The Bitcoin Saga

[Ginger_Yellow]

@CLWheeljack

re there specific terms in the NFTs about what rights it confers? If I own frame 162394 of Toy Story, do I get to sue for any profits if somebody else puts that frame on a shirt?

Not generally in the NFT themselves, but usually in the contract that the initial seller and the buyer enter into, and they vary considerably.

Here are the NBA Top Shot terms, for instance:

4. OWNERSHIP, LICENSE, AND OWNERSHIP RESTRICTIONS

YOUR OWNERSHIP OF MOMENTS WILL ONLY BE RECOGNIZED BY US IF YOU HAVE PURCHASED OR OTHERWISE RIGHTFULLY ACQUIRED SUCH MOMENTS FROM A LEGITIMATE SOURCE AND NOT THROUGH ANY OF THE CATEGORY B PROHIBITED ACTIVITIES (AS DEFINED BELOW).

For the purposes of this Section 4, the following capitalized terms will have the following meanings:

“Art” means any art, design, and drawings (in any form or media, including, without limitation, video or photographs) that may be associated with a Moment that you Own.

“Own” means, with respect to a Moment, a Moment that you have purchased or otherwise rightfully acquired from a legitimate source (and not through any of the Category B Prohibited Activities (as defined below)), where proof of such purchase is recorded on the Flow Network.

“Purchased Moment” means a Moment that you Own. “Third Party IP” means any third party patent rights (including, without limitation, patent applications and disclosures), copyrights, trade secrets, trademarks, know-how or any other intellectual property rights recognized in any country or jurisdiction in the world.

(i) Ownership of Moment . Because each Moment is an NFT on the Flow Network, when you purchase a Moment in accordance with these Terms (and not through any of the Category B Prohibited Activities), you own the underlying NFT completely. This means that you have the right to swap your Moment, sell it, or give it away. Ownership of the Moment is mediated entirely by the Flow Network. Except as otherwise permitted by these Terms in cases where we determine that the Moment has not been rightfully acquired from a legitimate source (including, without limitation, through any of the Category B Prohibited Activities), at no point will we seize, freeze, or otherwise modify the ownership of any Moment.

(ii) We Own the App . You acknowledge and agree that we (or, as applicable, our licensors) owns all legal right, title and interest in and to all other elements of the App, and all intellectual property rights therein (including, without limitation, all Art, designs, systems, methods, information, computer code, software, services, “look and feel”, organization, compilation of the content, code, data, and all other elements of the App (collectively, the “App Materials”)). You acknowledge that the App Materials are protected by copyright, trade dress, patent, and trademark laws, international conventions, other relevant intellectual property and proprietary rights, and applicable laws. All App Materials are the copyrighted property of us or our licensors, and all trademarks, service marks, and trade names associated with the App or otherwise contained in the App Materials are proprietary to us or our licensors.

(iii) No User License or Ownership of App Materials . Except as expressly set forth herein, your use of the App does not grant you ownership of or any other rights with respect to any content, code, data, or other App Materials that you may access on or through the App. We reserve all rights in and to the App Materials that are not expressly granted to you in these Terms.

(iv) Further User Ownership Acknowledgements . For the sake of clarity, you understand and agree: (a) that your purchase of a Moment, whether via the App or otherwise, does not give you any rights or licenses in or to the App Materials (including, without limitation, our copyright in and to the associated Art) other than those expressly contained in these Terms; (b) that you do not have the right, except as otherwise set forth in these Terms, to reproduce, distribute, or otherwise commercialize any elements of the App Materials (including, without limitation, any Art) without our prior written consent in each case, which consent we may withhold in our sole and absolute discretion; and © that you will not apply for, register, or otherwise use or attempt to use any of our trademarks or service marks, or any confusingly similar marks, anywhere in the world without our prior written consent in each case, which consent we may withhold at our sole and absolute discretion.

(v) User License to Art . Subject to your continued compliance with these Terms, we grant you a worldwide, non-exclusive, non-transferable, royalty-free license to use, copy, and display the Art for your Purchased Moments, solely for the following purposes: (a) for your own personal, non-commercial use; (b) as part of a marketplace that permits the purchase and sale of your Purchased Moments, provided that the marketplace cryptographically verifies each Moment owner’s rights to display the Art for their Purchased Moment to ensure that only the actual owner can display the Art; or © as part of a third party website or application that permits the inclusion, involvement, or participation of your Purchased Moment, provided that the website/application cryptographically verifies each Moment’s owner’s rights to display the Art for their Purchased Moment to ensure that only the actual owner can display the Art, and provided that the Art is no longer visible once the owner of the Purchased Moment leaves the website/application.

(vi) Restrictions on Ownership . You agree that you may not, nor permit any third party to do or attempt to do any of the foregoing without our (or, as applicable, our licensors’) express prior written consent in each case: (a) modify the Art for your Purchased Moment in any way, including, without limitation, the shapes, designs, drawings, attributes, or color schemes; (b) use the Art for your Purchased Moment to advertise, market, or sell any third party product or service; © use the Art for your Purchased Moment in connection with images, videos, or other forms of media that depict hatred, intolerance, violence, cruelty, or anything else that could reasonably be found to constitute hate speech or otherwise infringe upon the rights of others; (d) use the Art for your Purchased Moment in movies, videos, or any other forms of media, except to the limited extent that such use is expressly permitted in these Terms or solely for your own personal, non-commercial use; (e) sell, distribute for commercial gain (including, without limitation, giving away in the hopes of eventual commercial gain), or otherwise commercialize merchandise that includes, contains, or consists of the Art for your Purchased Moment; (f) attempt to trademark, copyright, or otherwise acquire additional intellectual property rights in or to the Art for your Purchased Moment; or (g) otherwise utilize the Art for your Purchased Moment for your or any third party’s commercial benefit.

(vii) Third Party IP . If the Art associated with your Purchased Moment contains Third Party IP (e.g., licensed intellectual property from the NBA or an NBA player), you understand and agree as follows: (a) that you will not have the right to use such Third Party IP in any way except as incorporated in the Art, and subject to the license and restrictions contained herein; (b) that, depending on the nature of the license granted from the owner of the Third Party IP, we may need to (and reserve every right to) pass through additional restrictions on your ability to use the Art; and © to the extent that we inform you of such additional restrictions in writing, you will be responsible for complying with all such restrictions from the date that you receive the notice, and that failure to do so will be deemed a breach of the license contained in this Section 4.

(viii) Other Terms of License . The license granted in Section 4(v) above applies only to the extent that you continue to Own the applicable Purchased Moment. If at any time you sell, swap, donate, give away, transfer, or otherwise dispose of your Purchased Moment for any reason, the license granted in Section 4(v) will immediately expire with respect to that Moment without the requirement of notice, and you will have no further rights in or to the Art for that Moment. The restrictions in Sections 4(vii) and 4(viii) will survive the expiration or termination of these Terms.

(ix) User Feedback . You may choose to submit comments, bug reports, ideas or other feedback about the App, including without limitation about how to improve the App (collectively, “Feedback”). By submitting any Feedback, you agree that we are free to use such Feedback at our discretion and without additional compensation to you, and to disclose such Feedback to third parties (whether on a non-confidential basis, or otherwise). You hereby grant us a perpetual, irrevocable, nonexclusive, worldwide license under all rights necessary for us to incorporate and use your Feedback for any purpose.

[CLWheeljack]

@Ginger_Yellow

Here are the NBA Top Shot terms

So, basically, you can display the image, and buy or sell the NFT freely (unless they “determine that it is illegitimate” somehow), but pretty much nothing else. I guess I can see it having value n a dystopian future where every image displayed on the internet is checked at all times to determine if you have the rights to display it.

Actually…I guess that’s probably want the IP owners want.

we grant you a worldwide, non-exclusive, non-transferable, royalty-free license to use, copy, and display the Art for your Purchased Moments, solely for the following purposes: (a) for your own personal, non-commercial use

You agree that you may not… modify the Art for your Purchased Moment in any way, including, without limitation, the shapes, designs, drawings, attributes, or color schemes… use the Art for your Purchased Moment to advertise, market, or sell any third party product or service;

Also, if it has a Mountain Dew logo in the background, all the above may be void:

If the Art associated with your Purchased Moment contains Third Party IP … depending on the nature of the license granted from the owner of the Third Party IP, we may need to (and reserve every right to) pass through additional restrictions on your ability to use the Art;

[delirium]

NFTs are still a little too young and wild at this point to have much utility and I can understand the skepticism, but there is absolutely potential in the technology and the concept. As the world becomes more digital and AR/VR are widely adopted, a digital asset can become a tangible and real thing in a way that is currently hard to imagine.

This podcast has some really interesting discussion on where NFTs are going: https://podcasts.apple.com/us/podcast/jesse-walden-a-primer-on-nfts/id1154105909?i=1000514059881

edit: wrong link

[Matt_W]

@AK_Icebear

As easy money dries up, highly liquid assets will lose some or all of the pricing they gained during the liquidity flood.

Are cryptocurrencies highly liquid? I can’t pay for most things with them, and they’re subject to highly variable exchange rates when I want to exchange for traditional currencies. They seem more like stocks to me.

[Ginger_Yellow]

Stocks (listed ones anyway), are generally considered liquid assets*. While there’s no one hard and fast definition, the general one is that you can liquidate your position quickly without causing a large move in the price (and therefore suffering a loss). That’s broadly true for the popular crypto coins (again - at least if we’re talking about exchanges into other coins), unless “you” are Elon Musk and talk about what you’re doing.

• For example, stocks included on a “major index” are counted as “high quality liquid assets” for banks by regulators, albeit with a substantial haircut.

@Matt_W

I can’t pay for most things with them, and they’re subject to highly variable exchange rates when I want to exchange for traditional currencies.

Neither of things are indications of liquidity, per se, just their lack of utility as currency. Though as a general rule, things with highly volatile prices tend to be less liquid than things with stable prices.

[Lantz]

Liquidity is not only a factor of what the asset is that you are holding and market capacity, but also the amount that you are holding. If you have $100k worth of bitcoin or $100k in US treasuries then they are both pretty liquid because you can sell that amount of bitcoin and convert it to cash at whatever the current market value is. If you are using them as collateral or something similar the treasuries are going to be much more desirable because their liquidation price is very stable but both of them are generally liquid. Now if you have $1B in both then the treasuries are way more liquid because you can easily liquidate that position in a day and the market wouldn’t even blink. But try and sell $1B in bitcoin in a day and you’re going to take a huge loss compared to the nominal market value.

[Menzo]

The Feds are wising up.

U.S. Treasury calls for stricter cryptocurrency compliance with IRS, says...

[Andy_Bates]

@Timex

But this artwork doesn’t have value, as you have stated, so it kind of proves my point by falling into same category as the infinitely reproducible digital artwork.

Maybe “value” isn’t the right word; I should have said “collectability” or “uniqueness.” Obviously digital media has value, as evidenced by people buying albums from iTunes or buying software or producing digital artwork and selling it online. Unless you think that “data should be free” and no one should have to pay for anything digital, which is a whole other can of worms.

@Timex

The baseball card has value because there are a finite number of them, and if you want one, you need to buy one from that finite set. If you were able to magically create perfect replicas of them at will, then they too wouldn’t really have value as collectible objects.

Yes, a baseball card has value as part of a finite set, not as a unique and specific object where the molecules of your baseball card are different from the molecules of my baseball card. If we both have the same baseball card in the same condition, then in terms of value and collectability, they are identical. So we’ve established that you can have multiple copies of the same item and they still have value.

With that established, why does the existence of forgeries mean that the originals no longer have value? If someone suddenly started selling copies of Action Comics #1 out of the back of a truck, would that make the existing original copies suddenly worthless? No, because everyone knows there are only six originals left, and the forgeries (even if they’re flawless) are still forgeries. Forgeries of physical media exist but the originals still have value, so I don’t know why that suddenly wouldn’t apply to digital media.

@Timex

No, they don’t. The NFT has scarcity. The digital object doesn’t.

With physical prints, the number is actually part of the work, but honestly there a finite number of the physical objects, while there are an infinite number of digital copies of digital objects.

If I buy a limited-edition 1 of 100 lithograph, I could easily get that items scanned and produce an infinite number of physical copies that would be indistinguishable from the original. Would that make the originals worthless? No, of course not. So I don’t know why you think it would be any different with NFTs.

Secondly, why do you think that an NFT can be infinitely copied? If someone pays for an NFT, do you think you can just walk over to their house and say, “Hey I heard you got an NFT, can I just get a copy for myself?” If a person has Action Comics #1, they’re not going to let you come over and make a scan of it, so I don’t know why you think it would be any different with NFTs or any other digital media.

@Timex

But they wouldn’t be owning anything unique. In the case of Toy Story, that media has already been copied over and over again, and probably exists on a million different devices. Not even counting copies that end users have, its nature as digital media means that it was copied a ton of times before the movie was even released.

A uncompressed frame from Toy Story probably exists on computers inside Pixar, but I doubt it exists anywhere outside of the company, since it’s proprietary data. There’s a difference between something theoretically existing on a hundred different devices (a million is stretching it), and that thing actually being available to you to access. We’re talking about something that only exists inside the company being made available and sold publicly. It’s the same thing as selling an animation cel: Sure, anyone can have a 4K Blu-ray of Snow White, but only one person can own the original cel for that frame of film.

@Timex

The only thing the NFT provides, is a history of the exchange with someone.

So, in that case, it’s just saying, “Hey, I paid Pixar money.” That’s all. That copy of the media that you received in that exchange is no different than any other copy of it.

Now, maybe you find value in that exchange with Pixar, I dunno.

“A history of the exchange with someone” is the difference between something authentic and a forgery. A signed comic is worth more than an unsigned one, because the signature is a history of exchange with that artist. A movie collectible is worth more than a replica, because the certificate of authenticity is a history of the exchange with the production company. A banana duct-taped to a wall is worth $120,000 to someone, because the history of the exchange is what proves that it’s authentic. You can’t just ignore what makes something unique and scarce, and then argue that it’s not unique or scarce.

And again, I don’t know why you believe that just because something is digital, that means people will just let anyone copy it. If I paid $5000 or $500 or $50 or $5 for frame 16384 of Toy Story, I’m not going to just copy it for any friend who shows up with a USB drive.

[Andy_Bates]

@CLWheeljack

I think part of the real problem with NFTs is that it isn’t clear (to me, maybe it is to somebody) exactly what rights the supposed ownership of the NFT is supposed to provide. With physical objects, ownership confers a right to access / usage, which digital assets self evidently do not.
…
Are there specific terms in the NFTs about what rights it confers? If I own frame 162394 of Toy Story, do I get to sue for any profits if somebody else puts that frame on a shirt? I doubt Disney would agree to that, because the actual IP belongs to them, and they aren’t going to give me free reign to reproduce it however I want.
…
So, it seems most likely that “ownership” here is purely nominal, essentially for bragging rights. The value of the NFT is purely based on what you can convince a buyer that it’s worth. Without exclusive reproduction or access rights, I feel like you’re going to have a much harder time convincing anybody, but ultimately it’s up to them.

It’s a collectible, just like any other collectible. If I own an animation cel from Pinocchio, I don’t get 1/126,800th of the profits whenever a DVD is sold, and I don’t get to sue anyone who puts that frame of the movie on a t-shirt, and I don’t get to print a t-shirt myself using that image. I get to own the cel and show it to my friends and put it up on my wall. Owning an NFT of something is the same as having a signed copy of Amazing Spider-Man #200 or a limited-edition replica of Mace Windu’s lightsaber or a unique print of a Roger Dean painting: You own the item itself, but you don’t own the IP.

[Timex]

@Andy_Bates

“A history of the exchange with someone” is the difference between something authentic and a forgery.

No, a history of exchange is traditionally used to establish that something is not a forgery, by providing provenance. In some cases, the provenance itself has value (such as McQueen’s car).

But the provenance isn’t what makes the object not a forgery.

I could find a rookie card of Babe Ruth in my attic, lost by some kid decades ago, and its legitimacy is not dependent upon knowing who owned it.

@Andy_Bates

And again, I don’t know why you believe that just because something is digital, that means people will just let anyone copy it. If I paid $5000 or $500 or $50 or $5 for frame 16384 of Toy Story, I’m not going to just copy it for any friend who shows up with a USB drive.

Unless you confirm that all other copies have been destroyed, than you don’t control that. In many of these cases with NFT’s, it’s just a picture that is already available online.

[Andy_Bates]

@Timex

No, a history of exchange is traditionally used to establish that something is not a forgery, by providing provenance. In some cases, the provenance itself has value (such as McQueen’s car).

But the provenance isn’t what makes the object not a forgery.

For an item that is otherwise common or easily duplicated, the provenance is what makes it valuable. A frame of film from Star Wars is not special or valuable, but when it’s in a frame that says “Authentic 70mm film frame, one of 9,500 produced, never to be reproduced or sold to the public again”, then it has value. There’s nothing special about that film print; it wasn’t from a premiere, and it probably wasn’t ever projected at all. It’s just one of 9,500 film prints that Lucasfilm decided to say “This is authentic because we produced it” and so it has value. The value comes from the provenance.

The identical frame of film from an identical film print will be the same in every way, but it’s not one of the 9,500 produced by Lucasfilm so it doesn’t have the same value. And it’s not even a forgery, because it’s from a film print just like any other film print. It’s just that one is “Authentic limited edition from Lucasfilm” and the other is not.

That’s what an NFT is: It’s the authentic, authorized collectible published by whoever owns the property.

@Timex

I could find a rookie card of Babe Ruth in my attic, lost by some kid decades ago, and its legitimacy is not dependent upon knowing who owned it.

Kid walks into a sports memorabilia store:

Kid: “Hey I have a Babe Ruth rookie card here. I’ll sell it to you for $500.”
Owner: “Where did you get it?”
Kid: “I found it.”
Owner: “Where did you find it?”
Kid: “Around.”
Owner: “Yeah no thanks.”

You’d be surprised how providing some sort of history helps prove the authenticity of a product.

But let’s say that the owner studies the card itself and determines that it’s authentic. For physical objects, you can do that. But for digital objects, you obviously can’t, so that’s where the NFT history comes in. I don’t see why perfect preservation means that something isn’t valuable, any more than having a perfectly preserved copy of Action Comics #1 would paradoxically make it less valuable.

@Timex

Unless you confirm that all other copies have been destroyed, than you don’t control that. In many of these cases with NFT’s, it’s just a picture that is already available online.

First of all, I’m specifically talking about something that wouldn’t be widely available online, a digital asset that comes directly from the company and wouldn’t be available anywhere else. “Digital” doesn’t automatically mean “is widely available.”

But for the sake of argument, let’s take a picture that is widely available online, like the Disaster Girl NFT that just sold online. The NFT of that image is different from the image itself, just like a signed headshot of Johnny Depp is different from an unsigned headshot. Anyone can make a copy of a headshot that is the same as the original, but a signed version is something separate and more rare. That’s all an NFT is: an authorized collectible. It’s just digitally signed instead of physically signed.

[AK_Icebear]

Liquid describes how quickly you have cash in your hand from deciding to sell. Not if you can use an investment as barter or currency. And not the USD value of the asset, which can vary widely for both liquid and illiquid assets.

Publicly traded stocks are considered highly liquid, at least a retail volumes. You click a button and you’ve sold it all. Same with BTC.

Real property is somewhat illiquid as it may take weeks or months to finalize a fast sale. Shares in a private firm may be super illiquid depending on contractual agreements.

[AK_Icebear]

This brings cryptocurrency transactions in line with regular bank and other financial transactions, which have similar reporting thresholds.

[Matt_W]

I guess I use liquidity in an imprecise (and probably incorrect) sense of how easy it is ultimately to convert to useful goods and services. Price volatility adds friction for things like stocks and bitcoin. And I suspect most people using bitcoin are holding it as an investment and not as an exchange of value, like currency is.

[AK_Icebear]

Yes, you are using the term liquid incorrectly.

I suspect most people holding bitcoin are doing so out of an act of speculation instead of investment - they plan to sell within a year to make some profit off of market momentum, regardless of fundamentals. Some stock investors are strictly short term speculators (and more during mega stimulus), but normally more are long term or value investors.

[Dave47]

@Andy_Bates

So you’re just manufacturing arguments for me now? Or is this actually based on something I said?

Oof, I mixed you up with AK_Icebear. Sorry.

But the environmental costs of both bitcoin and NFTs are massive and kill the idea that this is the next big thing. It’s beanie babies or tulip bulbs, only was worse for the environment.

[AK_Icebear]

You obviously feel strongly about it. The good news is you don’t have to participate. If you feel really strongly, donate to a politician that feels the same as you.

[Dave47]

@AK_Icebear

You obviously feel strongly about it. The good news is you don’t have to participate. If you feel really strongly, donate to a politician that feels the same as you.

You obviously feel strongly about your tulip bulbs. The good news is you don’t have to participate mentally with any of the externalities your actions cause. If you feel really strongly, donate to a politician that denies climate change the same as you.

[Tim_N]

@Dave47

The good news is you don’t have to participate mentally with any of the externalities your actions cause.

I am all for shaming people who make environmentally irresponsible choices or consumption behaviour, but you do know that there are coins other than bitcoin and there are some that consume less electricity per transaction than literally any other form of exchange available on the planet right now?

(OK, I don’t have anything to back up the “literally”, but thinking through the alternatives: VISA/Western Union/bank transfer/cash/barter, I think it holds up)

[legowarrior]

I have always wondered about that. How is this different from Tulip Bulbs?

Outside of the whole environmental impact?

Honestly, as a person that lives on this planet, and plays video games, I am always wishing that Bitcoin will just die already. A few people going bankrupt might be a good example to the rest of the people jumping on this bandwagon for good measure.