I don't understand why anyone would pay for this, under any circumstances. You're not paying for exlusive access to the tweet, or even ownership in any meaningful context - you get a certificate of authenticity tied to a cryptographic signature. The tweet is still out there in the wild, and it's not like you can delete it or transfer it to your handle or anything like that.

I truly, genuinely have no idea who's bidding on this, or what their reasoning is. In fact, I'm not sure I understand the concept of NFTs at all. In the physical world, fine art holds its value because there is exactly one of each painting, and the human hoarding impulse nurtures a sense of reverence towards originality. However, art "sold" via NFT is still accessible and available for anyone to appreciate and download. I don't have to ask for permission from the owner to look at the art, or even go to a specific location (like a gallery for a physical piece). I can just download the art to my computer and stare at it whenever I want.

The only argument I've seen for NFTs is that many famous artworks have prints made, that are cheap and available to everyone. The original painting is expensive and owned by a single person, but anyone can have an imitation hanging on their wall. I don't know that I buy the translation of this concept to the digital world, because prints are very obviously not the actual piece (not least because they're printed and not painted). If I download an image or video, or grab a link to @jack's tweet, I have the exact same configuration of bytes that the "owner" has. In the case of a link, I'm staring at the exact same thing the "owner" is, and the fact that it's on a reputable website means I'm not looking at a fake - thus providing the same guarantee as a certificate of authenticity. Hell, there's even a cryptographic element, since the site will use TLS for encryption.

Am I missing the paradigm here? Or is this just the method by which crypto millionaires will become crypto penniless?

> art holds its value because there is exactly one of each painting, and the human hoarding impulse nurtures a sense of reverence towards originality.

A huge amount of art holds value because someone needed to launder money. NFTs merely provide a simpler way for people to do that.

That is the clearest explanation I have heard so far. Lots to think about there.

How does one launder money through art? Don’t you have to still show where the money came from (and pay taxes etc) in the first place?

I don't know about money laundering but I've heard of a tax fraud trick involving art.

Basically, a sketchy businessman buys a bunch of art from some random unknown artist for pennies. He then gets his art world friends to start praising that artist and thus appraise the art at a stupidly high value. Come tax season, sketchy business man turns philanthropist and donates said art to some random museum. That donation is written off as a tax credit at that stupidly high value and now some museum is left holding crappy art. Alternatives strategies involve using the over-valued art as collateral for a loan or something in case cash is needed instead.

It's sorta like a pump-and-dump, except the intent is to fool some bureaucracy rather than the public.

Any evidence that this happens regularly? Often FMV of non liquid assets has to be evaluated by auction.

Evaluated by whomever you pay to have it evaluated. Watch dirty money. They explain the malincentives pretty well.

How does that work, mathematically? If you bought an asset and it appreciated you are liable for a tax on capital gains. If you donate this asset that simply eliminates the gain and the associated tax. But this is obviously a thing. Where am I wrong?

> If you bought an asset and it appreciated you are liable for a tax on capital gains. If you donate this asset that simply eliminates the gain and the associated tax. But this is obviously a thing.

If you donate an asset it eliminates the gain and the associated tax in addition to giving you a tax deduction in the amount of the donation. This is why people like to donate highly appreciated assets rather than selling the asset and donating the resulting funds.

The gain is fake. The tax benefit from the donation that is based on that fake gain is not.

It’s like making a million dollars in counterfeit money, then donating that to charity. You reduce taxes by $370,000, and are out $0.

Here are two links with lots of information:

https://www.riskscreen.com/kyc360/news/art-in-the-frame-for-...

https://www.imf.org/external/pubs/ft/fandd/2019/09/the-art-o...

> But in late 2017, US prosecutors say, Green fell in with the owners of a Mauritius-based investment company, Beaufort Securities, that engaged in fraud, stock manipulation, and money laundering. For Beaufort’s owners, duping investors into buying worthless securities was the easy part. The hard part was making the ill-gotten profit appear legitimate to regulators. Beaufort had done so in the past by depositing money under false names in offshore banks, then slipping it into the global banking system little by little. The company had also used the time-tested trick of buying real estate and quickly selling it off, often at a loss, to convert illegal proceeds into assets that could be accounted for as the fruit of a property deal.

> Now, money launderers like Beaufort were searching for less obvious ways to scrub their cash, and Matthew Green knew how to trade in multimillion-dollar works of art. Approached in late 2017 by the Beaufort conspirators—one of whom was in fact an undercover US federal agent who had infiltrated Beaufort—Green allegedly said he would accept £6.7 million (about $9 million at the time) in what he knew to be the yield of securities fraud in exchange for a 1965 Picasso, Personnages. Green would draw up phony ownership papers saying the work had been sold, all the while keeping the Picasso stored away. Down the road he would pretend to buy it back from his coconspirators at a lower price, keeping 5 to 10 percent of the laundered cash for himself.

> “Art is a very attractive vehicle to launder money,” says Peter D. Hardy, a former US prosecutor who now advises corporations and industries on compliance with anti-money-laundering requirements. “It can be hidden or smuggled, transactions often are private, and prices can be subjective and manipulated—and extremely high.”

If you are dealing with common goods, it is easy to detect if buy or sell prices are not standard. Also, IRS can detect easily if a company needs investigation when ratios do not match its industry.

With art, buy and sell prices have no comparison points and margins are very high.

Dealer: "I want to buy my 14th $120k car even though I dont have a job or legal business that generates the money to do so. The IRS is going to catch on that I'm buying these things through nefarious means."

Buyer: "I want 120k bucks worth of cocaine. How should I send you the money?"

Dealer: "I'm going to duct tape a banana to a wall and call it art. You buy the art. I drop off the coke."

Buyer: "Who the fuck would buy something like that?"

Dealer: "You, because you're actually buying the coke, not the banana or duct tape. But to the government, you look like a fucking idiot and I'm just a capitalist opportunist. They then dont question my questionable purchasing decisions because I'm an arteest."

I left out some details, but that's the broad brush strokes.

Edit: just thought about it. This is also a nice extra layer of plausible deniability for the buyer.

"I'm not sending money to acquire drugs/illegal weapons, I'm sending money for a... painting."

Cops: "It looks like a toddler drank paint and had projectile diarrhea."

"High class taste in sophisticated art cant be explained to simpletons like you."

hahaha, that was a hilarious read. Thank you for taking the time to write something funny while also explaining.

I watched this documentary on Netflix called Made You Look. There was a painting in it that sold for crap ton of money - it was literally two rectangles (not perfect rectangles, but close enough. And no, I am not making this up) in different colors. I paused the video and looked at it for a couple of minutes and thought, my 7 year old niece can draw this. What is special about this painting?

So yeah, I guess I am a simpleton who can't understand art ...

By your description I'm assuming it was supposed to be a Rothko.

This one, I think https://www.moma.org/collection/works/80566

I would suggest you don't try to evaluate 3x3m piece of art on canvas based on a screenshot on your 13" LED laptop screen.

True but theres also a difference for a wall sized "painting" of paint splatter/gradient rectangles and a Salvador Dali. I had the benefit of visiting the Dali museum in St Pete FL. Seeing his work in photos and on a computer screen is, "Meh, that's cool". Seeing the exact same pieces tower above you in person is a borderline religious experience that cant be described with words.

I assume it looks like this:

- get a business that operates mostly on anonymous/untraceable cash (laundromat)

- put drug money through it and pay taxes

- business use "clean" money to buy a piece of art for $1 million from a corporation owned by the criminal boss (that was bought for $1k).

Voila, clean money in the hands of the head honcho.

Pure speculation on my part, though.

Let's say Alice wants to send money to Bob on the downlow. Maybe as a bribe. Maybe as payment for a large shipment of drugs. Who knows. Anyway she wants to send him money. Bob's nephew Charlie is an artist. Alice buys a painting from Charlie for $10 mil.

This Planet Money episode can also be a useful resource to learn more: https://www.npr.org/sections/money/2018/02/09/584555705/epis...

You can buy art from upcoming artists for next to nothing and 10 years later inflate the price as much as you want, citing market value.

Do both sides have to be in on a money laundering exchange, though?

I still for the life of my figure out how Grimes made millions off her shitty videos last week. It was way more than "ha, ha this is hilarious and I'm going to spend some money on the joke".

Launder, or tax optimize.

Advantages of NFTs:

• Auctionable and sellable on the blockchain without any AML or KYC

• Creates a paper trail that posits as a legitimate way to have accumulated wealth to the taxman and government

• Round-trip costs of <2% as compared to traditional money laundering systems which can be an order of magnitude more expensive.

• Plausible denialability as art.

Basically, NFTs are a great way to launder money.

Launders will likely also do some unrelated party transactions to counter anomaly detection, so even if you don't want to launder money, buying NFTs can give you the ability to capture some money laundering premium.

You may find this description morally wrong, but don't doubt the ability for NFTs to grow in value. Money laundering is big money.

I'm fascinated by this but would like to walk it through (and no, with London and NYC as two of worlds biggest money laundering centres I think this seems likely)

I have millions of dollars in yuen in Guangdong - and I want to get it out of the country, or I have millions of dollars of cash from selling drugs in Mexico.

Then, I buy a number of ASICS and plug them in? I doubt I will get millions that way but it's a start, maybe I ... hmm the on-ramp is complicated - getting from dollar bills to bitcoin already requires laundering.

Ok, let's say I have my coins - transferred to me via the age old solution of handing cash to someone with bitcoins and they transfer them to my wallet. But of a giveaway but ok. Let's call that DirtyWallet.

Now I find a NFT company - it makes digital photos of the sidewalk in NYC and sells each paving stone online. The idea is to hide money laundering.

I buy half the paving stones on Broadway for a dollar each, from CleanWallet. Then I auction my paving stones, and amazingly they are all bought up by DirtyWallet for a million each.

CleanWallet now has millions and is ready to off-ramp.

I kind of get it but not really - it does nothing new - it still needs corrupt on ramp and off ramp people in corrupt places in the world (like London) - and that's where the real cost will come. The washing (transactions to hide origin) is the simple part - I would want to wash the money through family restaurants in MidWest (where the owner got in deep with low shark) or the other traditional approaches as well.

It just looks like this will be a small part - and given it public traceability i suspect a small part - once someone gets traced through the blockchain this will be avoided

It's a lot easier if the dirty money is already crypto, from ransomware, dark web transactions, etc.

Then the crypto is untraceable at both ends: one side leads to the victim, the other to someone with plausible deniability: "I was just selling art at market value. I didn't have anything to do with that crime, and I don't know the person who bought the art." In between, nothing but an anonymous wallet and an untraceable transfer of NFT.

I should imagine ransoms are payments are tracked. Tracking who gets paid for the ransom is surest way to end them. And it only takes one mistake to stain all the transactions.

Deniability is hardly the point - all dodgy transactions are deniable, it's just whether people care to pretend to believe you - the UK has anti-money laundering laws that basically say if you cannot reasonably prove your money is it dodgy we will take it. https://news.sky.com/story/zamira-hajiyeva-supreme-court-rej... - the criteria here is basically "do we believe do you" - it's really nebulous.

All it takes is a mixer with a large enough anonymity set.

The larger the set the greater likelihood of a coin designed to track joining ?

I'm not sure what your question is. In brief a mixer could works like the following:

Multiple people put money into a pot, in return they get an voucher that anyone can redeem.

At some later point in time someone redeems some money from the pot.

The anonymity set for this mixer is the number of people who put money into the pot. The more people that use this, the more anonymous.

This is the best explanation in the whole thread.

On ramping cash is the most difficult as regulations are tighter. If your money is clear and you can obtain crypto with a paper trail then there are possibilities to break the paper train once on chain. NFTs don't help here but investing in an anonymous smart contact that gets "hacked", buying a token that is rug pulled, betting in a casino, or some other way to lose money to yourself. From there a mixer with a good anonymity set should be good enough.

If, as you suggested you can obtain crypto without a paper trail then your plan might work. Since there's no paper trail you could even setup multiple sock puppets.

Then it would be more sensible for your CleanWallet to be owned by an NFT Art producing company. The become popular "over time" using your sock puppets and may even garner real attention (commissions per sale isn't uncommon and is a free bonus for the fees you've spent).

Alternatively you could run the NFT platform and take X% commission. With your sock puppets you mint and buy NFTs left and right. Maybe you'll even get some real business.

Both of these ideas shouldn't be difficult to off It's not uncommon for a crypto company to invest in other crypto companies which could add another layer of in direction.

This is all quite speculative and the ideas require a decent amount of effort. For the most part I agree that the use of crypto and NFTs to launder money is a bit overblown.

> The washing (transactions to hide origin) is the simple part

Isn't this the hard part? Not only this, but having to worry about physical transactions involving money...or the risk of traditional digital trails of bank transfers, etc?

My understanding is that NFT could clean up this aspect by 1) removing money transfer risk (probably use some sort of smart contract to guarantee transfer of NFT immediately to buyer upon successful bank transfer to seller) and 2) transferring underlying valuation to a subjective-valuation industry. Washing $ through a restaurant would open the restaurant up to possible scrutiny to prove they had higher food costs, etc...but NFTs appear to remove that risk since no one can really question increases to value of "art".

Also, technically the owners of the "high value" NFT could even be kept in the dark on the shady details if they are offered a quick buck by some offshore lawyer. They could probably even set it up to guarantee eventual transfer back to the original owner (netting them ~10% or so).

For anyone else like me unfamiliar with AML and KYC in this context:

  Anti-Money Laundering
  Know-Your-Customer

But how does any of that refute the idea of a tweet being sold with an NFT? How do you own someone else’s tweet? And what’s the real value here?

It is a bit like owning a protected building, for example a French castle.

You "own" it in the sense there's an immutable paper trail that proves you and you alone are the owner. However, the castle being protected as a national monument, you cannot bulldoze it or even change it in any way by law AND you are obliged by law to open it to the public.

Basically you are buying bragging rights.

But at least the same system that creates constrains also grants you explicit ownership, the castle can’t be duplicated, and it’s value is tangible. Here, Twitter isn’t selling the NFT — it’s a pledge of value from Dorsey on something that’s completely unrelated. For something that there isn’t one of… every person who views the tweet is looking at their own identical copy.

This all feels very strange to me, probably because it is so intangible AND Twitter is still broadcasting the message just the same AND Twitter already has a concept of ownership which isn’t being honored here.

It's how this is, at its root, about the concept of credit, rather than the concept of property.

If I grab something out of your hands and you say, "that's mine!" That would be property.

But if I put up a painting and you ask, "who made that?" That would be credit.

There is no scarcity of blockchain space - you can download Bitcoin right now and use less space than the newest "Call of Duty" collection. The property is very easy to acquire.

But then if you ask "who made Call of Duty", you are forced to point to the system of IP law, which may or may not credit the individual creators properly.

So, what NFTs are trading is a particular form of credit. This tears up some economic assumptions around what credit is "worth". A popular blockchain is one that allocates credit accurately and fairly.

But credit isn’t the same as ownership. Here we can all go to Jack Dorsey’s profile and have the question answered “who made this tweet?”. This is more “who bought this tweet,” except because it’s not physical and infinitely copyable with zero degradation by just going to his twitter profile, I fail to see how this NFT carries meaningful value that will last in time. We’d need society to recognize the value, and when there’s no cost to the copies, it seems to go against most of signaling theory.

Imaginary rights.

Actually you don’t own the tweet.

In a basic sense, you own a signed ‘snapshot’ of the tweet.

Basically it is kind of ‘only signed copy of the tweet’

Until I open my Lyft to their Uber and Dorsey sells the same tweet on my NFT marketplace.

I suppose there are many baseballs with famous signatures on them.. how rare that is changes the value.

Could NFTs be used somehow to cheaply transfer money between different foreign currencies? Currency exchange charges have always been absurd for no obvious reason besides banks controlling access...I feel like that market needs to be disrupted.

Art NFTs are a great way to launder money, but they're not unique in that aspect. There are plenty of ways to launder money with smart contacts and art NFTs aren't special.

Not all NFTs are art NFTs either, it is becuase it is art and has "intangible value" that gives sales plausible deniability. Trading card NFTs, in game item NFTs and other NFTs that have tangible value don't suffer the same issue.

Largely NFTs are an astroturfing job similar to crypto coins and things of that nature. Look at HN and search for NFTs. You'll see that there are a handful of articles years ago, but the vast, vast majority of articles/stories posted on NFTs in the last two weeks. Same on clubhouse, nothing that I recall on NFTs for a year, now at any given time there's a plethora of rooms with scare tactics titles like "Get in on NFTs now or the future will leave you behind" or "Become a millionaire with NFTs."

Not saying there's not some use for them, but this pattern is a huge red flag that there's a pump and dump style thing going on behind the scenes. ICOs and other cryptocurrency shared and share the same pattern.

That can easy be explained by their adoption by the rich and famous. Art NFTs were only made by niche artists until recently.

Now that they're somewhat mainstream yet not well understood by the public I would be more suprised if people weren't preaching it as the best thing since sliced bread.

NFTs seem like the next big scam just like many ICOs were last time in 2017. The money laundering argument makes sense to me however I still don't get how it isn't a ponzi scheme because the laundering is predicated on the value of the NFT only ever going up. With art there is at least some intrinsic value that could be argued but with an NFT there is none for the reasons you laid out.

It's just akin to a recognized by the owner and others deed of ownership over an asset.

And this gets bought by the same people that might buy an autograph or memorabilia that would be about equally useless without the story around it and others valuing it too.

As newer generations are increasingly living their lives in a digital world, is it that surprising that people will want to display wealth by acquiring native digital assets? If you had to predict what the youth of the year 2200 will be into, various forms of collectible digital tokens seems super reasonable.

The problem is knowing which ones.

Marketing/ETH pumping like the bitcoin pizza story. NFTs will be nearly useless unless they become integrated with real systems; legal system, ticking systems, royalty payment systems, DRM systems (this token allows you to download to such-and-such MP3) Buying NFTs for huge sums might move the needle on such projects.

This is still 1997 for NFTs - there will likely be more to come in the next decade

Additionally, not only are you not getting exclusive access to the tweet, not only is it not ownership in any meaningful context, but this "ownership" that this site is selling isn't even officially ran by Twitter (though, Jack selling a tweet on there may be christening enough for some people).

I could spin up an ethereum NFT to compete with this service, and do the exact same thing. Now, tweets are being sold on two different blockchains. It doesn't have the Official Stamp of Approval that something like NBA TopShot has.

If this were ran by Twitter, or at least had Twitter's backing, I'd understand the valuations a bit more. But, the website is the simplest, most thousand-line bootstrap-templated thing I've ever seen have so much money flow through it.

Completely aside from NFTs and any details of this specific asset, cash needs a return and will follow the prospect of it anywhere.

We’re in an everything bubble and the recent investment/attention boom for NFTs is not surprising.

My guess is it a mix of speculation and showing off. You might buy it to boast about it like the tres commas art piece in the Silicon Valley sitcom (remember it’ll be someone rich buying it) or buy it to sell to someone else in future, a greater fool so to speak.

A big part of spending a lot of money on certain things is the signaling of hey look at how much money I got.

Many luxury things aren’t useful, they are either a good way to store wealth in a manner that is less susceptible to certain market disruptions and even the reach of governments this is where gold and art come in or it’s a way to show everyone that you have so much money that you can afford to buy toilet paper made out of the fiber of some engineered pigmy pine trees grown in low earth orbit.

This one is maybe a little bit of both, because as long as there are plenty of people willing to spend money to achieve the latter this one also falls into the former.

I don't understand the confusion.

People have been selling weird stuff for years. There are services that let you "name a star" with a fancy but meaningless certificate.

Even with fine art, there many paintings that have value because of historical and absurd cultural reasons that border on being a scam.

People have always tried to sell stuff, and there always ~~fools~~ people that will buy them. The rules get crazier when it involves things at that exist at extreme ends. Like that app that was 10k that just had a spinning diamond to prove you had money to waste. Twitter is a big service, dorsey is a relatively famous name, idk, weird stuff happens.

We've been indoctrinated our whole lives to believe that "property" is somehow fair, rational, real, etc. Plenty of room for cognitive dissonance here.

I personally thing it's incredibly pointless, but when I was a kid I also thought collecting baseball cards was incredibly pointless. (Granted, baseball cards didn't cost $2M back then.)

People believe doing things like that gives them a piece of history. Some do it because they think it will become more valuable and fetch a higher price later.

I don't get it, but I don't begrudge people spending their money on whatever they want. Given that Dorsey is already rich, I'd hope that he'd donate the proceeds to charity, which would at least make all this worthwhile and productive.

You're not missing anything. We're in the middle of an everything bubble and very dumb people are speculating on very dumb stuff. It's a casino.

I know people who buy that stuff, and it's either:

* because they have a lot of coins, and they don't care what they're spending it on. For example, cryptokitties were fun

* they think they can make money out of that, because there's some hype

* they are promoting their own NFT platform with fake purchases

Another group is artists who have already made some money selling NFTs and now feel the need to support other artists.

I wonder if people imagine using the legal system to enforce their ownership in a similar way to IP enforcement by issuing takedown notices and stuff like that. I don't thimk anyone woyld buy that right now but maybe that's what people a hoping for.

The paradigm shift is that this is an agreed method of determining who has the right to sell a digital asset via an internet native method. You can look at the same bytes all you want, but you can't sell them, the owner of the NFT can, the same way you can look at a painting in a museum, but you don't own it and can't sell it.

Before there were walled gardens of this. Skins in something like CSGO being a good example, you could have a very valuable skin in CSGO but valve determines whether you own it or not and have the right to sell it. With NFT there's no central authority that says you have the right to sell something, you just do...

I honestly think this is a pretty powerful thing, I'm interested to see where it goes.

Agreed upon by whom? I don't agree to it. I think I own the first tweet. I'm willing to sell it to you though - for only 10 dollars!

It seems worse than the "I'll sell you the Brooklyn Bridge" scam, because, at least in that case, you're trying to buy something valuable. Here, you're trying to pay for the rights for some people to say you own something? Madness.

Naming a star and buying the Brooklyn Bridge are 2 great analogies of this. I also think it’s speculation because of the crypto bubble meaning the concept of buying a token a flipping it for a higher price has been proven to be a thing in a big way. Unlike a domain name these tokens have no intrinsic value outside of the domain of being a token and the psychology of people.

Do you have the NFT that Jack Dorsey originally and publically sold that establishes the right to sell?

If you don't then you have no credible ability to sell it, if you do... then maybe I'm interested.

I have something better. I have the ALL*-NFT that gives ownership of the NFT that Dorsey originally sold. Logically, if you own the token conferring ownership of the tweet, then you must open the tweet.

Just send me the money. I'll create a row in a sqlite database specifying you own the NFT, burn that on to a read only CD and mail it to you!

* - ALittleLight

By the market. If someone has item A that's worth 10 million dollars and you have that same item A but it was only sold for 10 dollars then the first item A, despite being the same as yours, is more valuable, and therefore people and eventually apps will deal with it rather than with yours.

In general items sold by their original authors will be more valuable (and you can already see evidence of this being wrong or right on the network), so this seems like a fine way of going about it.

> If someone has item A that's worth 10 million dollars and you have that same item A but it was only sold for 10 dollars then the first item A, despite being the same as yours, is more valuable, and therefore people and eventually apps will deal with it rather than with yours.

That's not "the market", that's sunk cost fallacy. If I buy a painting in a jumble sale for £5 and a reputable auctioneer confirms it's a genuine Picasso original, collectors will be willing to pay millions for it. If I spend £1m on a print or a painting by my sister, the auctioneer will still tell me none of their collectors are interested.

My sister did the painting! Her paintings are original and absolutely fine, just not remotely interesting to collectors. Me paying a silly amount for it has no real effect on that. Similarly, a Picasso picked up for cheap from someone who didn't understand art is still worth millions because collectors care about the current and future desirability of Picasso originals, not whether the last buyer/seller was an idiot. And collectors obviously also pay a lot more in real terms for Picassos than anyone ever paid Picasso.

Or to look more closely at your example, the resale values of a mint condition Harry Potter first edition bought for £10 and a Harry Potter first edition bought for £30k are exactly the same and exactly the same collectors and auctioneers will deal with it, precisely because assets are identical and the market cares about how collectible the asset is rather than its individual historic price. (The market price of a first edition owned by Rowling herself is also the same, but she can change that pretty easily with a signature to make it more 'special' than other first editions)

A painting in a museum is a physical object, it cannot be hung on two different walls simultaneously. This is why we need private property. Private property simply means that the owner of a good has the right to prevent others from consuming it or, in the case of a painting, from taking it and hanging it in their living room. None of this applies to tweets, which are not physical objects. You could theoretically exclude other people from reading certain tweets, limiting their freedoms gratuitously, but this is not what NFT art is about either. NFT art apparently is about selling "property rights" on something that doesn't really exist and that consequently don't confer the owner any actual right. The crypto-scammers have truly outdone themselves with this one.

Remember in the early days of COVID, Marc Andreessen published his It's Time to Build essay? How America needs to start solving housing, education, transportation, manufacturing?

I expect this essay to be the target of criticism. Here’s a modest proposal to my critics. Instead of attacking my ideas of what to build, conceive your own! What do you think we should build? There’s an excellent chance I’ll agree with you.

Our nation and our civilization were built on production, on building. Our forefathers and foremothers built roads and trains, farms and factories, then the computer, the microchip, the smartphone, and uncounted thousands of other things that we now take for granted, that are all around us, that define our lives and provide for our well-being. There is only one way to honor their legacy and to create the future we want for our own children and grandchildren, and that’s to build.

https://a16z.com/2020/04/18/its-time-to-build/

Well, it's been less than a year, and it looks like a16z is now big on NFTs.

https://a16z.com/2021/02/27/nfts-and-a-thousand-true-fans/

“Bitcoin and Ethereum don’t have organizations behind them let alone marketing budgets, yet are used, owned, and loved by tens of millions of people.”

Uh, what? This is written on basically a marketing blog for one of the most well known VC firms in the world. Which will invest millions of dollars in organizations that will go on to market an ever increasing amount of blockchain companies that will do... something. Which will be written about endlessly by news outlets because prices go up crazy amounts.

This whole NFT thing has actually made me want to shut off my computer, stop programming, and start farming or something. Either all these people are idiots or I am. I can only make sense of it if I assume most of it is actual money laundering.

Im literally with you on both your reason to leave tech and to go do farming. As a tip, permaculture is more sustainable than monoculture. Make sure to pick a good, warm environment to make your life easier. Dont name your chickens... makes it harder to kill them for harvest.

Haha thanks, as long as I’m not alone on the sentiment. And I appreciate the advice on permaculture — I just read Masanobu Fukuoka and would like to do more research on these methods. Also, I’m vegetarian and am not so sure I could even kill those unnamed chickens!

At the very least, dont underestimate the benefit of all nature chicken fertilizer (poo and compost processing). They make great passive tillers and pest control too. I fell in love with the idea of farming when I visited (often) my ex's parents farm. Saw a bunch of the permaculture/homesteading stuff in action long before it became "cool".

Absolutely, one of the features of Masanobu Fukuoka‘s farming method basically let the chickens wander the land and to provide fertilizer. I’d be down to keep them, just not eat them!

>“Bitcoin and Ethereum don’t have organizations behind them let alone marketing budgets, yet are used, owned, and loved by tens of millions of people.”

This is an extremely inaccurate statement by them, wow. I feel like if nothing else it's impossible to have anything to do with Ethereum without hearing about the Ethereum Foundation. The majority of projects built on top also have their own organizations. There's also most definitely marketing.

I even like the idea of NFTs and think there's a lot of cool things to be built on the blockchain, some of which already have working early versions. This, however, is clearly a puff piece by a16z that doesn't even try to present an accurate picture.

Some of the new DeFi projects don't reveal the names of team members. The market is just that frothy that people buying the tokens don't care about the CEO.

It's them shilling - propaganda.

It's just a symptom of the pandemic and upper-middle class people having too much money and time. Everything about decentralized, blockchain, token, are just made-up words like you see around stock analysis. They do not exist, people just want to gamble. It'll go away when everyone can go to bars again.

This is what floored me when he wrote that essay. For years, a16z has been poring millions into pointless crypto related companies. And they just keep doing it. Yet Andreessen has the audacity to tell us all to build while he chases the decades most trivial investments and asset classes.

Think of it this way:

As a VC, he bets on what makes money in the current system.

As a citizen, he calls for a change to a better system.

That makes him a talker.

His actions as a VC make it more difficult to accomplish what he's calling for as a citizen.

That’s your opinion. What if others disagree and view their investments in cryptocurrency tech to be investments in a future where individuals are liberated from banks and legacy money systems? That’s how I view it. Personally, it’s enough to remember how these people exploited the system to crash the economy during the “housing bubble” to sign up for that future. Disparage it all you want.

From the second link: "Modern video games like Fortnite contain sophisticated economies that mix fungible tokens like V-Bucks with NFTs/virtual goods like skins"

Fortnite skins are different from NFTs - you're not supposed to sell them on. I just checked this with a quick Google search just in case the developer had changed how they work since I last played. They haven't, the way to sell skins is to sell your account details via an external market. Some games companies ban players from online matches who are caught buying or selling like that. I also found a site for buying /selling useful in game items, and the way that the item handover works is literally by making players meet up in game and the seller dropping the item on the floor.

VBucks are just tokens that can only be spent in Fortnite and make it slightly harder for spenders to know how much they are spending on each thing. You get them slowly in game, and can also buy them with real money. You can only use them to buy different appearances and gestures, and only from the developer.

I'd therefore argue Fortnite does not have a sophisticated economy, nor uses NFTs. It has a clever business model, using free download of the game as a whole but paid customisation, to help make it very shareable and very effective at gradually warming players up to the idea of making a purchase or five. It has become much like a shopping mall for modern teenagers - they willingly hang out there for hours for free, right next to places tempting then to purchase.

so instead of building useful things like bridges or infrastructure, we decided to gamble on useless greater fool theory “assets”

Instead? As though some VCs allocating a couple billions of dollars of private capital to crypto investments gets in the way of the government properly allocating ~$7.8 trillion in tax revenue every year.

Venture capitalists don't build bridges or infrastructure, fortunately (although they could hardly do worse than the various governments in the US). Government does that by and large. It's the responsibility of government to allocate its tax revenue to infrastructure.

The US has among the least responsible governments that has ever existed in world history. That's on the shoulders of the voters and the politicians they elect. It's not the VCs or politicians (insert scapegoat here) that are the primary problem (they're all secondary), it's down to the American people that have behaved like absentee sloven bastards for half a century now.

I think the opportunity costs here aren't financial capital as much as is it human capital. The amount of STEM talent that goes to work for these crypto shops or hedge funds instead of picking up a nuclear or civil engineering degree and rebuilding the power grid in Texas or California probably has some bad effects.

The UK has to increasingly rely on Chinese nuclear expertise because over the last ten to twenty years a lot of engineers have retired and you don't just stagnate but decline because there's just not enough people and also state capacity to keep that process knowledge alive.

Musk says a lot of crap but on this he was right when he talked about the real loss of knowledge in spaceflight. It takes a very long time to get an engineering culture back once you lose it.

We are not lacking for the capacity to build infrastructure. We have both a plentiful supply of engineering talent and labor.

We're presently bombing Syria because Biden is a continuation of the Obama war hawk stance on toppling everything in the Middle East (which is a program that goes back decades now and fully crosses the political aisle from side to side, they're all doing the same thing when given power).

That's the kind of thing we do in the US instead of properly investing into our infrastructure. And we've been doing it across the whole of the post WW2 era. A minimum of $10-$15 trillion has been spent that way by the US just since the late 1960s. That's where our infrastructure money went.

To be fair, it's not like Twitter is useful to society. You cant expect people who got a positive feedback loop for building useless to switch to building a bridge, water treatment plant or a mosquito net.

Apart from the obvious questions such as "What does owning an NFT associated with a tweet actually mean?" an interesting aspect of this is: Is Jack Dorsey selling this tweet as CEO of twitter. Does he own it because he's the CEO of twitter and twitter owns the tweet, or does he own it because he wrote the tweet. If he owns it because he wrote it then does that mean I can sell my tweets? If he owns it because he's CEO of twitter does that mean twitter is selling it and it'll be listed on their accounts?

Also, the top bid is by Justin Sun at $2m, a man who from what I can gather is more famous as a "Tech entrepeneur" brand than for anything he's actually done. Also famous for bidding $4.5m for lunch with Warren Buffet.... and then failed to pay up.

Frankly, he looks like a great poster child for this transparent pump and dump.

> Also famous for bidding $4.5m for lunch with Warren Buffet.... and then failed to pay up.

Do you have a source for this?

From: https://markets.businessinsider.com/currencies/news/tron-ceo...

Looks like he complained about some health issues:

"[Justin Sun] unexpectedly dropped out days before the scheduled lunch date, blaming a bout of kidney stones. However, he apologized on social media for overpromoting himself, and Bloomberg reported that Chinese authorities briefly detained Tron employees, sparking conspiracies that he bowed out under pressure from Beijing."

That doesn't say he didn't pay. I would assume payment is upfront.

He paid and there was dinner, it was just delayed. Shitcoins are good business, Justin can afford stupid shit.

The case for NFTs rests on a virtuous cycle between artists and buyers. On the artist side, there are temporary benefits, such as increased prices and pandemic-safe fundraising. But the killer feature is programmability - for example, it is possible to program the NFT such that the artist takes a chunk out of every resale on the secondary market. This means that as long as there are buyers, there will be artists issuing their work as NFTs.

The buy side is more complicated, because people buy art for different reasons. But there are benefits such as digitization making money laundering more convenient. The main issue is legitimacy concerns, but so long as artists can benefit from NFTs, they are incentivized to express the legitimacy of the NFT. In the equation of who gets to decide legitimacy, I would say the artist has the most sway.

Of course, it's entirely possible that NFTs will fail. First off, it could fail if the issuing blockchain failed or had a contentious fork. Secondly, it's possible that the primary blockchain or issuer for NFTs could change, which could reduce the value of "obsolete" NFTs. There is also regulatory risk. Finally, there is the possibility that people who abuse NFT system, such as repeatedly reissuing art or issuing pirated art, could poison the well. But that's entirely different from saying NFTs are doomed to fail and inherently worthless.

> it is possible to program the NFT such that the artist takes a chunk out of every resale on the secondary market

I fail to see why this is desirable. What right does an artist (or indeed, anyone who produces anything) have to any portion of resales?

The right they contractually set with the buyer. Secondary market prices exploding compared to first sale prices isn't exactly uncommon in the art world, so why artists would be interested in this is fairly obvious. (To a degree it can also help keep first sale prices lower, it somewhat discourages quick speculation resales (which many in the art world think is a good thing), and lets the artist participate in later value growth of their work which given that the value is due to their work many people would say is fair, and thus they agree to such contracts)

> it is possible to program the NFT such that the artist takes a chunk out of every resale on the secondary market

I hear this and like the notion, but I'm curious - how does the smart contract know what the sale price was?

Currently it's done through the marketplace platform, so actually commissions don't track when you sell through other platforms. EIP-2981 aims to standardize this.

Depending on your view of platforms, this could be less than ideal. It should also be possible to modify the transfer function in the EIP-721 contract to be a swap, but this would require a new standard. In any case, it could be gotten around by an escrowed transfer with swap amount being set to 0. I don't think there is a way to prevent this.

The sale is done in via smart contract, a buyer essentially sends tokens (commonly Ethereum) to the smart contact. Under commissioned scheme the smart contact will create transactions that split the Ethereum between the relevant parties (commonly buyer, platform, seller).

Problem is with physical art, you have guaranteed unique item. Basically item guarantees it is unique.

With NFT, auctioneer guarantees item is unique, but nothing prevents you selling the same item on different markets.

Basically you are betting on the market you are using will be the ‘one’ in the future.

That problem already exists in the real world, where for example some paintings or gold necklaces are claimed by multiple countries, due to a lot of war looting and tomb raids.

Each country may hold a legitimate deed over the piece of art, whether that deed is recognized by other countries is another thing.

Yeah but still item is unique. Imagine every country claiming this item can sell.

In real world, you may have the deed but without the item, it has actually no value.

In digital world, you only have deed, not a physical item. So deed has the only value.

Here's an artist talking about this: https://youtu.be/1ERt4BTBbDk

I find his analogy more apt - nothing prevented an artists from making another painting and claiming it to be genuine #1 of #1 either.

It's just with NFTs the benefit for a buyer is being able to see this happen on a public blockchain.

I would like to see something like this but for media licenses.

It would be nice to be able to keep an offline NFT library (of, for example, music) where the tokens can be presented (with authentication) to streaming services like amazon or spotify in order to download a DRM-free copy of whatever media the NFT proves I own license to hold.

Needless to say, like most crypto-ideas, this doesn't need NFT. A digital signature from the seller of the license would work just as well..

I agree. I should have emphasized "something LIKE this".

I don't think any blockchain bullshit necessarily needs to be involved.

I would like to be receive some kind of cryptographically secure token from Bandcamp (or whomever) that is secure enough to be accepted as proof of purchase by content distributors.

This could make it feasible for places like spotify or google play music to sell "Bring Your Own Album" streaming service priced by operational costs rather than licensing fees.

Or for Amazon Music to sell "Replace your library" as a giant bulk download when your offline music library is accidentally destroyed but your carved-in-stone hard copies of all your proof-of-purchase licenses tokens (that provably belong to you and only you) are still safe.

Not really. What happens when the sellers pass away and someone has to check the chain of transmission ? Do you have to go to each spouse in order and ask them to retrieve "you know, a big file full of numbers" somewhere in the deceased's backup usb key?

You need a public and immutable chain of authentified transactions for that to be an instant check.

It does not, but agreeing where to keep register is a political problem. Why would register to be run by Sony and not Warner? With NFTs it is already there, held by forever neutral party, so it is easier for all market players to recognize it.

> it is easier for all market players to recognize it.

What advantage do they have for doing so?

How is this better than keeping a drive full of mp3s?

The tokens should be smaller and accessed less frequently. Potentially enough (in both aspects) to facilitate being backed up by printing out to some long-term hard copy like Base64 encoding on paper.

Additionally, they could make it feasible for places like spotify or google play music to sell "Bring Your Own Album" streaming service priced by operational costs rather than licensing fees. Instead of accessing the content in their normal subscription, you can access anything for which you can present a valid license.

Smaller is a benefit, but you're still beholden to Spotify or some other service holding your music for you, and continuing to honor the agreement.

Whether this agreement is stored as an NFT on the blockchain, or in Spotify's database doesn't matter, as long as they - or someone else! - can unilaterally yank that data out. And they can.

As far as files go, I'm reminded of the Robert Heinlein quote - probably mangled, maybe apocryphal - that you don't truly own anything you can't carry in your arms at a dead run.

The music does not belong to me.

The cryptographically secure token proving I own license to duplicate the music is what belongs to me.

Ah. I like it when the things I pay for belong to me.

It is important to distinguish between the physical media and the intellectual property.

When you buy a CD, you own the physical CD but not the music. If you go to a concert and the band plays some song from that CD, you wouldn't brag "Wow they are playing *my* song! I bought that song! I own it!"

The thing you own is the license to reproduce that music.

With old media, this license was essentially an afterthought inherent in the physical media itself due to the cost of producing a copy being so high.

Now with digital media, the cost of producing a copy is too low for that model to work.

I would argue that with old media, the license was explicitly and permanently baked into your purchase price - after all, you owned the physical medium. You could access it any time you wanted to, without asking permission every time.

I think moving away from this model sucks. We used to purchase the license; now we're renting it. In my above comment, the music didn't belong to me, but the license did.

Good news, this has existed for years! It's called Bandcamp.com

Just checked some of my Bandcamp receipt emails. Not seeing anything that looks cryptographically secure.

The "Download your purchase" and "Listen now in the Bandcamp app" links both have a "sig" option that appears to be some kind of thumbprint but they are not the same and are probably just related to tracking rather than the actual content.

This reminds me of the 'buy an acre of Moon real estate and receive a certificate".

https://lunarland.com/moon-land/

It's exactly that, but mostly not at prices you'd buy your kid as a birthday present.

So I could just screenshot the tweet and would have more physical gain for my $100,000.00 than the purchaser?

I guess I don't understand the value of purchasing this or I'm missing something obvious.

Your screenshot of the tweet hasn't been "signed genuine #1 of #1" by Jack Dorsey.

Pump and dump friendly. Money laundry friendly. For sure this new scam will have powerful forces to drive its marketed attractivity to the roof.

I would be absolutely shocked if this wasn't a violation of some part of the Twitter Terms of Service.

Yes, I understand who Jack is. The Twitter legal team probably hasn't thought out all the ins and outs of tweets becoming a currency.

What happens when someone's account gets removed, but they were in the middle of an auction? I'm sure they at least stir up a fuss.

Like most platforms, when you tweet, you own the copyright but license it nonexclusively to Twitter.

Twitter cannot stop you from selling your tweets because you are the copyright holder.

They are not becoming a currency. At best a non fungible asset.

This is just the tech version of "Donate to Kylie Jenner" to become the world's youngest female billionaire.

I think it is just the reality of this world that there exists people in this world whose sole purpose in life is to be exploited by others, and they gain pleasure knowing that.

"you wouldn't download a ~~car~~ tweet?"

How do these things work? Wikipedia doesn't actually say. Do you hash the data and then transfer ownership of the hash on the blockchain to somone?

Ownership relies on asymmetric cryptography, at a basic level the tuple (nft token, public key) is unique and enforced to be unique by the rules of the blockchain.

While Bitcoins are not tulips (of the Tulip Mania fame), NFTs are.

People will pay anything right now to not hold cash.

Value - the worth of something in terms of the amount of other things for which it can be exchanged or in terms of some medium of exchange. ------------------------------------- Game over. NFTs are validated publicly. From here is nothing new.

Can the future owner edit the tweet?

Legally, who knows?

Technically yes.

As for my take, the NFT is just a data, accepted to represent the idea of that Jack minted and is now selling the tweet. Contractually he hasn't agreed to give you rights to editing or deleting the tweet.

The last two paragraphs are a bit confusing to me. One is saying that the company auctioning the tweets compares the process to acquiring signed baseball cards -- but I can draw sunglasses on the player's photo with a sharpie if I want to, in that case. I am certainly not allowed to draw sunglasses on the player with a sharpie, of course, that would be very rude.

So is Jack selling _the_ tweet, or a signed "photograph" of the tweet? Is the buyer the "tweet's buyer", as it stands in the last paragraph or a... I'm out of analogies.

Or can the account owner delete a tweet after selling it as a NFT?

Money Laundering as a service

This feels wrong.

Doesn't really feel wrong to me. Just incredibly stupid.

Feels like someone is trying to invent a new way to launder money.

Gotta be rewarded for your crypto price-boosting tweets somehow. Directly buying and selling btc would be too obvious, just get some anonymous entity to do it for you, then pay you via your silly blockchain artworks.

Incredibly stupid things don't feel wrong?