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21 sats \ 38 replies \ @rkfg 20 Aug 2023 \ parent \ on: I was a well-paid blockchain / web3 dev for years, but became disillusioned. bitcoin
There will never be any good NFTs. They're 100% scam by definition, number hashes are not scarce and they can't be worth anything.
That's a bit black and white. First of all, what do you think makes a thing "worth" something? Scarcity? I have a very exclusive fart coming up, should I go to the market..
Things are worth what people pay for them. Simple as that. Saying number hashes are not scarce also makes no sense in this context. In a smart contract — which cannot be modified after creation— if I write "upon payment, write payee down in list as Owner, IFF number of owners is less than 10000", then that is a scarce amount of ordinals, there can never be "owner #10001".
Finally, let's not throw the baby out with the bath water. NFTs have a lot of use cases besides "trying to fool speculators to buy this new updated monkey picture".
That said, im in no rush to bring them to bitcoin (or to use Ordinals). Yuck :)
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The dividend use case still doesn't justify NFTs. It depends on you paying other people, if you don't explicitly pay they don't get anything. So why pollute the chain with these contracts? Keep a regular Postgres database of people who bought your shares and spread the money among them, it worked for decades before and it still does. The value proposition isn't the scarcity of the shares themselves but the dividends that you promise to pay. I don't see why 1 share out of 10000 would still be valuable if you stop paying for whatever reason. Even if you burn 9990 shares and leave just 10, each one of them would be just as valuable as before (i.e., it would be not) despite the supply shrinking by 1000 times. No payments, no value.
There might be an argument that with blockchain they can trade without touching your database, in a decentralized fashion. It doesn't really hold because there are no real benefits (as I said above, the value comes from you paying them, not being able to trade the tokens) and the big downside is that it's much more expensive to store this data on a global database, because no one else cares about these shares except those 10000 people who bought them, but everyone has to store this data forever.
You can resort to assets like RGB or Taro if you absolutely need it for whatever reason, but in reality 1 local database per company is much better for the task because these payments fully depend on that one company (and as such the value is inherently centralized) and nobody else is interested in storing them. If, or rather when, the company disappears and these shares become worthless it's much better to drop the database and forget it ever happened, rather than download this sad story of a dead company every time you setup a new node and do an IBD. It doesn't apply to the regular bitcoin transactions because you absolutely need to verify all money to make sure you get paid with real bitcoin and not something conjured out of thin air or doublespent. So no other option but download and verify everything, you don't know in advance which UTXO will be used to pay you.
Other than that, see my other reply above. There are no real useful use cases, only scam, spam, and delusions.
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Apologies for this 2 week late reply, I was confused by what you wrote, confused by "the dividend use case" rebuttal, which seemed like a complete non-sequitur to my own text (which didn't specify any use cases at all, only saying "they exist").
But I reread your comment now and see that maybe the dividend-confusion arose because I wrote
Things are worth what people pay for them.
So I want to clarify this, I didn't mean anything like "NFTs have value only when their contracts include payments to the owners [or shareholders, as you call them]".
I meant the sentence completely literally: In the context of pricing, there is no such thing as intrinsic value. If I am willing to pay 5000 BTC for an NFT, then that NFT is worth 5000 BTC. The value of a thing, the price it "should" have, is exactly equal to what a free market sells it for. (this btw is the Austrian view of value).
But as I wrote in my original post, I don't believe the NFTs I made were worth what they were sold for, I valued them at ZERO DOLLARS. So I think we have agreement in this, at least :)
I've looked through your discussion with @dieselbaby and @notgeld as well. It doesn't look to me like you are arguing in bad faith (that's why I'm replying and trying to steel-man your case as best I can), so I'm not going to repeat their arguments (which I agree with completely).
I'm trying to understand why you are dead set against NFTs as a concept. What I'm thinking is, you don't like bitcoin Ordinals. Is that the root of it? They certainly pollute the bitcoin blockchain currently (increasing fees, and reducing the pseudonymity of the currency), I'm no fan. I think the bitcoin community will solve the problem though. It was good that the flaw was discovered.
I don't think you are against NFTs in general. For real. I mean, are you against receipts? Diplomas? These are tokens (i.e. "indications / signs that represent other things"). You can take your name off your diploma if you want to make it fungible. A physical US dollar bill is an NFT, since it has a unique serial number. But put it in a bank account and it becomes fungible. Just a number in a postgres database (or in this particular case, almost certainly it lands in a file on a mainframe running COBOL).
Do you agree with that? That tokens which are non fungible are not inherently bad (even though they might be for specifically Bitcoin)?
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I'm against all NFTs on blockchain because they simply don't work, same as shitcoins, same as PoS. You can say "but they do work" and it's only partially true, same as buying sand castles for candy wrappers works until a bully comes, stomps the castle and tears the wrappers. As I already said in that other branch, NFTs don't need decentralization. Feel free to store them in a database, replicate it between those interested in this shit and be happy. Polluting the decentralized timechain is a waste. Why should everyone store my receipt from a supermarket for eternity? For real, why? What's the reason? I bought some food, ate it, shat it, the receipt is now useless but it's still preserved in the most decentralized database for eternity. It's like shitting into that database directly.
Same about diplomas or anything you can come up with. This stuff only concerns a few people, I don't care about some Argentinian dude's diploma, for example, I will never meet him or employ him. Why should I waste my precious disk space and bandwidth on that? The dude dies, the diploma becomes useless and yet it's stored forever. Same about apartment ownership, the house is demolished, it's useless. The NFT hype goes down, the monkey is worthless.
Sats, on the opposite, will not become worthless because they're fungible. Any sat is as valuable as any else, so we need to verify all of them. Everyone is interested in every sat verification because we can freely exchange them and I can get those Argentinian dude's sats, sure I want to make sure they were created from the valid PoW and were not doublespent. See the difference now?
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See the difference between what? I do not understand you at all, and it doesn't seem like you are interested in trying to understand me.
I did my best to steelman your case, to consider the best possible thing you could be arguing. It is more interesting to understand others than it is to build a wall around your own view and shoot anyone who approaches.
Can you make an argument for using non-fungible tokens on blockchains? I can (and have) provided arguments for why Ordinals are bad news, why NFTs can be scams.
If you cannot do this, then you are not learning anything by writing long texts. What is the point of conversation if your starting point is that you have nothing to hear?
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The difference between sats that have a use case and fully deserve their history to be preserved forever and NFTs that don't have a working use case (outside of pump&dump/scam schemes) and will be forgotten in a few months or eventually become useless or unusable due to external events and conditions. This difference.
How can I make an argument for using NFTs on blockchain when I'm fully against it? I don't get it. I explained in details why I'm against it. There's not a single argument that can justify their usage in a decentralized environment. I'm not trying to learn an objectively wrong point of view (why would I do that? Or did you mean "teach"?), instead I'm explaining why NFTs and Bitcoin are fundamentally incompatible.
I disagree. I had a "good NFT", I am a fan of the band Avenged Sevenfold, and in the lead-up to the release of their latest album which came out earlier this summer, they had a big alternate reality game event that ran in a bunch of locations across the west coast of the US and online, where people could solve a bunch of sophisticated puzzles and riddles to find clues, which I was able to do and locate another clue inside of a park in downtown LA. Because of this, some other fans of the band gifted me one of their (the band's) "Deathbat's Club" NFTs, as a sign of appreciation I suppose.
While I absolutely agree that the vast majority of NFTs are cash grab scams and hideously ugly at that, these ones are something pretty different. For example, the people who have one not only get things like priority access to cut the line at concerts, you're able to buy tickets before anyone else guaranteed, there's special merchandise, meet and greets with the band themselves, a whole lot of stuff that appeals to people who are fans of the band. It's basically just a way of them keeping track of a fan club, more or less, in a digital way and making sure that the benefits of being in the fan club remain rare and contained to only the number of people who hold one of those NFTs.
So yeah, there are absolutely situations out there where they are not "100% scam by definition", and this is far from the only such situation. You don't have to like it or want to take part in it whatsoever, but that does not mean that it is a scam.
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Those don't need to be NFTs, a simple database is more than enough. One can argue that NFT is "on blockchain" forever while any regular database might be gone but in reality it doesn't matter. Because for NFT to be valuable (and not just any other contract or tx output) you need to prove to other people (buyers, apparently) that it's real, and it's not possible without external sources of truth that reside outside the blockchain. Such sources might be blog posts, websites, twitter accounts, notary verified e-mails and so on, but the blockchain, any of them, can not attest the NFT all by itself.
So the only purposes of NFT are:
- scamming other people
- polluting the block space
That's it. Any other use case is fragile at best and a delusion at worst, only works until you can convince the others to buy it from you, otherwise it instantly loses any value and becomes just a random number. Which it is.
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What do you say about people that see value in provision, i.e. confirmed ownership history?
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Ownership of what? You can only prove that you "own" a hash. The history doesn't have any value without, again, an external source of truth that somehow connects the addresses/keys with real persons. Otherwise you can fabricate whatever history you want just sending between your own addresses, and that's how NFTs gained perceived value for the pump&dump scheme.
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The simplest argument here is about bytes stored onchain. But it is not really an object which has value but the mere substance of it originality. All copies which may be put later onchain will be just copies that are younger and not original. Imagine that any sculpture occupies some space, now digital art occupies some specific time interval in the past.
Blockchain itself is the history and I do not talk about whatever external history you mean.
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You can't prove that your bytes are the youngest in existence. There could be slightly different younger bytes. Change a pixel and it no longer matches, good luck digging through the blockchain looking for the earlier image (if it even exists at all). This way you can copy any NFT and without an external source of truth the buyer can't make sure your copy is fake. Scan the chain, find no matches, so it must be genuine, right? It's just spam and scam with no value except extracting sats from people believing in this shit, and they're left holding the bag. Oh, and new nodes need to waste bandwidth and storage on it too, even though it's most certainly isn't of any value to them.
You seem to have a fundamental misunderstanding of how public/private key cryptography works if your comment above is any indication.
You can absolutely prove that you own a hash, it's deterministically generated as a result of the interaction between your key and the contract with which the token is from.
(edit: I jumped the gun a bit and misread your comment above as saying that you could not prove that you "own" a hash, so my bad...but my comment below still stands as it is accurate regardless. The external source of truth you speak of IS the blockchain. The same way that it works on bitcoin....just because you're sending NFTs which can contain any kind of arbitrary data within them doesn't make it any different than people sending sats to one another. Same goes for people inscribing ordinals on bitcoin, too. Fundamentally the same thing, at it's core.)
Also, you ignored the very real use case I gave earlier (because it doesn't suit your narrative that NFTs are all 100% scams, which is bullshit). Sure, you could use a database instead of having the fan club membership I spoke of function as NFTs. But in doing so, you'd miss out on the following features:
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Token gating for access to their Discord server, a special website, ticketing purchases access (all of this with numerous levels of complexity beyond what you'd find in a standard database)
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The ability for people to freely transact their membership pass (NFT) by listing it for sale or purchasing it on a secondary marketplace, at any time. If that right there doesn't align with the ethos of decentralization and self-ownership that many bitcoiners have embraced and constantly champion to others, I don't know what would...
Your comment about it being a "pump and dump scheme" is moot, as this is a world-famous band who have sold millions of albums, and plays sold-out arena tours all over the globe with bands like Metallica...they're certainly not hurting for cash and the value (though such a thing is subjective, of course) that the fans who hold said memberships is gained via a one-time payment.
You seem to want to be getting deep into the weeds and having some weird conversation about what denotes value or what constitutes ownership of something...there is absolutely nothing that is required to confirm that you own the membership pass (or any other NFT for that matter) aside from a computer with the right software and an internet connection.
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Explain to me why should I store this garbage for eternity to let other nodes perform IBD? These tokens only concern a small number of people, why should this information be globally available if it's completely worthless for 99.999% (add more nines to your taste) of people? It's not money, it can't work as money, why do you need a global consensus for some discord entry tokens that would go to zero in 100% of cases after discord inevitably shuts down? Why should we store dead information forever? I know about node pruning, point is if everyone prunes no one can do IBD + even with pruned nodes you still have to download the entire blockchain.
The rest of your arguments follow, this information that virtually nobody is interested in, and which becomes more useless every passing month, should not be a part of the global consensus. On the opposite, transaction history becomes more valuable every block because it builds a chain that links the today's UTXO with the block it was mined in, proving that these sats are real and were not created out of nothing/doublespent.
You can store such useless information as any NFT, but it is simply spam, (and usually scam too). Anecdotal evidence that some famous people participated in a scam (whether willingly or accidentally) doesn't prove anything, because it's anecdotal. You can't validate a concept by saying that some well known people did it. It's completely irrelevant. Famous people bought monkeys for millions, now they're not worth crap, how's that not pump&dump? The fad passes quickly, fortunately. Those poor people who believed in the blockchain-future narrative are gonna get broke, not sure if they deserve it but I'm at least trying to warn the others.
absolutely nothing that is required to confirm that you own the membership pass (or any other NFT for that matter) aside from a computer with the right software and an internet connection.
False, you need something outside of the blockchain that confirms that this membership is genuine. Be it a hash, a date/block when it was minted, doesn't matter. Without that anyone can create a duplicate NFT, maybe even in the same block if they monitor the mempool closely, and who's gonna tell you which one of them is "genuine"? The answer is: both (because in fact there's no difference, random information isn't scarce) and neither (because both pretend to be something they're not).