NFTs: Discussion

[Propfam 2,305]

Edit: see my reply below for the exact definition of NFTs presented by ColdFusion. Sorry for my mistakes.

Hello,

NFTs or non-fungible token is getting hyped since like, 5 days ago. Yes, really recently. Sure, the background story is much much older, since 2017 to even 2012-2014. But, there are getting wild thanks to a Beeple's collection of his art sold for $69 mil. Yes, $69 million, enough to be an ultra-high net worth individual and also a nice number. For those who don't know about it, NFTs are non-fungible, meaning it can't be swapped with something else despite having the same value. For instance, let's say I have a SC4 region with 8 large tiles. Those tiles are same in conventional transaction. So they're same too in NFT transaction right? Nope, in NFTs those are different. I can sell a tile located in prime location differently than let's say tiles located in not so strategic area. In other words, NFTs are one-of-the-kind. This is different to let's say, bitcoins with an exception. I can exchange 50 bitcoins to someone here in ST and they have the same value. Sure, they have a different history. That's why I made an exception here. Another example is I exchange 2 $50 bills with 1 $100 bills. Both have the same value.

The applications are huge. One of the prime example is art ownership and virtual collections. As I mentioned above, an art sold for $69 million. Another example is the infamous Nyan Cat meme sold for $574,362.00. That's insane just for meme. To be fair, the buyer only gets the certificate of authenticity, not the license of the art though the artists can do so. Another instance is NBA Top Shot. Yes, the official NBA with collaboration with Dapper Labs opened up a marketplace similar to trading NBA cards, but digitally. One card is sold for $240,000. Insane. Another is the platform of OpenSea. In OpenSea, there is a marketplace for a game called Decentraland. It's so expensive that it's similar to real life land purchases, literally. One land is so expensive, that I don't know the exact value to USD. Around 2,72 million, maybe? If my exchange is true, that's $220/m2. Land in some not-so-valuable real life areas are in this range. Still impressive, nevertheless. Oh yeah, don't forget CryptoPunks. Another example is the successor of 3RR. Imagine you can buy a tile in such region for let's say $5,000 of initial purchase price. Maybe, this isn't impressive. How about if we open up the secondary market? Let's say that tile you have is very strategic. Suddenly, the market wants your tile for let's say, $100,000. You decided to sell it for that price. Then, the price of the land is increased to $1,000,000. The second owner decided to sell the land to third owner. Can you trace the third owner? Yes, you can by going to respective tracer website and enter your transaction number. This opens up possibility to monetize your work every time your work moves hand, aka royalties to you. Imagine you're a musician and decided to sell your song for $1. Then one of your fans sold your song for $5,000. Let's say you opt for 10% cut for every secondary market sales. You can get $500 just from one fan alone. Imagine there are 5,000 fans sold your songs. You can get $25 million. Not to mention if your song is sold for the third time. The revenue stream possibilities are endless.

Another application is the purchase of domain names. Yes, you can buy domain as an NFT.  You don't need to buy your domains from GoDaddy for instance. Instead, you buy them from here. Sure, it's not perfect since you can't type your domain yourself but if you want to buy preowned domains, this is the place. Correct me if I'm wrong.

Tying NFTs to real world objects could be a good idea. Imagine if the world's largest owner of cars decided to sold one of his car to someone using NFTs. Sure, you can print a COA, but using digital COA is much better. Not to mention, the transaction is entirely traceable, despite quite anonymous. If you know the transaction number, you can trace the transaction from the first owner to the current owner. Another example is selling a house using NFTs. But, I don't know the legality of such thing. Maybe, they're using COA alongside with land ownership certificate published by the respective government.

Relevant example of NFTs are subscription. Imagine Simtropolis instead of charging you from PayPal, charges you using NFTs. Simtropolis can publish certain number of NFTs and sell them in the market. These NFTs are also smart contracts, meaning you can get ST's benefits instantly from just buying one of them. For instance, I decided to donate $5 to Simtropolis. Instead of paying ST from PayPal, I just buy ST tokens from here or somewhere and when I buy it, I instantly get perks like custom badges, voting rights, and even eligibility to have CDs depending on the donation amount. This is the future of ST's donations.

But, there are some critics. One is they're really speculative, especially for the art and collections. But, this depends from the platform and the products. If we decided to publish donation NFTs here, we don't have to worry much about speculation. Two is they're really destructive to the environment. One independent study states that the average transaction emits ~200 kg of CO2. That's insane. One of the reasons are proof of work. There are some attempts to reduce the footprint: using renewables to mine the coins and using proof of stakes.

What do you think about NFTs? Sorry for my words. Thanks.

[rivit 3,402]

so if its non-fungible why did it cost $69 million or who gets the money swapped for the art? and if that individual wishes to dispose of it later what will be the exchange mechanism - seems a misnomer somehow... surely its just a fancy way of saying unique?

[Propfam 2,305]

Sorry for misconception. Here's the video:

 

[rivit 3,402]

Its not your explanation that I have a problem with at all.  I have no problem with certifying uniqueness to an asset which the attribution of a blockchain id guarantees, and the complete ownership/movement trail of the asset so designated.  The idea that unique items can be traced is also useful - think of the machinations that the paintings of the masters have undergone as the experts have tried to certify which are original and which not. All sorts of official forgeable documents could benefit - think deeds etc. 

I do think the term non-fungible is a bit of a marketing misnomer - sure, it fits the definition as given (handy as its self defining), but every person on the planet has a unique key, also traceable, called DNA. That makes us the ultimate NFT, however people are seen as fungible assets by corporations and governments - in the extreme exchangeable slaves to the rhythm. And we and our information are barely valued.  

In the end though NFTs, at present, are a way of making money by guaranteeing ownership of something hopefully certified unique (hence scarce) that someone might want in the future. It makes those holding them "privileged" compared to those who can't, thus exploiting our FOMO. Our human nature finds this irresistible - we love speculation.

What I think is a bit silly is the idea that you can pay for assets that exist as bits on a computer somewhere with bits on another computer a.k.a. money all in the hope/wish that someone in the future will pay more bits for the same bits. When you have more wealth than you know what to use it for, its a nice way to use it up. So our $69million is really only 27 bits and the owner got several MBits for the transaction (well more the rights to several MBits - it will be kept somewhere safe - what about the backups?). Depending on how these survive inflation will this ever be such a good deal?  And as The Goons would say - "its all in the mind, you know".

For the rest of us paying the rent and the next meal remain of more importance right now. Of course I may need to pay for an NFT to have somewhere to live once I'm 90, if I still want to..