How Stupid Are We: Just What The Hell Is A NFT Anyway? (Warning, there may be sarcasm ahead)

Welcome to a new feature of grouchyfarmer.com which, I hope, will never be repeated but probably will because every time I look at the news it seems the human race is well on its way to stupiding itself into extinction. It’s called How Stupid Are We. And I’ll warn you right now this article got way, way longer than I intended. But let’s look at NFTs.

The acronym NFT has been popping up all over the place recently. I read a lot of articles in which they are mentioned, usually by people who seem to have absolutely no idea what the hell they are or how the whole system works. All they know is that they think they can make money off them. Somehow. Maybe.

As the headline up there asks, just what the hell is an NFT anyway?

Sidenote: Well, as a former writer and editor my first question was really “Is it ‘a’ NFT, or ‘an’ NFT’?”. Personally I think “an” should be used because the rule of thumb is that ‘an’ is used when the following word starts with a vowel sound, in this case ‘en’. But if you want to use ‘a’ yourself, hey, I’m not going to complain. Go for it. Just to mess with any grammar police out there, I’m going to use both.

A NFT is a non-fungible token. There you go. That clears that up, right? So let’s talk about wood or cows or photography or something really interesting…

Hm? No? It doesn’t clear that up? Yeah, I suppose it doesn’t. Let’s see if we can dig into this.

The dictionary meaning of non-fungible is that it is a thing that is unique. There is only one of them and there is no other thing that can replace it. The dining room chair I’m sitting on right now is fungible. It is not unique. There are five others just like it sitting around the table and I’m sure there are hundreds of others floating around out there.

However my van Gogh painting depicting a tiny mouse wearing antlers romping in the woods with drunken unicorns while a certain politician who shall not be named stoically suffers from severe constipation off in a corner behind a bush is, however, unique. It is non-fungible because, well, van Gogh is dead and can never make another one (thank God).

Side note: No, no, no! Not that van Gogh. I mean my old neighbor Coriolanus van Gogh. No relation to that van Gogh at all. Give Coriolanus a box of crayons and a case of beer and it would keep him busy for hours, but the less said about that, the better.

So when you buy an NFT you are buying a unique object that no one else can ever have?

No. A lot of people seem to have that impression, but you aren’t. You’re forgetting the “token” part of the term. A token is a thing that serves as a representation of another, entirely different thing. Let’s say we go out to the local bar and I buy you a drink but you’ve already had two (Well, this is Wisconsin so most likely you’ll have had six or eight) and don’t want another. The bartender at some places will give you a plastic or wooden coin that you can use later to exchange for a drink when you do want one. That’s a token.

When someone buys an NFT of a GIF, JPEG or video or something like that, they aren’t buying an actual thing, they’re buying a token that represents that thing and which, hopefully, maybe, ‘points’ to the actual digital representation of that thing so you can go and look at it or something. I guess. In this case the token is an entry in a kind of special database called a blockchain.

So wait, Gf, you say. You mean not only are these people are paying literally millions of dollars for a stupid GIF file of a cat horking up a hairball that’s been floating around the internet for the last 20 years, they don’t actually get, well, anything at all for their money, just an entry in a database somewhere that says they own a thing?

Well, sort of, yeah.

If it will make you feel better, please feel free to join me in banging your head against a wall to get rid of the headache this has possibly given you. It won’t make you feel any better, but it does help pass the time…

But before you start banging your head on the wall and begin to suspect that the human race is going to be the first species ever to stupid itself into extinction (it probably will but that’s fodder for a different article), remember these are special gifs and jpg and mp3 files. And these are special databases. We know they’re special because they call them blockchains and not databases.

Let me see if I can make this more clear. I probably can’t because all of this makes my head hurt, but let’s try anyway.

I wanted to call it “Harvesting Pickles in October While Being Attacked by Wild Chickens” but I was overruled for some reason

Now look at that image over there on the right. That is a digital representation of a painting I did many years ago called “The Dancer”. And I want to sell you the NFT of that painting for, oh, let’s say a hundred bucks

Come on, just play along here.

So, you say, GF if I buy that NFT you send me the painting…

No.

Well, what, you ask, do I actually get for my hundred bucks then?

You get a token entered into a database that says I sold you an NFT of that painting. Period. I still have the actual painting, I still have the copyrights. What you own is an entry in a database somewhere that says I sold you the NFT of that JPG image up there, which I have stored on a flash drive laying on my desk. Unless the cat ate it, in which case it’s, well, in the cat but that’s the cat’s problem, not mine.

You’re free to sell the NFT, the token I just sold you, but the image itself? It’s still on that flash drive, in the cat. (Well, unless the cat pooped but I’m not about to go look. Ick. I’m not going to fish it out of the litter box.) I still hold all rights to that so you can’t do things like, oh, reproduce it in a book or something without paying royalty fees. To me. And the royalty fees are going to be steep because I want to buy a Cat D10 bulldozer and those puppies aren’t cheap.

But wait, you say, it’s a picture in this blog. Anyone can just do a screen shot of it and have a copy.

Ah, but only you own the NFT which says you own, well, the NFT which is, well, something, I suppose? Maybe? Kinda?

These NFTs we’re talking about here are all, oh, digital assets, let’s call them. They are GIFs of dogs trying to take a dump behind a bush, or alleged artwork in JPEG form or sound files or video files. Someone even bought a NFT of the very first Tweet for something like three million bucks, for God’s sake. Or what they were told is the very first Tweet. And ultimately what they own is, to be completely honest, nothing. Nothing except an entry in a blockchain that says they somehow “own” that particular asset.

I have no problem with buying and selling digital artwork or other digital assets. I personally do it all the time. I’m in Second Life where I spend time building environments. At the moment I’m building a sort of cyber/diesel/steam punk city with surreal elements like bits of kawaii culture, exploding penguins (seriously, exploding penguins. they’re great fun.) and other goodies. I do create my own stuff in SL but there’s no way I can build enough props, buildings, and exploding penguins in my lifetime in order to finish an entire city, so I buy stuff from other in-world builders. I sell stuff in SL as well, and some of my paintings and photos, (well, digital representations of them), are hanging on virtual walls or are on display in a few places in SL.

But when I buy something in SL, it is something I can at least use in that environment. It’s a bit of art. or a prop for a scene I’m creating, or a building that fits into the environment I’m making. When I buy something there I am buying the right to use the creator’s intellectual property in my own environment. With an NFT I’m not even getting that. All I get with an NFT is an entry in a database somewhere that claims I own that NFT. Period.

Now if you’re starting to think this all sounds like some kind of scam designed to separate people from their money, you aren’t the only one. Personally I agree, and there are a lot of people out there who feel the same way.

Supposedly you are buying the original “thing”, whatever it is. But if you stop and think about it for a moment, there literally is no such thing as an “original” object when it comes to a digital asset. It isn’t like a painting where there is only that one, single physical object. In the digital world everything is a copy. Everything. That’s how computers work. Look at this letter “T”. Within milliseconds of my typing that letter it ceased to exist and became a copy as the pattern of bits that represent that letter were copied from the keyboard’s buffer memory into the computer’s cache memory to be stored in main memory and and the “original” pattern of bits in the keyboard’s buffer was destroyed. Then a video system looked at that copy and saw that pattern meant it needed to put a “T” in that location on the screen and made another copy of it, and then the system realized I’m writing an article so it made a backup copy just in case, and some of that data was then stored on the SSD drive in this computer, which was then backed up, and then it realized the section of the SSD where it was storing that “T” was getting full so it made a new copy of that “T” in a new location and erased the old one to recover the space… You get the idea.

The person who bought the “original Tweet” bought no such thing because there is no original. By the time the sender of that original Tweet hit the send button, it was already a copy of a copy of a copy of a copy of a… You get the idea.

Here in the real, tangible, physical world, there are “original” objects, there are non-fungible objects. They have a physical reality. In the digital world, in the “metaverse” (dear lord I hate that term), in the “virtual world”, there is no such thing as an original copy of anything. The very nature of how computers work make the concept of an ‘original’ impossible because in the act of creating something even the artist or creator of that thing is always working with a copy and the ‘original’ is destroyed in the process of creation as patterns of bits are moved around in computer memory and data storage spaces.

The whole concept behind these NFTs is fundamentally flawed from the beginning.

And then we come to blockchains. What makes the whole NFT thing possible is, of course, the blockchain, a mysterious and astonishingly complex bit of code that creates a supposedly immutable, permanent transaction record of every movement of an asset in the system. If you start to look into the technical details behind a blockchain you will find yourself quickly wandering off to watch cute cat videos on YouTube out of sheer boredom. Now I know, sort of, how blockchains work, but if I started to try to explain it completely it would take me about, oh, five days just to write down the basics before I even got to things like decentralization, the different types of forks, genesis blocks, orphaned blocks, nodes, wallets, signatures, encryption, hashing… Sorry, I just can’t be bothered. Far better writers than I have tried explaining it to non-tech people, so I’ll leave it up to you to do your own digging.

But to get back to NFTs, what can I say? Let’s just say George C. Parker would have been proud if he’d come up with this scam.

I’ve heard NFTs being called a reimagining of the old “pump and dump” stock scam. Some NFT owners are selling their own NFTs to themselves in the hopes that the transactions being generated will make people think they are valuable so they can dump them on someone else. I’ve heard others claim that when following the “chain” to try to find the actual digital object the NFT is linked to, most of them don’t actually exist at all. Someone else said that nfts are only valuable as tools for money laundering, tax evasion and fraud. Scammers are outright stealing artwork from legitimate artists and selling them as NFTs. From one end to another, the whole NFT system is little more than a great, steaming pile of sh*t.

So, hopefully this has taken a confusing subject and helped to make it even more confusing.

Author: grouchyfarmer

Yes, I'm a former farmer. Sort of. I'm also an amateur radio operator, amateur astronomer, gardener, maker of furniture, photographer.

7 thoughts on “How Stupid Are We: Just What The Hell Is A NFT Anyway? (Warning, there may be sarcasm ahead)”

  1. I’ve been wondering if I am just old and this NFT thing is just new world tech and beyond my scope of understanding. Certainly blockchain is. But I’ve also felt that about cryptocurrency. I’ve come to the conclusion that all currency is just flotsam. It works only because we believe in it. We are encouraged by governments and banks backing the illusion but ultimately its just an illusion. I think maybe NFTs and cryptocurrency are just taking the illusion we have about currency generally to a higher level of delusion.

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    1. I think you have a valid point there. Our whole financial system is based on what I sometimes call ‘imaginary numbers’, i.e. things that don’t actually exist. Virtually all of our money exists only as numbers in a financial institution’s computers. But with the traditional finance system at least that dollar is backed by the government, it is guaranteed to have some specific value.

      With crypto there is no backing at all. A bitcoin is only worth what the speculators claim it is worth. There is nothing backing it up at all. Cryptocurrencies are what I call fragile, not only as far as their worth is concerned but also fragile as far as their entire existence is concerned. At the moment the crypto system is based on something they call ‘proof of work’, in the case of bitcoin that is the elaborate mathematical processes necessary to “mine” a coin. It is a process that takes up huge amounts of computer processing power and enormous amounts of energy. But all it would take is one significant technological advance or even just a clever hack to bring the whole system crashing down.

      NFTs are even more troublesome. The whole NFT system is currently rife with outright fraud, market manipulation, pump and dump scams, the “sale” of NFts that the seller doesn’t actually possess, etc.

      Liked by 1 person

  2. Amazing! I’m imagining all the possible scenarios with a potential for screwing this market up. What’s the hacking potential, for example? Surely something like a blockchain is a target no hacker worth his name could possibly resist? I’m very much on the outside looking in where tech is concerned, and this is another to add to my list of potential threats, like the Russians, sunspots, and Huawei. Enormously entertaining. Thank you!

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    1. I share your concerns. The blockchains themselves seem to be resistant to tampering, but it isn’t just the blockchain that’s involved. There is a whole system in place dealing with transferring crypto, holding it, moving it from one person to another, etc. and that most definitely is vulnerable. And I personally don’t want to hold an asset that is worth $2,000 one day, $10,000 the next, or $1,200 the day after, which is how wildly crypto can fluctuate. How can you do any kind of reliable financial planning when the value of what you own bounces all over literally on an hour to hour basis?

      NFTs are even worse. I’ve been seeing investigations showing that a large percentage of the NFTs people are buying don’t even exist, or which have stolen the intellectual property of other people, etc. NFTs seem like a perfect system for scammers to separate people from their money.

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