This emoji summarizes it perfectly: 🤢
One small but important correction. NFTs are not a scam, it’s an amazing technology that has the potential to revolutionize lots of stuff, that became popular when people used it for stupid shit.
Saying NFT is a scam because people have used it to scam others is like saying phones are a scam because people call others over the phone to scam them.
NFTs are essentially a decentralized token. This means that they can be used to represent anything you might want to represent with a token, e.g. ownership of a physical object such as a car or a house; ownership of a digital asset, such as a website or game; some predetermined amount of something, similar to a stock or bonds; etc. The fact that some people used it to mean ownership of random pictures and people thought buying random pictures on the internet for a ridiculous amount of money was a good idea tells you more about people than about the technology.
NFTs are essentially a decentralized >token. This means that they can be >used to represent anything you might >want to represent with a token, e.g. >ownership of a physical object such as a car or a house; ownership of a digital >asset, such as a website or game
No.
NFTs are not proof of ownership. At best they are the equivalent to receipts, at worse they are mere url links. They are certainly not title deeds, not proof of copyright ownership or anything of that sort. They are just a ledger that person D paid something to person C who paid something to person B who paid something to person A.
Lets use those NFT monkeys as an example. There is literally no proof anywhere on that NFT chain that person A is the rightful copyright owner or has the rights to sell said image. Furthermore, there is no proof that person A gave the rights to person B to resell said image. Or that anyone down the chain sold the complete rights instead of just selling the link to access monkey.jpg
The whole point of cryptocurrency is decentralized ownership. That’s the big breakthrough in technology, it’s the whole point of it, I can try to ELI5 how that works if you want to, but for the moment I’m just going to assume you accept that cryptocurrency can demonstrate ownership.
NFTs are an extension of that, except they can’t be split or traded by one another, i.e. they’re non-fungible. Therefore you can by definition prove ownership of those tokens, as that’s the whole point of the technology, which again, if you’re curious I can try to explain how it works.
How does ownership of those tokens transfers to ownership of something else? Well, that’s an excellent question, and the answer is that it happens in the same way that a piece of paper grants ownership of a house. There’s no innovative technology behind that piece of paper, but still everyone would agree that it grants ownership, and the reason is that the authority that enforces that chose to respect that piece of paper. Nowadays this is mostly databases and the piece of paper is just generated from the records there, but this is very insecure as anyone with database write access (or access to the physical folder containing the documents in case of old paper deeds) can transfer ownership. NFTs solve this because only the owner of a token can transfer it to someone else, so they’re inherently safer than any of the alternatives.
Again, the technology is great and has millions of excellent applications, but people use it for pyramid schemes and scamming others, but people do that with any piece of technology.
The whole point of cryptocurrency is decentralized ownership. That’s the big breakthrough in technology, it’s the whole point of it, I can try to ELI5 how that works if you want to, but for the moment I’m just going to assume you accept that cryptocurrency can demonstrate ownership.
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How does ownership of those tokens transfers to ownership of something else? Well, that’s an excellent question, and the answer is that it happens in the same way that a piece of paper grants ownership of a house. There’s no innovative technology behind that piece of paper, but still everyone would agree that it grants ownership, and the reason is that the authority that enforces that chose to respect that piece of paper.
So NFTs are not inherently proof of ownership as the person above said. The general concept of owning crypto (which no one is questioning here) is a very different topic than using NFTs as proof of ownership of literally anything else.
That’s neat. Until a representation of something on a blockchain has any legal meaning regarding authenticity, ownership, or anything else, and until the overwhelming majority usage of NFTs isn’t as a scam, NFTs remain a pathetic and comically stupid class of speculative asset constituting a pyramid scheme that also happens to destroy the environment.
The legal validity of things come from people using it and courts enforcing it, someone years ago might have said:
That’s neat. Until a representation of something on a piece of paper has any legal meaning regarding authenticity, ownership, or anything else, and until the overwhelming majority usage of paper isn’t as a scam, paper remains a pathetic and comically stupid class of speculative asset constituting a pyramid scheme that also happens to destroy the environment.
The thing is that even if a technology is used mostly for stupid things that tells you more about humans than about the technology itself. Or do you also think that phone calls are scams because 90% of the phone calls you receive nowadays are scams, even though the technology behind phone calls is the same used for mobile internet.
Also the destroy the environment claim is really bogus, for starter money pollutes more than crypto when you consider all of the chain of what it takes to produce and transport money. But also for example if you live in the US your home probably pollutes more than a mining farm since they’re usually in places where electricity is extremely cheap, mostly in China near a hydroelectric power plant. But also the technology itself doesn’t need to consume that amount of energy, that’s just the current implementation, but there’s a push to move to PoS instead of PoW, which would mean that NFTs (and crypto in general) would not need farms or even a specially powerful computer.
Ok, I was in agreement with you (the concept of NFTs is great, what people do with it is dumb) until the environment part
Crypto, even proof of stake, isn’t energy efficient and never will be, the banking sector uses more energy but it also manages quadrillion in funds and transactions, crypto’s value as a whole is orders of magnitude less than that and there’s more energy spent per transaction than in the traditional financial sector. Crypto replacing banks and cash would be an environmental disaster.
Next, even if mining is done using green energy, it means that this energy isn’t used to reduce emissions in other, actually essential, sectors. There’s an environmental cost to green energy (what do you think was under the dam’s reservoir?) so having to produce more infrastructure just for crypto is wasteful.
Hey, if you say NFTs aren’t a scam, then why is almost every single NFT project losing its value?
