June 13, 2023
Is crypto secure? What factors to consider if you will start investing
Non-fungible tokens for art can seem a lot like Tulipmania. But distinct digital tokens have real use cases for things like online address management.
Reason: Are NFTs Dumb, a Scam, or Secretly Useful?
NFTs: so hot right now. You might have heard so much about these eye-popping auctions for weirdo jpegs on the internet that you’re pretty sick of them by now. For those still on the bubbly side of the hype cycle, “non-fungible tokens” can seem like the solution to online art monetization. For everyone else, NFTs seem mostly like a high-tech way to part a fool from his money.
And lots of money is changing hands. One market tracker reports some $500 billion in all time NFT sale volume shuttled through top markets like Cryptopunks, Hashmasks, and Makersplace. But this is a superstar market. Most NFTs go for nothing at all, while a few supernovas go superviral (and strike it super rich).
Beeple, the closest thing we have to an enfant terrible of the NFT art scene, set the record when he sold a collection of digital grotesques for (of course) $69 million through a Christie’s managed auction. This wouldn’t be the art world if a record-setting event wasn’t marred by allegations of self-promotion and possible scamming: The proud purchaser of EVERYDAYS: THE FIRST 5000 DAYS, was revealed to be the Beeple- and crypto-investor MetaKovan, who had a financial interest in pumping up the price of Beeple works and NFTs more generally.
But with numbers like these, it is no wonder so many have rushed to cash in literally and metaphorically on this hot new trend. And these days, the money is cheap.
Odio facilisis mauris sit amet massa vitae tortor.
Taco Bell sold some NFTs. So did Grimes.
some $6 million worth. Professional attention seeker Logan Paul took a break from his Pokéhustle to issue a few million worth of NFTs. The worlds of sports, sneakers, and music have all dabbled in some NFT magic to try to build some buzz and a buck. Weeks after the craze kicked off, even New York Times technology columnists are trying to pawn off their scribblings as some kind of new blockchain bling.
How does an NFT work
What did MetaKovan actually purchase for that $69 million in real world money? Nothing is stopping me or anyone else from right-clicking on that rather unremarkable blur of five thousand images, saving it, and sharing it with the world. How can you say to “own” an inherently non-rivalrous property?
It does seem stupid. But then again, a lot of things that other people spend their money on seem pretty stupid. If there can be no disputes in matters of taste, there can certainly be boneheaded delivery methods to satisfy them.
One of the biggest problems with NFTs so far is that they have been fairly logistically unworkable. They’ve actually been around for a long time, arguably since 2013 or so, but have failed in each iteration in part for the following inherent problems. How can you tell if the person who sold you an NFT for some work has the “right” to do so? Perhaps that Beeple that you “bought” is just some copy, and the “real” NFT holder has yet to sell. Who verifies which is “real”?
In other words, the usefulness of an NFT will depend on exactly what that “T” allows the holder to access. Does the token unlock some useful online function or property, like with an Urbit ID? Or does it just point to a rando JSON file owned by some NFT marketplace? If it’s the latter, you might want to save your money for some old-fashioned real art that you can at least hang in your living room.
