I'd like to defend NFTs from a slightly different angle.
(Leaving aside the carbon emissions - let's assume everyone finally switches to Proof of Stake)
They are stupid. They are pointless. But then so is most of the art world - and going a step forward - so is much of what we value.
As several people have pointed out they are no less arbitrary than a limited edition print vs a commodity print. The value of fine wines escalates exponentially whilst the extra utility you get from any quality improvements trends towards nothing.
Much of what we value is pointless and bordering on delusional. But unless you're a wandering ascetic or superhumanly utilitarian in your consumption (hint - you're probably not even if you think you are) then the difference is one of degree rather than of category.
> (Leaving aside the carbon emissions - let's assume everyone finally switches to Proof of Stake)
I don't know how you get to defend something when you're sidestepping the biggest problem with NFTs.
I'm fine with stupid and pointless things as long as your stupid and pointless things don't wreck the environment. If someone decides to poison the local water supply because it's an "art project" they still poisoned the fucking water supply.
Thanks I've been looking for a PoS blockchain in production. Will check this out. Do you know any others?
I really enjoy NFTs conceptually, much more than crypto in general actually, and I really don't get a lot of the hate. If you remove the emissions aspect (which is the non-starter for me), I think it's so cool that there is a way to create scarcity in the digital world, even if that scarcity is totally "meaningless." Yes, there are some goods with inherent value: food, shelter, heat sources. But NFTs are far from the first type of asset that has no inherent value, and that includes both the cyber and real worlds. Humans like to curate and collect, and NFTs are just an expression of that drive.
What I wonder if why NFTs suddenly took off now. I remember hearing about them years ago.
Cardano is a production proof-of-stake blockchain. It has the fifth-largest market cap.
However, Ethereum has virtually monopolized the DeFi space. It is supposed to move to PoS, especially considering that transaction fees are insanely high due to recent demand.
You can't even run a hello world on cardano yet. but it has that market cap, with the expectancy that all users who buy in now will become super rich soon (Tm)
It's weird for me to read HN and see people speak of PoS as some kind of new cutting edge technology. Maybe some of the issues with it may or have may not been solved but it is so damn old now that it's 2021.
Like the first live real money implementation of a PoS chain was done by SunnyKing back in like...I want to say 2012, but maybe 2013. SunnyKing was the same guy who went on to make the somewhat interesting PoW function via finding largest prime numbers(arguably somewhat useful PoW, certainly more than double SHA-256), Primecoin.
Then in a larger scale there was NXT which was like 2013-2014ish, full PoS.
I don't care about the merits of these particular chains, but PoS was one of the earliest innovations in blockchain tech. The lineage was roughly something like:
0. All the centralised pre-Bitcoin cypherpunk digital currency stuff from the mailing list like Bitgold, Chaumian ecash whatever.
1. Bitcoin
2. Namecoin(decentralized DNS)
3. Feathercoin/Litecoin(Bitcoin with 0.25 block target time and 4x total coins), arguably shouldn't be on the list for 'innovation' but Litecoin is successful(at some point they changed the PoW work function to scrypt so I guess it counts, there were other scam coins around this time too doing the same thing. So I don't necessarily mean Litecoin was 'third place' overall, just that it ended up rising from the pile of shit).
4. Different forms of PoW functions. ie Litecoin doing scrypt so people could still use their ATI Radeon 4xxx to mine and not order ASICs from shady companies), Cryptonight stuff maybe(lies about it being 'developed on the darknet for years and being related that cicada thing' before and such, hard to make an accurate timeline for that one(ended up forked off as Monero, possibly post-PoS tech)).
5. PoS, 2012-2014ish. Probably didn't come before different PoW functions but it might have switched with #4's place, hard to remember the exact timelines, but people were trolling and making fun of PoS ever since it was theorized. Probably because a true fully realized PoS that is superior to PoW is a threat to the massive investments one must put behind PoW systems, which also becomes the root of their 'nothing at stake' arguments against PoS, which certainly had merit back then with early PoS implementations. I wonder if those truly got solved.
This was all like 2014 at the latest. Very old stuff but crypto is full of sales snakes(not targeted at you at all) who try to sell other peoples old open source tech as new modern innovations. It's a familiar pattern. People sold Bitcoin as private and anonymous for years...like way too long.
I'm imagining now there will be a point when PoS is 10+ years old and people will acting like it's the newest thing on the block still.
nft's don't poison the environment in and of themselves. First of all they don't NEED to exist on a proof of work blockchain, and second whether or not you make or trade nft's people are still going to be mining bitcoin and ethereum. your criticism here is of proof of work, not nft's. please don't conflate the 2. there are plenty of reasons that nft's are silly, but proof of work isn't one of them.
Until NFTs move away from proof of work I'll continue to criticize them.
It's like expecting good intentions and then being surprised when a few bad actors ruin things for the larger group. Tragedy of the commons is exactly why stuff like this should be called out, each and every single time.
You seem to assume that very little energy will be spent to acquire coins for staking. If there is real interest in ether and stiff competition to stake (and there better be for proof of stake to work), I'm afraid that won't be the case.
It will harm the environment, but no less than the rest of our economy. There are two problems being conflated here. In basically all of society, people harm the environment in order to acquire resources. In proof of work, you go one step further and proceed to destroy the resources you just acquired. This is because destroying resources via reversing hashes is a costly signal that cannot be faked and is hence not susceptible to a Sybil attack.
Proof of Stake doesn't have this problem. The mere act of owning a coin does not entail the destruction of value. In proof of stake, you just make money, probably harming the environment along the way as you do, and buy the coin. That's it. The resources you obtained are not destroyed, they are passed on to whoever you bought the coins from.
In both proof of work and proof of stake people are doing work (using energy) in order to obtain money.
In proof of work you work to obtain mining equipment and electricity and then use that to perform the work of securing the network (nothing is “destroyed”). You are then paid for doing that work. The more work you do relative to other miners, the more you will get paid.
In proof of stake you work to obtain eth (for example) which then grants you the privilege to run validators. The more you stake, the more validating you can do. You are paid money for successfully validating, and charged money for failing to validate. You will need to do more work to replenish money spent on unsuccessful validation. Ultimately, the more work you do relative to other stakers, the more you will get paid.
It’s going to be a little more difficult than it is for proof of work to measure how much total energy is used by proof of stake, but it still should be doable. Maybe it will be less than the energy used by proof of work, but maybe not.
I think in 1-2 generations people will look back and wonder about how dumb we were about our energy consumption regarding the environmental challenges we were facing.
Most of ou current Christmas folklore is pretty pointless lights being a pretty recent invention when compared to christian religion timespan. Same as for Christmas trees, they were pretty much on point when everybody had a wood stove to throw them in after Christmas and warm the house. Pretty pointless nowaday when you live in a flat...
Do you play video games, then? Because arguably it isn’t NFTs that consume power...it’s the GPUs. GPUs do way more than NFTs, and there is data that shows that gaming consumes way more than blockchain.
If my mom is any indicator, many consider video games stupid and pointless. Value is in the eye of the beholder.
A quick search finds that a single bitcoin transaction consumes around 773.80 kWh. That's enough to power a video game console, like a PS5 for example, for around 3100 hours. So the simple act of buying the video game to play would cost vastly more electricity than playing it ever will.
Whether or not gaming as a whole consumes more power than crypto as a whole isn't the question, it's whether or not crypto would consume more power per person using it than per gamer playing games. As in, give everyone a ~fixed power consumption quota - where is that power "better" spent, gaming or crypto?
I honestly don't know where the power is better spent. There are quite a few industries I personally find superfluous in the world according to my personal set of values. Ironically for this context, I consider bitcoin to be among them.
But I also don't think judging the industry on power consumption is particularly fruitful, unless we want to look industry-by-industry and weigh utility vs energy, which we do not do. We do this for blockchain because calculating this is easy. We don't even have these numbers for, say, the stock market, so we don't even know how good or bad that is. We can't answer the first questions that arise from this kind of analysis.
> We don't even have these numbers for, say, the stock market, so we don't even know how good or bad that is. We can't answer the first questions that arise from this kind of analysis.
1 bitcoin transaction takes more power than 100,000 Visa transactions.
> But I also don't think judging the industry on power consumption is particularly fruitful, unless we want to look industry-by-industry and weigh utility vs energy, which we do not do.
That's exactly what I think we as a society should do. We are limited on the amount of sustainable power generation, so looking at cost vs. value is exactly what we should be doing. Especially when something comes along that does the same basic thing as an existing system, but 100,000x more expensive.
If you want to bring the data you mentioned we can have a conversation, however I would be very surprised if it came close to the 50-130GWh mark for just bitcoin alone[1].
These are the sources I've used when I've gone looking, but it doesn't help that we don't actually do industry-by-industry energy consumption comparisons.
Maybe this is a the case, however there are, I would guess at least a billion people on earth who play games. there is nothing even close to that using blockchains. If blockchain energy usage is even vaguely in the range of games it can still be considered an enormous --possibly-- unnecessary usage of power
Maybe this is the case, but when we start judging what constitutes unnecessary usage of power, we get in the business of telling people what they can and cannot do with hardware they own. Last I checked, the HN crowd really doesn't like that kind of thing.
These are the sources I've used when I've gone looking, but it doesn't help that we don't actually do industry-by-industry energy consumption comparisons.
I think the majority of the value in art nfts will be derived from being part of the provenance, or being part of the history of the beginning of 'owning' digital art, much like owning a famous painting. By extension it could be applied to digital culture, for example the tiktok guy riding his skateboard is selling that meme as an nft. So if collectors are good (and lucky), they are basically able to buy their way into a niche of history by being associated with works that represent periods of cultural significance.
Sure that may seem stupid to most people, but most people don't even get why regular art is significant or can be very expensive. Personally I would attribute it to my lack of understanding rather than dismiss it outright.
The critic, which you do not address, is that (most) NFTs pretend to give assurance of ownership to an "original" digital asset.
The problem with NFTs is a conceptual one not a technological or psychological or societal one. The problem with NFTs is digital "products" by their nature cannot claim originality.
Art might be stupid, but you can actually make the claim of having an original insert_coin drawing, despite its value.
> The problem with NFTs is digital "products" by their nature cannot claim originality.
That's the beauty of it. Yes, the digital good by its nature is infinitely replicable [0], but everyone knows and (hopefully) understands that, and that is not what it is being sold with the NFT. The NFT, as I understand it, represents a totally new type of "ownership" that has no analogue in previously established forms of ownership. The closest thing to NFTs are securities, where the value of the security is almost always speculative in nature. NFTs just take this to its teleological end. Yes, an artist or John Cleese can go ahead and mint another Brooklyn Bridge token, but doing this would degrade their reputation and make their future work less valuable and attractive to buyers, just like a company that keeps minting stock indiscriminately is going to have a harder time selling that stock. John Cleese selling a token is actually very cool in my opinion, because he didn't have to call Goldman Sachs to make it happen. I see a future where we have premier blockchains where all the top assets will be traded. Someone selling farts [1] and such will not be on those blockchains (unless those farts become highly regarded, which they might), and the blockchain itself will be a sort of crypto-artistic expression. I think this is just the beginning.
I thought I had covered this point by talking about limited edition prints.
A print is a print is a print. The artist simple decides to make a set of 5. If someone later makes a run of 10,000 - why is the former more valuable. The artist might never actually touch the print. They are simply authorizing them.
How about photographs? Even back in the days of silver chemistry printing, it was fairly straightforward for an artist like Ansel Adams to go into the darkroom and print up more copies of his pieces. Most famous photographers, in fact, hire assistants who do the actual duplication to their formula, and then they sign, date and number the prints. Today, when even fine art photographers print their results via inkjet, it’s incredibly easy to reproduce as many copies as you want.
For modern graphic arts, the value has always come from being part of a serialized limited edition.
> For modern graphic arts, the value has always come from being part of a serialized limited edition.
The value to whom? To the artist the actual negative is clearly the most valuable to own. Original Ansel Adams negatives are actually very very valuable.
Things, actual things, have value because they are physical, and the closer to the original the more value they have. Negatives have the most value, prints have less value, and a digital jpeg of an Ansel Adams photo has almost no value. I know, I "own" several.
> and the closer to the original the more value they have.
Do you see the step you've just taken?
It's no longer about authenticity, it's about proximity to authenticity. Would a reproduction from the original negative by someone other than Ansel Adams be more valuable than a different type of reproduction? If so, why?
I am fully aware of what I am saying: things have value not only because of what they are or what they are made of, they have value for other reasons.
NFT people claim things only have value because of what they are, an art piece has value because it is an art piece, because it is beautiful to look at or whatever, and that visual property can be stored on the blockchain. That is where they are failing. They are missing 99% of the reasons things have value, and why they cannot understand two seemingly identical things having widely different values.
I think there is a flaw in your reasoning but it's hard to be sure because your last sentence is rather hard to parse.
> They are missing 99% of the reasons things have value,
Can you clarify?
> they cannot understand two seemingly identical things having widely different values.
We're not talking about the value in a piece of art - or even the value of owning an original piece of art.
Ownership itself is a social construct. Back to my limited edition print comparison:
You own one of a series of 100 prints or a photograph by a famous artist.
I "own" a reproduction of the same work that is high enough resolution to be indistinguishable from your print.
Assuming you can prove the authenticity of your print (maybe there's a chain of custody you can verify) - your print is worth thousands and mine is worth simply the cost of making another copy.
NFTs cannot guarantee the ownership of an original digital asset despite its claims because a digital asset has no original.
They cannot even guarantee the ownership of a limited production "edition".
They can guarantee part of a limited edition, if the contract is written such that only x tokens can be issued. If a future contract issues more copies, then that release will be less valuable by nature of it being later/less exclusive, even though it’s the same physical file.
I agree. But my point is that this is only a matter of degree more stupid than the concept of limited edition prints. Or $10000 cigars you can't smoke. Or a hotel room that costs similar amounts per night. The list goes on.
I may not be able to put it back in the same blockchain, which is a different issue, but if I only care about the bits that make up the “coin” I can absolutely copy them. I could even copy the entire blockchain.
AND the problem is not with the token, you can own all the original tokens for an image you want, you still don’t have anything different than a jpeg.
> I may not be able to put it back in the same blockchain
Look, if you can figure out how to double spend BTC, go for it. There's $1 trillion on that chain right now just waiting for the first genius with a copy-paste button to come along and take it.
It's not a different issue at all. A Bitcoin is not a thing you can copy. The UTXOs only exist on the chain and only mean anything in terms of the chain.
> you still don’t have anything different than a jpeg.
Yes, you do. You have verifiable providence of a unique digital signature (not unlike an autograph). You have a programmable, pluggable, leverageable, tradeable, asset that interacts seamlessly with hundreds of different applications (and rapidly growing).
Copying the value is a different question, but I can copy the data all I want.
> Yes, you do. You have verifiable providence of a unique digital signature (not unlike an autograph)
You have a signature that a token is valid on the chain, cool. As long as it stays on the chain of course. But that’s all it is, it does not make one jpeg the original and another one with the same bits the copy.
I can look at the Mona Lisa - either the original or a reproduction. Does that mean "owning the Mona Lisa" is meaningless? How about "owning the copyright on a painting that is on the internet"? Worthless or worth paying for?
Well yes. But anyone can make a reproduction of a Warhol print. But there is a chain of custody that adds value.
I'd like to reiterate that I think the value in a Warhol print is also stupid. It's less stupid than NFTs but the point I'm trying to make (apparently unsuccesfully) is that these differences are matters of degree rather than type.
We humans have a multitude of ways to invent value that is built on sand.
We have many fictions we indulge in about authenticity and value.
NFTs are a new fiction. They might even be dumber than other currently accepted fictions.
But the discussion is "which of these fictions is the most stupid?" rather than "NFTs are stupid". We are already a long way from genuine utility or intrinsic value and into the realms of social consensus and value-through-association.
Can they? A proper reproduction would involve replicating Warhol's screen-printing process exactly. Probably easier than painting a replica Picasso, but... still pretty involved.
Minting an NFT is trivial, you can do it with the press of a button, at scale. You could mint an NFT for every single item in the Library of Congress with a for-loop, if you could pay the transaction fees.
Owning a physical painting grants access to the object, so for example you can study the texture of the brush strokes, the canvas, take samples of the paint, smell it, destroy it, produce copies or images of it at any level of detail or resolution you like. None of this is possible with a digital reproduction.
If I own the copyright of an artwork, even one 'on the internet' I have exclusive rights to reproduce it commercially. For example I could sell prints, while it would be illegal for others to do so. The existence of the latest pop songs on Youtube doesn't stop the copyright holders commercialising it.
NFTs don't by themselves confer any of these rights or privileges with respect to the thing they purportedly represent.
(Leaving aside the carbon emissions - let's assume everyone finally switches to Proof of Stake)
They are stupid. They are pointless. But then so is most of the art world - and going a step forward - so is much of what we value.
As several people have pointed out they are no less arbitrary than a limited edition print vs a commodity print. The value of fine wines escalates exponentially whilst the extra utility you get from any quality improvements trends towards nothing.
Much of what we value is pointless and bordering on delusional. But unless you're a wandering ascetic or superhumanly utilitarian in your consumption (hint - you're probably not even if you think you are) then the difference is one of degree rather than of category.