Come for the politics, stay for the snark.

rich, arrogant assholes who equate luck with genius

Imperialist aggressors must be defeated, or the whole world loses.

He really is that stupid.

I’m more christian than these people and i’m an atheist.

We still have time to mess this up!

Republicans don’t lie to be believed, they lie to be repeated.

The poor and middle-class pay taxes, the rich pay accountants, the wealthy pay politicians.

They punch you in the face and then start crying because their fist hurts.

We can’t confuse what’s necessary to win elections with the policies that we want to implement when we do.

I might just take the rest of the day off and do even more nothing than usual.

Speaking of republicans, is there a way for a political party to declare intellectual bankruptcy?

Today’s gop: why go just far enough when too far is right there?

The current Supreme Court is a dangerous, rogue court.

Radicalized white males who support Trump are pitching a tent in the abyss.

Roe is not about choice. It is about freedom.

Republicans: “Abortion is murder but you can take a bus to get one.” Easy peasy.

Putin must be throwing ketchup at the walls.

The Giant Orange Man Baby is having a bad day.

Nothing worth doing is easy.

Petty moves from a petty man.

I desperately hope that, yet again, i am wrong.

If America since Jan 2025 hasn’t broken your heart, you haven’t loved her enough.

People really shouldn’t expect the government to help after they watched the GOP drown it in a bathtub.

These are not very smart people, and things got out of hand.

You are here: Home / Open Threads / NFT’s Make No Fucking Sense to Me

NFT’s Make No Fucking Sense to Me

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I don’t understand NFT’s. Period. That is the whole post.

As I age, one of my constant fears is I am going to become an old man who just doesn’t understand the world around him because it has changed so much. I like to think I am pretty on top of things, up to date on world events, up to date (within reason) with pop culture, and up to date with science and technological advances. Sure, I don’t know everything, and yes, there are tons of musical acts and actors and actresses in shows I have never heard of, but I think that speaks more broadly to the fact that far more stuff is widely available because it isn’t just the three major networks and a handful of radio conglomerates choosing what is popular.

So I’m not too worried about it. Crypto and NFT’s, on the other hand, make no fucking sense to me. And I play video games and understand the tangible value of things that solely exist in cyberspace like how people will pay real cash money to buy ingame gold to buy items. And even then, I do not understand why someone would plunk down a half million to sell something that doesn’t exist.

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109Comments

  1. 1.

    Roger Moore

    Crypto and NFT’s, on the other hand, make no fucking sense to me.

    This is mostly a sign that Crypto and NFTs make no objective sense. The bubble keeps getting bigger and bigger, but it’s going to pop when they run out of greater fools.

  2. 2.

    Enhanced Voting Techniques

    Buffet said something about never putting your money into something you didn’t understand.

  3. 3.

    Jim, Foolish Literalist

    I’m getting more and more comfortable not getting what’s going on in pop culture and technology.

    NFTs to me are like tulip bulbs and beanie babies (that was a thing, right? People speculating on toys? cabbage patch? Pokyemons?) Crypto worries me because 1) I get a pets dot com vibe from it and 2) I gather it’s an environmental disaster (?)

  4. 4.

    Betty

    I am in the same boat. It’s all a mystery to me, but there are people insisting that it is the future reality. The new Mayor of NYC is all in on it. Says he wants to be paid in crypto. Kind of scary.

  8. 8.

    Spanky

    @Roger Moore: Yep, it’s designed to be inpenetrable. It’s a scam, full stop.

    As you get older you’ll find that you’re more and more comfortable not knowing the latest pop culture, because it’ll suddenly occur to you one day that you don’t give a shit. Quite liberating, actually.

  9. 9.

    trollhattan

    I’d like a legit number on how many gigawatts computers actively mining cryptocurrencies are currently gobbling, and how large that number will be in five years should we* choose to not rein them in.

    *Definition of we forthcoming.

    Did they discuss this at Glasgow?

  10. 10.

    West of the Rockies

    There have been multiple posts on this topic, and pretty much have discovered a consensus: no one here has any great enthusiasm for cryptos.

    Are we getting old? Well, I can’t get enough Billie Eilish or Lil Nas, so I’m saying no.

  13. 13.

    Spanky

    @Spanky:

    A non-fungible token is a unique and non-interchangeable unit of data stored on a digital ledger. NFTs can be associated with easily-reproducible items such as photos, videos, audio, and other types of digital files as unique items, and use blockchain technology to give the NFT a public proof of ownership. Wikipedia

  16. 16.

    Matt McIrvin

    There’s nothing to understand. You’re buying an unforgeable certificate of ownership of some content that isn’t physical and can be copied by anybody anyway. If there’s no utility to be had from that certificate of ownership, then it’s just another vehicle for a dumb speculative bubble. End of story.

  18. 18.

    billcinsd

    Crypto and NFT’s, on the other hand, make no fucking sense to me.

    Well, to be fair, you probably don’t launder drug money, so don’t need Crypto

  19. 19.

    Roger Moore

    @Enhanced Voting Techniques:

    Only putting your money into things you understand is a great piece of advice.  It’s a subset of what is probably the most important thing to understand about investment: there are far more investments out there than you have money to invest in.  The hard part of investing isn’t that there aren’t enough good places to put your money;  it’s figuring out which places are good and which ones aren’t.  Limiting yourself to stuff you can understand does two good things.  On the one hand, it narrows down the field of investments you have to investigate, which is generally good.  Again, there are way more places to put your money than money available to invest, so narrowing things down should be the name of the game.  On the other hand, it increases your chances of identifying which investments are real and which ones are scams. since you’ll actually understand the places you’re thinking about putting your money.

    Of course one of the really important things to understand about this maxim is that it even applies to someone like Warren Buffet, who almost certainly knows more about investing than you do.  That there are plenty of things out there that he doesn’t understand should help you feel less bothered by the list of things you don’t understand.

  23. 23.

    TheOtherHank

    NFTs are something. If you give me $LARGE_NUMBER I will enter your name in a cell on a world readable Google Spreadsheet. Next to it I will say that you own this jpeg of Mr Frog.

  34. 34.

    Scott P.

    Think of it like a rare baseball card. It’s make of cheap cardboard. It has a poor, grainy photo. For many players, you could get an autographed nice glossy photo for less than their rookie cards. It’s not hard to make a copy or replica. What makes it valuable is that other folks think its valuable. Except in this case you’re not buying the card, but a piece of paper that says you own the card, which you can’t actually handle yourself … no, I take it back, it’s all nuts.

  35. 35.

    JoyceH

    I don’t understand how NFTs differ from copyright. Since they’re NOT a copyright, I assume it’s some kind of scam.

  36. 36.

    Chetan Murthy

    I’ve posted these two links before.  They’re pretty long reads, so I’ll TL’DR, but here you go:
    https://www.stormingtheivorytower.com/2021/06/the-nfts-aura-or-why-is-nft-art-so-ugly.html
    https://www.stormingtheivorytower.com/2021/07/the-nft-rube-goldberg-machine-or-why-is.html

    So we all have different ideas for what NFTs are, what cryptocurrencies are, etc.  I’ll state my priors: cryptocurrencies are ponzi schemes, *period*.  *period*.  OK.  On to NFTs (and this is, I think, a fair condensation of the links above).

    1. Did you know that there are these things called “Freeports” where richies will store their acquisitions?  Gold, wine, art, etc?  So a rich man might accumulate millions of dollars of art, buy it, sell it, to/from other rich men, and none of them actually have it shipped to their house(s) where they might actually, y’know, *display* it ?  Imagine that; it’s happening right now.

    2. Did you know that rich men store gold the same way?  And that there have been scandals where rich men have had their gold bars (stored in well-reputed banks’ vaults in well-reputed countries) “assayed”, only to find that cylindrical sections had been drilled out of those bars, and replaced by tungsten ?  Instantly lowering the value of those bars, needless to say.

    The lesson?  Don’t go assaying your gold bars, buddy.

    3. And the same has happened with cray-cray high-priced wine.  As long as you don’t inquire into the actual contents of the bottle with the insanely valuable label on it, it’s all good.

    4. and, yeah, we all know this happens with art all the time.  All.  The.  Time.

    5. So what’s the lesson from all this?  Answer: don’t buy/sell the actual artifact/bar/bottle.  Instead, buy/sell the certificate of authenticity/warehouse receipt/label.

    6. And from this, we can see what NFTs are: some clever boots thought: “here’s a market: people who realize that what’s being bought and sold, what’s being valued, is not the thing, but the certificate of ownership of the thing.  Insane, but this is what the rich are doing.

    That’s what NFTs are: the next step in the process of asset creation after all the ones I listed above.

    It’s all insane, of course.

  37. 37.

    PJ

    My rule of thumb on investments, or just buying anything expensive: is there an entity I can readily sue, who has sufficient money to compensate me for the loss or to fix what went wrong, if there is malfeasance (it’s defective (for physical goods), fraudulent, undercapitalized, hacked, etc.)  If there is no real recourse as a result of bad behavior or negligence on the part of the people issuing or maintaining the investment, you’re just gambling as to whether you can get your money out before the bad thing happens.

  38. 38.

    Tony Gerace

    @Jim, Foolish Literalist: Yeah.  Back in the late-nineties a guy I worked with had it all figured out.  He was gonna get rich by buying and re-selling “rare” Beanie Babies.  (Spoiler: He became poorer, not richer.)  My Millennial son has what I think is the best explanation of NFTs — stupid trust fund kids who have more money than they know what to do with.

  39. 39.

    Roger Moore

    @Spanky: ​
     

    Yep, it’s designed to be inpenetrable. It’s a scam, full stop.

    It’s not actually impenetrable. An ordinary person can understand the details if they put their mind to it for a while. But if you do that, you quickly figure out there’s no there there. Cryptocurrency has no underlying value, because the effort involved doesn’t produce anything of lasting value. The only value in cryptocurrency is the past effort validating the blockchain, but that’s not something of value going forward. The only way crypto can be of lasting value is if they can convince governments to accept it as legal tender. Then it suddenly will be worth something. But until they can do that, it is purely speculative.

  40. 40.

    Marmot

    My impression is that crypto, et al., is a solution to something that’s not actually a problem. Unless you’re some gun runner or assassin or drug dealer, etc.

    I often hear that Bitcoin is gonna solve inflation, which is hilarious—how would you identify inflation in all that price volatility? And NFTs are certificates of ownership for things that are exactly as good as their ripoff copies.

  42. 42.

    Tony Gerace

    @JoyceH: The greater fool tactic of “investing”.  Each idiot believes that he (usually a “he”) will not be the one stuck with worthless crap that he can’t sell.

  43. 43.

    Anon

    I’m going to wait until banks will loan money with crypto as collateral and insurance companies will insure crypto from theft

  45. 45.

    Martin

    Wait, you’ve played World of Warcraft for a decade with an in-game digital currency and assets and don’t get NFTs? They’re the same fucking thing.

    Blizzard digital artists design a Longsword of Fuckery +5, and they allow a single instance of it to exist at any given time. Someone buys it, either for being an OP weapon or for the in-game status (like that Wu Tang Clan album) and Blizzard tracks its ownership as it changes hands on the marketplace. It’s little different from a Honus Wagner baseball card (which is just a bit of cardboard, really) or an Inverted Jenny (just a bit of paper and glue). The value comes from the IP that is expressed on the asset, not the inherent value of its components. NFTs just do away with the penny’s worth of cardboard in a $2M baseball card.

    And unlike Blizzard being the accountant for the ownership of the Longsword, NFTs use the blockchain, which isn’t really that different from the established tracking of who owns the handful of Inverted Jennys or 1962 Ferrari 250 GTOs or this or that painting, whose provenance is secured primarily by tracking the owners publicly.

    I have no issue with the mechanics of NFTs, as they are just reimplementations of existing mechanisms. The issue I have with NFTs is the macroeconomics of it. Value requires scarcity and historically value has been attributed to non-artificial scarcity. Van Goghs are valuable because he’s dead and can’t make any more of them. That’s why art values went up so much when the artist died. If you can artificially do that, you basically have infinite opportunities to create scarcity, which just can’t hold. You can’t generate infinite value like that, and right now we haven’t identified the mechanism that will put a brake on that. Weirdly enough, the brake on art values was always the amount of gallery space to exhibit them in. However George Bush’s art might be valued is really a function of whose art would be displaced by exhibiting it. If you’re going to take a Lichtenstein off the wall for a Bush, that informs the value. There’s just no identified brake to NFTs. One will arrive, and I’m guessing it’ll catch a LOT of people out.

    We saw this with digital ads and Google’s model. So long as you had infinite space on web sites (and infinite web sites) then you had infinite ad supply, which had no choice but to drive prices down to zero. Every website operator (present company included, because that was the only way to sustain your website) just kept adding ads. Eventually that model broke, and we’re now in this sort of adolescent state of online advertising. NFTs will have to follow. You can’t generate infinite value because there isn’t infinite currency to absorb that value, so every NFT serves to cheapen every prior NFT in a race to the bottom. You get near-term results in this window of time that it looks like you *could* create infinite value, but that always catches up to you.

    One of the things you learn in physics is you can do a LOT of predictions just by applying the various conservation laws. You don’t even need to know the internal dynamics, you can’t create energy out of nothing. And the internet may seem to work this way, but the global currency/economy doesn’t. Sooner or later the former will come in contact with the latter.

  47. 47.

    PJ

    @JoyceH: If you own a copyright, you may or may not own the physical copy of an item (say, a Picasso painting), but you have the right to reproduce and distribute that item.

    With an NFT, you don’t get any of that, not the original physical item, nor the right to reproduce or distribute copies, but you do get a digital certificate which says that you own a digital copy of the original (which is identical to hundreds or thousands or millions of other copies which you do not own).  Why this would be worth anything is beyond me.  (I get that whomever the distributor of the NFT is is guaranteeing that there are only so many NFTs being distributed, but why should you trust them when it’s all digital and there is no recourse?)

  48. 48.

    Rusty

    They are not copyright, you are not getting any tangible rights.  Those are typically retained by the creator of the work.  It makes no sense because it makes no sense.

  50. 50.

    glc

    I suppose if one pays attention to Elon Musk one might also come to the conclusion that one doesn’t understand cars. On the other hand, it helps that we have some prior experience with them.

    The dollar is more or less a cryptocurrency now, just not one of the currently fashionable variety, which aim at addressing issues of privacy, verifiability, and trust in novel ways.

    NFT’s  exploit some of the same technology to do something intrinsically silly.

    A friend currently in the cryptocurrency business thinks all of the currently existing ones (including the one he is developing) will implode when bitcoin does, which he hopes is not too soon as there are interesting problems to be solved meanwhile and desirable applications down the line, notably in the area of privacy.

    There are some nice mathematical tricks in the background. For example, you can prove to somebody that you know the correct answer to a question without giving them the answer. This has applications to transactions between strangers that require trust. There are however lots of obstacles to implementation (given that people will be trying actively to break whatever system you use).

  51. 51.

    Ruckus

    It’s about value. Perceived value that is. It is speculation in speculation.

    It’s like thinking you are going to win in Las Vegas. Beat the odds. Get rich without the effort.

    You purchase something that doesn’t exist, on the premise that it will exist and be worth wildly more than you paid for it.

    A long time ago there were people in wagons that traveled town to town selling a cure in a bottle. Something to fix what ails you. All for the low, low price of whatever. Snake oil. This is the modern day version. Then what you needed was health and that bottle of snake oil held as much promise as anything else, if it didn’t kill you. This holds the “cure” for what ails most of us, money. It’s snake oil in different form. Someone will likely get rich, the rest of civilization will not, because John, as you say the entire concept has no actual value. But OTOH there are now enough people that might get wealthy running the scam, that it might give off the smell (or should I say stench?) of a real thing of value. As should always be said, value is in the eye of the beholder.

  52. 52.

    Gin & Tonic

    @Chetan Murthy: A plug. If anyone is genuinely interested in art forgery, you might wish to read William Gaddis’s debut novel, The Recognitions. It’s long and challenging, but worth the journey (IMO.)

  54. 54.

    CaseyL

    A very dear friend of mine has a very shady brother.  There is no scam in the past 40-odd years that he hasn’t hitched his wagon to, and he’s made a fair bit of money along the way. He’s not big time; more like low-middle.

    He was into cryptocurrencies for a while.  Now he’s hot for NFTs.

    That’s all I need to know to know it’s a scam.  He never gets involved in anything honest.

  55. 55.

    Roger Moore

    @PsiFighter37: ​
     
    NFTs are one of those things that could be useful but are mostly being used as a scam. They are a public, unforgeable receipt. That’s fine if it’s a receipt for something with real value that the person selling it to you has the right to sell. For example, people are perfectly happy to buy stocks where their only proof of ownership is an electronic receipt. But most of the NFTs, or at least the ones that have gotten attention in the media, have been for things that really don’t have anything like the real world value people are spending on them. They’re being done for attention or to launder money.

  56. 56.

    Ksmiami

    @billcinsd: we’ll we all know Steve may or may not be trafficking in all sorts of illicit trades so…Cole should check if there are suspicious cat paw prints on his keyboard. I wouldn’t put it past that cat to set up a crypto account…Cole blink if you need rescuing from an animal insurrection

  57. 57.

    Martin

    @JoyceH: They’re very close. Think of buying a Disney animation cell. You own that physical asset but you don’t have any claim to the copyright of Mickey Mouse or even claim to residuals from airing a Disney moving that was generated from that cell.

    It has value because there’s a limited number of cells, and that value speaks to how iconic that cell is. The moment that Bambi and Faline kiss is very different in value than some random frame from Return to Neverland, not because it’s rarer, but because it’s more culturally iconic. As such it’s hard to value outside of its presence on a marketplace.

    NFTs might transfer copyright, but they generally don’t. They’re like a Disney cell or a limited edition print which only has value because someone promised that they’d never issue more of them.  The blockchain sort of guarantees that.

    Worth noting that the analogues I’ve given might have some value to own, but they aren’t assets to earn money off of. I’m sure someone made money buying and selling Disney cells, but really the only one making money is Disney. That doesn’t diminish its value to you, but don’t go into this thinking that it will have value to anyone except you.

  58. 58.

    Chetan Murthy

    @glc:

    The dollar is more or less a cryptocurrency now, just not one of the currently fashionable variety, which aim at addressing issues of privacy, verifiability, and trust in novel ways.

    This entire comment is gaslighting.  And this quote is incredibly wrong.  The dollar is a fiat currency, and the number of dollars in circulation is determined by political/economic considerations, hence under the control of *governments*.

    Perhaps this commenter is trying to argue that the dollar is more-or-less already a digital currency; this is true, b/c almost all dollars are held in the form of balances in banks — which all come down to entries in the databases of the Federal Reserve.  Sure, this is obvious.  But this doesn’t make the dollar (or any other fiat currency under the control of a central bank or government) a cryptocurrency — not by any stretch of the imagination.

  62. 62.

    debbie

    @trollhattan:

    I never heard anything about them being brought up at Glasgow, but if they weren’t discussed, they fucking well should have been. It’s like rolling coal or something. Totally stupid.

  63. 63.

    Seanly

    @Spanky:

    To my very limited & skeptical understanding, you don’t own the actual photo or song. You just own the right to say that you own a digital copy of the item which itself might be just a digital representation of something.

  64. 64.

    Martin

    @Roger Moore: Yeah, NFTs could be very useful. We looked at creating something very, very similar a few years ago for educational credentials.

    Right now, most educational institutions have value because of their credentialing, not because of their education. Having a degree from Harvard says nothing about the education you received, just that you have a thing of scarcity, and Harvard knows this which is why the institution operates the way it does. It *might* produce a better education, but there’s no evidence of that contained in the credential. What did you learn? No idea. What skills did you acquire? No idea. What perspectives did you gain? No idea. Witness Jared Kushner.

    We were proposing a way to decentralize the credentialing. You take a course here, they issue you the equivalent of an NFT for completing that, and its tracked through a public ledger. It removes at least some of the rent seeking from credentialing institutions, which in a state like CA with 175 public colleges and universities that we’d REALLY like people to be able to seamlessly move between without committing to a near-exclusivity to one 4 year university. Just the task of collecting and validating transcripts from 1000 public high schools in the state is nearly impossible and we’re working through plans to standardize electronic versions of those, but really all we need are much simpler, much more basic receipts for various educational assets – completion of an A-G course (what CA uses to classify the various educational course categories for UC/CSU eligibility) and completion of a HS degree (given that CA like some other states allow you to earn a degree through proficiency ahead of the normal 4 year requirements that each school might hold you to). Our approach was to make this technically MUCH easier to implement without the kind of organizational politics that come with identifying a centralized registrar and maintainer, and how that affects budgeting, etc. We’d basically enable any institution to be the registrar for every institution, all at the same time.

    It should still work, but I just couldn’t pull the various educational systems together to pull it off. Got some other good stuff in the process, so not a complete waste of time.

  65. 65.

    Chetan Murthy

    @Martin:

    We were proposing a way to decentralize the credentialing. You take a course here, they issue you the equivalent of an NFT for completing that, and its tracked through a public ledger.

    Martin, while that’s an excellent idea, it isn’t an NFT and it doesn’t need a blockchain.

    1. not an NFT b/c a key aspect of an NFT is that it be tradable.  But this sort of credential cannot be tradable.
    2. doesn’t need a blockchain, since aside from rare deletions, it will be just additions.  So all you need is a publicly accessible database that can respond to queries.  Lots of those exist already — for instance, the archives of scientific papers — and all we need is strict controls over who gets to add entries to the database.  But this is easy enough: entries are added by participating institutions in an unforgeable manner using their public keys.
    3. A key point here is that the need to control who gets to make updates to the database is an argument *against* using any sort of “blockchain” in the commonly-agreed-upon sense of (anybody can contribute transactions).

    Again, it’s a great idea, but I think that comparing it to NFTs is doing it injustice — or giving legitimacy to NFTs (and crypto) that they don’t deserve.

  66. 66.

    Fair Economist

    NFTs are ridiculous. The only purpose is money laundering.

    The techniques of crypto could, potentially, replace many ways of transferring currency, although there are a number of issues to be dealt with, especially network capacity, value stability, and transfers to stable stores of value (like real currencies). There are coins that fix the first or second problem, but not together; and the last remains unsolved. Existing coins are just Ponzis, other the the stablecoins, which are just inefficient.

  67. 67.

    SN in CO

    When I am thinking of the latest computer-based currency analogue (whatever they call it), my first and most important question is “If this goes south, how do I get me share and head home?”

    The problem for me is that there is no exit strategy that doesn’t involve whoever is keeping the computer network “mining” going forward.   If they disappear, and take any “keys” to the network with them, it’s nothing but a bunch of soon-to-be-obsolete computers.  That’s it.  No more helpful that having mint condition long-playing records when all access to record players has disappeared.

    The gatekeepers who let you into the network (and control its access points) are invisible when you start talking about the mechanics of how “mining” occurs.  That entirely overlooks the infrastructure that makes it possible, and those who control that infrastructure.    . . . At least that’s my thought.

  68. 68.

    Martin

    @Chetan Murthy: Agreed. There’s a big difference between an asset that has inherent utility value (as people argue gold does) and one that has an implied value only due to the desirability of owning it by other people. A dollar is worth a dollar because the receiver of the dollar agrees it’s worth a dollar.

    But a dollar is worth a dollar because the feds say it is. There’s no market trading over your tax liability, the feds say you owe this and that’s what you owe. And as you note, the feds determine the scarcity of dollars so as we add value to the economy by producing goods, having more workers, increasing productivity and all that, you need to add dollars to balance that out.

    Crypto doesn’t work that way. There may be a fixed, limited number of bitcoin, but there’s an infinite number of cryptocurrencies. Bitcoin might work as an exclusive crypto, but it fails so long as anyone can just tip up new crypto and have that succeed. The fiat currency equivalent is anyone being able to declare their sovereignty and create a new currency, and that can’t happen. The US is not going to recognize my ‘Martinbux’ as a valid currency, which prevents me from using it to devalue dollars by undermining the Feds ability to tie them to economic output.

    There’s this temptation to think of ‘very large’ things as being equivalent to ‘infinite’ but very, very weird and important things happen along that interface such that there are real discontinuities at that point. You can’t extrapolate ‘infinite’ from ‘very large’ – lots of shit breaks very badly between those two. Most people aren’t accustomed to thinking that way, but mathematicians and physicists and computer scientists are usually pretty practiced at understanding them. We do a lot of work along that interface.

  69. 69.

    lowtechcyclist

    and yes, there are tons of musical acts and actors and actresses in shows I have never heard of, but I think that speaks more broadly to the fact that far more stuff is widely available because it isn’t just the three major networks and a handful of radio conglomerates choosing what is popular.

    Somebody may have already said this, but while the part about three major networks is correct, when you were a kid, John, there were no ‘radio conglomerates.’  One person or corporation could only own up to 7 TV stations and 7 radio stations.  I think the FCC started taking the lid off this sometime in the 1980s, along with the Fairness Doctrine.

  70. 70.

    Fair Economist

    @Roger Moore: An NFT is a scam. You could potentially use a blockchain approach for a standardized way of verifying something like a certification; but that’s not what current NFTs are. For one, you couldn’t sell the certification

    Some of the crypto systems are working on ideas like “smart contracts” which could be a legitimate use. Replacing or speeding things like escrow could work in spite of the high inefficiencies of crypto because the standard ways are also pretty inefficient.

  71. 71.

    Chetan Murthy

    @Martin:

    There’s a big difference between an asset that has inherent utility value

    Right.  And while I think we only quibble, I think that this is a difference between in-game assets and NFTs.  An in-game asset [speaking as someone who last played Rogue in 1983, and never since, and no other computer games] has use-value to the owner; an NFT has no such.  Everything else you say, is spot-on.

  72. 72.

    Fair Economist

    @lowtechcyclist:

    One person or corporation could only own up to 7 TV stations and 7 radio stations. I think the FCC started taking the lid off this sometime in the 1980s, along with the Fairness Doctrine.

    A lot of the propaganda problems in radio have arisen from the insane concentration in radio station since that got dropped. We’ve paid a big price for backing off that particular antitrust policy.

  74. 74.

    Martin

    @Chetan Murthy: The decentralization of the registrar was key because one of the big political holdups is who would serve as registrar, so it departs from public databases that way. Basically every institution would hold a copy of the ledger because in reality, most of the interaction volume comes from the institutions querying the ledger, rather than issuing transactions. As such it’s less likely to buckle under transaction load as you see in cryptocurrencies. You’re correct that the tradability function wasn’t there, and we had constraints on who could issue (accredited institutions), but the idea was an immutable, distributed ledger that could be queried. (We would not enable deletions – but you could add a transaction that revokes a prior addition.) But one of the goals was to create a mechanism where a credential (course, degree, etc) could be quickly and easily validated against the issuing institution rather than constantly being self-reported in ad-hoc and suspect ways. The sheer volume of duplicate reporting in the state is staggering. Just my institution receives 20 million+ self-reported credentials a year, and there is no digital way to validate *any* of them. And almost all 20 million are also being sent to our peer institutions. So even when we’ve paid however many people we pay to validate whatever fraction of those that we do (a lot is done in arrears and then we punish people for falsifying, which is sort of okay but also creates an opportunity cost for us to provide opportunities to additional people who didn’t lie to us) the other institutions also need to pay to validate their copies of everything because we have no way to digitally share our validation to them. These things just get accumulated as additional costs we pass back to students.

  75. 75.

    Chetan Murthy

    @Martin:

    The decentralization of the registrar was key because one of the big political holdups is who would serve as registrar, so it departs from public databases that way.

    So it seems that what you really wanted is:

    1. N separate databases, one for each educational institution
    2. each database is an append-only set of tables, and can only be updated by the issuing institution (using trans that are signed by the institution’s private key).
    3. and each institution makes their database available in-full for download, to other participating institutions

    This is straightforward to implement and yes, doesn’t require a central registrar.  The nearest analogy that comes to mind immediately is USENET newgroups, or more generally, grapevine data-propagation protocols.  All straightforward.

  76. 76.

    Martin

    @Chetan Murthy: Um, generally not in the case of modern games. Most in-game assets now are cosmetics, so they don’t change the game, but they do serve as signaling functions to others in the game of your status. Dota as one of the top esports can’t have in-game assets that change the gameplay, but they have $500-$1000 cosmetics that show off that yes, you did earn $2M as the last TI winners and you can blow 50 large on rare items to signal you as a top Dota player. So in that way, having a rare game skin isn’t really any different than owning an NFT of some meme. Can you profit off of it? Maybe. There are people in Dota that make money buying and selling those assets, but it pales in comparison to what Valve is making issuing those assets (¼ of which goes into the TI prize pool which is why you can earn $2M winning that title).

  77. 77.

    Chetan Murthy

    @Martin:

    The decentralization of the registrar was key because one of the big political holdups is who would serve as registrar, so it departs from public databases that way.

    Some things I’m curious about:

    1. You say that a central registrar is problematic, but who decides if institution A’s course X, is acceptable to institution B as a replacement for course Y ?  Doesn’t this require central coordination?
    2. Each institution would be free to invent its own data-formats for the records it uses to publish the accreditations of its students: who decides how to standardize data-formats and taxonomies ?
    3. and of course, if you’re going to be doing this as custom software, somebody has to maintain the code, decide when bugs will be fixed, and esp. bugs that affect previously “assumed valid” function

    I guess what I’m saying is, I don’t quite see how having a “blockchain” of some sort actually solves these problems, which all require at least a central organizing committee, but in fact require a central organization with the ability to decide how the system *shall* function.

  78. 78.

    Capri

    I now have skin in the game as my daughter quit her “traditional” job to work for Kraken, a crytocurrency company. The big decider was that they let her work 100% remote, and her husband is tied to a job in small town Ohio.   The traditional firm wanted everybody back when COVID fears lifted. They are paying her in actual dollars although I think she has some crypto options. I am not too worried because even if the whole thing crashes to the ground, as a CPA she’ll be able to get work somewhere else.

  79. 79.

    Ohio Mom

    I have a bunch of half-formed thoughts on this topic. That crypto is an assult on the idea of the nation state in a very unsettling way.

    Other than that, I have no problem with not understanding how it works and being completely befuddled by the people who champion it.

  80. 80.

    artem1s

    @Marmot:

    Bitcoin is gonna solve inflation

    back in the 80’s returning to the gold standard was also going to solve inflation. crypto is the high tech equivalent of hoarding precious metals in case of the collapse of society. only if society does actually collapse, not only will you starve because in the event of an apocalyptic event no one in their right mind will give you food for gold – you will also not have any fungible assets to barter because there will be no electricity to ‘store’ or ‘trade’ your crypto.

    it’s basically the latest get rich fad. Amway franchises with virtual crappy soap instead of actual crappy soap.

  81. 81.

    Martin

    @Chetan Murthy: For the most part. There was the concern of whether an institution vanished (which happens surprisingly often in CA as community colleges consolidate/expand or lose accreditation, simply because of how many we have) so we didn’t want there to be a definitive host even for a database to be copied, rather the transactions would be immediately decentralized with no master database (or subdatabase).

    To be clear, I’m not trying to draw an equivalence to the technical implementation, rather the kind of real world problems that could be solved here. We may not have needed a blockchain and could have implemented under a simpler system, but if a blockchain either provided additional technical credit (by having better libraries/implementation due to greater popularity) or political benefit by convincing people it would eliminate some perceived risk like rent seeking, then it’s worth doing it that way. I have to note that we were unsuccessful at solving this problem, and I’ll take responsibility for that, but go-to-market strategies are very often not a straight line from concept to adoption. Very often you need to route through various neighborhoods that in theory could have been avoided, but in practice cannot. That’s why blockchain got added to every startup pitch deck, because that’s what allowed the money to be handed over, not because it was necessary to the solution.

    The underlying concepts and implementations of NFTs do allow for solving problems by routing through or around neighborhoods (like identifying who the registrar was) that previous toolkits necessitated. Part of our idea was that if an institution didn’t have the technical assets to host a database, all they really needed to do is issue a transaction and could query off of anyone else’s database – someone in their district, their system, or anywhere in the state. There are so many different kind of partnerships in such a complex system that we’re trying to allow for all of them. We have stronger partnerships and in some cases data sharing with some community colleges than we do with other UCs. Hazards of running institutions that outwardly look centralized but are in practice highly decentralized.

  82. 82.

    J R in WV

    @Rick Taylor: ​

    What’s an NFT?

    It stands for Non-Fungible Token, which means a unique object containing value. As opposed to $20 bills which contain value, but are all identical, fungible is a technical term for Identical, and non-fungible means unique, aka not identical.

    There is much mysterious hand-waving and bull shit involved, also too.

    ETA: Actually, $20 bills, and $50 bills are really NOT fungible, they all have serial numbers, which are used in cases of big time robberies, etc, etc.

  83. 83.

    J R in WV

    @Enhanced Voting Techniques:

    Putin is a Deadhead.

    There are a lot of Deadheads I won’t invite into our home. I AM a deadhead, regret Jerry’s passing every time I hear him play. But some Deadheads are shiftless violent motherfuckers who need to get away from me asap. Putin would be one of those!

    Mostly they can’t sing a note of any great Dead music. Or play any instrument, at any level. That’s a clue.

  86. 86.

    Gary K

    Only putting your money into things you understand is a great piece of advice.

    Paul McCartney’s father-in-law Lee Eastman asked him what he really knew and liked; PM replied “Buddy Holly.” Eastman promptly went out and bought Buddy Holly’s catalogue for him.

  87. 87.

    Zzyzx

    @glc:

     

    The dollar is more or less a cryptocurrency now

    No it isn’t. The difference is that the dollar has the backing of the United States government – and specifically the army – as a backstop to give it value. Crypto doesn’t have anything other than belief that people will still use it.

  88. 88.

    Chetan Murthy

    @Martin:

    The underlying concepts and implementations of NFTs do allow for solving problems by routing through or around neighborhoods (like identifying who the registrar was) that previous toolkits necessitated.

    The particular technique that solves the problem is “who is the registrar” is this:

    1. first, each institution that publishes credentials does so using public key infrastructure, and signs those credential transactions
    2. each institution publishes its trans in a log, with chained checksums and signatures, so that any institution that downloads that log can verify that nothing is missing, nothing added/forged.
    3. second, the public keys are themselves disseminated in that same data-feed
    4. any participating institution can and will cache all credentials that it gets from other institutions, provided that it has validated those transactions (by checking signatures)

    Here’s the thing: all of this existed before crypto — it’s called “best effort databases” or “eventual consistency”.  indeed, cryptocurrencies doesn’t use this stuff, b/c they need to do more than “merge a bunch of logs from a bunch of publishers”.

  89. 89.

    Martin

    @Chetan Murthy: Excellent questions! You should take my job now that I’m retiring!

    1.  The authority for who decides is generally down to the receiving institution – this is broadly referred to as the ‘articulation process’. If you take a course over there, we get to decide what kind of credit to give you. It could be subject credit (we recognize you now know statistics) or unit credit (we recognize you completed 4 units of mathematics) or both. That is gated by a whole mess of relatively new legislation regarding transferability of credits, establishing reference courses for most course taken in the first 2 years and mandates on offering and receiving credit. Basically the CA legislature declaring that the 4 year schools can’t refuse to recognize 2 year school coursework, and forcing us to do so. There’s a whole process for how *that* system work that I worked on, but suffice it to say it works adequately well. That creates two additional registrars – one who maintains the non-legislatively driven database of equivalencies that has been around for quite a while (maintained by the UCs) and one for the legislatively driven database (maintained by the CSUs) which is fairly new as is the legislation. There’s an additional registrar for the high school equivalencies (the A-G) database, and each school maintains independent databases for AP and IB credit as there is no legislative requirement for these to be in any way consistent across institutions. Adding to this we have a system that allows for GE at any one institution to fully substitute at another institution, with it’s own completely paper driven system, plus a 5th or so registrar for study abroad courses as part of system recognized programs, and separate local databases for campus recognized programs. All told there are probably 500 different databases just in CA needed to paint the full picture of what counts for credit across all institutions. That’s just for undergrad, there are other databases for graduate course equivalencies for eligibility to medical school, for international coursework now incorporating countless different unit accounting systems because not everyone uses Carnegie like most of the US, and wildly varying grading systems. I wasn’t even going to take a shot at the graduate stuff.
    2. The standardization of data formats and taxonomies was envisioned to build out of the aforementioned legislation driven process. Basically, we have an adequate system of shared responsibility for defining course content and articulating it between systems. UC was not part of that legislation, but I’ve pulled a fair bit of UC into it on a voluntary basis mainly by convincing the higher-ups that it was in UCs best interest to buy into this – both from a strategic competitive basis but also from an administrative cost basis. So because we have an existing stable and accepted set of bodies that handle the taxonomy, we would simply build off of those for this purpose. The format would be the one that these bodies would require, since everyone already is legally required to interact with them and comply with their standards and processes. We were not so much adding a new player as building a technical group to do the work on behalf of an existing player, who would retain authority over the results. This would both give us an easy mechanism to fund this group because it has a clearly defined role under state law, but also is the cheapest way to do it because it’d leverage a LOT of existing infrastructure.
    3. Oddly, this is the easiest part, not because it’s easy, but because we’re already doing this really poorly in LOTS of other places and it’s a very well recognized problem. Part of my pitch to the system heads was the error rate of the existing databases (as high as 30%) mainly due to a lack of data entry validation in some of the databases (literally any validation whatsoever) and a lack of data format standards and so on. It is not unusual for an institution to submit their credential information to these various registrars in completely different ways (as in different primary keys –
      AF AM 101 vs AFAM 101 vs  AF-AM 101) because of constraints imposed by other in-house or vendor data systems, depending on which system they’re exporting the data from.

    The accreditation problem in CA is massive. It’s primarily institution to institution, and course to course. So my institution need to articulate our MATH 1 course against 175 other schools. If  ours changes or any of theirs change, we need to review it again. If we have 10,000 courses, that’s 1.75 million equivalencies to track *for each school*. But if we have this intermediary layer, where reference courses can be established and agreed to, then my school just needs to articulate our 10,000 to the reference versions, and other schools their 10,000 to the reference versions and then you just join across that relationship. You go from 175*1.75 million/2 agreements to 175*10,000 agreements. You’ve scaled the problem back so much that you can now build in a lot of validation, and standard setting at that intermediary layer, provided you can get all parties to agree.

    And there are some decent partners and resources such as the US Dept of Ed that maintains some taxonomies like CIP codes for degrees (inherited from the CSU system that created it for their own purposes), Carnegie foundation. I work with the Urban League a lot because they serve as a *wonderful* public service data broker from DOE and other groups, etc. I’ve worked with the David and Lucille Packard Foundation, Bill and Melinda Gates Foundation, etc.

    This stuff isn’t really expensive to maintain. You’re talking 3 staff and a 5 digit equipment/service budget at a minimum, ideally more like 8-12 staff so you can build in a consultancy operation to the different institutions to help them with their local implementations, otherwise you’re duplicating that x175, and you typically house them in some existing administrative space. The problems are really where to house it, whose ledger is it paid from, how authority is distributed, who they are accountable to, etc. The more of that you can eliminate, the better. And if you invest enough in it, you can start going over to Instructure and making demands because you’ve got 15% of the nations higher educational institutions in your pocket – something we love doing with the College Board.

  90. 90.

    Gin & Tonic

    @AWOL: Coming back late, but in wonder that somebody would devote nearly 7,000 words to a relentless attack on a writer who’s been dead for over 20 years, and whose work is not terribly popular at any rate.

  91. 91.

    Obdurodon

    I was around when/where many of the technical foundations that eventually led to Bitcoin and NFTs were being laid, and I still think they’re bullshit. NFTs do not confer ownership of the underlying asset, but only of a particular identifier for that asset. Thus, they only have weight among the group of people who agree that whoever sold you the NFT had the right to do so and *also* that there can be no other valid identifiers for that asset. Damn small group. Even those who hype NFTs as a general concept would not hesitate to infringe on or work around the claim that a particular NFT represents. These are, after all, the same people who have no problem with Ponzi schemes or money laundering.

    There are some minor innovations involved in “crypto” – and yes, I’m still salty about people hijacking the term to mean only this one application of cryptography, polluting its use for the field generally. But there’s nothing at all groundbreaking about it. Blockchains are just databases with no internal data structure or integrity, poor query capabilities, absolutely pathetic update rates, and insane memory/computation costs. As Chetan Murthy says, all of the pieces to do this better already existed decades ago (though I’d say we can do better than NNTP and the *best* solutions are only a few years older than Bitcoin).

  92. 92.

    Ella in New Mexico

    Not only do I not understand NFT’s.

    What the fuck are they

    And, NO, I did not read everyone’s responses so I could tease out the info like I was doing a Goddamned White Paper.

  93. 93.

    Obdurodon

    @Ella in New Mexico: An NFT is a “proof” that a particular string of bits – e.g. a piece of digital art – belongs to you and you alone. It’s public, and it can’t be forged or duplicated but it can be transferred. The technical mechanisms don’t matter. What matters is that it’s only as meaningful or trustworthy (or exclusive) as the issuer makes it, and is not recognized by real-world courts and laws. It’s like “owning” something in a video game, in the sense that enforcement is up to the game developer and nobody has any reason to care unless they’re actively playing the game at that moment.

  94. 94.

    J R in WV

    @Ruckus:

    A long time ago there were people in wagons that traveled town to town selling a cure in a bottle. Something to fix what ails you. All for the low, low price of whatever.

    We have on our kitchen windowsill a old lavender bottle that came full of Lydia Pinkham’s Tonic — in the long ago. Lots of alcohol in the mix, and perhaps some laudanum, aka opiate pain killer. It didn’t cure anything, no more than my pain pills Cure my arthritis, but they do make life a whole more easy to deal with…

  95. 95.

    LongHairedWeirdo

    So I’m not too worried about it. Crypto and NFT’s, on the other hand, make no fucking sense to me. And I play video games and understand the tangible value of things that solely exist in cyberspace like how people will pay real cash money to buy ingame gold to buy items. And even then, I do not understand why someone would plunk down a half million to sell something that doesn’t exist.

    Well, in one sense, it’s not *too* different from stamp or comic book collecting. Heck, it’s not really different from buying a Banksy that shreds itself when the auction gavel is struck.But there’s some stuff that bugs me.

    Like, I know an artist, SJ Tucker, great musician, amazing voice, sings stuff I like to hear sung. If she was selling a collection of NFTs, for $X, where $X is something I can afford, though far more than concert tickets or album sales, I could easily see myself buying one as a way to support an artist whose works I enjoy. What I can’t see doing is, once she’s sold them all, purchasing one from another person – then I’m no longer supporting the artist (though maybe, if it helped out a friend who needed cash and had few salable/convertible assets… ah, but when a friend needs help, lots of rules get broken).

    (Why is it different once she’s sold them all? Well, if she was selling them for $1000, and I bought the first one sold for more than $1000, that sets an expectation that they’re worth more to the right buyer, and will possibly drive the price to her higher. Once she’s sold them all, my primary reason for buying something ephemeral like that is gone. What’s that, you say? You think that’s weird? Damn, if only you’d had some clue that you might run into weirdness :-).)

    It’s true, a comic book or a stamp are still *something* – but the physical possession only holds value so long as there are sufficient, sufficiently wealthy, collectors, who consider those specific items valuable. Heh. Though to be brutally fair, you don’t have to put an NFT into a safety deposit box :-).

    So I *almost* understand NFT purchasing.

  97. 97.

    TJWeston

    Can I just go on record as saying that this was the most valuable discussion on the Internet today.

  98. 98.

    Ken

    @?BillinGlendaleCA:I always see NFT’s as a certificate of authenticity and no more than that.

    You mean like the certificate of authenticity you get with your authentic reproduction 1888 LIberty silver dollar electroplated in genuine 12K gold? Supplies are limited but if you act now, we’ll ship you two replicas for the price of one! just pay additional shipping and handling.

  99. 99.

    Tony Gerace

    @Marmot: I had a “spirited debate” a while ago with a young (compared to me) Millennial nephew about “cryptocurrency”.  I did not find his views convincing, nor was he impressed by mine  It seems to me that “cryptocurrency” is, in fact, the solution to two different “problems”: 1) How to impress people about what hip libertarian you are … and, most importantly, 2) How to burn tons of coal and other fossil fuels in order to generate electricity for the server farms to “mine the cryptocurrency”.  I find number 2 to be particularly impressive.  After all, the world really needs new reasons to burn coal.   I told my nephew that I could also burn fossil fuels “crypto style” by just loading dumpsters with $100 bills and setting fire to them.  He said “OK Boomer” and we moved on to another topic.

  100. 100.

    Ken

    @Chetan Murthy: The lesson?  Don’t go assaying your gold bars, buddy.

    “They’d saved the city with gold more easily, at that point, than any hero could have managed with steel. But, in truth, it had not exactly been gold, or even the promise of gold, but more like the fantasy of gold, the fairy dream that the gold is there, at the end of the rainbow, and will continue to be there forever–provided, naturally, that you don’t go and look. This is known as Finance.”

    — Terry Pratchett, Going Postal

  102. 102.

    Cathie from Canada

    I saw a news story just today that Tarantino is trying to “monetize” little bits and pieces of Pulp Fiction (deleted scenes, script points never filmed, clips on the cutting room floor, etc) and the studio is furious as are the scriptwriters, etc.

    I wonder if he was inspired by the NFT craze? And I wonder how many other Hollywood people will be trying this too.

  103. 103.

    Leslie

    You don’t understand them because there’s nothing to understand. They’re a con job, like selling someone the Brooklyn Bridge.

  104. 104.

    Fancycwabs

    Well crypto is like buying stock in a company that doesn’t make anything except advertisements for itself. NFT’s are the bill of sale for the Brooklyn Bridge.

  105. 105.

    glc

    There seems to be some disagreement about terminology in connection with my earlier post, which in any case was mainly directed to John’s original comment.

    Calling the dollar a cryptocurrency doesn’t disparage it.

    On the other hand, I see I also wrote that the cryptocurrencies might all implode, which isn’t consistent with the previous statement. At that point I meant the term in the narrower sense for bitcoin and its ilk. The thinking there is that bitcoin is likely to collapse and drag with it anything based on (or thought to be based on) similar principles, and then it may be a while before there is interest in developing the ideas further. But the use of cryptographic protocols to create new modes of financial transactions with various desirable properties will carry on. Some of them may be quite exotic, and some are already essential parts of our lives.

    Could have been phrased better.

  107. 107.

    different-church-lady

    NFT’s make perfect sense to me. They are the latest innovation in the great tradition of separating fools from their money. What’s so hard to understand?

  108. 108.

    rollSound

    The uber-rich already destroyed the unions take all the money from working-class people.  The housing crisis and China trade war decimated the middle class.

    They’re running out of people to fleece, so crypto was invented to squeeze money out of the upper middle class, and NFTs are a way to get money out of the slightly less rich.

  109. 109.

    not_a_cylon

    NFTs are expensive jpegs people buy in the hope of selling to an even bigger fool down the road.

    I’m half your age, John, and I don’t understand crypto and NFTs to be anything other than a grift. Don’t feel bad :)

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