In this way it's like the stock market to the Nth power.
As money accumulates in larger and larger sums, and is abstracted farther and farther from tangible real-world power and resources, you get this. Things get increasingly weird.
There's got to be some kind of equilibrium point between this stuff, and your basic anti-fiat-currency gold bug, but I'm not sure what it is, particularly since modern macroeconomics acknowledges the capacity to just print money and make it up pretty quickly in the increased economic activity that makes possible: austerity isn't really a functional solution. This crypto stuff really works by the same principle: if you get enough people into it, they CAN'T crash because the important people are too deeply enmeshed in the system and will cheat to any degree to preserve the value of their properties.
I think it depends what is done with it. With macroeconomics, you can have entire countries spurred to activity and producing goods and services because they can transact with resources. With this crypto stuff, I very much wonder if it ends up being a small number of very privileged people demanding rights to increasingly silly abstractions that are said to be the value of entire cities, or countries.
I'm not sure that's sustainable, politically. I'd ask, how convenient is it for the first crypto trillionaires to buy real-world mercenaries? Things could get very dark, albeit in a peculiarly cyberpunk sort of way that might appeal to some.
It's not at all like the stock market. Shareholders are own the underlying business. NFT holders don't own the underlying piece of art. They only own the NFT. It's like buying a "share" that is just a blank piece of paper, and paying millions for it!
I interpreted the comment to mean something more like the derivatives market. In the derivatives market, you start getting "weird" stuff like futures contracts, collateralized debt obligations, or credit default swaps. Last two examples are, admittedly, a biased reference to 2008 since those are sort of the poster-boys of that market crash. Futures contracts aren't really that weird, but certainly more weird than just owning stock in a company.
So people might be trading (as in 2008) to "own" some N-th power representation of private debt that ends up going to zero because the underlying private debt itself was not sustainable. It's different from NFT, but for each degree of distance the financial instrument moves away from the real world, it looks increasingly weird, e.g. I own a share of insurance on a fraction of a bucket of debt people took out to buy their homes. (And I still think this is better than NFT unless the NFT has some underlying real-world thing tied to it.)
Derivatives markets always have some claim to an underlying financial good. If you buy futures, you can redeem it later for the good the futures guarantees. NFTs have zero relation to the underlying asset they are being connected to. All you're buying is a pointer to a piece of art.
My limited understanding is the blockchain data are distributed enough to get past the "that URL" issue. You'd need to destroy "that unknown collection of URLs" to eradicate the NFT.
The problem as I see it is that NFTs lack any potential energy. Their value is purely kinetic, and expressed in the transaction. If no one wants my NFT, it's so much binary noise.
Wrong. Most NFTs contain a content-address (hash) that is pointing to data on IPFS. The buyer can pin and make sure the data stays alive for everyone. Kind of like torrents but for web.
> Maybe marginally better than URL but not very much IMO.
Vastly better than a URL. Content-addresses points to content that can be served from anywhere. URLs point to actual locations. Anyone can seed the content behind the IPFS hash, including the owner of the NFT.
While with a URL, you cannot change it. If the owner wants to make it work after it disappeared, they would have to buy the domain name, make the hosting work again and then setup a server there, add the file so it can be served.
While with a IPFS hash, the owner could just turn on their IPFS node and everything works as before.
A URL has another huge disadvantage: a URL is the address of a thing, not the thing it is pointing to in itself. The thing it is pointing to can change. If you paid $70 million for a URL pointing to a Beeple artwork, you might be upset if the owner of the URL changed the content to a Rick Astley video.
But it does matter and has to do with the NFT. If you put a URL, whose content can change over time, the NFT that effectively be changed. At least what it's pointing to.
If you're using a content-address hash, you can be sure that you can always get back the same result from that hash as when you got the NFT N years ago.
If the buyer takes down their pin, and nobody else has it pinned, then that's their prerogative. The NFT is still there on the ledger, unless the whole blockchain goes down too.
