Thread by @Kavaeric

I've had to give this explanation about NFTs and crypto-whatever before so I thought I'd just write it out here, thread to follow

One of the "problems" (if you view it as a problem) of digital goods is that they're inherently infinite. If I make a digital image, I transfer it endlessly, or make a billion copies with relatively little effort and with copies that are indistinguishable from the original.

This is contrast with real world commodities, say, a barrel of oil - if I wanted to get a barrel of oil I'd have to buy it off of someone else that had it or go put in the work (or pay someone else to do the work) to dig up a barrel of oil for me.

Real world commodities are inherently scarce, you have to put in labour and there's only so much to go around; digital goods are infinitely duplicate-able.

This makes it hard to base the value of digital goods on supply/demand, because there is effectively infinite supply.

There have been many ways in which folks, usually companies, have tried to create digital scarcity. Software DRM, licensing, and limiting content to closed streaming services are such ways to limit digital content being infinitely duplicated, to varying degrees of success.

Blockchain/crypto tech, without getting into the details and mechanisms, is just a technology to enforce scarcity on digital goods without using a central counting system.

If you want a very simplified explanation, remember how it takes work to generate, say, a barrel of oil, and that's what keeps it scarce?

Crypto tech enforces something like that by requiring a lot of work to generate valid tokens - this is where the crazy energy use comes from.

These tokens are more or less glorified serial numbers you might find on a banknote, and you can't just duplicate serial numbers.

It also requires a lot of work (and thus, energy) to transfer/verify a transfer so you can't just duplicate or copy or fake tokens either.

Again, the exact mechanisms of the tech are arbitrary - what matters is that it is tech to create digital scarcity by forcing an excessive amount of work needed to generate/trade the digital commodity, thus emulating the barriers to create/trade real-life commodities, like oil.

😬, you go, isn't the point of digital technology to overcome the barriers of physical limitation and create a free point of information exchange?

Well, yeah, that's part of why a lot of people are critical of this tech as "not solving any problem", but on that note...

Consider: with any commodity, there is commodity trading, people who make money by simply buying the commodity low and then selling them high, and pocketing the difference. Oil futures/contracts, soybeans, gold, company shares, it gets traded like that.

What's worth noting is that the commodity itself does not actually matter.

The exact nature of the commodity, what it means as a resource, is irrelevant to your interests beyond its ability to be bought low and sold high.

People who trade barrels of oil aren't petroleum engineers, and people who buy Tesla shares don't necessarily care about lithium-ion or zero-emissions tech.

All that matters is if you can get commodity that can be traded. All else is incidental and irrelevant.

With that in mind, what on earth makes you think the people who buy and trade crypto or NFTs give a shit about the supposed tech or art you attach to it?

Why would they have to?

In the same vein as how people who trade a company's shares don't give a shit about how the company is run as long as it turns them a profit, why would they care about your work?

🖼 The simple truth is that they're just grifters, rent seekers, looking to get rich off the exploitation of creatives and academics, and the internet is already full enough of those.

The other takeaway that I think is pertinent, though, is that none of these mechanisms are new. Commodity trading isn't new, and grifting isn't new, making money off of the scarcity of goods isn't new.

What TFT/crypto tech purports itself to be is a new technology that can solve problems in society - but its purpose, as far as I can discern, is to simply allow these old practises work in a new era.

Truly revolutionary tech, like digital tech and the internet, actively subvert old practises like commodity trading, and threaten free and open resources to anyone in society.

In this sense, crypto is a means to bulwark against the possibility that society will have to change.

I've been on record for being highly critical of techbro culture, and how it has been assimilating absolutely everything it can get its hands on, on the promise that solutions will spring out of thin air if you just devote yourself hard enough.

https://twitter.com/Kavaeric/status/1276659036889505792

My biggest issue with crypto and NFTs isn't just environmental or grifting—although those count—it is representative of what I feel a devout willingness to enforce old practises and systems no matter what happens.

We could've fulfilled the promise of the internet bringing on a new era, and allowing that tech to force us to change how we think and structure our society. But instead of that, we patch is so that it lets us carry on what we did before, just on silicon instead of paper ledgers.

Electric cars are a way to perpetuate private auto ownership in the face of climate change, facial recognition tech as a way to counter public access encryption tools, and DRM and crypto to port commodity trading into what is effectively a post-scarcity ecosystem.

Technology, to them, is a tool to defend against the possibility that other technology might force change in society, by ensuring said new technology can be used to once again perpetuate the same systems and status quo that have been in place for centuries.

✨ Suddenly it all snaps into sharp focus.

They celebrate crypto because, for them, it's a way to perpetuate the status quo from which they benefit from the most.

It's good ol' commodity trading, for the digital era, now not even bound by anything as frivilous as physical as finite resources or the resource actually being needed for things like food. It is unbound and capable of unlimited capital growth, and they love that.

They push "decentralisation" hard because it's not about decentralisation, it's about self-enforcement, and they can now enforce artificial scarcity without the need to set up a complicated central administration.

Get ready for crypto-DRM software and games, by the way.

They were worried that new technology would actually force change in terms of democractisation and open/public access information and awareness - of course they see something like crypto and NFTs like a divine saviour in tech form.

Crypto does solve problems and stops threats, but they're not new threats. And what counts as a threat is relative.

And while you might not know yourself, the people who wield it know exactly what they think is a threat.