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95% of NFTs are Worthless: Report
(petapixel.com)
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this post was submitted on 21 Sep 2023
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Technology
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I would argue 99.99% of crypto and nfts are complete scams. But Blockchain is a change in how we manage and distribute data, and can remove centralization of power from humans that we would otherwise need to trust for managing autonomous systems like the data in a banks public ledger.
It’s a common misconception that blockchain gives trust. If you control a majority of nodes in a Blockchain system you decide what the truth is.
This opens the door for illicit players to manipulate things their way.
Lack of trust doesn’t replace trust.
Central, provable/accountable, trust is needed for financial systems to work.
Everything else is “Wild West”.
It's also a misconception that some illicit players can take over a large enough Blockchain system.
The cost to run a 51% PoS attack on Ethereum, as of today, is $20 Billion
(current staked total of $40 Billion)... that is, $20 Billion, if you already had them. Buying that much of Ethereum, with an available liquidity of $670 Million... is just impossible, there is not enough on the market, simple as that. If you tried really hard, you could maybe convince some HODLers to part with some of their hoard for a high enough price... unless they decided to stake and try to stop you. How high would you want to go to prevent that? $200 Billion? $200 Trillion...? Then after proving you can pull a 51% attack, the price would instantly crash down to $0. How much spare cash do you have to burn?
Let's do Bitcoin
Running a 51% PoW attack on Bitcoin, would mean either hijacking half of the current 400 Million TH/s hash rate, or adding your own 400 Million TH/s to the network. The most recent and cost effective mining hardware does about 250 TH/s for $8500 (plus power), so you'd only need 1.6 Million of those at a cost of above $13 Billion. Sounds easy, until you realize there are no 1.6 Million miners on sale. If you tried to buy those many, fat chance the manufacturer wouldn't keep 50% of the production to themselves. Then comes the kicker: on a network without smart contracts, you can only double-spend your own coins, or block others from spending theirs... for how long would you be able to keep that 51% attack, before people realized what was going on and just kicked you out of the network?
Trust is trust in the inability of anyone to successfully attack a financial system.
Blockchains are absolutely provable/accountable to everyone everywhere at any time, which central systems are not.
Oh, don’t get me wrong - the technology behind them is something we should be embracing more than we currently are. Being able to publicly have transactions out in the open is great, and ensuring that both parties have to authenticate on both their ends helps a ton in preventing stuff like fraud.
I just think cryptocurrencies and NFTs are squandering the blockchain and the tech behind it. There are a couple of cryptocurrencies that make sense because they have something backing it (which I just personally prefer straight-up, even with fiat money), but it’s otherwise pretty much all crypto follows Bitcoin’s trend, which in turn is more akin to a stock where it just… sort of arbitrarily goes up and down. NFTs as we currently know them, on the other hand, are just a huge scam through and through lol.
"Squandering" is a great description of what they've been used for. The only implementations I've seen thus far that seem genuinely useful are FileCoin and a few decentralized computing attempts like ICP (not Ethereum). I could see a potential niche use-case for NFTs to decentrally coordinate ownership of abstract properties like domain names, but speculative monkey jpegs ain't it chief.
NFTs could also be used as ownership proofs of DRM protected stuff, like games, software, music, videos, books... no more "buying" an ebook until Amazon pulls it out of your "library". Arguably any certificate is a kind of off-chain NFT, and vice versa, so using one or the other may become interchangeable depending on whether it should be made public or kept private.
Ethereum focuses on being a generic platform for DeFi services, so it's logical that it has the largest amount of trashy attempts at reinventing the wheel. ICP I still haven't found a real use for, and FileCoin storage costs are crazy high, way above most cloud solutions.
Could you describe a case example how that applies in practice?
Because yeah I understand that when we all have our own copy of the data someone can't falsify all our independent copies but is data being tampered like that even the problem?
It's a problem when you're dealing with decentralized systems (read: Byzantines general probelm). If there's no central authority, how do you verify the person actually has the money and isn't lying / double spending?
Bitcoin is an example. A wallet is unique data (private key) that is stored only the users storage. That private key proves ownership of funds owned by a wallet address / hash. A wallet address has funds if someone with valid funds sent money to it. A person initially gets that data by mining, which is like spending computational power to solve a puzzle, in which solving also processes a set of transactions at the same time. This is like the process of minting, except anyone is allowed to mint. It also helps identify who the miners/minters are, since utilizing energy gives a signature (It's really hard to hide using a megawatt of energy with a thousand computers, for example)
A use case is it allows people in war torn countries to consolidate their wealth digitally. Gold, for example, could easily be confiscated at the border, or the refugees currency could only have value in their country. Lebanese people had their money squandered by the banks and the government, because they were the central authority. In a system managed by people, over a long enough period of time, a bad actor will gain some control of the system. This effect is worse the more control is centralized.
It also means you couldn't sanction other countries the way the America is doing to Russia's banking system right now. I'm indifferent about that argument but maybe you think those sanctions are good in which case would be a point against decentralized currencies.
I think more interesting ideas in blockchain involve decentralizing ID. A microchip in the heart can both act like a smart watch by monitoring health data and represent a unique identity in a decentralized system by using the biometric information like a fingerprint scanner. With a secure decentralized way to establish identity, you can decentralize voting, and remove politicians from the political system
I... think that would be a crime, even with a majority vote. 🤫
We already have that in most countries, it's biometric national IDs and passports. Particularly in EU countries which issue biometric national IDs with secure personal certificates, we could implement direct democracy right now.
I personally envision a future where we use blockchain technology to create a new direct democracy party in which every member has a unique identifier and the blockchain ledger system used to track polling data. Every individual member of the party would have one vote in each poll at ever level (federal, state, regional, etc) - for every single thing that gets a vote, and the elected politician representing that party would be required to vote based on the polling data.
Everyone would have access to a copy of the ledger to confirm their votes are counted accurately, and they can review polling data to confirm their elected politicians are voting based on polling data, and the representative would be replaced if they do not adhere to the results
@cassetti
That's risky, because the way you say it, I can check how you voted on things, and come have a serious discussion about your choices.
Much more interesting are technologies that allow to prove something, without divulging the details.
... Though again, those don't require blockchain
@alyaza @Poggervania @ComradeKhoumrag @GunnarRunnar
Everyone has a unique identifier. If you don't share that with anyone, how would they know who's vote it is? Couldn't the number be randomized and a new UUID provided on a routine basis?
Every American has a Social Security number, but it's not exactly like we're told to broadcast it to the world...... I don't see why something like that couldn't be implemented here using technology.
My point is the general ledger technology of the blockchain which would be beneficial here.
But of course this is all a pipe dream. America is damn near a Kleptocracy and both political parties have written laws to prevent a third political party from ever arising.
@cassetti @alyaza @Poggervania @ComradeKhoumrag @GunnarRunnar if you use a unique identifier more than **once**, there's possibility to correlate information and tie to a person. Even once you could use timestamps and other information to tie it to a person.
And, in relation to government, there isn't much benefit to using blockchain that couldn't be solved using other technologies.
Why a party? You don't need a party for direct democracy, just 1 person = 1 vote. Either vote yourself, or authorize someone you trust to vote in your name, be it for a time, or on a certain topic, or whatever, if you're too busy to vote on every poll.
I'd love to see that happen, But it's because America won't switch to a direct democracy. Instead we have a Kleptocracy run by corporations and the 1% who have power over both parties in America. However if it were possible to create a third political party where every member of the party earns only one vote maybe it would give people power back over corporations. But it's a pipe dream, I know it'll never happen.
The problem I see with it being a third "political party", is that it would still have to get past the gerrymandering, the FPTP, and the general issue of financing.
In representative democracies, that "representative" part is so often set up with extra hoops in a way that counters any attempt at direct democracy. It's... a curious coincidence.
Problem is: who is in charge to write down the thing that is being voted for. E.g. "we need to protect the children" will get my yes vote. However, that is very unspecific and the specific thing could be "we are scanning every text message and sent file on every of your devices to compare that with child sexual abuse images as we need to protect the children". I wouldn't vote for that. So, whoever can frame the question that is beeing asked still directs what is happening.
Get an AI to analyze each poll and compare it to whatever preferences/indications you gave it, then output a yay/nay. For the lazy, let it automatically cast the vote for you.
Whoever gets an AI capable of holding more context, and to fool other's AIs, will direct what's happening... but will have it become increasingly difficulty.
OMG fucking techbros. Yes, technology can be useful for many a thing, can both alleviate social issues by providing legit wealth, as well as shape society by its own shape (e.g. the interactions possible and encouraged by a social network).
It won't, it can't, however, bring about utopia for us. For to shape technology such that it would shape us in beneficial ways we'd have to fucking know what we want at which point we wouldn't have the issue in the first place. Society, as a superorganism, will have to understand human nature, first.
Go outside. Talk to people in the real world. Use the faculties nature has given to you to fix shit, like your body, your mind, both ratio and instincts, don't pray to some technological spectre that it shall deliver us from evil you're displacing.
Look, I don't want to pull the faculties card, so I'll tell you a very easy thing to do: go to your city hall, or whatever public place you have with ALL THE LAWS applicable to you personally, and read them ALL. Just once, no more.
Then go outside, and find a single person who has done the same, with whom you can have even a remote chance of talking about the real and full consequences of any single law change proposal.
If you do that... congratulations, you're better than a whole law firm with a hundred lawyers taken all together. And congratulate the other one for being one of the only two people in the whole world who can do it too.
For the rest of us, having an AI read all that stuff, then make it compare whatever we think we want, with what the result of changing even a couple words would be, much less 50 or 200 pages of amendments, is not about bringing some "utopia"... it's about having a fighting chance of not stepping on a landmine in a quagmire at night in the middle of a tornado.
Right now, we have to pray to a party, a bunch of representatives, all their staff, their lobbyists, and several law firms. I'd rather pray to a single "technological spectre" that I could turn off and on again, as many times as I wanted.
An AI being able to do that kind of analysis would be an AGI. Also: Garbage in, garbage out. Without knowledge of the system you cannot know what you actually want.
Let's take NIMBYs as an example: A municipality wants to drop parking minimums and fund public transport and start up a couple of medium-density housing/commercial developments around new tram stops in the suburbs, to fix their own finances (not having to subsidise infrastructure in low-density areas with high-density land taxes), as well as save money for suburbanites (cars are expensive and those tram stops are at most a short bike ride away from everywhere), and generally make the municipality nicer and more liveable. Suburbia is up in arms, because suburbanites are, well, not necessarily idiots but they don't understand city planning.
The issue here is not one of having time to read through statutes, but a) knowing what you want, b) trust in that decision-makers aren't part of the "big public transport" conspiracy trying to kill car manufacturers and your god-given right as a god-damned individual to sit in a private steel box four hours a day while commuting and not even being able to play flappy bird while doing it.
Even if your AI were able to see through all that and advise our NIMBYs there that the new development is in their interest -- why would the NIMBYs trust it any more than politicians? Sure the scheme would save on steel and other resources but who's to say the AI doesn't want to use all that steel to produce more paper clips?
Questions to answer here revolve around trust, the atomisation of society, and alienation. AI ain't going to help with that.