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by basch 1639 days ago
Philosophically, I think there is something there. How do you create scarcity in a digital infinitely copyable world, without an authority figure. With baseball cards and pokemon cards, you can create artificial scarcity by only printing so many in a run. NFT scarcity is really no sillier than baseball card scarcity. The original creator says "this collection has x amount." What makes that matter is that they said so, and the community believed them that their decision was important. Pokemon could print a "rare" card for every person on the planet, but that ruins game mechanics. In digital games, you can control scarcity with a central authority. EA or Ubisoft or Blizzard or Microsoft can only issue so much of an item, and they distribute them, and you cant copy it because the authority keeps track.

In a decentralized world, a digital yet scarce item can be created, distributed, and reused. A game can go under, and a new game can pop up and respect the accumulated wealth of the community. A game can fork, where half of the community plays one teams version, and half plays a different one, with nobody losing their assets. A rogue developer can entice people to play by inviting people to reuse tools they acquired from a rivals game. A counterfeiting blacksmith can forge their own weapons, and a dark side community can vote to allow them in game, while a light side community can vote to only allow official weapons. What it will all come down to is consensus, the developers (and players voicing through where they spend their attention) of the game deciding which items should be allowed to be imported and which shouldnt. IMHO, there is something cool about the player stats of an RPG being isolated and separated from the game itself, and always owned by the player not the game company.

From an investment perspective, I can see why it looks as dumb as anything in the physical speculative art world. But as a game mechanic, it does seem to offer a useful utility that previously depended on some server staying up forever or trust in a closed system. This is a brink or cusp, where theres a good idea out there somewhere, and maybe someone has or hasnt executed on it yet, but if it has been made into something truly useful, it still isnt popular enough to be well know by us plebs yet.

They also, more simply, act as a membership card or vip pass. You can spend money to join a club, and then you get the corresponding experience that comes with it. Take for example the Matrix NFT. I fully expect there to be some somewhat cool experiences that real people get to really experience by consenting and paying to join that social experiment. Sure it could work roughly as well as a database entry at a central authority, but decentralization is one way to allow easy transfer of your membership to someone new when youre done, without the game developer having to care or keep track of who is who. It turns into Willy Wonka, whoever holds a golden ticket is allowed in, copying tickets isnt possible.

3 comments

> How do you create scarcity in a digital infinitely copyable world

Your premise rests on this question. My counter is what is the value in creating scarcity beyond just trying to make money? Your examples are about people investing in money and not losing those assets. Your experience example is not really digital scarcity if I understand your hypothetical correctly. It is about a real physical scarcity, the number of people who will be let into the experience, being represented in a digital world. There is no new innovation there.

To me the idea of creating scarcity out of something that is not scarce is done for one and only one reason, for a financial benefit.

>what is the value in creating scarcity beyond just trying to make money?

Gameplay balancing.

We've crossed a very blurred line of gaming, role play, and real life. Whos to say which is which anymore.

I dont think profitability and production of gaming are mutually exclusive. Why cant game creators also make money for their work?

I guess I could have phrased that a little differently so you couldn't pull a quote out of context and miss my point regarding scarcity in a gaming context. In the context of games I was referring to decentralized scarcity. I can recognize the example of a game being better if not everyone has the same cards (but this is still financially motivated since Pokemon is a profit making endeavor). But in that context, what value does decentralization have? Why is decentralized Pokemon better than centralized Pokemon in a way that doesn't boil down to at least one of the parties having a financial interest in decentralization? The whole idea of "forking games" seems pointless to me. If there is demand for a fork, why wouldn't a different centralized version satisfy it? The only added value is the preservation of financial stake in the game. One again the idea of scarcity leads back to financial gain.
How often do we see game servers shut down where the game isnt playable anymore? I think there is something cool about the accumulation of in game assets being in a persons personal owned wallet, and not an account on the game server. That dichotomy has consumer benefits.

A game company can disappear, and the players can pick right up where they left off, with a new game, remake, or a reverse engineered copy of the server.

Why cant financial gain be a PART of the whole? People can both collect pokemon cards, and play with them. It's not mutually exclusive that you have to declare youre one or the other. Although NFTs probably should include a "you opened the wrapper" function, to create additional scarcity as people destroy the value of their items by making them less digitally pristine.

>A game company can disappear, and the players can pick right up where they left off, with a new game, remake, or a reverse engineered copy of the server.

If there is demand, this can and will happen anyway. There are countless examples of fans continuing to mod and/or host games after they were abandoned by the original creators. The only difference is that you want to import your assets from one game to another. The only thing being preserved here are the assets from the old game. The only added value from NFTs is preserving an investment in the old game.

>Why cant financial gain be a PART of the whole? People can both collect pokemon cards, and play with them. It's not mutually exclusive that you have to declare youre one or the other. Although NFTs probably should include a "you opened the wrapper" function, to create additional scarcity as people destroy the value of their items by making them less digitally pristine.

No one is saying that you can't have fun with your Pokemon cards. But Pokemon cards and decentralized digital scarcity are not interchangeable concepts. Decentralized digital scarcity appears to only be motivated by money.

Who balances the game in a decentralized world?
The game creators and the market.

In the same way that the market will refuse to believe I printed an authentic pokemon card, the game players decide which printers/minters are valid game token producers. If the community decides to respect a certain game production team, that becomes reality. A game company being in charge only lasts as long as the players believing in them. It's the polar express basically.

I'm skeptical that this can work in a way that is fundamentally different than games without NFTs today.
I can definitely see the use-case for things like Pokemon or Magic: The Gathering cards, the NFT being issued for each individual copy, and signed by the game company. This way, rare cards can remain rare, can be used to play a game, and ultimately, can be traded/sold just like physical cards. The paper trail leading back to the company will be recorded in the blockchain.
> How do you create scarcity in a digital infinitely copyable world, without an authority figure.

This is a problem created to fit the solution. Why in the name of God would anyone want to re-introduce scarcity into a post-scarcity space? Such a person is so narcissistic, so greedy, so sociopathic that they would deny others something they could have for nothing in order to enrich themselves. It is sickening.

> A game can go under, and a new game can pop up and respect the accumulated wealth of the community.

People keep saying this and it makes no goddamned sense. They didn't accumulate any wealth, they accumulated some entries in a database somewhere. A developer could even more easily just make a game that uses those assets without all the artificial scarcity.

Making closed source software is a way to create scarcity in a post scarcity space. Are you innocent of that too?
Closed source software can still be copied, even if you charge money for it. I have never created any software that utilized any form of DRM. Hell, most of the code I write is public domain, making it even more free than most open source software.

Besides, I'm not saying we shouldn't compensate creators. Unfortunately even though the digital world is post scarcity the one where our bodies reside is not and creators need to eat. However, I don't believe that shoving scarcity into a post-scarcity space is the way to go about that.

So you agree that DRM is a way to enforce scarcity in a post scarcity world ?

Your words - my software can be copied even though I sell it.

exactly the same with NFTs.

My Digital art can be copied even though I sell it as an NFT.

NFTs don’t enforce scarcity at all, not of the artwork itself.

> So you agree that DRM is a way to enforce scarcity in a post scarcity world ?

Yes, and one that is fundamentally flawed, and never should have been attempted in the first place in my opinion, but I think you'll agree that an NFT is not quite the same thing as DRM.

> Your words - my software can be copied even though I sell it. exactly the same with NFTs.

Ok, there's a semblance of an argument here I don't actually think is complete bullshit: If one can sell software without DRM, which can be copied by anyone, what exactly is being sold? To which I am forced to reply with things many NFT promoters say: supporting the developer, the concept of legitimacy, etc.

But, if that's all that an NFT is, then it is effectively just a donation. The problem is that NFTs claim to be much more than that, they claim to be a groundbreaking new technology that enables people to do things they never could do before[0], but that's obvious bullshit since people have been selling software in the same way I have sold software for 50 years.

If you're going to claim something like an NFT proving ownership, the only reason for that to have any value is if ownership confers some right or privilege that is otherwise lacking. For software, let's say it gives you access to direct support from the developer.

Again, the problem is that people already do that, and it doesn't require anything near as complicated as the entire NFT system! It's just a bog standard entry in a bog standard database that so and so owns a license. The decentralization buys nothing because if I stop supporting it no one will care that you have that license anyway. You could say that it allows someone to resell that license, but again we already do that today, and I could just as easily refuse to recognize a resold NFT as I could anyone's resold license because there's a history of ownership.

It really just looks like a giant scheme to try and convince people they're paying for something they're not.

[0] presumably not just having a new way to rip off rubes.

I don’t know about other people and their misconceptions. I hope (and think) they are not as widespread as you think.

But yeah I think of NFTs as a novel way to support digital art. Not much else, just pay the artist. Same as buying a painting really, except you don’t really own the painting anymore.

The idea that buying art is anything BUT supporting an artist is pretty funny. It’s as if we’ve normalised art as either an investment or a museum that we can’t touch. Buying art was always meant to just let the artist do his thing!

Selling digital art before NFTs was a complete pain! Before them you had to go with an agency or gallery, they took a cut, they had to like your stuff. It was absolutely painful, full of gate keeping and bullshit I (and many others) hated. Now you just mint (hopefully on a low carbon chain) and off you go, you tweet about it, get some attention, make some money. It’s simple. The fact that there’s a secondary market for it, well there always was one for art.

It certainly attracted a bunch of rubes who buy ape JPEGs but there is an honest revolution in digital art happening right now. Look into FXhash on tezos, I’ve lost count of the amount of generative art on that market and it’s really really mind blowing. People are coding amazing stuff on there and selling it, something which used to be virtually impossible without a gallery and a rep and a bunch of nonsense.

I think an NFT is a form of DRM that doesn’t enforce scarcity - ie you own A license to that artwork but that doesn’t give you the right to it. That license can be bought and sold, maybe eventually that will have value (my personal favourite is that NFTs should allow you to remix the artwork into your own art, but who knows).