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(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...

...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.

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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.

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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.

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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?

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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.)

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The idea that this is "your" monkey jpeg pretty much just relies on social consensus, since you have no tools to enforce ownership.

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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.

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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.

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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.

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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.

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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.

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What happens to all your minigolf arcade tokens when the minigolf place shuts down? Well, you're left with a bunch of useless tokens.

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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.

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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.

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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.

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"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?

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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.

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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.

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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.

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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?

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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.

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Why would you want digital scarcity? The answer is, you wouldn't, not unless you were some kind of market speculator.

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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.

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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.

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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.

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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.

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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.

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Collectors will still want paper comics, because physical scarcity isn't artificial.

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Show replies

Danny Gay-da-Lore-ian

@weredawgz

Replying to

aren't you excited for all the steam scams where scammers CLAIM the game have a blockchain but don't

Replying to

A lot of this thread is just plain factually wrong, and I would love to have a serious discussion with you about it, but it feels like most of those efforts are wasted.

Like a big piece you're entirely missing here is smart contracts and how they actually do create usefulness enforced on the blockchain. But even most people I know working in serious tech jobs don't really know anything smart contracts, that's totally not on you.

Show replies

Replying to

I dunno, every 'average' person I know is struggling to understand why anyone would ever invest in them

Replying to

best thread on nfts I've ever read

Replying to

and

I think it's very easy for the average person to understand how useless NFTs are. It's the rich people that don't get it.

Replying to

and

I feel like there probably is *some* use case for "a unique digital token that one person provably owns," but (a) none of the ones being currently touted are it, and (b) it will probably turn out to be a pretty niche case.

Llyw

@Llyw

Even in that case, what does Blockchain do that a database can't for that use case?

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Replying to

and

So then famous pieces of art are worthless too right? You can print off a picture if the Mona Lisa, but it's not the original. You can build a perfect replica of the GT 500, Eleanor, from Gone in 60 Seconds, but it's not the original. It's a certificate of authenticity, unique.

Ehcks

@EhcksTGD

Clan Virulitch, Plague Priest

Physical objects are actually scarce. There is only one original Mona Lisa and it's not for sale. You can't buy it. It exists to be admired, to show off the skill of its artist Leonardo da Vinci. Who knows who made the ugly monkey jpegs? Who cares who made the ugly monkey jpegs?

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Replying to

Had a similar thread earlier, and yeah they do literally nothing.

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Replying to

and

When I wonder why nfts and crypto exist then I think of this quote

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Phil (French SaaS-preneur)

@saasisson

Jan 11

This is mathematically wrong It should say "the median person" for it to be correct.

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Replying to

and

It took me so long to understand exactly what NFT's are because I assumed, like any rational person, that they would make sense. They don't, and it wasn't until I figured out the scam that I fully understood what they are.

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