So WTF are NFTs all about? Buying JPGs? Why can't you just right-click save? Is this a giant ponzi? Far from it...

[AceVentures]

I've noticed that there is an increasing number of people on this forum that are becoming aware of NFTs and are interested to participate, but rightfully cautious at the moment. After all, it sounds absolute bat-shit crazy to talk about NFTs today. Buy a $300,000 jpg of some pixels? Bound to get ridiculed by way of pointing at ponzis and tulips. In fact, this is how I feel every time I talk about NFTs to somebody that's only known of them from word of mouth with the real value-proposition seemingly lost in translation.

So I'm starting a separate thread outside of the main Bitcoin/Cryptocurrency discussions to bring attention to this next-level abstraction that we as fastlane unscripted F*ck-you entrepreneurs absolutely ought to know about.

I've been digging and digging for the "right" resource but I've only lead myself astray - I do not believe a comprehensive medium exists that encompasses the depth/breadth of what we're talking about.

Instead, I've opted to share with you glimpses of the vision and hope that with the community here we can gather the missing pieces as the story unravels before us.

I'm going to Frankenstein a bunch of different things together so bear with me.

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From VISA's latest CryptoPunk purchase (today) comes an article describing NFTs. It mostly brags about VISA and lacks enough depth but it's a good start for people that have no idea wth I'm talking about. Here are some key points and I'll even highlight the bangers.

Let’s start with the basics — how do you explain NFTs?​

Cuy Sheffield: NFTs are a way to represent ownership of a digital good, like an image, video, or piece of text. Since the rise of the Internet, there hasn’t been a way to claim possession of a digital good, since most files can be infinitely copied, pasted, and shared. NFTs are unique tokens that can be used to certify the provenance, authenticity, and ownership of a piece of digital media.

Like cryptocurrencies, NFTs are tracked and exchanged on a public blockchain. But unlike cryptocurrencies, NFTs are unique. One bitcoin is identical to another, but each NFT is one-of-a kind.

What excites you about NFTs?​

Sheffield: NFTs have the potential to become a powerful accelerator for the creator economy and lower the barrier to entry for individual creatives to earn a living through digital commerce. NFTs are starting to usher in a new form of social commerce that empowers both creators and collectors.

NFTs could also fuel small and medium sized businesses (SMBs) in powerful new ways. The rise of ecommerce has made it possible for SMBs to sell online and reach customers around the globe. But they still have to produce and ship physical goods, which can have high upfront costs. NFTs give small businesses an opportunity to harness public blockchains for producing digital goods—which can be delivered instantly to a crypto wallet. We can envision a future in which your crypto address becomes as important as your mailing address.

How are you and your partners at Visa thinking about this space?​

Sheffield: From a commercial perspective, NFTs are gaining momentum as digital-first sports memorabilia. With platforms like NBA Top Shot, fans can collect and display their favorite game “moments.”

We expect a huge range of new cases in the years ahead. The ability to track and leverage a digital asset in multiple environments could mean exciting new opportunities in ticketing, gaming music, art, and beyond.

Imagine discovering a new musician online. You purchase an NFT of their album art, which can simultaneously serve as a piece of art that you can display online, an entry into an exclusive chat group where you get to connect with other superfans, and a backstage pass for an upcoming show. Ownership of the NFT could also unlock exclusive memorabilia, whether “air dropped” into the owner’s wallet or rewarded after certain behavior, like making a purchase at a specific store.

The artist and their fans can now connect directly with each other and build a powerful community that create new experiences for both.

How might Visa play a role?​

Sheffield: NFTs are rapidly gaining traction and we expect continued growth. For example, there has already been $1B in payment volume in August alone up from less than $100M in all of 2020.

Enabling secure commerce is what we do — we’re the network working for everyone — and that extends to new forms of digital commerce that unlock access. So, it’s not surprising that we’re thinking deeply about this space and how we can apply our expertise in enabling seamless and secure digital payments to make NFT-commerce accessible and useable for buyers and sellers.

In the near term, we want to help brands and businesses better understand NFTs and how they might be harnessed for customer and fan engagement. To that end, we published a paper with observations on today’s NFT landscape, as well as actionable guidance on how to evaluate and scale NFT opportunities.

Looking ahead, we’re working on some new concepts and partnerships that support NFT buyers, sellers, and creators. We look forward to sharing more in the months ahead.

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Now let's talk about imo the most exciting economy that emerges from the NFT abstraction: the MetaVerse.

I wrote the below piece back in February of this year - and it is more relevant today than ever so review it if you want to get a better feel for what the MetaVerse is all about.

Metaversed

Thoughts on the technology, philosophy, and culture of this new world.

metaversed.net

A rather long read, but worth it if you're interested in getting a vision for what a digital future can look like with crypto as it's infrastructure.

Below is the TL;DR from the article.

• Crypto is laying the foundations for a self-sovereign financial system, an open creator economy, and a universal digital representation and ownership layer via NFTs (non-fungible tokens).
• The Metaverse is coming; trends indicate our direction of travel. Our next great milestone as a networked species awaits us: 7B digital souls with the option to exist almost exclusively online and participate in a virtual economy with societal impact.
• More time spent online will lead to more value created and consumed digitally.
• In order to maximize willingness of individuals to allocate serious time and capital to virtual environments, establishing trust in their durability as well as economic robustness is paramount.
• As education of web 2.0’s shortcomings rises, users will prefer credibly neutral platforms that lack altogether the capacity for arbitrary censorship, undue rent extraction (also in the form of privacy cost), or sudden cessation.
• All of these threats are only amplified by increasingly immersive, pervasive, and interconnected digital environments.
• Decentralized networks provide a unique and unmatchable degree of assurance, whilst a universal erosion of trust in institutions is forcing the desire for alternatives.
• NFTs on top of them enable a standardized universal digital representation and ownership layer for any natively digital “thing” such as game assets, digital art, or domain space.
• Early breakout successes will drive FOMO as onlookers scramble to understand the new tool sets available. The network effects of these protocols prove difficult to overcome; their open nature compounds permissionless innovation incredibly quickly as each additional creator builds on the shoulders of all who came before.
• Owning core pieces of these new worlds brings great financial returns to those who believed; many of whom will be from emerging markets who were quick to move on the opportunities available.
• Beyond wealth, the initial players are granted additional advantages. As pioneers of a variety of new business models and technologies, their accumulated IP and know-how provide a significant moat.
• In the same way the rise of mobile forced large buyouts and talent acquisition, so too will the rise of crypto across gaming and the creator economy.
• In hindsight, it will be obvious that crypto’s role in the Metaverse was the most imperative yet least explored by those speculating on its emergence.

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There was also a post I read this morning that describe this emerging economy nicely so I will share as well:

On Metaverse "But in the metaverse" is a running joke on cryptotwitter I regret to inform you that it is no joke. What we are playing for is whether our children will be fully free or residents in a digital company universe - with the illusion of free, but not really free.

The Wikipedia definition is OK "The Metaverse is a collective virtual shared space, created by the convergence of virtually enhanced physical reality and physically persistent virtual space, including the sum of all virtual worlds, augmented reality, and the Internet."

In other words, the metaverse is a superset of virtual realities, augmented realities and the internet. NFT Twitter & Discord is a form of proto-metaverse, with its avatars, shared communities and shared 2D/3D spaces (
@opensea, @oncyber, @decentraland), hanging off it.

And this is, of course, a continuation of decades of internet communities from bulletin boards to AOL to modern social networks So what is different now? Why does this feel different? So what is different now? Well, global internet scale for one, but more importantly: - Crypto/NFTs and - UX

Crypto, and in particular NFTs, have converted our online communities for the very first time into an ownership society. Your avatar, your digital art, your in-game items, your gallery template are all NFTs and they are genuinely owned by you

This is very new, very different. You are not a 'user' on the flip side of an EULA, a mere guest on someone's server with effectively no rights whatsoever, but a true sovereign owner of your digital objects. It is BTC, but for everything digital

The scale and breadth of what this can unleash is astounding as you get huge decentralized global communities coordinated with economic incentives. Crypto is like 5x normie speed. NFTs are 2x to 3x crypto speed

What about UX? This is what drives the jokes right now. 3D worlds are still clunky. Interesting, but not ready for consumer prime-time YET. I like Decentraland, but my information flow is 100x better on Twitter

The UX issue is going to be solved in the 2020s [AceVentures here: this is what LUKSO's ERC725 asset class unlocks, seamless UX via blockchain abstraction]. You can expect photorealistic mixed reality (augmented reality, virtual reality and real reality) with minimal lag in non-ridiculous devices this decade. Mixed realty (the Metaverse) will be just your regular life.

Some of the smartest people in tech also know this, including: 1) Mark Zuckerberg 2) Epic Games https://theverge.com/22588022/mark-zuckerberg-facebook-ceo-metaverse-interview

This is both good because they have the money to invest in improving the tech but this is bad because the goal will be walled gardens. You already can't access the best VR hardware in the market without a Facebook account which is, to me, alarming

Unfortunately right now we have few allies: a) China is going walled garden b) US political leadership is not thinking strategically, sees everything through an AML/KYC lens c) EU is determined to learn nothing from the last 30 years of tech failures

So anon fam, for right now, we are on our own. We have to build, build, build now, as fast as possible, to make the default decision for corporations to join the open system, not to try to capture a closed one.

We are all in this together. Don't sweat the differences between punks / BAYC / AB or 1/1s. Right now we need to scale and onboard everyone. If we can get 1M, 10M, 100M, 1B people the experience of owning their digital assets, good luck to the in-game closed store.

The Metaverse will actually happen this decade. If it is open, human innovation will flourish. If it is closed, we are digital serfs of sorts. We 100,000 or so people right now are the front-line in this battle and we have to do it ourselves.

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There is much more to this and I will be updating this thread as I get more time. For now - let's just get a conversation started. And y'all please make an effort to keep this thread separate from the BTC/Crypto thread which has an INSANE amount of value contained within. This is not meant to replace the other thread - but instead of all the price talk, I just want us to take a step back here and understand the abstraction, to discuss emerging business models, to talk about the topic of private ownership, and ultimately to leave bread crumbs for the less fortunate amongst us to catch up with this ground-breaking model for future economies.

As a fellow Unscripted member of this forum - I salute you for taking the time to educate yourself on a controversial and technically challenging idea.

Tagging @GPM @Bekit @Ocean Man who had originally asked for some NFT info - just as a reminder that I've decided to take this conversation out of the main BTC/Crypto thread.

 

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[AceVentures]

View: https://www.youtube.com/watch?v=gY1EmqTSco8


Just because you mint an NFT for a specific jpeg, in no way allows for your ownership or rights to that picture/asset in the same way being scammed into buying a piece of paper to own part of the Brooklyn bridge does.

The courts and legal system determine who owns what land or other items such as car titles, etc. Not some token that I can create in a few minutes (which I have done) and claiming that gives me rights to something nobody else can. Someone can download the jpeg from CryptoPunk that sold for thousands of dollars off the internet without anyones permission. You're not going to a judge and suing that you own an image thats on the internet because you paid for an NFT that I created out of thin air and tricked you into buying it and claiming you owned it now.

Wrapping real world assets such as real-estate and car titles are still some ways away - the primary reason being that the problems around digitizing hard-identities are nuanced and have not yet been solved.

Right-click saving a JPG is akin to printing a picture of the Mona Lisa and hanging it on your wall. Sure there's a Mona Lisa on the wall, but it is not THE Mona Lisa. You couldn't sell or do anything with your copy, as it's not the real thing.

Today, we're simply talking about this abstraction layer and the powers it enables. Nobody is encouraging you to ape into JPGs. They just happen to be how people are using that abstraction layer with respect to digital art. More practical use-cases are emerging and have powerful utility. Please re-read the original post to get some insight as to what these use-cases are.

The NFT craze is just a repackaging of crypto kitties for people with too much money and not enough brains.

Thank you for your insult - I'll make sure to evaluate the size of my brain next time I play with NFTs.

For the entrepreneurs on this forum that are capable of thinking for themselves, let's continue to explore how this technology enables us to access new/emerging marketplaces as well as the ability to engage with people directly, cutting out middleware software/companies that tax your interactions across the internet via violation of your privacy, your data, and your sovereignty.

One prime example we can explore is the creator economy that's well an alive today, albeit under the whims of big tech overlords.

Take YouTube for example. Today, more kids want to be YouTube stars than astronauts, doctors, engineers, or any other profession we used to look up to when we were younger. Despite the opportunities that arise from the ability to INFLUENCE via the internet in the form of video, your content does not belong to you. It belongs to YouTube. Should they decide your opinion, or your face, or what you stand for is not in line with their interests, they can effectively steal all of your IP, your influence, and your audience in an instant.

NFTs are an abstraction layer that can ensure the video content you put out is not only uncensorable, but that YOU are ultimately the benefactor of whatever fame/attention/monetization route you pursue with your content.

This is ONE example.

And my apologies I did not watch the video you shared - I simply don't have time to wage ideological wars with people that have closed their minds to innovation. These arguments are akin to people ridiculing the internet when it first emerged, suggesting people can just use the radio for listening to sports, use record players to listen to music, and read the newspaper to keep up with current events. That same mentality is today preventing people from exploring a new world of opportunities due to their own ignorance.

 

[MTF]

I don't care at all about the silly virtual collectibles and find it hard to believe that they'll be ever valued the same way as physical stuff.

What I find possibly revolutionary is how NFTs can allow authors to get paid each time someone resells their ebook. Via Joanna Penn and Simon-Pierre Marion:

What makes it possible to resell ebooks? And if we have a smart contract in place, can we get a cut of a resale?​

Simon-Pierre: Absolutely. To be able to resell an ebook, you have to make it clear for the royalty owners of the book. So, of course, if you try to resell an ebook and the royalty owners, or the copyright owners of the book do not want the ebook to be resold, of course, you're going to lose in any court.


But for example, in our solution, what we are saying is that we ask the rightful owner of the book if they want their ebook to be resalable or not. And they take the decision if they accept or not, this state of reselling. If they do not accept, then people won't be able to resell it, but if they do accept then the ebook can be resold.


And of course, this is all again stored in the smart contract. So if you accept that a reader resells his books, then you can also set in the smart contract, what are the percentage for the distribution of the resell transaction? So if you say, ‘I will let my readers resell their book, but when they will resell it I want 50% out of it, and I leave them the other 50%.' That's an example.


But the other thing you can put in the smart contract is the notion of time. So you could say, ‘I would like to have that resell option enabled in the blockchain smart contract. But maybe not right now because often my sales are very high the first year and then after that, they go down a little bit.'


So you can say, ‘I will enable the resale after a year.' So you can purchase the book, but you cannot resell it, but a year after the resell option is activated, and then the reader can resell the book. And this could create another sub-market and other revenues for you.

 

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[AceVentures]

How does one invest or participate in this NFT market?

I mean with BTC, I could go to an exchange and get a coin.

Is NFT akin to purchasing art pieces then? You have to have the right “eye” as each NFT is different from the next one?

NFTs today are mostly similar to purchasing art pieces. You could participate in that fashion, and yes having the right "eyes" becomes incredibly important. More than having eyes is recognizing if a collection has true uniqueness to it.

For example look at ArtBlocks - they do generative art and it has found love within many Ethereans hearts due to the unique nature by which the art comes to life.

There's also Squiggly, which are literally squiggly lines but again computer generated so many of these CypherPunks turned Ethereans have a deep love for this type of art.

There's also a trend of pfp (profile picture) avatar projects. This is the cryptopunk and bored ape yacht club (BAYC) or LonelyAlienSpaceClub projects. People join the community by buying an Avatar. Typically these collections I've seen have had ~10,000 pieces but they don't need to.

BUT imo all of these are mostly proof of concepts. You see, people are really excited about NFTs today because it's such a powerful abstraction. But in its current format, most NFTs live as ERC20 or ERC721 smart contracts.

These types of contracts are in nature limited - they contain ownership information (public address of owner) As well as a JSON file that has all the relevant information contained within. Now unfortunately at this current stage of the blockchain game, these JSON files are not "composable" by other smart contracts and thus their use across permissionless blockchains is rather limited.

There will be many usecases and many winners, but at this stage I'm more interested in infrastructure design/architecture.

I play with these things every day. After months of heavy use, I've learned a ton about the user experience and what value skews would change the game. Smart contract wallets are one of these game-changing value skews.

Im currently betting on the use of the ERC725 token standard as an emergent asset class. This asset class will be far superior to other smart-contract standards in that there is an executable function inside the contract itself. This execute function can be called from outside the contract and so this contract can become dynamic.

This dynamic element enables you to have a "wallet" like you do in metamask today, but it'll actually just be in a smart contract on chain. This execute functions opens the door for enabling new recovery features. Personalized recovery features. As many and as unique of a recovery that you would like. Remembering your "private keys" will not be something you'd be doing anymore, because this on-chain smart-contract could sync up with other data sources and perform checks against them.

Imagine "signing in" to a contract using a password if you want, or a pin, or whatever you set, and once authorized any dapp you visit you automatically authenticate via this smartcontractwallet, and then from there you can do all your social media, all your banking, and every other tokenizable function can be controlled from this wholly owned contract that lives onchain.

The real beauty in all of this, is in the simplicity of the abstraction. It's not a complex standard, in fact it's a really simple design. It's this execute function that opens up a brand new playing field for the composability of contracts across the crypto stack.

Take a look at this, it's called a universal profile. These are smart contracts on chain. But they're user profiles like on social media. Imagine now if you own the key to this account, there are now functions on the web app for you to do things.

You can create your own universal profile Universal Profile Cloud

What's cool is if you go thru the process, you never sign a tx personally, a relay service creates this account for you! I hope you can begin to see how social applications can be built using these principles.

Long answer I know - but wanted you to know that "investing" in NFTs today can look like lots of things. I believe the real money is in picking the right infrastructure layer.

 

[AceVentures]

How can an Autor participate on that?
Lets say, I write a book and sell it online. Can I pack it in an NFT each and sell that with copyright protection?
My brain is hard working to understand that all!

I don't care at all about the silly virtual collectibles and find it hard to believe that they'll be ever valued the same way as physical stuff.

What I find possibly revolutionary is how NFTs can allow authors to get paid each time someone resells their ebook. Via Joanna Penn and Simon-Pierre Marion:

Yep you guys nailed it - it doesn't have to be about art. It's simply a digital ownership abstraction for ANYTHING you want.

In yalls case as authors - you could be selling your books in NFT format. Perhaps you could offer limited edition versions of your books, each with a unique chapter that the original prints don't have.

You could sell access to your content via an NFT "membership" token. So if the customer owns your membership NFT token, when they surf your web-page they get exclusive privileges on your site. Perhaps they get to chat with you directly, perhaps they get exclusive access to all of your upcoming content, or perhaps they are the ONLY ones that get access to your future content.

As you can imagine there are many many ways to play this game - but the royalties aspect @MTF has mentioned is another critical point.

An interesting marketing scheme today would be to offer your NFTs for practically free - but build a community and a brand as your main effort. The side-effect of this is the community will be selling/trading/exchanging your tokens on the secondary marketplaces and each time your NFT transfers hands, you collect a royalty.

In practice, you create an army of marketers and promoters. They have every incentive to hype your product, because the have a direct economic incentive to resell at a higher price.

 

[sadlerj]

Jealous, I wish I could figure out how to be rich weird instead of poor weird

 

[Antifragile]

 

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[AceVentures]

Where do I subscribe to your newsletter, Ace? Providing some awesome value and distillation of info.

This move against Apple I feel is super helpful for the crypto industry, for sure!

Right here on this forum fam - I don't want any of your money or to have you on an email list to shill you anything.

Everything I learn I am willing to share with yall for free.

No pay walls or secret societies here - just a desire to lead an Unscripted life and to lead as many of my peers as I can along with me.

 

[MJ DeMarco]

Thanks for the write up, I need to really read this and get up to speed.

 

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[AceVentures]

Any way to invest in NFTs that would generate regular cashflow?

My personal opinion?

Invest in the underlying network on which NFT sales/transactions are settled upon - and validate that network (like mining) to receive staking rewards, which are a function of the fees people/businesses are willing to pay to settle their txs. That's your business model that fits the CENTS commandments to the tee.

Currently that network is ETH. But I personally believe that most NFT txs will be settled on other more custom chains designed specifically for handling this type of behavior.

My current bet is on an emerging network called LUKSO - ticker is $LYXe. Project scheduled to go live before EOY - founder of the project created the ERC20 standard (the standard on which 90%+ of existing projects are built) and has created a new NFT standard called the ERC725. Coin is currently sold on the Kucoin exchange as well as decentralized money markets (UNISWAP).

I've talked in large detail about this project in the Bitcoin/Cryptocurrency thread so make sure to read-up on those. If you still have questions afterwards shoot me a DM.

 

[AceVentures]

I'll give you guys an example of a brand I'm a big fan of - and I'll let you read between the lines to see how this process leads to winners of both the participants as well as the brand.

A brand called RTFKT studios (pronounced artifact studios) started out within the Sneaker niche. If you're not a sneakerhead, let me tell you that there is a huge market for Sneaker fans. Collectible sneakers can exceed hundreds of thousands of dollars in value.

This brand makes digital version of badass sneakers and sells them as NFTs. They then have "forging events" whereby if you own the original NFT of the badass sneaker, RTFKT studios can forge you an actual shoe of this artful sneaker and ship them to your home.

I purchased a number of RTFKT studios NFTs a few months ago because I was not only interested in the product, but I had a respect and love for both the brand as well as the community of people that believed in this brand.

Fast forward a couple of months - and RFTKT studios is now working on a new Avatar project. But here's where things get interesting. Half of all of the avatars this company will be creating will be reserved for current RFTKT NFT holders. They will be airdropping these latest Avatar NFTs directly to the wallets of the people that own these previous RTFKT NFTs.

Because people are interested in this upcoming Avatar project, they've been rushing to buy existing RTFKT pieces, some that were given out to RTFKT holders for FREE, just so they can get access to this upcoming project.

Consequently, all of the RTFKT pieces I had purchased have more than 10x in price in anticipation of this drop, and because people are willing to pay more and more to be a part of this community, recognizing that as this brand grows and becomes more successful, being a member of this community gives you priviledged access to anything they release.

The price of my NFT's have gone up by over $40,000 over the past 3 weeks because of this.

If the brand wins, so do the people that believe in the brand - because for new entrants into this community, their "access" is in the hands of people that already own the brands pieces.

I'm not shilling anything - I just want to give you an example of how leading brands in this space are using this abstraction to bring in revenue for themselves as well as their community.

WIN and let WIN is the model.

 

[Andy Black]

I don’t understand NFTs, but thought this was interesting:

‎My First Million: #209 with Gary Vaynerchuk - Why NFTS Are the Future on Apple Podcasts

‎Show My First Million, Ep #209 with Gary Vaynerchuk - Why NFTS Are the Future - 13 Aug 2021

podcasts.apple.com

 

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[AceVentures]

Great Thread! Hopefully someone can explain, how do you actually make profit with those NFTs?

The same way you make money with anything in life - deliver value to people.

The main advantages in THIS economy vs traditional marketplaces is you have pure ownership of your data, your interactions are uncensorable and transparent, and you have a direct line of communication between merchant-customer.

If you were previously not delivering any value - wrapping a shit idea into an NFT will still result in shit earnings potential. But if you deliver real value - the benefactors of this value can participate in the success of the project. If it's an art project for example - there's secondary marketplaces for your buyers to resell and effectively become promoters of the project.

Fictional Example: @MJ DeMarco creates his newest book called "How to break free from tyranny" and creates limited editions of this book in the form of an NFT. FLF fanboys purchase this new NFT and receive the value contained within the information that is shared.

If anybody else wishes to know what's written in this book - their only route is to obtain this NFT version of the book on the secondary marketplace. The more people want to read the book - the more the current holders of this book can earn by reselling on the secondary marketplace. Oh and MJ collects a royalty off of any further transaction.

Say I read this book and got immense value - I can brag about all I've learned and how much this book has changed my life. This promotion is not only good for MJ, but it is especially good for me - because if someone now wants access they have to get this special access from me personally - and I'm now in a position to command whatever I want in order to transfer my rights to this knowledge to someone else.

In this process - MJ benefits from an army of shillers/promoters of his content, without himself having to shove his book down people's throats.

Now say MJ decides to host a new summit - but only people that hold the current NFT are eligible to attend this conference. This further drives the value of the NFT. And any additional input into MJ's brand can have loyalty to the original NFT holders as a baseline. You can see that the "brand" becomes win and let win. Not only does MJ win - but anybody that believed in MJ's brand also wins.

 

[AceVentures]

Whoever is on the others side of the deal (buyer), why would they pay $60,000? This part does not make sense to me. Is it some tax evasion scheme?

Why would someone pay $2-3M for this?



Cultural significance.

In the case of NFTs, this behavior has multiples of that cultural significance effect.

Why pay $100,000 for a Rolex when nobody gets to see your flex. It's a F*cking stupid shiny piece of metal we strap around our wrist to tell the time, nevermind that the sun is the ultimate queue for what "time" it is.

Why pay $400,000 for a Lamborghini when you're going to keep it tucked in your garage every day for nobody to potentially scratch and ruin?

How often do we drive? How often do we drive our luxury cars?

Now consider how much time we spend on the internet. We spend practically every living moment connected to the web.

A $1M CryptoPunk is a status signal and membership access into a one of a kind community. JayZ has one. Odell Beckam has one. Steve Aoki has one. Gary Vee has one.

In the digital world - being a member of the cryptopunk community is more rewarding than owning a Rolex or a Lambo.

 

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[AceVentures]

Alright alright FLF fam I got another banger for you today!

This Opensea NFT Bible is one of the best resources I've seen to date.

Below is the table of contents, in case you wanted a quick glimpse as motivation to explore the document.



As always, I'll Frankenstein some parts together and highlight the bangers for the folks in here that don't have as much time as I do to dig into these rabbit holes.

What is a non-fungible token?​

Non-fungible assets are just normal stuff. Fungible assets are the odd ones out!

Most discussions about non-fungible tokens begin by introducing the idea of fungibility, which is defined as “able to replace or be replaced by another identical item”. We think this overcomplicates things. To get a better sense of what might constitute a non-fungible asset, just think about most of the stuff you own. The chair you’re sitting in, your phone, your laptop, anything you could go and sell on eBay. All of these fall under the category of non-fungible things.

Blockchain-based non-fungible tokens​

Just as we had digital currencies (think airline points, in-game currencies) before cryptocurrencies emerged, we’ve had non-fungible digital assets since the dawn of the internet. Domain names, event tickets, in-game items, even handles on social networks like Twitter or Facebook, are all non-fungible digital assets; they just vary in their tradeability, liquidity, and interoperability. And many of them are incredibly valuable: Epic Games made $2.4 billion in revenue selling costumes in their free-to-play game Fortnite in 2018 alone, the market for event tickets is projected to reach $68 billion in 2025, and the market for domain names continues to see solid growth.

We have tons of digital stuff, we’ve just never really owned it.

So it’s clear we already have tons of digital stuff. But to what extent do we “own” these digital things? If digital ownership only means that an item belongs to you and not someone else, then you own them in some sense. But if digital ownership is more like ownership in the physical world (the freedom to hold and transfer indefinitely), this doesn’t always seem to be the case with digital assets. Rather, you own these assets in specific contexts, which may or may not make moving them around easy. Try to sell a Fortnite skin on eBay, and you’ll discover the difficulty of moving digital assets from one person to another.

This is where blockchains come in! Blockchains provide a coordination layer for digital assets, giving users ownership and management permission. Blockchains add several unique properties to non-fungible assets that change the user and developer relationships with these assets.

Standardization​

Traditional digital assets—from event tickets to domain names—have no unified representation in the digital world. A game likely represents its in-game collectibles in an entirely different way than an event ticketing system. By representing non-fungible tokens on public blockchains, developers can build common, reusable, inheritable standards relevant to all non-fungible tokens. These include such basic primitives as ownership, transfer, and simple access control. Additional standards (specifications for how to display an NFT, for example) can be layered on top for rich display inside of applications.

These are analogous to other building blocks of the digital world, like the JPEG or PNG file format for images, HTTP for requests between computers, and HTML / CSS for displaying content on the web. Blockchains add a layer on top that gives developers a brand new set of stateful primitives on which to build applications.

Interoperability​

Non-fungible token standards allow non-fungible tokens to move easily across multiple ecosystems. When a developer launches a new NFT project, these NFTs are immediately viewable inside dozens of different wallet providers, tradeable on marketplaces, and, most recently, displayable inside of virtual worlds. This is possible because open standards provide a clear, consistent, reliable, and permissioned API for reading and writing data.

Tradeability​

The most compelling feature enabled by interoperability is free trade on open marketplaces. For the first time, users can move items outside of their original environments and into a marketplace where they can take advantage of sophisticated trading capabilities, like eBay-style auctions, bidding, bundling, and the ability to sell in any currency, like stablecoins and application-specific currencies.

For game developers specifically, tradeability of assets represents a transition from a closed economy to an open, free-market economy. Game developers no longer have to manage every piece of their economy: from the supply of resources to pricing to capital controls. Instead, they can let free markets do the heavy lifting!

Liquidity​

Instant tradeability of non-fungible tokens will lead to higher liquidity. NFT marketplaces can cater to a variety of audiences—from hardcore traders to more novice players—allowing for greater exposure of the assets to a wider pool of buyers. In the same way that the ICO boom of 2017 gave birth to a new asset class driven by instantly liquid tokens, NFTs expand the market for unique digital assets.

Immutability and provable scarcity​

Smart contracts allow developers to place hard caps on the supply of non-fungible tokens and enforce persistent properties that cannot be modified after the NFTs are issued. For example, a developer can enforce programmatically that only a specific number of a specific rare item can be created, while keeping the supply of more common items infinite. Developers can also enforce that specific properties do not change over time by encoding them on-chain. This is particularly interesting for art, which relies heavily on the provable scarcity of an original piece.

Programmability​

Of course, like traditional digital assets, NFTs are fully programmable. CryptoKitties (which we’ll talk about later) baked in a breeding mechanic directly into the contract that represents the digital cats. Many of today’s NFTs have more complex mechanics, like forging, crafting, redeeming, random generation, etc. The design space is full of possibilities.

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Leaving it off here - if the above has been useful to you I'm sure you will take the time to dig further into the original post.

Keep fighting the good fight and educate yourself!

 

[CareCPA]

Ok, I've spent way too much time thinking about this, especially for someone without a tech background. But in my mind, there are currently two popular types of NFTs.

One is the "art" NFT, which I don't really understand because I don't understand art to begin with. I have no idea how to value it, and it has no real use to me. So if someone creates some digital art and wants to sell it as an NFT, that's great, but that holds no interest for me.

The second is what I will call a "utility" NFT - there is probably a technical name for this, but I have no idea. This thread is long and hard to digest for the non-techy.
This type of NFT actually allows you to do something or have access to something that you would not otherwise have.
Since @MJ DeMarco has been brainstorming here, let's come up with a new idea.

Maybe MJ wants a more exclusive group than just the INSIDERS, so he develops a VIP level. He only wants 200 members at a time, because more than that and it just becomes noise.
To accomplish this, he creates an NFT, and 200 can be minted (I get fuzzy on this part, but that's why there are consultants to pay). He can invite people he likes to mint them (or probably mint them himself and sell them?) so that he can control the quality of the group in the beginning.

Anyone who holds this NFT can have access to a hidden area of the forum. From a procedural standpoint, if you have the NFT in your Metamask wallet, then you can connect to the website and see the hidden area. I'm sure there are other ways to accomplish this, but I've at least played with Metamask so I have a vague idea of how it works.

The NFTs can also be resold, and MJ can collect a royalty on each sale (built into the NFT/contract so it is automatic). Residual money = win.

But, more importantly, it encourages the group that holds the NFT to provide actual value in their section of the forum. The value of the NFT they hold is directly related to the value of the information that is in the hidden forum to which the NFT grants access. If no one participates, then the NFT will have no value. If the forum is lively and full of great, actionable info, then NFT will rise in value and can be sold at a profit. So it is in the NFT-holder's best interest to provide value.

If you wanted to join a group of 200 people, how much would you pay if that group was random people on the street? Probably nothing.
What if that group was successful business owners of multi-million dollar businesses who are inherently incentivized to participate in the conversations because the value of their NFT depends on it? Probably a lot.

I think a lot of people are currently creating NFTs just because it's new and they can, but that doesn't meant the NFT always makes sense (or maybe they are just all art, so they make sense to other people and not to me).

The trouble I'm currently having, is how do I find the NFTs that actually have some kind of use or purpose?
I see ones that can be used in games, but that doesn't interest me. I see some that can be staked, but I can stake other coins without owning an NFT. Where are the NFTs that are actually useful?

 

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[dgr]

Great heads up @AceVentures

NFTs are here to stay.

Not so far (just a couple of months ago) I was mocking them. Now I believe they will disrupt several industries (and of course I've spent a lot of money on those damned JPEGs).

Some opportunities I see:

- NFTs are a great way to crowdfund a project. You're giving value upfront (the NFT), which can have voting rights, access permission, or just be a store of value. It's already happening, one example is catzmeow, that is trying to fund the animated series with the characters (made by a member of the bowtied jungle on Twitter). Other projects are trying to fund a game. But for now, most projects are just NFTs with an item in their roadmap to "make a game". Instead of the other way around: We're making a game, let's use NFT to fund it.

- Play to earn: This is happening with AXS and others. They distribute their earnings to their players. Some people in Asia have outsourced the gaming LOL. How is this related to NFTs? They serve as property/identity/commerce inside the game/metaverse. (In Axie Infinity you need to buy first at least 3 Axies to access the game)

- Royalties: NFTs and crypto will allow for transparent royalties management. Imagine that every 8h, for every minute watched of a movie on Netflix, a smart contract distributes the royalties to all the participants. You, as a secondary actor, receive 0,00001 X-TOKEN for minute watched; the cinematographer gets 0,00008, etc. The same with other platforms, music, etc. Total transparency and automatization.

- Fractional art: right now it's expensive to buy a Cryptopunk or ArtBlock if you're not crypto-rich. But fractional art will allow you to buy a fraction of that NFT (like you buy a fraction of a BTC, but less liquid I guess).

...

This is in constant evolution. Right now there are avatar profile picture projects, generative art, music, access tokens...

Some NFTs are quite fun and innovative, even if they are just jpgs. For example, this.
(disclaimer: I own one of these, sorry for the shill - I don't recommend you to ape into this if you don't have some experience first)

TBH I'm very new still into the NFT world. But if some of you are interested, I can write the few things I know about how to find them and try to value them. (Any advice you have is well received since I'm still a newbie)

Lastly, let me tell you: 95% of them will go to zero. This summer has been crazy, with 8-10 projects launching every day.

 

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[AceVentures]

Tagging a few homies that have been intrigued by the ERC725 standard - I got some illuminating perspective for you today.

@MoneyDoc
@Ocean Man
@MTF
@Creed
@Frinys
@Bekit

In a previous post here I talked about two key elements that make blockchain-based NFT's incredibly powerful.

These are: Standardization and Interoperability.

Please refresh your memory before we move on.

Standardization
Traditional digital assets—from event tickets to domain names—have no unified representation in the digital world. A game likely represents its in-game collectibles in an entirely different way than an event ticketing system. By representing non-fungible tokens on public blockchains, developers can build common, reusable, inheritable standards relevant to all non-fungible tokens. These include such basic primitives as ownership, transfer, and simple access control. Additional standards (specifications for how to display an NFT, for example) can be layered on top for rich display inside of applications.

These are analogous to other building blocks of the digital world, like the JPEG or PNG file format for images, HTTP for requests between computers, and HTML / CSS for displaying content on the web. Blockchains add a layer on top that gives developers a brand new set of stateful primitives on which to build applications.

Interoperability​

Non-fungible token standards allow non-fungible tokens to move easily across multiple ecosystems. When a developer launches a new NFT project, these NFTs are immediately viewable inside dozens of different wallet providers, tradeable on marketplaces, and, most recently, displayable inside of virtual worlds. This is possible because open standards provide a clear, consistent, reliable, and permissioned API for reading and writing data.

Alright! Glad to have you back. Now, why is this so important and why do I keep harping on it?

Many people fear that the current blockchains or the current NFTs are all just a scam, until some superior awesome government made and MIT certified, peer-reviewed technology comes out and shits on everybody's bags.

People often make the mistake of thinking superior tech wins out. But, there aren't many BlueRay or BetaMax left today. The point is that powerful standards that gain network effect go on to become incredibly useful pieces of infrastructure.

This is why today the ERC20 standard remains one of the most instantiated smart-contracts across the entire blockchain space.

Format Wars are nearly 100% won by network effect and not tech. This is why I keep harping on the standards and the technology stack that has the most network effect out there: today, this remains the ETH-based smart-contracts ERC20, ERC721, ERC1155. This is why I believe the inclusion of the ERC725 standard, which is entirely ETH-based and inherits the existing ETH network effect benefits, has huge potential.

If you don't believe me - go ahead and read a little bit about the different Format Wars that took place over the past few decades to understand HOW and WHY network-effect based standards ultimately win!

As always, I'll Frankenstein a couple of things from Format Wars and highlight the bangers. Importantly - I want to bring your attention to two format wars that I see as the most important, and how efficiency led to faster network effect and go on to succeed.

1. One is AC vs DC
2. 3D Graphics APIs

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A format war is a competition between similar but mutually incompatible technical standards that compete for the same market, such as for data storage devices and recording formats for electronic media. It is often characterized by political and financial influence on content publishers by the developers of the technologies. Developing companies may be characterized as engaging in a format war if they actively oppose or avoid interoperable open-industry technical standards in favor of their own.

A format war emergence can be explained because each vendor is trying to exploit cross-side network effects in a two-sided market. There is also a social force to stop a format war: when one of them wins as de facto standard, it solves a coordination problem[1] for the format users.

• Direct current vs. alternating current: The 1880s saw the spread of electric lighting with large utilities and manufacturing companies supplying it. The systems initially ran on direct current (DC) and alternating current (AC) with low voltage DC used for interior lighting and high voltage DC and AC running very bright exterior arc lighting.[2] With the invention of the AC transformer in the mid 1880s, alternating current could be stepped up in voltage for long range transmission and stepped down again for domestic use, making it a much more efficient transmission standard now directly competing with DC for the indoor lighting market. In the U.S. Thomas Edison's Edison Electric Light Company tried to protect its patent controlled DC market by playing on the public's fears of the dangers of high voltage AC, portraying their main AC competitor, George Westinghouse's Westinghouse Electric Company, as purveyors of an unsafe system, a back and forth financial and propaganda competition that came to be known as the war of the currents.[3] AC, with its more economic transmission would prevail, supplanting DC.

• 3D graphics APIs: DirectX vs. OpenGL vs. Glide API. In the latter half of the 1990s, as 3D graphics became more common and popular, several video formats were promoted by different vendors. The proliferation of standards (each having many versions with frequent and significant changes) led to great complexity, redundancy, and frustrating hardware and software compatibility issues. 3D graphics applications (such as games) attempted to support a variety of APIs with varying results, or simply supported only a single API. Moreover, the complexity of the emerging graphics pipeline (display adapter -> display adapter driver -> 3D graphics API -> application) led to a great number of incompatibilities, leading to unstable, underperforming, or simply inoperative software. Glide eventually dropped out of the war due to the only manufacturer supporting it — that is, 3dfx — ceasing production of their video cards.

 

[AceVentures]

Quick update: my investment in RTFKT paid out big time. This marks the end of my current NFT chapter and the beginning of my entry into the next step of the game.

Here's what happened:

So I had some of their NFTs, which qualified you to mint their upcoming CloneX project. Each qualifier gave access to 3 CloneX mints at a price of 0.05E. I spent about 7-8k on these qualifiers about 5-6months ago. 11,000 such clones would go to the qualifiers, and another 9000 or so to a public sale.

The pre-sale went live 2 days ago and I minted all my eligible clones, waiting for the reveal and the public sale. Here's where things get interesting.

They announced their public sale will be a Dutch auction with a starting price of 3E! The clones that were minted in pre-sale have been selling on the secondary marketplaces for about 3.7E, with people valuing them at slightly above what they should sell in the public sale. What's F*cky is that the current 2ndary prices are not too far off from the public sales 3E, and despite this small difference, there is not a plethora of demand on opensea.

Over the past 2 days, maybe ~400 clones have changed hands. This was especially worrisome for me, because the public sale set to go live today is expecting to sell ~9000 clones at a starting price of 3E. That's 27,000E or roughly $110MM dollars. In what F*cking world is a $100m sales target make any sense for ONE product, a set of 3D files?

Maybe their public sale will be a smashing success, but in my estimation it will be a catastrophic failure. They'd have had much more success onboarding more people into their ecosystem, but they opted to brand themselves as exclusive and in their own bubble thought they could sell their files for $100 frigging million dollars.

I sold all my clones and my qualifiers yesterday, making out with $250k in profit.

We will see today whether I made the right move or not, but I've been watching liquidity dry up on NFT collections really quickly, and I value E so so much more than the current version of NFTs.

NFTs, as they live with ERC721, are imo nothing more than a proof of concept. I don't believe any existing ERC721 will have lasting value, except for 0.001% of shit like maybe Punks or BAYC.

I was really hoping RTFKT might join that group of elites, but I very much doubt their ability to pull it off at this point. The reasoning is simple: misalignment with my values. I loved what they were building, but after learning that their new project would start at a 3E Dutch auction, I couldn't unsee the money grab they were going for.

I tried very hard last night to show people in the community that a $100M sales target is F*cking ludicrous. Nobody wanted to listen to me. Echo chamber of hopium.

I wish RTFKT and their community success, but I'm going to take my $250k and keep playing the web3 game, finding people and ideas that mesh with my values.

The moral of the story is: pay attention. There is money to be made and money to be lost. I'm thrilled with the success I achieved with this brand, but had I not been paying attention and asking questions, I might have been left holding a bag of illiquid JPGs instead of 250k.

All eyes on the public sale today: I was either very wrong and there will be tremendous demand, or a bunch of people will be left with a bag of JPGs with nobody to sell to.

 

[Lex DeVille]

Over the next week, I'll spend time learning to create ERC-721 NFTs. Once I have a process down, I plan to start building these into everything I offer going forward whether it is physical products, digital products, or even freelance client services. I'll give them away free with a royalty attached for resell, and start to determine how NFTs can impact the totality of my income ecosystem. I believe we're still early enough that several things can happen from this:

1. Sets a foundation for growth
If NFTs become as big as I see them becoming, then learning to create and use them now will be much better than stumbling through the process later on during the real gold rush.

2. Media attention
Smaller brands that offer NFTs as part of their customer experience will stand out, which makes them worthy of media attention and publicity because of the newness. It will be easy to attract media attention at all levels.

3. Word-of-mouth
When customers discover their NFT, they'll suddenly own something that they may not know anything about. They've heard the word, but it means nothing to them. So they'll do some digging and they'll go just deep enough to see talk of NFTs selling for tens of thousands or hundreds of thousands of dollars. Now they own one. They feel special. Feels like they just opened the candy bar wrapper to a golden ticket (and maybe they did). That's worth telling people about.

4. Increased perceived value
The NFTs you create may be worth nothing right now, but the customer doesn't know that. They don't know wtf they have, and honestly, neither do you because you don't know where you will be in 5 years or 10 years. But imagine if you got free scratch-off lottery tickets with every toilet paper purchase. You might want to buy more of that brand of toilet paper than another brand that doesn't give you any shot at a payoff.

5. Past NFT ownership matters
Since ownership of NFTs is tracked, if your NFT ends up in the hands of a celebrity or huge influencer, then the value of that NFT instantly should skyrocket. If you are a freelancer, and you create an NFT and gift it to your celebrity client, then you've potentially just gifted yourself a very big payoff at some future date in the form of royalties.

There are probably many more benefits to doing this now that I am not yet thinking of. There's also the possibility that it won't payoff at all and maybe I'm just full of shit. Either way, I'm going to find out.

 

[AceVentures]

The seems just like clever wordsmithing to me. If someone buys the book from Amazon, they also have an "original" and "the community" can see you own book... it all just seems like a bunch of flimsy value skew that really isn't skew at all.

I find there is negligible value skew for the buyer, and more so, for me. Financially speaking, I'd be better off selling 100,000 books on Amazon VS selling an NFT for $100 that transfers ownership 50 times because ultimately, it will be stolen anyway.

The bottomline is, I see no benefit to the arrangement as it limits my work to a few people. Worse, I get no protection from copyright theft which ultimately occurs on every book I write. I'm still not convinced we're operating in Greater Fool market.



Thank you, this definitely adds intrigue and value, but I still doesn't constrain supply. That's the problem with this. If someone wants my book, they buy or steal it. Under the NFT ecosystem, that remains the same, just that buying it becomes more difficult, and more expensive, royalty or not. And when a $15 book is suddenly a $500 NFT through resale, the torrent thefts will only become more predominant.



OK, this makes some sense. So my NFT (a book) which will also have to include some private party at my home once per year. This adds to the "project".

I wrote an example a few months back, exploring a fictional scenario for you. My perspective has become more clear since, but it's still a fun read. Afterwards I'll walk you through how I'm thinking about NFTs today.

The same way you make money with anything in life - deliver value to people.

The main advantages in THIS economy vs traditional marketplaces is you have pure ownership of your data, your interactions are uncensorable and transparent, and you have a direct line of communication between merchant-customer.

If you were previously not delivering any value - wrapping a shit idea into an NFT will still result in shit earnings potential. But if you deliver real value - the benefactors of this value can participate in the success of the project. If it's an art project for example - there's secondary marketplaces for your buyers to resell and effectively become promoters of the project.

Fictional Example: @MJ DeMarco creates his newest book called "How to break free from tyranny" and creates limited editions of this book in the form of an NFT. FLF fanboys purchase this new NFT and receive the value contained within the information that is shared.

If anybody else wishes to know what's written in this book - their only route is to obtain this NFT version of the book on the secondary marketplace. The more people want to read the book - the more the current holders of this book can earn by reselling on the secondary marketplace. Oh and MJ collects a royalty off of any further transaction.

Say I read this book and got immense value - I can brag about all I've learned and how much this book has changed my life. This promotion is not only good for MJ, but it is especially good for me - because if someone now wants access they have to get this special access from me personally - and I'm now in a position to command whatever I want in order to transfer my rights to this knowledge to someone else.

In this process - MJ benefits from an army of shillers/promoters of his content, without himself having to shove his book down people's throats.

Now say MJ decides to host a new summit - but only people that hold the current NFT are eligible to attend this conference. This further drives the value of the NFT. And any additional input into MJ's brand can have loyalty to the original NFT holders as a baseline. You can see that the "brand" becomes win and let win. Not only does MJ win - but anybody that believed in MJ's brand also wins.

First I'd like to point that the properties you gain from using NFTs are not for copyright protection. But that's a universal problem with digital content, even your sales on Amazon or elsewhere, if digital in format, are subject to being uploaded on decentralized storage solutions and pirated.

Before we go any further, I'd like us to reframe our perspective around NFTs and think about them from another angle. Let's think in terms of contracts, or better yet interoperable capsules. These capsules can contain information, but they're also programs. Meaning upon interacting with these capsules, your customers can execute a pre-programmed set of interactions. This is an important understanding as it opens up doors to ideas that haven't been fully explored.

Next, in the context for a business solution, I like to think about NFTs as a marketing/sales channel. I'll describe the properties you inherit with crypto rails as one of your sales channels, and then I'll try to wrap some of them up into an example scenario so we can explore how it might come together.

1) Your email list can be thought of as a wallet list: This has profound implications so I'll start with this. Wallets are the ID you will be using to connect with your customers. They're important because they can be used to fetch a social/economic graph of your users behavior as all their interactions are stored on public ledgers. This can be be valuable for marketing. This also means your users' contract engagement history can be used in your programming of your custom capsule's properties/behavior.

2) Interoperable information/program capsules: The wallets contain capsules that are interoperable with various file formats across the web, but also money formats. This means you form a direct relationship with your customers, and the basis of this communication is also a payment channel. This makes your monetization of digital property customizable but also direct merchant-consumer.

3) Partnerships: Because your capsules are interoperable with capsules deployed by other users, you can streamline all kinds of partnerships with other projects and people globally.

4) Programmatic behavior: the capsules you write can contain static information, but can also be programmed to perform a certain function.

Now let's consider a scenario, and we can use your brand as an example.

You establish a connection with your customers via these capsules. Leaping from web2 to web3, you use your existing communication channels to fetch customers' public addresses. You incentivize them by offering them free premium content. You take some content, similar to how you did your $1 few-pager a while back, you wrap it into a smart-contract, and distribute them to your users.

Once this is established, you can send your customers other content or programmatic capsules directly to their wallet. This is similar to your newsletter. After a few have been distributed, you can begin to incentivize participation into your newsletter by distributing content that is only accessible if you own a certain capsule already. This can bring demand for the existing capsules that are out there and raise their perceived value.

Each capsule you distribute to your customers is akin to the collection of items in a game. With certain items, certain features or perks of the game become available to them. So by owning a "Summit Attendee", "Epic Contributor", "INSIDERS" capsules, your acccess to MJ's brand and content can be gamified differently. Some of these capsules, by the way, can be constructed in such a way that they are not tradeable. Again, think of them as programs.

After establishing a connection with your users on these rails, you can offer your upcoming products as "NFT" sales. These sales can have tokenized behavior. So say you allow a batch of 500,000 mints to be done. Whoever buys this NFT can also be incentivized to promote your sales. If they buy one of your capsules, you can pre-program them in such a way that if one of their friends, say a wallet address they have previously interacted with, also buys your capsule, your marketing treasury capsule can automatically send a $5 reward capsule to this person's wallet. Next, as you host a new summit, the set of wallet addresses or customers that verifiably own certain sets of your capsules can be treated differently. If you bought all 3 of the last drops within 1 day of them being on the market, you are rewarded with a dinner with MJ. If your wallet transaction history shows you've interacted with other FLF member's wallet addresses, you can be rewarded with additional content or privilege or insight or XYZ value you want to assign so as to reward community engagement.

As your brand grows, and the number of capsules/programs you've distributed spreads, you can create evermore sets of creative social/economic behaviors that can be automated.

As you can see, royalties are another type of pre-programmed economic incentive trigger. The underlying property that enables such a behavior is the programmability of these capsules with which much broader and more creative sets of automated social/economic activity can be gamified.

This is just one perspective. The possibilities for these communication channels are only constrained by our ability to imagine what can be done with them. I've continuously encouraged users here to engage with the ideas and collaborate around what can be done. I think this thread has done a good job at getting different people to throw darts at the board. The more we hack at it together, the more clearly we will begin to understand and appreciate how we can leverage these technologies to empower our businesses and our customers.

 

[Deleted70138]

Here is the script:

1) Garyvee (or any other public figure) creates NFT album
2) They attach royalty fee of 10-20-30%
3) They give out those NFTs for free (not truly free, as you pay ridiculous amount of gas fee)
4) They promote online how great NFTs are and indirectly promote their own album
5) For every transaction they earn money, marketplace host earns money, while schmucks try to trade their way into the fortune.

If you don't know who's the schmuck, you are the schmuck. House always wins.

 

[AceVentures]

Back in here with another banger today! This one does an excellent job of breaking down the value-chain, comparing web2 to web3, and using plenty of examples/mental models to drive the point.

Tagging @Andy Black here: as per your previous post on the topic of Web3, I think you will enjoy reading this.

Will frankenstein and highlight the bangers for you guys, but please dig in as there is so so much to talk about in this article:

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The vocabulary around Web3, like that of many early movements, is very idealistic. It’s all about using technology to create trustless systems, wrest power from corporations, and give it back to the people. I think that vocabulary is why I haven’t taken it seriously as a real alternative to the status quo.

But I have gone deep down the rabbit hole, and I think I get it now. I can see how the decentralized web might make the leap from passionate early adopters to the mainstream, that there are real economic advantages to a decentralized internet, and that Web3 architectures will play a crucial role in a robust Metaverse.

What has been missing for me is a clear use case, like NFTs, and an understanding of the business models and value chains underlying a lot of these concepts. Yes, there’s idealism, but there’s also a sense of building a new economy in which the value accrues to the people who create the value. That’s capitalism, baby.

Today, I’m going to do my best to unpack it. Web3 and the Metaverse are two separate ideas that may or may not intersect. I think the future is much more exciting if they do. To understand why, we’ll start by understanding Web3, dive into NFTs, then move onto the Metaverse, and then look at what could happen when these ideas converge.

• What is Web3 and Why is it Important?
• Non-Fungible Tokens and Digital Ownership.
• NFTs in the Wild.
• The Size of the Metaverse Prize.
• The Open Versus Closed Metaverse.
• Crucible and The Direct-to Avatar Economy.
• The Value Chain of the Open Metaverse.

[...]



Web3, then, isn’t as much an idealistic repudiation of Web 2.0 (although that’s a good marketing tool) as much as it is a natural evolution of the market made possible by new technology.

“Cryptonetworks combine the best features of the first two internet eras: community-governed, decentralized networks with capabilities that will eventually exceed those of the most advanced centralized services.”

At the heart of Web3 is the idea of consensus protocols and standards with money baked in. I think about it like a series of open source APIs that anyone can use to build according to an agreed upon set of rules, that gain financial value over time which is shared with everyone who contributes to the API.

Instead of building siloed products, Web3 is built for interoperability. This is a key concept, keep it in mind. Decentralized Finance (“DeFi”), which, as the name implies, is attempting to build a new financial system without central financial institutions, is one of the most promising layers being built on Web3. A common analogy for the way DeFi products are built is with “money legos.”



[...]

I’ve always viewed the Web3 movement as anti-capitalist. That couldn’t be further from the truth. The movement is really about doing one of the most capitalist things there is: cutting out the middleman. It means that instead of value accruing to the Aggregators, there can be a more direct connection between suppliers and consumers.



It’s not about taking money out of the system, it’s about moving the money around to the people who create and the people who consume, and to the people who maintain and improve the network itself. And it’s about attaching each user’s data and money directly to them (Self-Sovereign Identity), creating a public record that they own what they own (blockchain), and letting them take it with them, and profit from it, wherever they go on the web (Interoperability).

[...]

Proponents of the Metaverse predict that it will be a multi-trillion-dollar digital economy that replaces the internet with shared virtual worlds. If the internet is 2D and siloed, the Metaverse is 3D and interoperable, like if video games and the physical world had a baby.

In some ways, the seeds of the Metaverse are already here. We meet on Zoom, work in Teamflow, talk on Clubhouse, tweet on Twitter, shop on Amazon, and game in Fortnite. Today, though, all of these pieces are disconnected, like walking around a city and changing outfits and ID every time you enter a new building. Web3 and NFTs might hold the keys to stitching together the back-end of the Metaverse by building connective tissue and interoperability into the system.

[...]

A closed Metaverse is controlled by one or more large companies and lacks interoperability between platforms. Think of it like a 3D Web 2.0 with some new protocols. This is what happens if Facebook wins with Oculus and other Facebook Reality Labs projects, for example. If that happens, expect more of what happens today, on an unimaginable scale.

Sweeney and many others hope it never comes to that. They’re advocates for an Open Metaverse. The Open Metaverse is one built from the connection and interoperability of a series of different platforms, worlds, sites, stores, experiences and more. It’s a Web3 version of the Metaverse, in which players could travel from Fortnite to Roblox to Oculus, bringing all of their data, skins, NFTs, and digital currency with them seamlessly.

[...]

Metaverse will occur when there's an event that takes place simultaneously across multiple AAA platforms, where players can walk from one to the other as the same avatar, wearing the same skin.

Already, smaller developers are making this possible. Last week, Cryptovoxels, Somnium Space, and Decentraland announced that they’re working to let users portal between worlds.

[...]

The Value Chain of the Open Metaverse​

Looking at [...] one example - Direct-to-Avatar, built on Web3 tech - gives a glimpse at how radically the value chain might change in an Open Metaverse.

So knowing that, what happens to the DTC value chain in a world of Direct-to-Avatar? I think it looks something like this:



By dematerializing the supply chain and selling directly to the end user, as represented by the Avatar, the D2A value chain removes entire steps - manufacturing, logistics, and support - and integrates R&D, Retail, and Marketing:

• R&D becomes production, as renderings and previsualizations, potentially using materials and prices from DIGITALAX’s DOF Sheet, merge with the final product.
• Retail. In the place of Shopify stores, designers might host their own fashion shows or auctions in virtual worlds built with the Unreal Engine.
• Marketing. Limited edition drops, the word of which spreads through Discord servers, might replace marketing through traditional digital channels like Facebook and Google.

In this value chain, the profits don’t accrue to the aggregators, like they do in DTC. There’s no “40% of all VC money goes to Google and Facebook here” if it works. The creators will earn the profits[...]

 

[MTF]

This is hilarious. After a freediving session I was talking outside in front of the school with some guy about ways to make money as an author and mentioned that as new formats come along (such as NFTs), you can possibly take your content and adapt it into these new channels.

He started asking me various basic questions about NFTs (stuff I was also extremely apprehensive about, such as "why buy it if I can download a JPG"). Since I've done my homework I was able to answer all these questions in what I feel was a non-hypey "here's how it works" way.

Other people started listening as well and suddenly I became an NFT expert even though I know almost nothing about it LOL.

This only shows how early we're in this stuff and how little you need to know to know so much more than everyone else. If you dedicate a few dozen hours to it, you'll know more than almost everyone else in the world. When NFTs grow into new, everyday applications for regular people (like real estate, royalties, communities, etc.), you'll be far ahead.

I'll personally probably focus on NFTs for authors and/or artists in general as I think that they're so badly F*cked by big corporations that this can change their lives.

 

[MTF]

When I buy a book on Amazon, I don't feel like I own anything. Can I gift it to my friend? No. Do I really own it then? No.

To add to this point...

You don't own a Kindle book you buy on Amazon. As per their terms, in reality it's only licensed. With NFTs you are the owner, it's always verifiable, and there's no "CEO" of NFTs to take it back from you.

@MJ DeMarco:

You don't own your Kindle books, Amazon reminds customer

www.nbcnews.com

This is what NFTs solve as well. You actually get to buy and own a digital file, not merely be allowed by Amazon to rent it by clicking "buy".

Obviously print books are different but these, while not going away, aren't the first format choice for most people.

As for your thoughts about piracy and stuff, this makes no difference whether it's a Kindle book or an NFT. Also, for the time being I wouldn't think of NFTs as an alternative to "traditional" selling. It's more like a new income stream, currently best for collectors and just as an additional way for people to show you support.

 

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[Heal Piece]

I'm know we have touched on security before, but seems appropriate to bring it up again. A person was "hacked" last night and lost 8 BAYC (worth over 50 ETH EACH) 7 MAYC (worth over 10 ETH EACH) and 1 Clone X( worth a min 4.5ETH) A conservative estimate here is roughly $2 MM in assets, but it's probably a bit more assuming he had some rares. I put hacked in quotes because the fault was actually his own, despite the malicious attempt put in front of him. He was trying to sell one or some of his pieces via a private sale to save some money. You can avoid fees on Opensea by doing this, but at your own risk. A person who was privy to this information, maybe the person who proposed to buy the NFTs sent our poor sucker a faulty link which prompts a signature for access to his wallet. He signed thinking this would prompt the sale, but did not double check the link he was clicking. It instead gave the "hacker" full access to his wallet for which he kept ALL of the assets listed above. As a matter of fact, our poor guy clicked the signature a whopping ~16 times continuously transferring more assets over. The hacker transferred everything to his own wallet at no cost then sold quickly for deep discounts on Opensea. He walked with over 1 MM last I saw.

A lot of people are blaming the guy for not using a hardware wallet, which I know has been preached around here. But in this case even a hardware wallet would not have saved him as he was giving access to whatever wallet was holding the asset in. So a few good rules for everyone...

-NEVER give anyone your seed phrases. For any reason. EVER!. Also, DO NOT keep your seed phrases stored on your phone or in a photo, or in any file (word doc) on your PC.
-If you did any of the above, reset your seed phrase on your wallet, hand write it down and stuff it somewhere safe (in a safe?) I have 1 sheet at home and 1 in a safe deposit box at my bank.
-NEVER click a link to give access to your wallet that isn't a link straight from an official website or official discord.
-If you have multiple valuable NFTs or large amounts of crypto, use multiple wallets! This gentleman above had over 2 MM in NFTs and 11 ETH in one metamask wallet. Make multiple metamask wallets and even spring for multiple nano ledgers.
-NFTs are in a bit of a bull run right now and some fake (rug) projects are popping up. ALWAYS DYOR! Don't hear about a project from one person and then just ape in on a mint from FOMO. Basic questions you should ask, is the dev team doxxed? Have they launched any successful NFT campaigns before? How old is the discord? What's their road map look like or is there even one? How big and active is their community? Red Flags: Non-doxxed dev team, fake giveaways on twitter, new twitter accounts with large inactive followings, "stealth launch" and open discord to public on same day as mint, copy cat art from other projects. Non of these mean anything in one singular instance ,but when you start to see multiple on one launch, tread cautiously.

It's still very much the wild wild west in crypto and NFT land and there are a lot of unsavory people out there looking to take advantage of newbies, or in some cases not so newbies! I know this seems a lot like common sense, but many of these new millionaires were made just this year on BAYC and they opt to overlook a lot of this security. And off the top of my head this is the 3rd or 4th person in the last few months who has lost multiple apes due to one of the things i described above.

A note to end on, it appears Opensea froze his assets that were stolen and are attempting to retrieve them for him. Make what you will of that, it's a happy ending, but also against what web3 should be.

Edited for random misspellings i caught, sorry wrote this in a bit of a hurry.

 

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[AceVentures]

Hello @AceVentures.

I'm wondering what your latest thoughts are on Lukso? I know that you told us that you would update if you saw something that made you change your mind.

Also, thoughts on Facebook planning on entering the NFT space? Should we be worried?

Facebook and Instagram are reportedly exploring plans to make, showcase, and sell NFTs

Meta smells money in the NFT craze

www.theverge.com

Thank you!

My thesis has changed. I've wanted to share my thoughts for a while now and I believe this is a good opportunity to do so.

I noticed several unsettling patterns last year, and in late November I decided to pull everything out from crypto - despite it not being aligned with my prior strategy. I saw liquidity dry up in NFTs, then I saw liquidity dry up for LUKSO, and I began to see liquidity dry up for best-in-class assets like ETH. Moreover, I had unresolved questions about the impact of ZK on blockspace economics. Being dynamic with my viewpoints allowed me to win. When ETH was sitting at around ~4600 I exited everything in a flash of intuition and have not gone back in yet.

I mentioned a few months ago that I believe ZK cryptography will flatten a lot of people. I still believe this to be the case, and my unresolved questions around it are what keep me from entering new positions.

Crypto's sustainability today is held on a few basic premises:

1. Demand for blockspace
2. Supply of blockspace

ZK is a form of compression. You can take hundreds of thousands of transactions, and batch them into a singular proof, and then submit that singular proof into a new block. In practice, what would have required thousands of blocks (and associated fees) to process information can all be reduced to one block. Moreover, you can layer these compression methods: meaning that you can then take hundreds of thousands of these proofs, and compress them into another singular proof, and then submit that into a new block. There does not seem to be a limit to the depths of compression layering.

For months now I have been trying to engage people to get clarity around the community's thoughts around the impact of ZK compression on blockspace economics. I have yet to find any answer, possibly because even the people we might look up to within the web3 space have inherent bias depending on their financial stakes.

So far, what I can tell is that these compression methods will result in a reduced demand for blockspace by several orders of magnitude. People that ignore this view suggest that the excess supply of computation will be met with spam and further demand given cheaper transactional capabilities. I tend to agree - but in order to validate that thesis I should see demand pick up.

Crypto plumbing is more or less capable of meeting mass demand at the moment - what it really needs is killer applications. Censorship resistant and community owned applications that generate cashflow and have massive demand. Only a handful exist today. I am certain more of this will come with time.

I remain on the sidelines until I can validate this theory.

At a macro level - what I estimate will happen is blockspace will become a utility, similar to how HTTP is a data transfer utility you don't pay for. I expect the largest bulk of value-transfer to take place at a dApp level instead. Meaning the service or product offered is value-accretive enough to demand a profitable fee. Right now, much of the web3 space revolves around fees/blockspace.

What does this mean for LUKSO? I still believe that the abstraction of blockchain interaction is a killer feature nobody else has. With their partnerships with the likes of Nike, Instagram, and major fashion brands, I still believe it can grow a sizeable network of users. The economic sustainability of the network? Less certain of, as the thesis I outlined above applies to all blockchains who's cashflow comes from the basic premise of earnings per sale of blockspace.

In practice what this means is that there is still money to be made - but it might largely be driven by speculation and forward looking sentiment rather than current economic viability. It becomes much harder for me to make educated bets under these circumstances. The blockchain business model, as it sits, struggles to be profitable in the face of monster compression techniques. The only way to continue providing an economically viable source of blockspace under this compression technique is to counter it with orders of magnitude larger demand. To be clear, this could very well happen, I'm just waiting to see it with my own eyes.

This is my own personal opinion. It comes from my own experiments and understanding. In fact I have not seen anybody talk about the concerns I outlined above. I do not suggest you or anybody else make financial decisions from what I share here. This all might play out completely differently from how I present it today: I simply want to reiterate again that ZK is a paradigm change in cryptography and we ought to be prepared for the risks and opportunities that it brings about.

As an advocate of web3, I struggle with a sense of responsibility for what I share. There is much joy to see others win, but that sentiment reverses and feels exponentially more hurtful when I see others lose. It has humbled me many times over the past year - and though the immediate answer has been to pull back from discourse, I believe there is a harmony to be found in offering counsel without stirring the pot above boiling point.

The best advice I have for people playing the game right now is to think for themselves. It is of utmost importance for your financial and overall wellbeing that you do not outsource your thinking to me or anybody else for that matter. When I pulled out, nobody was doing that, and at surface level the sentiment seemed incredibly bullish. I didn't even have much time to act - there was no DCA out, I acted on intuition and didn't have enough time to warn others, because my own line of thought was blurry. The only reason I succeeded where others failed was that I made a decision of my own thinking, irrespective of what anybody else thought. This comes with self-confidence and a record of acting on one's own intuition.

I still believe there is much money to be made playing the game - but we all gotta smarten up, pay close attention, and never get married to our takes. There is so much noise right now that it takes a lot of insight to discern the real signals. Being dynamic is the most important skill in a world that changes so fast.

Keep your head up, especially on a bloody day like today. All the best friends.

 

[MA81]

View: https://www.youtube.com/watch?v=gY1EmqTSco8


Just because you mint an NFT for a specific jpeg, in no way allows for your ownership or rights to that picture/asset in the same way being scammed into buying a piece of paper to own part of the Brooklyn bridge does.

The courts and legal system determine who owns what land or other items such as car titles, etc. Not some token that I can create in a few minutes (which I have done) and claiming that gives me rights to something nobody else can. Someone can download the jpeg from CryptoPunk that sold for thousands of dollars off the internet without anyones permission. You're not going to a judge and suing that you own an image thats on the internet because you paid for an NFT that I created out of thin air and tricked you into buying it and claiming you owned it now.

The NFT craze is just a repackaging of crypto kitties for people with too much money and not enough brains.

 

[AceVentures]

What I am having a problem grasping with these "universal profile" and "membership tokens" examples is how is this different than a regular user account with an email address? How is it any different than having a Google account and logging in to all the 3rd party websites that support it?

It's similar. Except the "profile" is a smart contract on the blockchain. This makes it possible for any blockchain that supports the ERC standard to read and interpret it. This means that as these platforms build - everything you own and do continue to be compatible with every other lego piece that gets built in this space.

And because smart-contract blockchains allow for programmable functions - there can be permissionless and automated behaviors.

You also never need to "log-in" anywhere because web3 apps automatically look for and detect private cryptographic keypairs. So you go on any web3 app and you're automatically authorized based on the tokens you own in your wallet.

There's also the aspect of pure ownership. Google owns your data. They own your account. They own everything you do using their services.

Using blockchains and NFTs - YOU own your data, your profile, your assets, and how you choose to reveal information about yourself.

There's also the permanency aspect. Google can get hacked, or their centralized servers can be controlled/manipulated. On blockchains, every node in a network would need to collude together simultaneously to change the order of things. So long as the network is live and has honest validators, your "data" is preserved forever, without the ability for any one party to manipulate the past or the future.

Consider in web2 today: every new website you want to access requires you to create a profile. Each platform thus gets access to all kinds of information about you - your full name, address, phone number, date of birth, etc. Why should you reveal all of this sensitive information about yourself just to listen to some songs for example?

Managing 100s of accounts, hundreds of passwords, leads to hundreds of possible attack vectors against your information.

 

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[AceVentures]

Probably. I ignored it completely and wished to be there back then. Luckily for us, the good stuff doesn't start until mid September. There's still time.

Fear of having already missed out will compound as everyone that considered NFTs to be a bubble continue to watch this abstraction pick up steam.

We are still very early with NFTs - we shouldn't dismiss it as being in a top, as this abstraction has barely started to make it's way into disrupting traditional markets.

If anyone could share how to get into NFT projects speciffically, it would be priceless. Alex Becker is constantly calling NFT projects and photography, but have no idea on how to acquire them.

1. Start with a centralized exchange or local peer-to-peer ETH/BTC markets
2. Buy some ETH
3. Download Metamask browser extension and create a wallet
4. Transfer your ETH into your personal Metamask wallet
5. Hop onto Opensea.io

Now you can use your ETH to either place bids on NFTs or outright purchase at the asking price.