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The blockchain is going to destroy everything.

Posted: Wed Feb 09, 2022 2:23 am
by Pocket
Dan Olson, who usually does thinkpiece videos about movies and stuff, posted an absolute unit of a video explaining pretty much everything you could possibly need to know about NFTs and why they are terrible:

I'll save you the trouble of sitting through a two hour lecture and sum up the important points, or at least the ones that support the thesis statement contained in the thread title:
  1. For those who missed the memo, cryptocurrency is designed to be decentralized, with the database being hosted redundantly on zillions of separate computers (specifically, those owned by the people doing the "mining"). The idea here is that the database, aka the "blockchain", is not only immune to governments devaluing their fiat currencies, but also impossible to destroy should one or more of them decide that crypto is now illegal. Which sucks because crypto should be illegal, for reasons we'll see in point 2.
  2. Not only is the data itself redundant, so is the data processing performed every time a transaction is made. This is where things got a bit fuzzy for me, but the fact that so much pointless processing is required (well out of proportion to the number of copies of the database) is fully intentional, to disincentivize gaming the system by running your own processing farm while everyone else just has their own dinky little computer. But because it's still possible to gain slightly more than you waste on buying computer parts and electricity, people with enough cash to buy in do it anyway. This has resulted in a total power consumption (and, by extension, carbon footprint) estimated to be on par with a small industrialized nation.
  3. The blockchain itself takes the form of a ledger that can never be changed, only added to. Kind of like the ledger in your checkbook. This means there's a permanent record of everything that's ever been added or removed from anyone's account, and anyone who has the means to host their own copy of it and wants to put in the time to play Internet Detective can see the full transaction history of any given user. Often this includes substantial clues to their real-life identity, assuming they didn't voluntarily make it public already.
  4. While Bitcoin's value continues to grow (despite everyone continuing to treat every slump as the beginning of the end), its viability as an actual alternative currency—that is, a thing you can spend to buy real things with directly—has essentially died off for good. One of the big reasons for this is that there are fees attached to every transaction. And these are not small fees. They're not even unreasonable but manageable like PayPal's. We're talking a minimum of $25 per transaction, and that's on a good day; the fees actually go up depending on how busy the network is. So a Slashdot event can mean the fees rocket into the thousands. The other reason is the constant fluctuation. The value of Bitcoin doesn't just fluctuate from day to day, it fluctuates from second to second. In fact, it fluctuates faster than transactions can be validated by that huge, bloated network of redundancy, so you might find that a transaction cost way more than you agreed to by the time it's been processed.
  5. Enter Etherium. Initially conceived as a competitor to Bitcoin (and already one of many by that point), it's more complex in that each block in the chain is capable of containing arbitrary code rather than just quantities of a fake currency. And this is where NFTs come in. NFTs, which are almost all hosted on the Etherium network, usually manifest as links to a copy of a file—like an image—hosted on a server somewhere. Because the blocks are too small to contain the actual image. This means that if the server goes down, your token now contains nothing but a broken link.
  6. As for the content of said tokens and why people would want to buy and sell them, it's essentially the equivalent of those "buy a star" registries back in the day where all you get is some company's claim that something way out in space belongs to you. Hey, fun fact, there were multiple companies doing that, and they did not bother to coordinate their databases to ensure that people didn't buy the same star from two different companies. Why should they? Who's gonna find out? It's not like they bought anything real anyway. And NFTs are exactly the same way. No one can stop two people from minting an NFT of the same exact URL let alone an identical copy of the same file hosted somewhere else, so naturally the market is already full of fraud. Artists' work getting right-click-saved to scammers' hard drives, uploaded somewhere else, and then sold back to an unwitting public. And the retort when artists complain? "You should have minted NFTs of your art yourself, then there'd be an official one and you'd actually be getting paid for it."
  7. Not that artists could have made much money off it anyway. Outside of people whose work was already super-famous, the numbers point to most NFTs of unique artwork (as opposed to the randomly-generated bullshit like the Bored Apes) selling for less than you most artists could make off a single commission.
  8. There's also a huge security hole in all of this. The block is, ironically, big enough to embed a malware applet programmed to siphon money out of the owner's wallet and into yours if and when they attempt to interact with it in any way. This is the source of a lot of the NFT "hacking" that's happened, the rest being just good old-fashioned phishing scams. They're stuck with this malicious token in their wallet forever.
  9. And of course the real reason people are buying NFTs is the same reason anyone would still want to buy cryptocurrencies themselves: speculation. Or to put it another way, it's basically a pyramid scheme except instead of a pyramid it's shaped like a single, straight line. The only way to profit would be to find someone even more gullible later, someone who wants what you got and is willing to pay even more than you did. Naturally, a lot of people assume this "bubble" is going to burst eventually, leaving all the suckers (who, despite appearances, are probably mostly not rich kids who deserve it) holding the bag.
  10. Sadly, this is probably the more preferable of the two possible outcomes. Because somehow, in spite of all of the above problems, there is now a huge push in the tech industry to try to build the next generation of the Web on top of this shit. This would result in a world where all of your personal information is visible to said Internet Detectives by default, as is everything anyone has ever sent to you (consensually or otherwise), everything is commoditized, and it's all open to flagrant fraud and manipulation with no oversight or recourse. And if our experiences with Webs 1.0 and 2.0 are any indication, this will all happen faster than lawmakers can do anything to stop it.
  11. Oh, and Etherium has been promising for ages that they'll switch from the energy-wasteful proof-of-work system to something called "proof-of-stake" that has extremely minimal energy footprint... and the main reason they haven't done it already seems to be that the people in charge just don't feel like it.

Re: The blockchain is going to destroy everything.

Posted: Wed Feb 09, 2022 11:49 am
by Smoke

Re: The blockchain is going to destroy everything.

Posted: Thu Feb 10, 2022 2:28 pm
by Pocket
Oh for fuck's sake.

Are Nazis behind everything now?

Re: The blockchain is going to destroy everything.

Posted: Tue Feb 15, 2022 5:12 pm
by Pocket
So this happened. Some dudes set up a thing that mints NFTs of Magic: the Gathering cards, for people who want to play the game online in a way that incorporates the same artificial scarcity as the physical card packs. (I've mentioned before that I think CCGs are already a form of gambling the same as lootboxes in video games and should be stomped into dust for the same reasons, but anyway...) The thing is, this was done without any authorization from Wizards of the Coast, nor any intention of giving them a cut. The inevitable happened.


The sheer arrogance of using "ngmi" (short for "not gonna make it") in this way is hilarious. "A billion dollar megacorp is going to fail because they refused to get on board with MY crypto scam that they weren't making any money from."

It's becoming increasingly clear that NFT-bros aren't merely confusing NFT ownership for IP rights, they consider it a replacement for it, one that shortcuts the pesky business of having to actually pay something to the actual creators (even if it is usually a pittance compared to what they stand to gain) in return for having the right to use their work. Crypto is just another anarchist scheme of dealing with laws they don't like by just... straight-up breaking them in broad daylight and asking the powers that be "And just what the fuck are you gonna do about it? I'm behind seven proxies!"

Re: The blockchain is going to destroy everything.

Posted: Wed Feb 16, 2022 7:42 am
by Smoke

Re: The blockchain is going to destroy everything.

Posted: Sat Feb 19, 2022 8:48 pm
by Pocket
And when Tycho's ramblings on the subject start to sound wise:
I'm genuinely starting to think the Internet is bad, and not because of minting or mining or any of those things. I'm starting to think it's bad because it allows for groups of people to manufacture consensus without any checksum from external stimuli. Let me put that another way: I think it is bad, bad here meaning actively dangerous, to construct a wholly local reality. That sort of thing works well, really well, until it doesn't.
Weird that it's taken him this long to figure that out, though. Or that this is the first time he's felt compelled to say it out loud.