We can't avoid it any longer. Here's a story about the NFT mania... aka someone bought a JPEG for $69m in Ether NFTs – or non-fungible tokens, a newfangled way to trade virtual assets – truly exploded into the mainstream on Thursday when Christie’s auctioned off its first-ever NFT digital artwork for $69,346,250. Not a typo. That's perhaps a lot to unpack. An NFT is a unique string of numbers and characters that act as a digital …
How much did they pay in TAXES? You have sales tax and don't forget.. the "voluntary" income tax. In the states, that wold be %23 long term capital gains on the current value of the transaction.
Buy ether for $3 and hold for a few years.
It gets to $1400 as you trade it back and forth during a calendar year and last day of the year you trade between Bitcoin and Ether, never once going to Fiat currency.
Come January, it drops. Feb, Drops more... March, April... Oh no, must pay taxes.
Ether is now $300 - %21 of its Dec 31 value and you now owe %2 more in taxes, in US dollars, than all the crypto you have. You have to convert it into cash and If you think you can take that HUGE loss and apply it to the current year, NOPE. You can only take off a max of $3000 each year for the rest of your life.
It is still called "voluntary tax" but if you don't pay, someone will show up at your house with a gun and force you to volunteer your stuff.
The difference is, if your tulip investment crashed, you still owned actual tulip bulbs. If your cryptocurrency of choice crashes, you own nothing.
True, but this article isn't about cryptocurrency, except insofar as the payment was in Ether.1 It's about an NFT, which is something, even if all the use-value is available in other copies.
We (that is, modern global capitalism) have long recognized value in intellectual property, and an NFT is just another certificate of intellectual property, much like a copyright registration or certificate of provenance, for example.
There's also a possible Benjaminian "aura" quale for some people in an NFT, which is an interesting question for aesthetics and critical theory and the psychology of value.
1And Ether is not entirely equivalent to non-stable cryptocurrencies like Blockchain in this regard, because of its foundation in Ethereum, which has use-value through smart-contract processing. Personally I wouldn't be keen on using the stuff, but it's not pure fiat. And there is a lot of money tied up in Ethereum smart contracts.
It's not a "something", it's a number in a database.
Unlike, say, a number in a bank's record of people's balances, you can't actually do anything with it except masturbate over owning it, sell it to a bigger fool, and possibly feel guilty about how much unnecessary CO2 was generated in creating that bit of the database.
The canonical work is Charles Mackay's "Memoirs of Extraordinary Popular Delusions and the Madness of Crowds" from 1852.
Worth a read. And a ponder ... if all this was known nonsense back in the mid 1800s, why are people still taken in by it? Available on Project Gutenberg.
Recommended reading: "Only Yesterday" by Frederick Lewis Allen. The book was written 90 years ago in 1931. It describes the excesses of the bizarre decade between 1920 and 1929. Disturbingly,those of us watching the current decade unfold will feel entirely too at home back then. It's really quite a good read. Let's hope that the 2020s don't end as disastrously as the 1920s. http://americainclass.org/sources/becomingmodern/theage/text2/text2.htm
Or
Trollope's "The way we live now" https://en.wikipedia.org/wiki/The_Way_We_Live_Now
Dickens' "Little Dorrit" https://en.wikipedia.org/wiki/Little_Dorrit
Even possibly
https://en.wikipedia.org/wiki/A_Modest_Proposal
Because it's just an obscenity when people are starving. There is no excess population. Just an excess greed problem.
I was thinking "it sounds kinda similar to a Ponzi scheme" but who knows... or the Tulip Madness in Amsterdam a few centuries ago.
This kind of thing ALSO sounds like a way to LAUNDER MONEY...
* criminal "sells" something under the table to a buyer
* Buyer THEN purchases NFT at agreed-upon price from "seller"
* Transaction appears legit on the surface, and there's now a precedent for paying huge prices for something that has no actual worth.
Expect more of same. This is kinda obvious, not like they did not already think of this...
Of course I don't know exactly what the honorable commentard had in mind in referring to an unmade bed and a blank canvas. I ain't him. But both those things have been created and displayed as art in high-flying galleries. So has a urinal signed "R. Mutt" (1917, by Marcel Duchamp) (the original piece has gone missing, however). Another artist (Flanagan? Not sure) took a large bag to the shore, filled it with sand, and called it a work of art. Not to mention Joseph Bueys' work, "Explaining Art to a Dead Hare", which title exactly describes the artwork he performed.
It's been a long time since "Art" meant "something realistic and pretty that virtually everyone could agree about". Digital images are not "real" in the sense that you can't squash flies with them, as you can with an original Picasso painting. But then you could argue that a live performance of Petrushka isn't real either because once it's over all you have is the memory. (You could record it and then you have a digital copy of a work of art. Which is pretty much what we are already discussing.)
So to my mind, the only real news here is the method of copyrighting the work: the NFT thing. And, frankly, it seems to me a fillip -- a somewhat novel proof of provenance which has not had time to show its utility over the long haul. Proof of provenance is indeed a sticky wicket for art which has been around for a few centuries; some early works are assigned to long-dead artists based only on descriptions published long ago by an equally long-dead writer. Maybe NFT answers a need, I dunno. Maybe it's a bit of early '20s flash-n-glitter.
"You could record it and then you have a digital copy of a work of art."
Digital? Why would I go to all the time and trouble to properly mic up a symphony orchestra, just to record it digitally? What a waste that would be ...
I suspect this "digital is everything!" concept is part of the overall problem.
"Except the seller will have to pay taxes on it, and the transaction is a matter of public record, which kind of defeats two of the main purposes of money laundering."
What? Those are the exact purposes of money laundering. The problem faced by criminals wishing to launder money is that they have some, but they don't have an explanation of how they came by it. If they make a purchase with it, the tax authorities will become curious how they managed that and why none of the money came to the government. The criminal therefore can't buy the expensive stuff they want.
Laundering that money means it is now known to the legal system and can be used without triggering alarms. In order to do that, they do have to pay taxes on it, but they also have to have an explanation for the tax man. If they claimed they just got paid millions by a friend, the tax authorities are going to be suspicious and investigate it. So in order to launder money correctly, a criminal wants a transaction that looks completely legitimate and passes a tax audit. Taxes and public record are required features of the system.
"“Yeah I have no f*****g clue what I'm doing here man. I've been down the rabbit hole of [FILL IN YOUR FAVOURITE SUBJECT] for all of about 2 months (though to be fair in this space that is like 6 f*****g years) so I'm very much just making this s**t up as i go!!!!"
Be honest, when reading this, who did NOT think of their own boss...
How long before the copyright, trademark or other litigation? There's a least one corporate logo in there (Burger King) and the odds seem good that at least a few of those images might raise an eyebrow to someone else (copyright or use of a photograph without a model release). Lawyers love a juicy target with a known volume of cash they can drain ;)
Was his advice "mine some bitcoin and don't sell for at least eight years"? Because otherwise his advice was meaningless.
It is almost certain he ended up selling them to buy an Xbox a year later and thought he made out great, and isn't a 20 year old millionaire retiree today.
On the BBC news this morning, the "artist" explained that the online "work of art" would last in perpetuity because the token is "in the blockchain" (I wonder which blockchain), even if the "art" were deleted. So you've essentially bought a hash for $69M.
Seems a pity that folks with so much to waste couldn't find something [a] more useful and [b] more interesting than a collage of stuff already dumped to Instagram to lose it on.
Last I heard, only around 2 or 3% of all the tablets ever found have actually been read/translated (half a million, give or take, are in museums). I started learning cuneiform in it's various guises when I was young and deluded, thinking one could actually make a living contributing to knowledge of the past ... and it seemed more interesting than the mundane Latin and Greek. Perhaps I'll take it up again if I ever retire. There has GOT to be something of interest in all those unread tablets besides "<this year> billy-bob had 15 she-goats with kids, harvested 22 bushels of wheat and made 75 gallons of wine and 40 pounds of cheese" and the like ... wouldn't it be cool to be the first to read it after 5,000 years or so?
There are a couple rolls of coins (US coinage dated 1978, pennies, nickles, dimes, quarters, half dollars, and dollars), sealed in lead and cast into a concrete foundation that I laid in that year. I'm the only one that knows they are there. Hopefully someday, when they are worth something, somebody will find them. I'm fairly certain that they will still be there when the last of any of today's crypto keys have been lost (or compromised to the point of meaninglessness).
Is it art? No, of course not. But I rather suspect that whoever finds the stash will have more fun with it than any holder of one of these NFT thingies ever will.
"Seems a pity that folks with so much to waste couldn't find something [a] more useful and [b] more interesting than a collage of stuff already dumped to Instagram to lose it on."
The "folks" -- in this instance -- have a vested interest in getting this kind of lunacy embraced by others.
This was not a simple case of a simple (but preposterously wealthy) moron wasting his/her money. Have a look at Christie's sale announcement.
So we have a computer file, NOT signed and a token that says you own this computer file.
So what is the point. The file is NOT unique, there could be a billion copies all identical, so what makes this unique or valuable?
To me it is just like crypto currencies, "funny money" with no actual value.
"there could be a billion copies all identical"
Where's it stored right now? Another leaky S3 bucket? An unattended FTP with anonymous login still enabled?
Given enough time a vuln will be exploited* and the data will flow.
* My bet is the biggest vuln is the stupidity of the "buyer" to believe they "own" this data. They will do something even more incredibly idiotic causing the copies to commence.
> The file is NOT unique, there could be a billion copies all identical, so what makes this unique or valuable?
There are probably a billion copies of the Mona Lisa, too. If you only value what is portrayed in the painting, then it would seem ridiculous that the original is so much more valuable than even the most faithful copy.
Ownership of a definitive "original" has far more perceived value than ownership of any copy, no matter how perfectly replicated the copy is. This is common for paintings, sculptures, buildings, classic cars, etc. So why not also JPEGs, if the only difference is the ease of perfect replication?
The problem is that any copy is different from the original - no matter how close to it. You can tell which is the original and which is not - it may be difficult, but not impossible.
In the digital world you have identical copies - you can't really tell them apart.
A relatively good point, but the original Mona Lisa is valuable both for its artistic value and for the fact that museums get people to come look at it and pay for the privilege. Since an exact copy of this image and most of the other NFT-backed data is available for free, there's no value as an exhibit. The owners of the tokens have to hope that others will continue to care about the ownership rights to something they can get for free. But then again, I would never want to purchase the original Mona Lisa, even if I had infinite money available, so I'm the wrong person to argue for this.
But you don't own the copyright. What you own is a number which identifies you as an owner of a right to a file which others have a right to, but your right has a serial number and you can sell it. It does not mean you have the ability to deny access to others. Most resources with an NFT attached are already available publicly by design.
> No he didn't, he tweeted "Holy Fuck" - just once and no asterisks.
El Reg wasn't quoting him twice, they were responding to his statement by repeating it. Admittedly, it's a bit easier to see that with a bit more whitespace...
When the auction closed, Winkelmann tweeted: “Holy f***.”
Holy f***, indeed.
> What's with the sudden censoring of quotes? I can't remember El Reg being shy about using the full range of vocabulary in the past?
Dunno on this one, though. Might be that the author's trying to make sure the article doesn't trip up any office profanity filters.
It does seem like filter-sensitivity has been cranked up of late, especially on social media - I know a friend just got slapped with a warning about "sexual" content on Facebook for posting something to the effect of "Holy f***, I paid £15 for mine".
OTOH, I've recently had a flood of unsolicited messages from various people (all blocked and reported) offering various physical services, so I can see why maybe they've done so...
AFAICT, someone paid $69M to get a digital signature of a JPG added to a blockchain, indicating that they own the JPG. And it isn't even clear whether the new owner owns the copyright to the image, or is just the registered owner of a file that can be still be copied and distributed to others. Or even trivially modified by its creator and sold again.
Wow.
I'm not sure about this one, but in most of the other NFTs sold recently, they don't own the copyright, they may not be the only owner of a token for it (the number is public though), and the image they "own" is also available for free. But they're one of the few people with a signature saying it's theirs, and that is what counts. It reminds me of the people who take money in order to name a celestial object or even assert ownership over it, but all that actually happens is that the new name or ownership claim is entered into a database unrecognized by anyone else. The only smart thing to do in this environment is to find some junk and see if someone will be convinced that, since there's only one of it, it must be a valuable investment and they're more than happy to hand you a pile of cash for it.
Would I buy an NFT and a JPG for $XYZ million? No.
Would I buy a 400 yr old piece of canvas with some coloured brushstrokes for $XYZ million? No.
Honestly, I can't see any great difference between the two "items"... a thing is worth what somebody is prepared to pay for it.
And this allows you to won art that can't be put on an easel.
You own a painting or sculpture only if you have the physical item, this lets you own a totally digital artwork or 3d render, or computer generated animation.
Without this how would you 'own' a digital sculpture ?
Well you can own the copyright to an artist's back catalogue. But that is meaningful ownership which you can monetize. Whereas NFT doesn't seem to correspond to any meaningful sense of ownership. Certainly not for commercial gain other than "resale". Which makes it sound quite Ponzi like.
Honestly, I can't see any great difference between the two "items"... a thing is worth what somebody is prepared to pay for it.
Indeed.
But I have seen the original of The Empire of Light II by Rene Magritte at MoMA. It was an amazing experience, at least in my opinion - quite literally jaw-droppingly beautiful. I've got a poster of it - it's like a pale shadow of the original. I could almost imagine paying the $x million I'd need to own that (in a perfect world, where I had $x million to spare...)
I am on shakier ground when I admit that I collect first editions - where the only distinguishing factor about the books I collect is that they were part of the first print run. So what? Why does that make them particularly exciting? Well, I could try to justify it - but in the end their value comes down to collectability, scarcity and condition. But they are still physical items.
But to pay $xxx million to "own" something that literally anyone can have a precise bit-for-bit identical copy of, that literally no-one could distinguish fro the "original"??
That's just stupid. It makes no sense.
The great masses haven't splurged...
Well, enough of them have to bid up prices on some pretty inherently worthless items. There's always dumb money looking for a return in a low interest rate environment; qq.v. Ponzi schemes, GME, etc.
Based on the update on who the 'buyer' was, smells like a pump to me. Wait for the dump. In the meantime, if you need over 42069 in Ethereum to buy a picture certificate, maybe Ethereum is way overvalued?
It's an interesting work, starting with many series of zeroes with the occasional ones representing the voices of individuals suppressed by mass society. The frequent use of three zeroes in a row is probably a reference to the Holy Trinity. The sudden switch to the use of more ones in the palette is an optimistic cri de coeur, then settling down toward the end to a more balanced distribution in which zeroes and ones can live together, side by side, in harmony.
I look forward to further creations from this artist.
Reminds me of the mighty Bender's Robot Grace (Futurama):
In the name of all that is good and logical, we give thanks for the chemical energy we are about to absorb.
To quote the prophet Jerematic, one zero zero zero one zero one zero one zero one zero one… [pause]... zero zero one… zero one one zero zero one… two.
Amen.
Yes, really, a rock. I picked it up last Autumn during one of the periods when travel was allowed. It's fist sized chunk of glassy grey chert with a rather drab fossil imprint on one side. Except when I look at the fossil carefully, it turns out to display many walking legs and other appendages of a Cambrian(?) arthropod. Such rocks are not unheard of, but they are quite uncommon. So it is a most unusual rock. If I can just invoke the magic of blockchain, surely it will become a very valuable rock indeed. Conventional blockchain looks to be a bit much for my two decade old computer to handle. And I'd have to actually understand it. Which I don't. And don't want to. But the actual cryptology used doesn't seem to be critical. So maybe I'll just use ROT13. Anyone know how I can contact Christies once I've worked out the mechanics and properly blockchained the thing?
Seriously, my plan is to contact an expert someplace where they have paleontological research collections and see if they want it. But I'm taking some photos with different magnifications and lighting first.
Here's what you do:
1. Keep doing the same thing you were going to do with the rock. People don't want old-fashioned physical things they might do something with. You're going for digital.
2. After taking the photos, keep them. These are what you will sell.
3. Download SQLite. Your computer can handle that.
4. Run the following query: "CREATE TABLE ROCKCHAIN (photoname text, owner text);".
5. Get your photos auctioned. Publish them first so that everyone can see or copy them for free.
6. When each photo sells, update your database table.
7. When all photos have sold, hash the database and publish the hash.
8. Yes, that's not a blockchain, but nobody cares really. As a bonus, you can also publish a blob of text that says something about a blockchain and people will give up and assume you did it right.
9. Enjoy the cash.
Well, on the bright side, we basically just did. Some rich person was willing to buy something worthless for a bunch of cash. The sale would incur taxes. Then the auction house paid the artist a chunk of that. That is his income, so it too gets taxed. The auction house took another chunk as revenue, which increases their profit. So they'll be taxed on that profit soon. And, if the rich person decides to sell again, that's a capital gain and gets taxed as well. I mean it's still really pointless that anyone wanted it, but we did get tax revenue from it.
You like potato and I like potatoe,
You like tomato and I like tomatoe;
Potato, potatoe, tomato, tomatoe!
You say eitherium and I say bollocks
You say either and I say nyther;
Eitherium, eyether, neither, nyther,
Let's call the whole NFT thing off!
Amazing, how far-sighted the Gershwins were back in 1937.
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