87 - Weird things on the web 🕸️ #1: NFTs
Hey there, !
Heard of NFTs?
They’re all the rage at the moment, coming off the back of the crypto-currency hype. It’s become a wonderful examination (at least, to me) of the human psyche and behaviour - what will people collect, and why!
Let’s take a step back:
1. What’s an NFT?
A non-fungible token (NFT) is like a Bitcoin that is not fungible (interchangeable) - i.e. it has it’s own specific identification (and not just a driver’s license!). It’s a digital token that is unique in a particular way…kind of like a barcode…and is currently used to track the digital ownership of certain objects. As an example, the main use case at the moment is for digital art, but as you’ll see below, there have been a whole swathe of things that have come from the NFT metaverse (a fancy way to refer to virtual reality, or at least, what people think will be the ‘online’ version of the Earth).
These have been put up as one of the next things that are needed to transfer to a fully digital society - a way to track ownership using a blockchain-type system, without having it be bogged down by the crypto-currency part of it all.
2. Do you hate them like you hate Bitcoin?
Okay, hate is quite a strong word. But…kinda?
For me, the key thing around Bitcoin and these types of cryptocurrency was that I couldn’t see a use case that could specifically, and only, use Bitcoin. If you can trade bitcoin for USD, then everyone will naturally peg the prices relative to USD, which means that you’re essentially just a more digital version of a currency.
Sure, you might say that “well, it’s gotta start somewhere” and that’s fine. But if you’re able to pay your rent, or your food using USD as well as Bitcoin, the government is just gonna make you pay in the equivalent amount of USD anyway.
The features of Bitcoin can also be replicated by banks and financial institutions, meaning that you wouldn’t need a separate currency to do anything - you could just use what people are building. BeemIt, Osko, and PayID are some examples of ways that the user experience is improving in the financial sector, and providing newer, more secure ways to transfer and hold money.
So my conclusion was that if you had something specific to the Internet that you could create (e.g. digital art) then that would make sense to me as a use case for a currency (because it’s exclusively Internet-based). The key thing is that the vendor would only accept in a cryptocurrency, and not change the price based on whether the US dollar equivalent has gone up and down. No matter what, their art would cost 0.5 bitcoin - even if it goes up to $50k, or down to $1k. And I don’t think many people can stomach that risk…
On that note, it’s a speculative asset which means there’s hella risk involved, and essentially you’re waiting for more people to put money in, before you can take yours out. What a scheme! The idea, at the end of the day, is that someone’s gonna be holding the bag for a lot of these cryptocurrencies, and you just hope that person ain’t you.
(Note: I acknowledge that there are some valid use cases for cryptocurrencies e.g. regarding unstable regions of the world where banks can, at any time, be blown up or acquired by totalitarian governments, and thus it is a better bet to put your money in Bitcoin. It also exposes some of the digital issues with things like foreign exchange and international payments (i.e. they suck), but I don’t think that’s what most people are primarily using it for.)
Remember all those ICO’s that you hear literally nothing about these days? Whatever happened to them all? (Spoiler alert: They ran away with the money).
On the other hand…I have this major bear case on cryptocurrencies, and yet the number still goes up… shakes fist at sky
3. Okay so what’s this piece about then?
Well, I’m always fascinated about things when I’m wrong! In this case, there is exploding popularity in the realm of crypto, and yet the logical, rational part of my brain says this should not be the case.
So then…what?! I’m obviously wrong, but why?
This makes me go out and have a look at things that are happening in the space to try and understand, and I instead find things like:
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John Cleese sells the Brooklyn Bridge - literally minting a picture of the Brooklyn Bridge and selling it on OpenSea, the largest marketplace for NFT auctions as of writing this. It sold for approximately 18 ETH, which equates to approximately USD$30k. I’m SURE he did it as a troll, but what a lucrative troll
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Overly Attached Girlfriend sells her meme - and sells it for 200 ETH, which equates to approximately USD$500k. CAN YOU FREAKIN’ IMAGINE THAT. Someone in the world decided that a PICTURE of a meme is worth USD$500k. I could not believe it when I was watching her tweet about it when the auction was at like 0.2ETH, and she was already beside herself with happiness. 200ETH is a freakin’ life changing amount of money. Good on her, but wow.
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Jack Dorsey sells the first tweet on Twitter for $2.9M - TWO POINT NINE MILLION DOLLARS FOR WORDS ON A FREAKIN WEB PAGE. I cannot believe that. I just had to stop looking honestly. Great that he gave it to charity but I just…wow.
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Doja Cat launches an NFT Marketplace - Juicy Drops - it’s essentially a digital collectibles marketplace - if you acquire the whole set, you get access exclusive merch drops. Amazing gamification, artificial scarcity at it’s very prime. Props to Doja Cat for coming up with such a fascinating idea, unlocking even more value from her fans, but honestly again, what the fuck.
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Chadwick Boseman NFT given as an Oscars gift - this is actually pretty wholesome - an artist made a 3D animation / render of Chadwick Boseman, and is going to auction off a ‘minted’ NFT for charity. Look, that’s kinda cool, I dig it if it’s for charity.
So in my eyes, it’s a combination of hype, fun, and ‘who the fuck cares what people do with their money - not everyone invests in index funds like you, you boring man’
4. This sounds awesome - how do I get rich?!
Hold your damn horses - haven’t you just seen what a weird situation this is yet?
I read a really great description of what an NFT actually is and it goes as follows:
An NFT is like a digital scrap of paper that has an address written on it, which you have to follow to actually see your art.
Essentially, the NFT is a digital token that does not actually include the piece of digital art, but rather serves as a pointer, or a link to that piece of art. This Verge piece summarises quite nicely the problems with using URLs as the pointer (essentially, what happens when that server goes down / URL is taken over?).
It’s the same thing as the blockchains that purport to give provenance (tracking / identification) for physical objects - there’s absolutely no way to directly link those things together. You could ‘own’ the NFT, but the art / object / whatever could be essentially, well, gone.
Even going back through my own archives, there are a bunch of images and gifs I’ve linked that don’t exist anymore. How crazy is that?!
The other thing to add to this is the marginal cost of copying/sharing on the internet is pretty much 0. So if I take that piece of art, copy/share it somewhere else, and ‘sell’ it to someone else, you can’t freakin’ stop me?! It’s a ‘property’ right that’s literally unenforceable. What are you going to do with it? Stop me from using the image? Who’s gonna enforce it? Most artists aren’t making money off NFT’s anyway!
Lastly, I noticed this article - the story of a hacker who was able to ‘transfer’ a second edition minting of one of the most famous digital art pieces, previously sold for $69M to his own account, without needing permission from the current owner (so, essentially stealing it). There are always kinks to be worked out in cryptographic systems, but this is a major one, no? If you really hold so much stake in wanting to digitally ‘own’ something online, surely you want it to be secured?
tl;dr: I’m a curmudgeonly old internet man who doesn’t want any of your crypto nonsense.
I still don’t believe in the case for crypto, but I acknowledge that my belief is not reflective of reality. I should have bought when it was at $3k (okay Hu?!) so I could have made at least 10x my money but shrugs it is what it is.
The main lesson I learnt from this all is that if you see a bubble, you want to be early and get it so that someone else is holding the bag. But that seems super mean and predatory, so I don’t really want to do that.
You got any crypto? Why have you bought in? Should I release a Vince NFT so you can buy shares in my life?
Chat soon :)
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✔️ Real Life Recommendations
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Drunken Master - it’s so good. A young Jackie Chan learning how to fight ‘drunkenly’ from an old ‘beggar’ (actually a martial arts master) - the action scenes are hilarious and show off Jackie’s creativity in using the world around him to choreograph fights. There’s literally a scene where the ‘master’ uses a handkerchief to fight off 5 guys at the same time in a restaurant, using the tables, the chairs and chopsticks with great comedic effect. I found this on Netflix, but for some reason the dub switches between English and Cantonese - apparently some problem with the DVD rip :( Ah well, still a great one to watch!
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Castles of Mad King Ludwig - I haven’t recommended a boardgame in a while, but I played this again recently and remembered how bloody good it is. It was the first game I ever bought in the ‘designer’ realm of boardgames, and I finally parted with it (as I’m getting a Collector’s edition from Kickstarter). You bid on rooms to add to your castle, and it grows bigger and larger and more ridiculous (a fungus room that goes into the scullery that goes into the royal bedchambers? A stable that comes straight in from a living room?). It’s super fun and really aesthetic - highly recommended!
🚌 Adventures on the Information Super-Highway
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Cool data embedded in the blockchain - transactions allow you to put a little bit of data on the blockchain - some people putting ASCII art, or messages about really important events in their life. There are also more sinister things - URLS to child porn and racist symbology. A perfect blend of the internet, wouldn’t you agree?
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Non-Fungible Taylor Swift - Stratechery hits it out of the park again, this time tackling the idea that though art itself might be distributed widely and easily, the artist themselves holds a lot of power being non-fungible and non-shareable. The value of art can be controlled by the creator after it’s distributed, and yanked away from those who try and extract some of that value for themselves.
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Meet the man who sold his fate to investors at $1 a share - before all this hype, some guy in America sold 100,000 shares in his life at $1 a share. All his shareholders got to make decisions about his life, at one point investing $79.63 in a Rwandan chicken farmer (lol). A fascinating story - when his girlfriends wanted to influence his decision-making, he essentially just said ‘buy more shares in my life’.