Are NFTs just marketing gimmicks with no added value?

[legiteum]

All of these things have as much value as people believe they have.

Something comes to my mind. Do you remember when youtube girls were welling stuff to their fanboys? It was their bath water, pieces of clothing, one even sold her farts in a jar and people were paying for that shit. It was worth something to them. Does it mean these things were valuable? To most of us they were shit but they were paying money for dirty underwear of some chick that doesn't even care about them.

Value is subjective and I think a picture of a monkey is worth 0, but some people think it's $100k...

I completely get that, and clearly the value of blockchain anything is based almost entirely on its brand name perception since the practical use is so limited. And there are billion dollar brands in the world like "Gucci" and "Real Madrid" and "Bitcoin" that make whatever object you place that brand on valuable just because the brand.

But NFTs are different because they usually pretend to be something they aren't. The reason is because insofar as you are selling a non-tangible item (e.g. a digital asset), then the only potential worth is the copyright protection on that item, which is buried in the contract for the NFT.

In other words, most people think they are buying a JPEG of a Monkey when buying an NFT that nobody else can buy but unless it's specified in the contract, the one who sold it to you could make one million more JPEGs just like it and sell them as a one-off.

And even if the contract for the NFT covers this, you have absolutely no recourse in enforcing your contract because there's no known counterparty to sue with the NFT itself. (And if there is one, then... why did you bother with an NFT in the first place since you could have just signed a plain old contract between two parties?)

So yes, value is subjective, but NFTs don't even guarantee you that subjective value.

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[adaseb]

I heard of NFTs back in 2017 and assumed it was a big joke. Back then people were paying $50K for some monkey JPEGs. I was thinking they were crazy. Then those Bored Apes became worth millions and then I decided to learn more about NFTs. Its basically a collection of art but you cannot fake ownership like you would a prized painting.

Say you bought the Mona Lisa, your friends came over and saw it. They wouldnt know 100% if its real or not. But with NFTs you cannot fake ownership. So I guess I understand the value behind it. But I am not much of an NFT investor or traders. I have no idea how the floor price even works.

[legiteum]

Say you bought the Mona Lisa, your friends came over and saw it. They wouldnt know 100% if its real or not. But with NFTs you cannot fake ownership. So I guess I understand the value behind it. But I am not much of an NFT investor or traders. I have no idea how the floor price even works.

What? What are you talking about?

With an NFT you can fake ownership easier than ever before since a private key proves you are the owner of nothing whatsoever.

What proves you own the Mona Lisa is government documents saying you own the Mona Lisa. And not "some private key" owns the Mona Lisa, but some actual human person owns it.

Imagine somebody sells you a house using an NFT. Then somebody else moves in "your" house and calls the police telling them to throw you out of their house. Now you have to sue the person who sold you this NFT... except there's nobody to sue since you can't take a private key to court.

In short, buying tangible goods as an NFT is always a scam. Don't do it .

[boyptc]

I struggled with the proper placement of this topic. This is clearly a Bitcoin-related (blockchain-related) topic, and I think belongs on Bitcointalk.org, generally speaking.

You're right about this but this is a section for mostly Bitcoin discussions and not NFT/altcoin blockchain discussions.

There's the right section for this, you can move it from here through "move topic" at the bottom of this page.

But there's no dedicated area of NFTs on this website, or something that would seem to cover that topic in a general way.

Altcoin discussion --> https://bitcointalk.org/index.php?board=67.0

Service discussion (altcoins) --> https://bitcointalk.org/index.php?board=198.0

[hatshepsut93]

You might say that the difference is that the transaction can be done anonymously, but since NFTs are essentially legal contracts, and contracts require known identities to hold up in court, then it would seem as though an NFT itself doesn't add any value, since you need to add identity to the contract anyhow, at which point there's no added value to using an NFT.

You are quite correct, although NFTs aren't even legal contracts or any contracts, they are just tokens on blockchain that have unique identifiers and that's it. The people behind them told that they give ownership, but ownership is not actually ownership without having any way to enforce it. Bitcoin is self-enforcing, the system doesn't need any outside help, but NFTs are not. You can put a link or even a file on blockchain, but it won't stop anyone from copying it, so it needs the help of actual legal courts, which is the opposite of what Bitcoin has achieved.

[GreatArkansas]

(...)
Can somebody who knows the NFT business tell me what I am missing?

NFTs are more than just marketing tricks, they provide a new way for artists and creators to own and sell their digital work, isn't that amazing?
While some see them as overhyped, NFTs are evolving and could change how we handle digital ownership across various fields.

We are just still early and some people don't appreciate the use of this, there's still room for growth.

[Reatim]

NFTs, meme coins, smart contracts, altcoins, etc. are nothing but scams.

These are the buzzwords that scammers use to lure people in and trick them out of their money. Bitcoin is the only one that is not a scam.
Many people enter the crypto market only to find this out the hard way after they lose their money.

If the government was doing their job ethereum and all the rest of the shitcoins would be shut down to prevent these scams from happening.
Of course that is why bitcoin exists because governments are totally clueless, incompetent and corrupt.

Why do you think ethereum is a shitcoin?

A lot of altcoins are useless and most of the time end up dying
even if the projects are legit.  there are still chances that
altcoins are scams however not all of them are and ethereum is
a very bad example of what you would call a scam.

Bitcoin is superior to ethereum and all of altcoins but some of them
aren’t scam and actually provide some really unique features that
could be implemented in bitcoin in order to improve it more

[legiteum]

You are quite correct, although NFTs aren't even legal contracts or any contracts, they are just tokens on blockchain that have unique identifiers and that's it. The people behind them told that they give ownership, but ownership is not actually ownership without having any way to enforce it. Bitcoin is self-enforcing, the system doesn't need any outside help, but NFTs are not. You can put a link or even a file on blockchain, but it won't stop anyone from copying it, so it needs the help of actual legal courts, which is the opposite of what Bitcoin has achieved.

And if it needs help from the courts to enforce, then it's absolutely idiotic to use... blockchain[/i] in this transaction. The whole point of blockchain is to remove the government from the equation.

(...)
Can somebody who knows the NFT business tell me what I am missing?

NFTs are more than just marketing tricks, they provide a new way for artists and creators to own and sell their digital work, isn't that amazing?

Can you give any evidence to your claims here? How does an NFT give an artist a new way to sell their works that they didn't have before? In either case, the artist must create a usage contract for their work, and they must sign their own name to that, as well as that of the counterparty--just like they would do without the NFT being involved. So why have an NFT in the mix at all? What value does it add?

While some see them as overhyped, NFTs are evolving and could change how we handle digital ownership across various fields.

We are just still early and some people don't appreciate the use of this, there's still room for growth.

Can you explain how it will grow? What it will grow into? What they are evolving into? Any specifics?

[thecodebear]

When it comes to blockchain-based NFTs, I'm trying to answer one question: why?

What is the actual added value of an NFT versus a plain old contract between two known entities as is done in traditional digital content marketplaces?

You might say that the difference is that the transaction can be done anonymously, but since NFTs are essentially legal contracts, and contracts require known identities to hold up in court, then it would seem as though an NFT itself doesn't add any value, since you need to add identity to the contract anyhow, at which point there's no added value to using an NFT.

What am I missing here? Why use an NFT when the NFT, by itself, is technically worthless, and a valid transaction without the blockchain aspect of the transaction is the same as the value with it?

In other words, couldn't you just enter into the same contract the NFT specifies with the real names of the parties, and accomplish the same thing, but without the added complexity of the blockchain stuff?

Can somebody who knows the NFT business tell me what I am missing?

NFTs have value, but people have to use NFTs for its strengths.

Like with fungible cryptocurrencies, there's Bitcoin, which is using blockchain to its strengths, and then there's altcoins which definitely do not use blockchain to its strengths. So in fungible cryptocurrencies there's basically Bitcoin which is really valuable and then a bunch of fluff.

With non-fungible uses of cryptocurrencies...well, we've pretty much only seen the fluff so far. Digital images are a terrible use case for NFTs, because the valuable thing is the image, which can simply be copy-pasted regardless of owning the NFT. So a really terrible use case of NFTs has become the main use of NFTs lol, and I think a lot of people even just equate NFTs with digital images on blockchains now. But of course NFTs can have plenty of uses, we just need to play to the strengths of NFTs. Specifically, the valuable thing of an NFT needs to not be the data held, but the actual act of ownership. With images the valuable thing is the data, which is why its a terrible use of NFTs.

Anyway, to more directly answer your question, once someone finds a good use case in which to use NFTs, the only real reason to choose to use it over some other existing digital infrastructure would be if you want to allow ownership to pass between people in a p2p network.



So I'd say NFTs are useful when:

1) its the actual ownership of the NFT that is the valuable thing, where there is nothing supposedly valuable about the NFT data itself

2) the usefulness of owning the NFT comes directly through the blockchain itself, like partial owning of real estate split up into NFTs where the payouts of rental earnings get sent out to the NFT owners on the blockchain itself

3) you want to allow free market p2p passing of ownership (trading) of the ownerships. So like if this is some regulated thing or some centralized thing there's no reason to use NFTs because ownership would have to go through third parties anyway, but if that's not the case and you want the ownerships to be freely traded in the market then the easiest thing to do would be to do it through NFTs.

NFTs make the most sense when all three of these things are met. For example, NFT pictures only hits #3, making them pretty useless because there is no value in doing #3 if the first two things aren't very important to your NFTs.

[CODE200]

Yes! That's what NFTs are minus the marketing, they're just gimmicks that is used to siphon a lot of money from crypto investors that want to bank on their potential to make a lot of money and profit by investing in them, that's how I see NFTs and even though they're a profitable thing to invest especially if you know the right ones to invest into, I still can't get behind from the fact that it's not worth anything besides being just a JPEG or an item, at the list when it's an item, you've got some utility but other than that, it's useless. Kind of like a painting that doesn't even took any effort to be created, that's how I would answer those who say that NFTs are a work of art.

[Maus0728]

For me, I think they've got their own value. It's like paintings or sculptures, and it's value should be dependent on how much effort was put into it and how many people perceive it's value. Inherently speaking, it doesn't have a lot of value but then again, it's the people that would give that value. Also, shouldn't this be in the Altcoin Discussion or maybe the Other board? Seems out of place to talk about NFTs in Bitcoin Discussion.

Definitely a gimmick but I'm not going to let it be a bad thing, the reason people hate on NFT is it's lack of utility but it's also the fault of many people that look forward to buying NFTs, they're the reason that it's got a value, because someone's buying them, if you're mad about NFT, don't give it the attention and see it overnight becoming just a fad.

[Poker Player]

That's what I think but maybe because I don't understand it very well. In any case I think the vast majority of NFTs are garbage and maybe a few are saved. For as in art, many people paint pictures or make statues but few become of great value.

For me, I think they've got their own value. It's like paintings or sculptures, and it's value should be dependent on how much effort was put into it and how many people perceive it's value.

Of the latter, but not of the former. Mozart took much less effort to compose than Salieri, and guess who went on to fame.

[avikz]

When it comes to blockchain-based NFTs, I'm trying to answer one question: why?

What is the actual added value of an NFT versus a plain old contract between two known entities as is done in traditional digital content marketplaces?

You might say that the difference is that the transaction can be done anonymously, but since NFTs are essentially legal contracts, and contracts require known identities to hold up in court, then it would seem as though an NFT itself doesn't add any value, since you need to add identity to the contract anyhow, at which point there's no added value to using an NFT.

What am I missing here? Why use an NFT when the NFT, by itself, is technically worthless, and a valid transaction without the blockchain aspect of the transaction is the same as the value with it?

In other words, couldn't you just enter into the same contract the NFT specifies with the real names of the parties, and accomplish the same thing, but without the added complexity of the blockchain stuff?

Can somebody who knows the NFT business tell me what I am missing?

NFTs are nothing but useless digital contents. With the advancements of AI technology, 99% of the NFTs are created by Ai algorithm without any human interference (apart from typing prompt) and then sold in the marketplaces. Just because the ownership is recorded in a blockchain, NFTs can's draw value out of it. It was a hype which has died down long ago, died even faster than ICO craze. Also it is a playground for the money launderers at a much larger scale.

So if you are planning to invest in NFT, hold on. Rather invest in Bitcoin or ETH for long term and forget everything else. NFT is a pure scam business.

[legiteum]

2) the usefulness of owning the NFT comes directly through the blockchain itself, like partial owning of real estate split up into NFTs where the payouts of rental earnings get sent out to the NFT owners on the blockchain itself

I'll just call out that one example of what I am talking about. Without a contract enforceable in a court of law, who is to say what "profits" are? What happens when you don't get paid? Are you going to sue? Sue who? You can't take a private key to court.

So in your example, #2 will never be met. Ever.

Bitcoin--and currencies generally--work because the value is inherent in the singleton brand name. You value Bitcoin because it's Bitcoin.

In the case of NFTs, the value is supposed to be a contract--but an unenforcible contract is no contract at all. It's just a worthless piece of paper.

Contracts are only enforceable when there are two identified legal entities--known individuals or known business entities. Entities that can, for instance, hire lawyers to defend themselves in court.

If the counterparty if a private key, then it cannot do so--but you can't sue it, either.

In other words, if you buy an NFT connected to a contract that states you will get half of the profits from the rentals in an apartment complex, you have... just been ripped off. You will never see any of those profits because there's no way for you to collect them.

I get that some (many?) NFTs are based on contracts with the names of real people and/or real business names. But if that's the case, why bother with blockchain?

[coolcoinz]

In other words, most people think they are buying a JPEG of a Monkey when buying an NFT that nobody else can buy but unless it's specified in the contract, the one who sold it to you could make one million more JPEGs just like it and sell them as a one-off.

Isn't it the same with art? Let's say you buy a framed photo of something. The seller could make a copy. You pay $1000 for it and the next day he makes another 50 copies. Unless it's written in a contract that he can't make copies, he can.
It's the same with other collectibles. People buy signatures of other people for money, but we all know they can make more of these.

IMO NFTs are mostly worthless, but if buying that monkey or penguin makes you feel better, special, like you're a member of an elite club, you should do it. Some NFT's are such entries and allow you to get member only content.

[legiteum]

In other words, most people think they are buying a JPEG of a Monkey when buying an NFT that nobody else can buy but unless it's specified in the contract, the one who sold it to you could make one million more JPEGs just like it and sell them as a one-off.

Isn't it the same with art? Let's say you buy a framed photo of something. The seller could make a copy. You pay $1000 for it and the next day he makes another 50 copies. Unless it's written in a contract that he can't make copies, he can.
It's the same with other collectibles. People buy signatures of other people for money, but we all know they can make more of these.

IMO NFTs are mostly worthless, but if buying that monkey or penguin makes you feel better, special, like you're a member of an elite club, you should do it. Some NFT's are such entries and allow you to get member only content.

If the artist made no promises about the number of reproductions, that would be correct. If you buy a print of a Banksy, and it doesn't have something like "42/100" in the corner, then you are just buying an official copy of a Banksy, but he can make as many as he wants. But there's also an implicit notion of limits since it's a physical thing. Banksy might make 1000 prints or even 10,000, but he probably won't make ten million, so your print will be worth marginally more than just the production costs. Old posters have value of being from a particular time, etc.

Every work of art (any kind of intellectual property, really) will have some implicit or explicit contract associated with it, e.g. it's copyright statement for instance.

NFTs can't enforce their contract unless they are connected to an identity. I like the idea of buying and selling contracts on the internet, and this notion that NFTs have popularized is very cool, but using blockchain for it is pointless.

[NotFuzzyWarm]

When it comes to blockchain-based NFTs, I'm trying to answer one question: why?

What is the actual added value of an NFT versus a plain old contract between two known entities as is done in traditional digital content marketplaces?
.....

Why? becasue it is a easy way to scam money from the idjits that buy into them.
What is their added value? Only thing I like about them is the massive fees they generate for us miners. If fools want to spend their BTC on high fees to give to us miners, works for me...

[thecodebear]

2) the usefulness of owning the NFT comes directly through the blockchain itself, like partial owning of real estate split up into NFTs where the payouts of rental earnings get sent out to the NFT owners on the blockchain itself

I'll just call out that one example of what I am talking about. Without a contract enforceable in a court of law, who is to say what "profits" are? What happens when you don't get paid? Are you going to sue? Sue who? You can't take a private key to court.

So in your example, #2 will never be met. Ever.

Bitcoin--and currencies generally--work because the value is inherent in the singleton brand name. You value Bitcoin because it's Bitcoin.

In the case of NFTs, the value is supposed to be a contract--but an unenforcible contract is no contract at all. It's just a worthless piece of paper.

Contracts are only enforceable when there are two identified legal entities--known individuals or known business entities. Entities that can, for instance, hire lawyers to defend themselves in court.

If the counterparty if a private key, then it cannot do so--but you can't sue it, either.

In other words, if you buy an NFT connected to a contract that states you will get half of the profits from the rentals in an apartment complex, you have... just been ripped off. You will never see any of those profits because there's no way for you to collect them.

I get that some (many?) NFTs are based on contracts with the names of real people and/or real business names. But if that's the case, why bother with blockchain?

I don't agree with that. But its fine if that's your opinion. If a real estate company says they are legally bound to giving out payments to the holders of the NFTs, then they are legally bound to do that. And the payments would all be transparent. So if they aren't paying it would be very obvious to everyone. As to whether or not the owners of the NFTs would have to identify themselves I don't know, but it would be extremely easy to call out the company if they aren't making the payment since all of the NFT owners would be aware that none of them are getting any payments. What you are saying is that a company would be allowed to transparently scam people, and everyone would know about it, yet no one would do anything about it....obviously that is not how things work.

Besides, the whole thing could be automated. Like: money from rentals gets sent through a crypto service that converts the appropriate amount to the cryptocurrency used and it gets sent out to the NFT holders. Rest of the money goes to the company. This is very doable. So I don't see any ground for you thinking this couldn't happen. I'm not saying it will happen, I have no idea if this kind of real estate crypto product will be created by companies, but it could absolutely be done.

[thecodebear]

In other words, most people think they are buying a JPEG of a Monkey when buying an NFT that nobody else can buy but unless it's specified in the contract, the one who sold it to you could make one million more JPEGs just like it and sell them as a one-off.

Isn't it the same with art? Let's say you buy a framed photo of something. The seller could make a copy. You pay $1000 for it and the next day he makes another 50 copies. Unless it's written in a contract that he can't make copies, he can.
It's the same with other collectibles. People buy signatures of other people for money, but we all know they can make more of these.

IMO NFTs are mostly worthless, but if buying that monkey or penguin makes you feel better, special, like you're a member of an elite club, you should do it. Some NFT's are such entries and allow you to get member only content.

Absolutely its the same with a photo. But nobody is paying say $100k for a photo. Because you aren't buying a photo because you think it is some rare asset. You're buying it because you think it looks nice and you want it on your wall, so you're maybe paying a few hundred dollars for it and the frame if it is really nice and a big frame. People who buy NFT pictures are silly enough to think they are getting something unique and valuable that only they can own, when in reality anyone can copy paste the picture, and the creator or literally anyone else could create more of the same or similar things. If they were buying it because they think the picture is cool...well that is worth $0 because anyone can copy-paste the picture.

However a physical piece of art, like a painting, is different, because that times time and effort and unless the artist is also extremely skilled at copying they aren't ever going to make the exact same painting again and again. And a print of a painting is of course obviously not the real thing. And this is why an original painting can be worth a lot, but a photo is not worth a lot, and NFT pictures are only worth a lot because rich crypto people don't know the difference in value these things hold so they go around trading NFT pictures for many thousands of dollars when there is no underlying value there.

Similarly, a signature from a famous person is more about like proof that you met the person, unless of course you bought it off someone else, but still it is proof in the object that the person actually held and signed this thing. And signatures are limited, and everyone understands there will be many signatures, but they are still limited by some amount. And having a copied signature is meaningless because the value is based on the idea that the person actually signed that exact physical object, while having a copy-pasted NFT picture gives you the exact same picture. Anyway signatures are a pretty silly thing to be valuable because its literally just the fact that someone wrote their name on something haha.

I think the main point, as I said in my first post in this thread, is that NFTs are only valuable if the valuable thing is in the ownership, not in the data. Which is basically what you said: people feel like the get value from being part of an NFT club. That is their own fault for thinking their is immense value in that haha, but that is each person's individual decision to throw away money on that idea. The picture itself is worthless because you can copy paste it endlessly. But I don't know any NFT pictures where you actually get any value from the ownership, though if you say there are ones with member-only perks I'll believe you, but with the vast majority the value is supposed to be the picture itself. Maybe there are some that gives you some sort of special owner-only access to other things. In that case the value of the NFT would be derived from that, and not the useless copy-pasteable image in the NFT.

Basically, NFT pictures are the epitome of greater-fool theory, because there is no actual utility of the picture (anyone can get the image for free), there is no actual scarcity of the picture (anyone can get the image for free), the only value is that you paid a lot for it so you hope that alone means someone else later will buy it from you for even more money. So yeah, you're right NFT pictures are mostly worthless, and people are only paying to feel like they are part of some club, and given the prices some people pay, they are paying fortunes to just feel like part of a pretty useless club online haha. But physical media is different. And also let's realize NFT does not equal NFT pictures. NFT pictures are a type of NFT, and specifically a type that doesn't take advantage of anything of value NFT tech can provide, so its a very dumb use of NFT tech. It just happens to be that the really dumb thing became popular because its visual and rich crypto people speculated their way into paying absurd sums of money for things that have no underlying value.

[legiteum]

I don't agree with that. But its fine if that's your opinion. If a real estate company says they are legally bound to giving out payments to the holders of the NFTs, then they are legally bound to do that.

Correct, but if the holders of the NFT ever need to enforce their contract, they need to reveal themselves as actual human beings.

And since that's the case, the blockchain aspect of the transaction has no value whatsoever.

What you are saying is that a company would be allowed to transparently scam people, and everyone would know about it, yet no one would do anything about it....obviously that is not how things work.

Why not? Do you keep track of every commercial rental transaction at every strip mall you drive past? Contracts are enforced by the parties involved, not a generalized "they". The minute you want to enforce your contract, you'd need to reveal yourself.

Note that there are privacy-enhanced ways of hiding your identity from the general public, e.g through an LLC or whatever. But you cannot, by definition, hide the identity from the court, which would require documentation proving the parties in the lawsuit lawfully represent the lawful owners. (I suppose, with enough key pairs, you could devise a scheme to bring a suit using only key pairs, but this would require a mind-boggling string of new legislation that I think we could all agree would never practically happen* ).

(*And note here we would just be talking about key pairs and not blockchain, which would still just be an implementation detail that would be pointless for a system whose primary purpose is to be revealed to a central government).