following links:

[1] - https://mattdesl.substack.com/p/hicetnunc-and-the-merits-of-...

[2] - https://jackrusher.com/journal/what-does-it-mean-to-buy-a-gi...

Obviously not, because those are tangible things. That’s not a valid comparison.

There are basically two theories of their value: the collectible theory and the ownership theory. These overlap but are best explained separately.

In the collectible theory, NFTs are like an autograph you get on merch from a famous person. Think an autographed photo of Will Shatner you might get at a con. Usually the (cryptographic) autographer is the original artist of the work being autographed. Of course the autographer can release multiple autographed versions of the same work, but this decreases their value (and the value of any further work they might autograph).

Collectibles have long had value to humans, but they also suffer from three annoying problems: storage, fakes, and transaction costs. NFTs solve all three - they never degrade on the blockchain, their authenticity is cryptographically verifiable (assuming one can associate the signing address with the famous person, which is comparatively simple), and they are easily transferred online.

The second theory is the ownership theory. Here NFTs are used to track ownership of the underlying digital asset. In our current internet this is absurd, as the torrent is designed to demonstrate - everything is a copy, and even the NFT holder can never get access to the "original" bits. The ownership theory requires adoption of NFTs as an ownership mechanism in the metaverse, along with associated digital rights management technology. It's an early land-grab for the VR overworld.

Now, personally I don't find either of these theories very compelling. But I also didn't find cryptocurrencies generally very compelling, so I don't have a great track record. Cryptocurrency really tends to turn us all into Frank Grimes -like characters who miss out. I believe the more widely-used term is "midwit".

Not really. In your Mona Lisa example, an NFT would be more like a blockchain based ticket to the Louvre that has a link to a Mona Lisa JPEG.

That’s the mismatch in NFT discussions: The believers have been convinced that the NFT is the artwork, but everyone else looks at the NFT and sees a link to a JPEG with no actual rights, possession, or ownership of the artwork.

NFTs aren’t the artwork. They’re a fancy crypto receipt that says “I paid X amount to someone and we agreed that transaction had a link to this specific JPEG”. You can technically go into the blockchain and confirm that your receipt was the first, but there’s nothing stopping anyone else from making another NFT of the Mona Lisa and selling it.

The blockchain itself can’t even verify that the Louvre sold you the original Mona Lisa NFT, you have to rely on 3rd-party news articles and such to confirm the address was truly associated with the Louvre. We’re already seeing scams where fraudulent NFTs are being produced that claim to be authorized by legal owners of the artwork but are actually just scammers selling NFTs of someone else’s artwork. But the funny part is that discovering these frauds has zero impact on the blockchain because the NFT was already minted and owned and you can’t undo that. We just have to look off-chain to websites to tell us what these tokens are supposed to be thought of, ignoring the actual blockchain NFT contents and trusting the non-blockchain NFT sources.

They might be valuable to other members of the NFT believers group in the same way that rare baseball cards are valuable to other baseball card collectors, but the rest of us just aren’t interested in trading digital baseball cards of JPEGs.

There’s also a huge problem with wash trading: Someone can make their NFT or NFT collection look arbitrarily valuable by trading it between multiple wallets they own. From the outside it looks like the NFT is “sold” for huge amounts of money, but really it’s just someone moving their own money and NFTs around on the blockchain. In the real art world this is much less practical because someone would be paying huge tax bills and auction fees on each sale. With blockchain, someone can simply wash trade with themselves across wallets and nobody would ever know. NFT values are definitely being pumped up by this scam because it’s too obvious and easy to ignore.