Non-RPG General News - The Problem with NFTs

Folding Ideas explains the problems of NFTs (non-fungible tokens). These data objects can be used in games, too:

The Problem With NFTs

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The unfortunate thing is, I think the blockchain has all sorts of potential - it's just that, as usual, we've taken the technology and charged off in the direction of the nearest cliff.

I think the fundamental idea of "NFTs", as a robust record of ownership of real-world things (such as a land registry in an area with massive corruption problems) could be very useful. I think they could also be used for a general digital media licensing system - when you buy a game, it's not just yours on the good graces of the platform providing it, but you get an actual license to hold on to in a robust system.

But, no… there's fast bucks to be made.

Greed ruins everything.

Hopefully people smarten up about this trend before it bruises their collective wallets. I see this as absolutely no different than micro transactions in games, including loot boxes and their ilk. The very bottom of shenanigans.

I saw a fun crypto story today. The price of crypto has been crashing lately, as many probably know. NFL player Odell Beckham chose to receive his entire $750,000 salary this season in bitcoin, and because of the plummeting value of bitcoin, that contract is currently worth around $412,000. Even better, he still gets taxed at the dollar value of the contract so he ends up netting around $412,000 - $375,000 = $37,000 dollars. Or less than me.

Originally Posted by JFarrell71
I saw a fun crypto story today. The price of crypto has been crashing lately, as many probably know. NFL player Odell Beckham chose to receive his entire $750,000 salary this season in bitcoin, and because of the plummeting value of bitcoin, that contract is currently worth around $412,000. Even better, he still gets taxed at the dollar value of the contract so he ends up netting around $412,000 - $375,000 = $37,000 dollars. Or less than me.

Well, at least the Rams won yesterday.

Seriously though, I feel bad for the guy. Still, you have to wonder what the hell he was thinking to take that sort of risk considering how volatile Bitcoin is.

See, that above story only proves that sometimes people have to be protected from shooting themselves in the foot. Especially some so-called adults.

that story's all kinds of speculation. We don't know when he got paid or what bitcoin was at when he got paid.

Even though bitcoin is down overall it still has spikes. It went up a few thousand just the other day. Theoretically If he got paid at the right time It could have gone up and he could have sold for a nice profit. Also if he already see's the market crashing he can sell it as soon as he receives it losing nothing. The taxes are a wash as he'd have to pay them if he's paid in cash or bitcoin. I'm sure he has a good tax guy too and is paying much less that the 50% the article states.

I do wonder when he leaves it in there and when bitcoin hits 100,000 in a couple years if they will write an article about how smart he was.

Anyway I wouldn't feel too bad for him his net worth is around 40 million.

Originally Posted by sakichop
I do wonder when he leaves it in there and when bitcoin hits 100,000 in a couple years if they will write an article about how smart he was.

Speaking of speculation…

It's impossible to know, but I wouldn't bet on Bitcoin hitting that in the next 2 years.

Originally Posted by sakichop
that story's all kinds of speculation. We don't know when he got paid or what bitcoin was at when he got paid.

Yeah, actually we do. I don't remember the exact number, but it was something like $65,000 at the time he signed the contract and it's a little more than half that now. All the numbers I gave above are obviously based on the relative value of the Bitcoin. When he signed the contract is also public knowledge. It's silly for you to say we don't know this or that when you clearly haven't bothered to look.

I don't feel bad for him. I used it to illustrate how stupid crypto is, and he was stupid for taking his salary in crypto.

Originally Posted by JFarrell71
Yeah, actually we do. I don't remember the exact number, but it was something like $65,000 at the time he signed the contract and it's a little more than half that now. All the numbers I gave above are obviously based on the relative value of the Bitcoin. When he signed the contract is also public knowledge. It's silly for you to say we don't know this or that when you clearly haven't bothered to look.

I don't feel bad for him. I used it to illustrate how stupid crypto is, and he was stupid for taking his salary in crypto.

I read an article on it that I googled. It basically takes bitcoin at its high and what it is now which is not accurate. Not one of the several I checked broke down his pay and what bitcoin what worth at the time. (Unless you want to provide a link to one that does?) So don’t assume I didn’t look when you don’t understand.

It doesn't matter what the price was when he signed the contract. He gets paid over 36 weeks. Buying over time is widely considered the best way to invest in crypto it’s called dollar cost averaging. So if he gets a check today bitcoin is at 34,000 not 65000. Therefore if he plays the long game he will very likely come out way ahead.

I won’t argue with you about if crypto is stupid or not but I’ll just say investing in it was the smartest thing I’ve done.

Originally Posted by sakichop
It doesn't matter what the price was when he signed the contract. He gets paid over 36 weeks. Buying over time is widely considered the best way to invest in crypto it's called dollar cost averaging. So if he gets a check today bitcoin is at 34,000 not 65000. Therefore if he plays the long game he will very likely come out way ahead.

Whether dollar cost averaging is a good way to invest depends entirely on the time frame. For him, the timing doesn't look too good since it's only a 1 year contract. With the impact inflation is having on the markets, I don't expect it to rebound much this year if at all.

You're right about playing the long game, but he'll likely be holding the bag for quite awhile. Hopefully he has the patience to wait it out.

Originally Posted by Ripper
The unfortunate thing is, I think the blockchain has all sorts of potential - it's just that, as usual, we've taken the technology and charged off in the direction of the nearest cliff.

I think the fundamental idea of "NFTs", as a robust record of ownership of real-world things (such as a land registry in an area with massive corruption problems) could be very useful. I think they could also be used for a general digital media licensing system - when you buy a game, it's not just yours on the good graces of the platform providing it, but you get an actual license to hold on to in a robust system.

But, no… there's fast bucks to be made.

There's a big problem with storing information on the blockchain: it is extremely expensive. I read a few days ago that (at that moment) storing 1MB of data on the ethereum blockchain costs approximately $300 000. So to store a contract there it would have to be extremely limited since every KB costs about $300.

Because of this, at the moment NFTs are simply pointers to something stored on a normal server somewhere and therefore likely to suffer link rot. Ie the link through the NFT marketplace will likely lead to a 404 web page after a while.

(Ethereum is supposed to move to a proof of stake model instead of proof of work, which is supposed to make everything a lot better (don't ask me how)).

At the moment NFTs have no legal framework as well, so nothing is actually bought apart from the pointer. Maybe when laws catch up something good will come out of this, but at the moment almost all NFT trades are like buying a unique link to a view of a digital artwork. The digital artwork is not exclusive to you and the link isn't guaranteed to show the image or whatever you bought. It's only guaranteed to point towards the same place.

No one has been able to explain to me how I as a gamer might benefit game experience wise. The only things I've seen are:

1. Maybe it can lead to cross store ownership of games (unlikely unless the game stores agree on one way of registering game ownership).

2. Maybe it can allow second hand sales with the store getting a piece of the pie for every resale (more likely since they can make some money this way, though less than an actual sale).

3. Finally some people who enjoy collecting digital "I'm the only one who has this"-stuff might be able to buy items for real money that no one else can buy the exact same copy of (though they likely can buy their own version like having a limited edition print of something). And they will own proof of this on the blockchain.

The first and second could make actual ownership of digital games possible, but it will likely require regulation through laws.

The third is possibly fun for collector types of people. Which I'm not.

Indeed, but as you mentioned before, storing the information this way is incredibly expensive so the NFT token, like those money, will start to cost more to operate than the object they record and become a value by themselves.

Originally Posted by Kos
Indeed, but as you mentioned before, storing the information this way is incredibly expensive so the NFT token, like those money, will start to cost more to operate than the object they record and become a value by themselves.

They will only be valuable if someone wants the token. And there's no real incentive yet for most people.

I see no benefits to the consumer with practices such as these at all, only potential losses. And if you think about it, you can easily see the losses in advance before the money flies out of your hands.

NFT = Selling sand to desert dwellers.

There is a million people out there, offering to make a record on the wall in their closet, stating that this something belong to this someone. Why would you want this and how to choose the best closet? What do you do if there are conflicting records across closets? What to do if there is 1 pixel changed, or image brightness slightly increased that is different asset now for all hashing purposes.

NFTs strike me sort of like traditional art dealing strikes me.

Well, except that you're not actually buying the art - and the art is not actually art in many cases. Then again, I feel that way about "real" art as well

It's like a shared delusion that could or could not lead to making a profit - as well as some kind of perceived prestige.

You could call it the Emperor's New Clothes syndrome in a new form - but is it really an illusion if enough people agree? I guess it's like power.

I rarely recognize it myself, but I certainly don't have trouble meeting people who do.

Of course, during these initial stages - it's much more likely to be a scam supported by the mega wealthy to put the brakes on the incoming massive market crash.

I mean, they sure are putting out all the stops to tell people this is a get-rich-scheme to have fun with.

But it's pretty desperate, if that's the case.

As for how it impacts gaming? Well, it's just another way to fleece the customers. Do I think it will mean the end of good games? Not really.

I mean capitalism has never been a bigger part of gaming than this past decade, and I still think we're seeing more quality games coming out than ever. A lot of those are by smaller teams, sure, but we're still seeing the big boys here and there.

I can't predict the future, obviously, but I doubt this will be as big a negative as many seem to fear.

There are much bigger problems than that lurking around the corner.