It is really difficult for the average person to fully conceive of how useless NFTs are. We're primed for reason. If people are making so much noise about this technology-- if it IS technology, at all-- then surely it does SOMETHING... right?
(The answer is, no. It does absolutely nothing.)
It records a crytocurrency transaction and appends arbitrary data to the transaction. That's it.
The general agreement is that this transaction confers ownership of whatever data is appended to the record, but there is no mechanism for enforcing that ownership...
The general agreement is that this transaction confers ownership of whatever data is appended to the record, but there is no mechanism for enforcing that ownership...
...and often the data is abstract or imaginary. You "own" a gun in a video game, but that gun may or may not actually exist. There may or may not be a way to equip, shoot, or even look at it.
None of those functions are inherent to the NFT. They all rely on external infrastructure, which exists independent of the NFT. If you're wondering what role the NFT *does* play, then, the answer is nothing-- it parted a fool from his Monopoly money. That's it.
You "own" a monkey jpeg, except you don't. The data appended to the NFT is just a link pointing to the monkey. You don't necessarily or intrinsically control the server space hosting the jpeg. You may have absolutely no way to influence the jpeg.
So, if you can't delete the jpeg, alter the jpeg, move the jpeg, hide the location of the jpeg from public scrutiny, or stop other people from downloading, copying, modifying, and redistributing the jpeg, in what sense do you own it?
Well... you don't. You "own" a ledger entry saying that you paid someone smarter than you X amount of cryptocurrency, and also, there is a picture of a monkey located at X url.
(Which may or may not be true, as while the ledger entry is immutable, the data it points to is not.)
(Which may or may not be true, as while the ledger entry is immutable, the data it points to is not.)
The idea that this is "your" monkey jpeg pretty much just relies on social consensus, since you have no tools to enforce ownership.
Likewise, if you buy a special gun in Ghost Recon: Wildlands, well, sure, it's 'your' gun, and you can do anything you want with it. As long as what you want to do is something the person who made the gun lets you do, because ultimately they control the data, not you.
If what you want to do is redeem some kind of code associated with the NFT's data, you might be in luck. If you want to do anything else-- say, bring your gun into Fortnite-- you will discover that Fortnite has not obliged you by building an "import gun" button for you to push.
So, if your Ghost Recon: Wildlands gun is basically just a DLC gun for Ghost Recon: Wildlands, what was the point of making it an NFT in the first place?
Answer: there was no point. This served no purpose at all. We already have DLC infrastructure that works way better.
Answer: there was no point. This served no purpose at all. We already have DLC infrastructure that works way better.
It is useless technology. It's weird for a technology to be useless, but it literally does almost nothing, and the one thing it does (scribe a transaction on an immutable ledger) isn't very useful for any of the use-cases people like to speculate about.
Basically, the thing to focus on about nonfungible tokens is the word "token." The token is the data. It's what distinguishes an NFT from a regular crypto ledger transaction.
It's a token: a useless object which may be traded in for a useful object, theoretically.
It's a token: a useless object which may be traded in for a useful object, theoretically.
What happens to all your minigolf arcade tokens when the minigolf place shuts down?
Well, you're left with a bunch of useless tokens.
Well, you're left with a bunch of useless tokens.
In the case of nearly all NFTs, these tokens exist without a corresponding trade-in counter. It's not just defunct: there was never anyone willing to do anything in response to being presented with the token in the first place.
Most NFTs right now are being traded against lofty promises that, some day, there will be a miraculous prize counter where these tokens may be redeemed for all sorts of wondrous splendors.
This prize counter is never going to exist. In many cases, it CANNOT exist.
This prize counter is never going to exist. In many cases, it CANNOT exist.
In the few cases where the promises being made aren't flatly impossible because of technological, logistical, or legal barriers, the thing the token would enable generally already exists in a much more convenient form.
"An NFT could bind together words, images, video, and music into a new form of literature!"
That's a website. Homestuck. You're describing Homestuck.
What, exactly, are you supposed to do with a token valued at one (1) Homestuck?
That's a website. Homestuck. You're describing Homestuck.
What, exactly, are you supposed to do with a token valued at one (1) Homestuck?
Who is going to give you one (1) Homestuck? You could sell your token to someone else, but what are THEY going to do with it? The only use for the damn thing is to sell it to an even bigger fool.
Essentially, for these tokens to be worth anything in the genuine sense of being useful for any purpose, some entity has to be willing to accept and process them. If they represent a gun in a video game, that video game has to put in the infrastructure to process the token.
If they represent an issue of a comic book, the comic book publisher has to set up infrastructure to process the token and give its owner access to the comic.
You might have noticed that you can already buy DLC in video games, or comics online, without using NFTs. You would be correct. What difference does an NFT bring to the table?
Well, there's just one thing, assuming the infrastructure is set up around it and it works: the token is digitally unique. It can be tracked as it is traded across the blockchain.
So it reintroduces one of the major flaws that digital distribution conquered: scarcity.
So it reintroduces one of the major flaws that digital distribution conquered: scarcity.
Why would you want digital scarcity? The answer is, you wouldn't, not unless you were some kind of market speculator.
Let's return to comics for a moment. Okay, let's say Marvel has set up infrastructure for processing Spider-Man tokens into Spider-Man comics.
This is where you run into the final poison pill of the whole scheme:
Your token serial number may be unique, but your Spider-Man comic is not.
Your token serial number may be unique, but your Spider-Man comic is not.
It's the same Amazing Spider-Man issue #593 that everyone is reading in comic shops. It's the same Spider-Man 593 being digitally pirated in comics torrents and on Russian websites.
You have a token saying "This is Digital Copy #445 of Spider-Man issue #593" but who gives a shit? Definitely not anyone who wants to read the comic, which can be digitally reproduced endlessly and effortlessly.
Collectors won't want it because the token will only remain good as long as Marvel retains interest in the program. Once they shut down or overhaul their web backend and break the URL the token points to at some point in the future... well. The minigolf arcade closed.
Collectors will still want paper comics, because physical scarcity isn't artificial.
Comics are also particularly illustrative because they underwent a speculative investor rush in the 1990s, when everyone suddenly wanted to rush in and snap up whatever was going to be "the next Action Comics #1"
The industry was happy to oblige them, running off limited collector's special edition versions of every creatively, artistically, and economically worthless random issue of every book on the shelf.
Everyone in the world bought a copy of Spawn #1, waiting eagerly for it to become worth thousands of dollars. Which it never will, because 1) they printed 1.7 million of the fucking things, and 2) nobody gives a shit about Spawn anymore.
Just like in twenty years nobody is going to give a shit about the golden neon Hello Kitty keychain gun attachment in Rainbow Six Siege or whatever the fuck.
This is the one actual "use case" for NFTs: a speculator's market in which nearly everyone will end up with worthless irredeemable tokens and an empty wallet, and a couple of people will accidentally strike it rich... IF the technology sticks around at all.
Which it won't.
Which it won't.
Which brings us back to the ACTUAL use case of NFTs:
Scamming suckers.
Scamming suckers.
Nearly all NFTs in circulation right now are absolutely useless and utterly worthless, floating on a cushion of (blatantly illegal but still fairly unregulated) market manipulation to create an illusion of value.
The infamous monkey jpegs that "sell for tens of thousands" are mostly being moved around between shell accounts by the same person, handing himself ever-escalating amounts of funny money to convince rubes that, man, these apes sure are worth a lot!
Why, Bob just sold that one monkey jpeg to Bob-in-a-beaglepuss for $3,000! Wow! I should go stock up on monkeys while there are still some available!
This requires that you be absolutely horny for new tech, or absolutely ignorant about new tech, and that you not ask one very crucial question:
Why the fuck would anyone want to buy a token redeemable for an ugly-ass jpeg of a monkey (that anyone looking at the blockchain can just download and reproduce infinitely)?
The answer is the one common sense dictates: Nobody.
Nobody wants to pay for a shitty jpeg of a monkey. ESPECIALLY when they could easily obtain the shitty monkey jpeg, legally, for free, with nearly zero effort.
Nobody wants to pay for a shitty jpeg of a monkey. ESPECIALLY when they could easily obtain the shitty monkey jpeg, legally, for free, with nearly zero effort.
It is literally the scam where you sell someone a fake deed to the Golden Gate Bridge, except you can at least imagine reasons for wanting to own the Golden Gate Bridge.
This is why NFTs are surrounded by so many weird and completely fake claims: everyone pushing them is looking to make a quick buck on the scam before everyone catches on and the racket collapses.
anyway that's why NFTs are useless bullshit, thanks for coming to my TED talk
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