NFT - WTH?

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Forums › Finance and wealth management › NFT - WTH?

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#285921 25-May-2021 12:00

The whole thing seems ludicrous based on my current understanding, though I freely admit my current understanding is poor.

Perhaps the fact that I can't see the "why" is just symptomatic of my lack of vision (and one of the reasons I will never be a tech-billionaire, but still...)

Is the below a fair summary or just a facetious take that wilfully misses the point?

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#2712818 25-May-2021 12:02

No, as far as I can tell that is a perfectly accurate summary. NFT is a scam.

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#2712820 25-May-2021 12:05

SaltyNZ:

No, as far as I can tell that is a perfectly accurate summary. NFT is a scam.

Indicative that the wealthy have run out of things to spend money on and "own" then?

(plus another way to gouge the gullible?)

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#2712825 25-May-2021 12:13

Yep, and Bitcoin/"crypto" generally is not far behind but at least sometimes you can exchange them for something of value.

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sittingduckz

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#2712836 25-May-2021 12:49

Finally I understand this. What a brilliant description

I'm not a complete idiot, I still have some parts missing.

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#2712843 25-May-2021 12:58

And presumably someone else could also sell a receipt for the Mona Lisa to some other ~~gullible sucker~~investor, which they would post in *their* broom closet as proof of the current owner of the receipt for the purchase of the receipt associated with the Mona Lisa.

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#2712845 25-May-2021 13:24

I don't see it much different to buying stocks in a company. You don't get any control of the company (unless you're Warren Buffet), you don't get given anything, just a note to say you own a piece.

It's just another way to purchase art, support the creator, etc. Would I ever buy one? Absolutely not haha, I like to hang stuff on my walls. But it's not a scam by any means.

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#2712849 25-May-2021 13:35

chevrolux: I don't see it much different to buying stocks in a company. You don't get any control of the company (unless you're Warren Buffet), you don't get given anything, just a note to say you own a piece.

It's just another way to purchase art, support the creator, etc. Would I ever buy one? Absolutely not haha, I like to hang stuff on my walls. But it's not a scam by any means.

It's completely different to owning stocks in a company. If you own stocks, you get to vote on major decisions (even if your vote isn't worth much on its own because you only own a small percentage) and you get a share of any profits.

With an NFT, you get nothing at all other than a label to show to people who may not agree with you that the label even exists and you have no rights at all over the original object, whatever that may be.

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#2712968 25-May-2021 19:12

I think it's very similar to buying stock for 99.9% people that buy stock. While, yes, you may get voting rights, does anyone actually exercise them? Sure you get dividends, but there's no guarantee of that, the company can choose what they pay. In reality the "normal" investor has no real control over what they bought, nor can they do much to maintain its value. Of course, you can sell your shares down the track and make a capital gain. But you could also do that with your NFT.

I also think the reddit post is an oversimplification in terms of describing ownership. While you don't necessarily get the copyright, or even exclusive ownership of the "art". It's all up to the original seller of the token to decide on the terms of its sale and ongoing ownership in the first place. And the ownership of the token is verifiable by the blockchain.

To reiterate though, it's not something I'd ever do myself for art work. But I think that's probably just my own internalised prejudice that I want a physical thing. NFTs will become more and more common as we progress.

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#2713069 25-May-2021 23:33

I see anything can be turned into an NFT for profit.

https://www.newshub.co.nz/home/technology/2021/05/iconic-charlie-bit-my-finger-video-to-disappear-after-nft-sells-for-us-760-000.html

It's going to be a race to the bottom as every influencer tries to create that one viral video that they could turn into an NFT now.

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#2713104 26-May-2021 09:35

The mum who filmed her kid with the "F.... goat" could be rich!

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#2713120 26-May-2021 10:24

chevrolux:

It's just another way to purchase art, support the creator, etc.

Support the creator???? How does the artist get any money from it?

And the point is that you are not purchasing art. You are purchasing a receipt tenuously associated with an art work.

The whole point of ownership of something is that you get to have control over it. You can look at it, move it around, change it, destroy it, prevent other people from using it, sell it. Owning intangibles still gives you something that is in the end tangible. Shares give you a say in how the business is run, and dividends. Maybe a small say & income, but you can lump together all those small things into a big thing. (Ask Engine No 1 & ExxonMobil). Copyright gives you control over who can reproduce a work. Similarly a patent.

When you purchase an NFT on the Mona Lisa or Stairway to Heaven or the Wankel rotary engine, you get no say in anything about them.

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#2713132 26-May-2021 10:58

Senecio:

I see anything can be turned into an NFT for profit.

https://www.newshub.co.nz/home/technology/2021/05/iconic-charlie-bit-my-finger-video-to-disappear-after-nft-sells-for-us-760-000.html

It's going to be a race to the bottom as every influencer tries to create that one viral video that they could turn into an NFT now.

Why anyone would pay $760K for limited rights over that video is beyond me. I guess if I had a $760K windfall, I'd say I'd use some of it to offset the cost of mining those NFTs, and bitcoins, and to fix climate change. I might even do it.

But the key thing here is not the token, but that the rights to the video were sold by the owners. Those rights could equally have been sold without an NFT, e.g. as a copyright licence. The NFT records its current owner, but hopefully it also records what video rights are contractually tied to the NFT. Otherwise, conceivably the new rights owner could turn around and sell the rights again without selling the NFT, or sell the NFT without the rights. I guess NFTs also allows a new marketplace for the buying and selling of intangible stuff to develop.

IANAL though.

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#2713393 26-May-2021 19:45

frankv:
chevrolux:

It's just another way to purchase art, support the creator, etc.

Support the creator???? How does the artist get any money from it?

Suggest you do some research, as he’s quite correct - it’s one of the things I find most interesting about NFTs in the art world, given the current difficulties in artists making anything on the re-sale of their work. I understand some (conventional) art may be sold on the basis that this is required/expected, but I imagine it’s difficult to police. NFTs can make this integral to the sale.

There have been recent episodes of Planet Money and The Indicator (both interesting NPR podcasts) that have dealt with NFTs, including this one on a JPEG file that sold for US $69 million!

https://www.npr.org/2021/03/12/976513031/the-69-million-jpeg

I see much more merit for the use of them in the art space than say NBL videos; that’s more like the rich adult’s version of collecting trading cards, and just seems so tragic...

https://www.npr.org/2021/03/09/975450173/the-200k-nba-nft

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#2713617 27-May-2021 09:28

Hmmm... I see. In this context, NFTs seem to be kinda like personalised plates or collecting stuff that you then store in a bank vault, in that they have no intrinsic value or benefit, but you can sell it again, perhaps at a profit. Or like competing in the America's Cup or setting up a philanthropic foundation or climbing Mt Everest. What people are buying is status, rather than something with intrinsic value. It's a statement like "I have so much money that I can spend $69M just to show that I'm rich enough to spend it on something with no intrinsic value".

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#2714509 28-May-2021 12:47

jonathan18: given the current difficulties in artists making anything on the re-sale of their work.

Why should artists make money on resale of their work? Ford doesn't make any money when someone resells their Focus. I didn't keep getting paid by Vodafone after I quit even though they were still making money off the systems I installed. I mean, I'd sure like to have, but that's not how it works.

Artists already get paid for their work after they finish it for far longer than anyone else. Write a song, and you keep getting paid for it for 50+ years after you die.

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