back to article WTH are NFTs? Here is the token, there is the Beeple....

In the art world this spring, there's just one phrase on everyone's facemasks: the non-fungible token (NFT). When artist Mike Winkelman sold a JPG embedded into a cryptocurrency token for $69m in Ether (he pocketed $53m of it) jaws hit floors. But what is an NFT, exactly, and should you care, or just roll your eyes and go about …

  1. Anonymous Coward
    Anonymous Coward

    Time to update the saying

    "Fools and their non-fungible tokens...."

  2. WonkoTheSane
    WTF?

    Whiskey Tango Foxtrot!

    "The blemish on this utopian landscape is energy usage. Ethereum still uses proof of work for its consensus mechanism, leading to what data scientist Alex De Vries' Digiconomist site says is a 76.23kWh per-transaction footprint."

    I could drive for 350 miles on 76.23kWh!

    1. Disgusted Of Tunbridge Wells

      Re: Whiskey Tango Foxtrot!

      VeChain uses PoA.

      NFT's can be done without using the electricity consumption of a small state.

      1. Sorry that handle is already taken. Silver badge

        Re: Whiskey Tango Foxtrot!

        Can you explain PoA in straightforward terms?

        1. Disgusted Of Tunbridge Wells

          Re: Whiskey Tango Foxtrot!

          Very, very roughly:

          Bitcoin works of Proof Of Work (how many hashes per second can you do?).

          Proof Of Stake means your right to vote on the network is determined by how many coins you own rather than how many hashes per second you can perform.

          P.O.Authority is just done by trusted individuals with a financial incentive not to screw it up ( because they've staked a large amount of the currency ). I believe the fact that they can't verify more than one consecutive block prevents a hostile actor from doing any real damage.

          1. Disgusted Of Tunbridge Wells

            Re: Whiskey Tango Foxtrot!

            PS: I should add, I've got a bit of VET because I think it's a worthwhile system that could have a large price due to its usefulness rather than, like bitcoin, in spite of a lack of it.

          2. This post has been deleted by its author

          3. Sorry that handle is already taken. Silver badge
            Facepalm

            Re: Whiskey Tango Foxtrot!

            Wow, the Heath Robinson-esque mechanisms they keep coming up with to attempt to address the shortcomings of POW are becoming truly bizarre. Trusted central authorities! In my blockchain!

            1. Ian 3

              Re: Whiskey Tango Foxtrot!

              I totally get your point but tt will be interesting to see what legal standing a P.O.W NFT with no recognised authority has under any particular legal jurisdiction.

              'I own this thing!'

              'Who says?'

              'The Internet!'

              Works fine for people happy to accept a value for a crypto-currency, but may not stand up in court.

            2. Disgusted Of Tunbridge Wells

              Re: Whiskey Tango Foxtrot!

              It's literally not POW.

              1. Sorry that handle is already taken. Silver badge

                Re: Whiskey Tango Foxtrot!

                Yeah it's even more ridiculous

  3. Disgusted Of Tunbridge Wells

    These NFT's worry me slightly because what if somebody stores something abhorrent in them. Does that make the entire blockchain illegal?

    1. DS999 Silver badge

      Sounds like something someone should try to find out, and if it accidentally kills the NFT bubble as a side effect so much the better.

    2. Doctor Syntax Silver badge

      "Does that make the entire blockchain illegal?"

      If it does it will probbly make it more valuable. Such is the way of the world.

    3. SloppyJesse

      > what if somebody stores something abhorrent in them.

      Already been done with bitcoin. Didn't stop it.

      A Quantitative Analysis of the Impact of

      Arbitrary Blockchain Content on Bitcoin

    4. Loyal Commenter Silver badge

      My understanding is that the block, whilst existing on the blockchain, is essentially encrypted, and it is the key that is being sold. In my mind, if that block contains something illegal, then the illegal act would be owning, and using, the key

      This is based on a rudimentary understanding of how Ethereum works, and IANAL, etc.

      1. Disgusted Of Tunbridge Wells
        Facepalm

        Ah, of course.

    5. Lee D Silver badge

      Literally already been done, there is some (highly) illegal stuff stored in the Bitcoin etc. blockchains already and there's nothing you can do about it, which - yes - makes their legality of ownership of a copy of the blockchain questionable, and is permanently fixed in that branch of the blockchain forever.

      When something is unmoderated, it will be abused.

      When something is anonymous, it will be abused.

      When something is unregulated, it will be abused.

      The blockchains are already completely ignoring that problem.

      It doesn't even matter whether it's the CSS decryption key or the most illegal kinds of pornography, if someone can get it in there, thereby using it as a third-party anonymous distribution method, then they will.

      1. Lee D Silver badge

        For reference:

        https://www.theguardian.com/technology/2018/mar/20/child-abuse-imagery-bitcoin-blockchain-illegal-content

  4. Ochib

    Looks like a good way to launder money

    Create art in a NFT and get someone to buy for a few million. Nice clean cash

    1. Sorry that handle is already taken. Silver badge

      Re: Looks like a good way to launder money

      Nailed it.

      1. HamsterNet

        Re: Looks like a good way to launder money

        The "Art world" is only for laundering money.

  5. Andy Non Silver badge
    Coat

    I am selling this post

    on El-Reg. It is available for only £10,000 in NFT. Come on get your wallets out, you know you want to. Own a bit of history.

    1. Wade Burchette Silver badge

      Re: I am selling this post

      I will offer you 900 dollerydoos. This link is your payment.

      1. Andy Non Silver badge
        Happy

        Re: I am selling this post

        Payment accepted. May you long cherish that post.

        1. HildyJ Silver badge
          Devil

          Re: I am selling this post

          I screen shotted your post and am now offering it as an NFT for 500 poundpoos.

  6. Aaiieeee

    I feel like crypto has recently got more complicated. The whole running a program on the block chain?? A black hole is opening up and everyone is jumping in but I can't see what the all the fun is down there (other than all the dosh that seems to be coming back out!).

    I kind of get what NFTs are but also I really have no idea what they are.

    I'm confused??

    1. Daniel Pfeiffer
      Coffee/keyboard

      Non-Functionible Software

      Yeah, bring it on, embedded in your work of art:

      • Non-Fungible Bugs

      • Non-Fungible Spyware

      • Non-Fungible Ad-Slingers

      • Non-Fungible Back-Doors

      • Non-Fungible Crypto-Miners (e.g. Bitcoin running on Ethereum, ₿@Ξ)

      1. Chris G Silver badge

        Re: Non-Functionible Software

        I am not surprised that Damien Hurst has jumped on this bandwagon, anything that doesn't involve real work (or art) would appeal to him, he in turn , is literally a product of the so called doyens of the contemporary arts institute.

        On a more monetary note, I have a number of digitised, blockchained bridges for sale, anyone who is interested please leave a comment here with your banking details and gullibility quotient.

      2. Arthur the cat Silver badge

        Re: Non-Functionible Software

        I want Non-Fungible Fungi. Or possibly Non-Fungible Fun.

    2. Jon 37 Silver badge

      Blockchain is all about creating something that can be sold. Whether that be mining or NFTs.

      Unfortunately there's no intrinsic value to the things being sold. They are only valuable because people believe that they are. It's a speculative bubble where those who get out at the right time will make a fortune, and others will lose loads.

      1. Plest Bronze badge

        "They are only valuable because people believe that they are."

        Well said, that's the art world nailed to a tee!

        I'm not saying art has no value but it's so subjective as to only have value to the viewer or viewers. Sure there is some art that simply spans generations, class, etc and most of us can agree on what "good art" is compared to "bad art" but ultimately it's all worthless and priceless at the same time dependent upon who's looking. I'm semi-pro photographer, so I rely on lots of cliches to make my extra income, I rely on playing on a share idea of good artistic cliches and most are happy to pay me for that but ultimately my work has no more value than the next person.

        It's a funny old world.

      2. Anonymous Coward
        Anonymous Coward

        Like autographs, baseball cards, the football used in the 1966 world cup, a cup that the queen drank out of etc. Etc.

        1. HildyJ Silver badge
          Facepalm

          My son was sure he was going to pay for college with his Pokémon card collection. Unfortunately he missed the bubble. Even more unfortunately, Plan B was for me to fund it.

          1. Anonymous Coward
            Anonymous Coward

            Didn't Pokémon just start another bubble? Don't tell me you tossed all you kid's cards in the trash a few years ago.

            Hoping beanie babies bubble again. Partially because it's fun to say "beanie baby bubble" but mostly because SWIMBO has a massive collection.

      3. Yet Another Anonymous coward Silver badge

        But with art you can create value by paying a relatively small amount of money to an expert or to an museum for them to decide that your painting is by daVinci and so is worth $400M.

        You can't do that if everyone can prove the identity of $ARTIST

    3. Tim 11

      Basically there is too much money in the world, and we're running out of things to invent, so the only way to get economic growth is abstract investment bubbles, like a pyramid scheme.

      1. First Light Silver badge

        We could redistribute some of it . . .

    4. Mint Sauce

      Well colour me dumb, but much like Aaiieeee, I've read the article and I'm really none the wiser. Perhaps someone would like to parcel up my confusion into one of these Notably Frangible Tickets, and let's get rich!

  7. Muppet Boss Bronze badge
    Thumb Up

    What about mothproofing?

    Non-fungible tokens sound like molds will not eat them, that's a good one for the UK! Are they mothproofed though?

    1. Ken Moorhouse Silver badge

      Re: Non-fungible tokens sound like molds will not eat them

      The idea is certainly mushrooming.

  8. Steve Button

    So, it's a bubble?

    Basically, yes... and yes.

    I'm not seeing any practical use for this that gives you any tangible benefits over a traditional written (or verbal) contract. A solution looking for a problem.

    1. juice Silver badge

      Re: So, it's a bubble?

      > I'm not seeing any practical use for this that gives you any tangible benefits over a traditional written (or verbal) contract. A solution looking for a problem.

      From what I can see, a NFT is essentially a way to generate a unique identifier that says "this specific collection of bytes existed at point X". And it's this receipt that's being traded, and which has the value.

      For a given value of "value", anyhow. Your opinion may well vary... ;)

      In truth, the current use of NFTs feels like a speculative bubble - and with the ecological impact it's having (aka: each transaction uses enough electricity to power the average UK house for over a week), I'll be all to happy to see it pop sooner rather than later.

      But at the same time, I can see a potential use for NFTs. In that they're a perfect way to record copyright.

      In fact, if/when we gt the promised drop in energy cost, I wouldn't be surprised to see companies offering this as a built-in service.

      E.g. every time you save something in Adobe Photoshop, it requests an NFT, which it then embeds as metadata within the image.

      Instant, automated, untamperable evidence that this particular item was created at date X on machine Y at IP address Z.

      No more arguing over who first created something, who contributed which elements, or what was present on date X. It'll all be there in the NFT.

      And whenever someone creates a new item based on this item, the system could automatically embed the original NFT(s) into the new file's metadata.

      Want to create a meme featuring a photo of a US president, a video game character and the theme tune from a popular kid's TV show? Here's NFT-A, NFT-B, NFT-C for the source items, and NFT-D for the meme itself.

      Hey presto. Instant tracability of IP usage, which in turn means you can automatically trace financial or legal obligations.

      Admittedly, this sort of NFT system would need to be baked in at the point of creation, and I don't know if NFT generation can scale up to the levels which would be needed, or if it's possible to generate NFTs in realtime to embed them in this way. And there's hosts of other real-world issues - too many to list on the back of this virtual beer mat.

      But still. Automatic copyright tracking is pretty much the first and only real practical use I've been able to think of for blockchain...

      1. Anonymous Coward
        Anonymous Coward

        Re: So, it's a bubble?

        You are basically talking about a fundamental change to copyright: automatic vs registered.

        Right now, copyright is automatic. It belongs to the creator as soon as creation happens, period.

        You want to replace that by copyright exists as soon as it s registered in a blockchain, because in your eyes, it removes the burden of proof that the current copyright incurs.

        But this is *still* a solution in search of a problem. It's *already* possible to register copyright, without having to use fancy digital tools. In some countries, it even used to be mandatory to register copyright to own it.

        Your solution has the exact same issues: the creation can of course be stolen or duplicated before being registered, and registered by the thief. And then, what? Even if witnesses come to attest that really, they saw the real creator at work, how do you alter the incorrect information stored in an immutable chain? Adding more blocks to it that say "oh noes, this previous block was wrong"?

        How is that better?

        1. juice Silver badge

          Re: So, it's a bubble?

          > You are basically talking about a fundamental change to copyright: automatic vs registered. Right now, copyright is automatic. It belongs to the creator as soon as creation happens, period.

          I think you've misunderstood what I suggested.

          I'll happily agree that copyright is automatically assigned at the point of creation (though as you noted, that wasn't always the case - IIRC, in the USA, you had to register it).

          The problem is that the burden of proving this is on the creator. So if person A and person B both create the same thing, and claim that their thing was created first, the only way to prove this is if said thing has been registered somehow.

          E.g. back in the day, people used to put stuff in an sealed envelope and post it to themselves; as long as the seal remained unbroken, the mail date-stamp was considered proof.

          (Or at least: that was the recommendation I used to see in computer magazines when people asked about sending their games to publishers. I don't know if that was ever actually used in real life...)

          So what I'm saying is that NFTs could be used to formalise the registration process. Which has zero impact on the assignment of copyright - it's just formalising it in a way which makes it easy to track.

          And there's a key difference between this and the old ways of registering copyright, in that it can be fully automated, and it can be done at the very instant of creation. No need to trot down to the Post Office with your floppy disk stuffed in a padded envelope...

          As per your comment - and as I briefly alluded to - there's a lot of potential issues and concerns.

          Not least, the fact that there's a huge "legacy" base of copyrighted material which hasn't been registered. And it's highly unlikely that we'd be able to (or perhaps even want to) get NFT generation built into every IP-generation system. And that's before you consider things like auto-saves, etc - do you really want a new NFT generating every time you type a new word and pause?

          But still. The use of NFTs to track formal copyright registration is still pretty much the only good use-case I've been able to think of. Even with the above issues and concerns!

          1. EatsRootsAndLeaves

            Re: So, it's a bubble?

            > I'll happily agree that copyright is automatically assigned at the point of creation (though as you noted, that wasn't always the case - IIRC, in the USA, you had to register it).

            Copyright in the US is now automatically assigned. But, copyright registration still exists. AND, in the US, if you want to be able to sue in federal court against perceived copyright infringement you must have registered it (slight simplification, see https://www.copyright.gov/circs/circ01.pdf.) Without registration you can still file DMCA requests, etc., but not sue. And since copyright is federal, you can only sue in federal court.

            >E.g. back in the day, people used to put stuff in an sealed envelope and post it to themselves; as long as the seal remained unbroken, the mail date-stamp was considered proof.

            >(Or at least: that was the recommendation I used to see in computer magazines when people asked about sending their games to publishers. I don't know if that was ever actually used in real life...)

            What the US Copyright Office calls "Poor Man's Copyright." And absolutely useless. As note, since you can't sue without having registered your copyright, simply posting the document to yourself does nothing and is less than having a series of drafts and backups on USB key and the like.

          2. Chris G Silver badge

            Re: So, it's a bubble?

            "E.g. back in the day, people used to put stuff in an sealed envelope and post it to themselves; as long as the seal remained unbroken, the mail date-stamp was considered proof."

            So that would be Schroedinger's Copyright, since the proof that the work was first and original is only valid if the seal is unbroken, so the work has an equal chance of being first or not or first and subsequent.

    2. Anonymous Coward
      Anonymous Coward

      Re: So, it's a bubble?

      In the same way that collecting stamps, autographs, or baseball cards is a bubble...

      1. Ken Moorhouse Silver badge

        Re: collecting stamps, autographs, or baseball cards is a bubble...

        Which reminds me of the bubblegum containing cards depicting the American Civil War when I were a lad

  9. Anonymous Coward
    Anonymous Coward

    Just in case you missed it on the BBC yesterday evenng ...

    Tulip Fever.

  10. harmjschoonhoven

    Prior Art

    At the beginning of his carrier in Paris Pablo Picasso could not pay his restaurant bill. He scribbled on a five Franc banknote and signed it. One of his friends swapped it for a fifty Franc note ....

    1. Plest Bronze badge
      Happy

      Re: Prior Art

      Always a winner, you and your art are worth nothing until you're not about anymore to make more art then if people are lucky it'll be worth a feaking mint and they cash in on your legacy.

      Just like life assurance, you're worth more dead than alive!

    2. Francis Boyle Silver badge

      Re: Prior Art

      The story I heard was that after he became an international celebrity he would doodle on his cheques because a signed Picasso was almost always worth more than the value of the cheque.

  11. Pascal Monett Silver badge
    Thumb Down

    "distributed blockchain-based programs"

    "the only limit is your imagination "

    What could possibly go wrong ?

    Flash, say hello to blockchain NFTs, your spiritual successor.

  12. FBee
    Go

    Internet Meme "victims" are now profiting via NFT

    Aprops on Star Wars Day (May the Fourth be with you...) some folks who have been (mostly) UNfortunately turned into internet photo memes (see: Star Wars Kid) can now see money in their pockets by selling said NFT meme photos. Surely The Kid deserves a few million for all the embarrassment he's been through...

    1. Anonymous Coward
      Anonymous Coward

      Re: Internet Meme "victims" are now profiting via NFT

      "Disaster girl" recently got half a million dollars... https://www.bbc.co.uk/news/world-us-canada-56948514

  13. neilo

    So too bad when the embedded URL goes bad. Then what do you have? An NFT of a 404 doesn't seem that valuable to me...

    1. Alumoi Silver badge

      I guess it all depends on the value of the site the 404 happens.

  14. Stanislav Bonita
    Coffee/keyboard

    If you're interested in NFTs...

    I have a bridge to sell you.

  15. Scott Pedigo
    Coat

    There are also existing PoS-based blockchains

    I looked into buying a $10 NFT and a colleague reported that the current gas price for the transaction would cost $80 (for the fractional Ethereum) (plus $12 to link a wallet, and another 5% website transaction fee). Needless to say, I declined to engage in such a lopsided purchase. I started thinking that Ethereum was a PoS-based blockchain :-)

    I look forward to Ethereum's change to Proof-of-Stake based processing that was mentioned in a previous comment. I'm curious as to what will be the result.

    1. Bitsminer Bronze badge

      Re: There are also existing PoS-based blockchains

      I think they need to change the acronym.

      Every time I see "PoS" I read it as "piece-of-shit".

      Or, then again, maybe it is correctly named....

  16. Potemkine! Silver badge

    Priceless

    "One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not."

  17. graeme leggett

    Raising funds idea

    "fund scientific research into plausible ideas that fall through the cracks"

    Shouldn't that read "fund scientific research into implausible ideas picked up by cranks"?

    1. Efer Brick

      Re: Raising funds idea

      yeah but you'll miss the cranks that have good ideas

  18. StrangerHereMyself Bronze badge

    Adage

    In the US we have an adage: "There's a sucker born every minute" which pertains to those clueless individuals shelling out real dollars for NFT's.

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