Our Take on NFTs

https://www.jbr-holdings.com/post/our-take-on-nfts

by astukari • 5 years ago

33 86 5 years ago

oblio• 5 years ago

Summary:

So, in conclusion, NFTs are a cool idea. If there ever becomes a day where its possible to buy and sell digital art easily and legitimately, it will be of great benefit to artists and consumers alike. And while the blockchain does get us closer to that path, the technology is simply not there yet for it to be viable. It is for this reason that JBR does not recommend its artists to use NFTs as a point of revenue.

They seem to be some sort of consulting company that helps artists make a living by selling their art.

gnrlst• 5 years ago

Parsing out the gold rush from this whole industry is difficult, and the speculative nature of NFTs has understandably turned a lot of people away.

However, NFTs are more than digital art, and frankly have nothing to do with art. Art is just a very superficial and speculative application, and has become synonymous with NFT, fueled by craze and media attention. It's akin to someone saying an electronic device is another word for tamagotchi.

I know this tech gets a lot of hate on HN, and I resonate with a lot of it, but I'm also trying to see beyond this gold rush. What I find interesting and promising is the ability to give uniqueness to THINGS in the digital world (not art necessarily), and to do so in a decentralized manner so that anyone can build applications that integrate those things in a certified and safe way thanks to trustless authenticity and consensus.

YXNjaGVyZWdlbgo• 5 years ago

That's not what NFTs are.

wizzwizz43• 5 years ago

What I find interesting and promising is the ability to give uniqueness to THINGS in the digital world

That's hashes you're thinking of. NFTs require hashes, but hashes don't require NFTs.

Whenever any cryptocurrency-related thing seems useful, you're seeing the potential of the underlying cryptography. Not the potential of the cryptocurrency thing.

rodiger4• 5 years ago

Everything after that phrase does require the blockchain though- not individually, but as a sum it would be very difficult to bring that all together in a centralized manner.

remram• 5 years ago

NFTs don't give uniqueness to things any more than URLs. Give a URL to a thing (whether it's a JPEG or something else) and that thing has a clear name and a clear domain, but the association to the thing is one-way and somebody else can still present the same content at another URL.

Whether the URL is verifiable with the domain's key is HTTPS and still doesn't do what you claim.

onion2k• 5 years ago

What I find interesting and promising is the ability to give uniqueness to THINGS in the digital world (not art necessarily)..

That's not real though. Any scarcity in the digital world is people pretending that they have some sort of unique object. Just look at the number of people who post "bored ape" JPEGs in the comments on any story about NFT ownership - very obviously there is no uniqueness or scarcity or even ownership there.

Abundance is a fundamental property of digital data. It's trivially copyable at basically no cost. You can't remove that property and still share whatever the thing is with people.

JumpCrisscross• 5 years ago

What I find interesting and promising is the ability to give uniqueness to THINGS in the digital world

So DRM. Laundered through jargon to seem cool to some techies.

alexvoda• 5 years ago

But what purpose does giving uniqueness to things that are by nature infinitely and indistinguishably replicable have?

The limitless perfect replicability of digital things is one of the key benefits of beeing digital. Imposing uniqueness is an artificial limitation.

the_gastropod• 5 years ago

I see this a lot, and I somewhat empathize with you for wanting there to be something interesting there. But what you're describing is just nonsensical. There is no such thing as a digital "THING". Any digital "THING" is only a thing via interpretation by a computer program that musts be TRUSTED to interpret it correctly. That fact makes the concept you're describing dead on arrival.

Cryptocurrencies and the very most-boring versions of "smart contracts" are the only things blockchains can do. Any time you're dealing with anything that's not:

1. Tokens themselves 2. Rules for transferring the tokens themselves

blockchain is purely worse than a non-blockchain alternative. Because you're necessarily involving 3rd-party trust, which is antithetical to the reason blockchain exists.

thrwy_918• 5 years ago

More simply, it allows you to buy and sell the ownership of digital art

I simply do not agree with this characterization. At a minimum, the vast majority of NFT transactions do not allow people to buy and sell ownership of digital art. They allow people to buy and sell ownership of the NFT itself. Unless you consider the token itself art, this is a very different proposition.

People come up with all sorts of complicated metaphors for what NFTs are, but at the end of the day, they are digital tokens. That's it. An NFT is not the digital art that it may be notionally connected to.

outside12342• 5 years ago

They sort of get to this at the end of the article, but are right.

The reality is that NFTs are vehicles for money laundering and gambling. They really have nothing to do with the art.

twox23• 5 years ago

Gambling yes, but so far the money laundering claim is baseless outside of hypothetical scenarios. The overwhelming majority of NFT sales are retail sales well below the $10k price point.

boopboopbadoop4• 5 years ago

I came here to say this as well. Who are these guys and why have they gotten this crucial point wrong?

ineptech• 5 years ago

Because they relied on an nft marketplace for definitions:

For more information on NFTs and the terminology used in this article, the OpenSea NFT Bible is the current de-facto document for NFT knowledge

scoutt2• 5 years ago

I don't know much about NFTs, but I understand it as a sort of "certificate" (?).

Like buying the rights of an old album; an album for which the original is lost. I might receive some piece of paper that says the songs are now mine. Of course, there are already thousands of copies of the songs, but (somehow) now the songs are mine, and I can certify it.

but at the end of the day, they are digital tokens

I can simplify everything up to the point of saying that the 10 bucks bill you have in your pockets is just a piece of paper, but we all know it's more complicated than that.

Fellshard• 5 years ago

And yet, NFTs grant no 'rights to use': licensing, copyright, terms of use, or any other legal terms of the sort. At its heart, it's because blockchains are not widely recognized as legally authoritative. They /cannot be/, since there is no guarantee that an image is uniquely identified by one NFT across all blockchains, and therefore a court would be required to pick and choose 'winners' when considering which blockchain rightly determines ownership.

episode0x012• 5 years ago

Linus Akesson (big in the C64 demoscene) created the only good example of an NFT I've come across [1]. In the token he puts the source code to his "A Mind Is Born Demo" which compiles to the very demo you watch when you view the token [2].

[1] http://www.linusakesson.net/scene/a-mind-is-born/nft.php [2] https://opensea.io/assets/0xa7702e0769c5d408ebf2b056d7c3cc0a...

boto3• 5 years ago

What prevents the author from selling another token with the same content? How is the content unique to the buyer?

unsignedint2• 5 years ago

You can think of NFT like a baseball trading card. You may get an ownership to the card, but you won't get ownership for that baseball player depicted on a card.

Now of course, if there's a contract that says "whoever owns this baseball card owns this baseball player" then you get an ownership, but that's unlikely. Same with NFT, unless there's recognition and contract in place that designates ownership of actual work, you won't own the work itself.

cassianoleal2• 5 years ago

Only it's not very easy to make an exact copy of the baseball player. The digital art, on the other hand...

yucky2• 5 years ago

There are unlockable NFT's where you get access to what is inside. Think of a JPG with the words "My favorite Color" in a black font on a white background. That's it, and that's all any non-owner sees. Only the owner is able to unlock and see what it is. Everyone else knows my favorite color is inside that NFT, but they don't know what the color is.

It's an overly simple example of course, but now carry that out to trade secrets, future stock prices, gambling picks, private videos etc. The "art" on the outside isn't really relevant. It's just an indication of what it is you're owning. It might be just that art, or it might be something else depending on the contract. You're seeing the box, not what is in the box. You have to own it to get the contents of the box.

okokwhatever• 5 years ago

Unless some artists start to use the keys to let the customer the visualization of the art. Anyway this would be the end of art as we know it... obviously...

2Gkashmiri• 5 years ago

i have since yesterday ( no kidding) heard about NFT because i like to live under a rock. i get the whole hype thing but are people really this dumb hat they are willing to fork over cash for a token whose only aim is to be a bubble store of value and general pissing contest who owns the more elusive ones?

i have never bought art so i can't imagine how that trade used to happen say till 20 years ago or even 10 years ago before all this? is it the same? different?

officialchicken• 5 years ago

I have purchased art. It usually comes in one of two forms - originals and prints/issues (numbered limited copies). There are massive differences between digital and physical art in terms of copyright - with a lot of overlap between digital art, NFT's, and prints. When it comes to "artificial scarcity", an NFT isn't too much different than a print/issue, very similar to photographs. It is possible for an artist to "reissue" prints, and it does happen infrequently with the expected devaluation. But I've never heard of a "drop" or "lootbox" for purchasing fine art. I'm sure it's happened, and imagine it will become more popular in galleries.

The major difference I see is the signature, which artists often use as a control mechanism to create lower-cost versions for sale (e.g. unsigned or pseudonym copies) of original pieces. It's technically impossible to get an inexpensive unsigned NFT and then have it signed later (this often costs one thousand+ dollars for paintings). Since an unsigned piece doesn't have "provenance", it has little-to-no resale value. But if you like the artist and want to support their work it's a great way to get started.

mschuster91• 5 years ago

i get the whole hype thing but are people really this dumb hat they are willing to fork over cash for a token whose only aim is to be a bubble store of value and general pissing contest who owns the more elusive ones?

For what it's worth, most physical art investment isn't much better than that.

The amount of art that is (essentially) forever locked up in "toll and tax free warehouses" (Zollfreilager, no idea about the actual English word) is immense - alone in the warehouses of Geneva, there are over 120.000 pieces of art worth many billions of dollars [1]. No one can visit or see them, they are only tokens and change owners at auctions for ever higher and higher prices.

Art loses its meaning that way, it's yet another enjoyment that has been hijacked and completely transformed by hyper-capitalism and money laundering, not to mention looting, theft [2] and Raubkunst (art pieces confiscated by the Nazi regime mostly from Jews, ending up sold on the open market or being kept by Nazi officials and museums).

[1] https://oe1.orf.at/artikel/644453/Monumente-verschwindender-...

[2] https://en.wikipedia.org/wiki/Geneva_Freeport

BashiBazouk2• 5 years ago

My father owned a gallery for a few decades. His may be atypical as it was not in an expensive/exclusive shopping district and was some what avant-garde, but the way art sold at his level was copious amounts of alcohol. A very high percentage of art sold at the opening and was directly related to the quality of the party. I think people are not sure about art unless they can lock into it a positive memory. Art becomes not only a pleasing picture for your wall but a trigger of a good memory whenever looked upon.

jonathan-adly4• 5 years ago

The OG NFT club: https://en.wikipedia.org/wiki/Augusta_National_Golf_Club

Humans just want to be feel cool and part of something exclusive. It's dumb to buy digital art receipts for 6-7 figures, its dumber to pay that much and then 5 figures on a yearly basis to play golf.

People with money want their own club though, so something like that will always be around.

the_doctah4• 5 years ago

This is one of the worst analogies I've ever seen.

katspaugh• 5 years ago

I think they were alluding to the Bored Apes Yacht Club, one of the most popular "profile picture" NFT collections.

randomhodler847• 5 years ago

Disagree, it’s one of the best. Community access is the primary value of the “prestige nfts”. Do you think people like ape jpegs?

It’s membership cards.

Cshelton• 5 years ago

You get it.

Another analogy I use for friends who ask (I have a sizable NFT 'bag'(investment)):

I say why do people buy Rolex watches and Gucci purses? Status. So you can't show off a 'real' Rolex well in the digital world. NFT's are that. Provably scarce. Verifiable.

The luxury industry is massive and people crave to have status and/or 'belong' to something. NFTs are no different and they are not going anywhere. It is early.

BashiBazouk2• 5 years ago

I think you will find with most exclusive clubs there are a few types that join but the more common are the ones who have so much money that the cost is immaterial and those who wish access to those people. For the latter they are not paying 5 figures to play golf, they are paying 5 figures to make deals while they happen to be playing golf.

jonathan-adly4• 5 years ago

Exactly. It is the same dynamic with BAYC or similar NFTs. If I want to digitally rub elbows with some hot shot VC or CTO of a tech company, it's an easy way in. And for the ETH early adopter with cost-basis of ~$10 - it's play money.

BitwiseFool• 5 years ago

I feel like monetizing digital artists is a problem better addressed by subscription services like Patreon. The way I see it, an NFT basically locks a sale to one follower whereas a support/subscription services allows the creator to receive money from multiple followers for the same piece. When the creator perceives 'art-theft' as a problem, they can always resort to using a third party watermarking service. The NFT itself has no such anti-copying measures. Sure, someone "owns" it but there is no practical way to identify who made a copy and distributed it.

Just my two cents.

randomhodler847• 5 years ago

There is no way to know someone didn’t run remove_watermark.py on your jpeg either. At least with an NFT there is a tx graph of cryptographic signatures.

Fine Art is about story and provenance. NFTs do provide both.

criddell4• 5 years ago

NFTs do neither, at least not for the thing it is associated with.

In his article on Web3, Moxie Marlinspike wrote this:

So as an experiment, I made an NFT that changes based on who is looking at it, since the web server that serves the image can choose to serve different images based on the IP or User Agent of the requester. For example, it looked one way on OpenSea, another way on Rarible, but when you buy it and view it from your crypto wallet, it will always display as a large [poop] emoji. What you bid on isn’t what you get. There’s nothing unusual about this NFT, it’s how the NFT specifications are built. Many of the highest priced NFTs could turn into [poop] emoji at any time; I just made it explicit.

boopboopbadoop4• 5 years ago

Fine Art is about story and provenance

Fine art is about being aesthetically pleasing. A JPG can do this on its own, without an NFT.

Maybe you mean the value of art is determined by, among other things, story and provenance? Sure, NFTs provide those two. What they don’t provide, which in my opinion is the most important part, is a unique piece of art. Some think a unique record in a blockchain that points to a non-unique copy of a JPG is equivalent, but it is not.

criddell4• 5 years ago

I don't think there's any reason why an artist couldn't create 500 copies of a piece and generate 500 NFTs to be sold or given to supporters.

Your last sentence seems to be describing a DRM problem which, AFAIK, is an entirely different class of problem.

falcolas• 5 years ago

An artist can mint an infinite number of NFTs for any single piece of art. They'll all be 100% legitimate. Only one will be the "first", but that's not much of a distinction (or rather, it's the same distinction you get from owning the first of a numbered copy of a print).

twox23• 5 years ago

You can think of NFTs as akin to Patreon. The thing is they are way better than Patreon. NFTs pay a perpetual royalty to the artist, and the few intermediaries involved mean much smaller fees. Opensea takes only 2.5%. Art theft is an issue no matter how/where an item will be sold, but the IMO when people steal digital art and sell it as NFTs, it just validates the market for the artist it was stolen from. If those artists decided to sell NFTs they would make a killing and squeeze out the thieves.

smnplk• 5 years ago

The founder of Signal has a great article about web3 and NFTs here --> https://moxie.org/2022/01/07/web3-first-impressions.html

SkyMarshal• 5 years ago

https://news.ycombinator.com/item?id=29845208

emerged• 5 years ago

I have a theory that you could build an entirely fake blockchain ecosystem and people would still use it. Just use all normal “web 2” technology to simulate the same dynamics and people would still play the game to try and win money.

In other words, the energy we see in crypto has nothing to do with the actual technical capabilities. It’s people enjoying playing an emergent game produced by the particular crypto low level mechanics.

It may continue to go on for a long time just the same as any game or gambling web site stays popular.

lukifer2• 5 years ago

I find the existence of "testnets" for blockchains fascinating. All the major chains have a parallel/shadow network used for testing and development, effectively identical to the real thing. Yet merely by social consensus (and semantic tags), one of them is acknowledged to be Monopoly play money, while the other is a store of value on par with many nation-states.

DonHopkins• 5 years ago

I propose NFTHC: based on "Proof of Weed" instead of "Proof of Waste". It's green renewable "Web 4:20" technology. Burn Weed, not Coal!

It uses the honor system instead of crypto, just like those "Are you 18 or older? (Yes) (No)" age verification popups.

To generate an NFTHC "Toke'n", the centralized server asks you: "Did you just burn some weed? (Yes) (No)".

If you answer "Yes", then Shazam! Bob's your Uncle: it instantly and efficiently generates your unique NFTHC "Toke'n" without burning any coal or gas.

Other than the fact that it's based on getting wasted instead of wasting energy, using truly green renewable resources whose production actually takes CO2 out of the atmosphere instead of burning coal that causes cancer and heart disease, designed for honorable stoners who just want to get high and relax instead of greedy money launderers and tax dodgers and scammers shilling shady get-rich-quick pyramid schemes who want to viciously cheat gullible victims out of their life savings while carelessly destroy the environment, NFTHCs are totally green, natural, organic, and aromatic, and they don't require wasting energy and burning stinky carcinogenic coal, so Proof of Weed based NFTHCs are otherwise totally indistinguishable from "traditional" Proof of Waste based NFTs.

aww_dang• 5 years ago

These are all interesting questions and dilemmas. However I'm not sure they are as interesting as the act of cashing-in on the hype. Until these issues become more interesting for market participants, it is largely a moot point.

We can discuss it everyday for the next year, but the trend will continue regardless of how rational or irrational HN's scruples are.

The discussion can still be interesting either way.

earthboundkid• 5 years ago

My take: Real Money Neopets.

ufo• 5 years ago

I feel that although this article is recommending against nfts, it still gives them too much credit. Referring to unspecified "myths" and "bad blood" and linking to an opensea article in the end.

ChrisMarshallNY• 5 years ago

I have no opinion on NFTs. They are not my bailiwick. I don't plan on getting involved, so I am not spending much bandwidth on the matter.

However, as a former artist, that has sold a few works, the concept of "original art" is important. That's how we can sell photographs, made with film, as the actual film is an "original." I know that when I sold my works, I did not explicitly sell the rights to reproduce. I was young and naive, but I think that the law was already sort of on my side. That meant that the buyers couldn't make money by selling prints of the paintings that I sold them.

Digital work kind of blows a hole under the waterline of "original art." Digicams are now prevalent. I think a few pro photographers use film cameras, but they are quite rare. Even Annie Liebovitz uses digicams. I know that camera companies have tried in-camera digital watermarking, but I also know that these have all been successfully hacked.

And then, we have 3D/pure digital art, which can be awesome, and can take as long as any master oil painting. One example that I use, is Worth Enough, by Radoxist[0]. He spent over a year on it (It's a 3D rendering). I think that Floating Bazar, by Emilis Baltrusaitis, took a lot less time[1] (I think it is a 2D work), but is still an impressive work. There's a lot more stuff out there. Those who sniff at digital media, are probably short-changing their worldview (of course, a huge market for 3D models, are "undressable" male and female mannikins).

I'm not sure that NFTs are the solution to establishing "originals." They just seem to be a way of proving that something was paid for. The artist and the customer need to word the contract carefully; just like they have had to do, for decades. I seem to remember reading about students of great masters, making copies and paintings in the style of their mentor, and selling it as the main artist's work, and we always know about unscrupulous art dealers, selling copies.

Note that Radoxist also sells "other views" of Worth Enough[2]-[5]

[0] https://www.deviantart.com/radoxist/art/Worth-enough-7324787...

[1] https://www.artstation.com/artwork/QYdK3

[2] https://www.deviantart.com/radoxist/art/worth-enough-add-sho...

[3] https://www.deviantart.com/radoxist/art/worth-enough-add-sho...

[4] https://www.deviantart.com/radoxist/art/worth-enough-add-sho...

[5] https://www.deviantart.com/radoxist/art/worth-enough-add-sho...

nathias• 5 years ago

NFT as tech gives objects digital autonomy. This is a big deal, but it does not entail rights, rights are something states do, not crypto.

Our Take on NFTs

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